BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

---------------------------------------------- -------------------------- : In the Matter of : : 2010 U.S.

- HANEDA COMBINATION : Docket DOT

- OST

- 2010

- 0018 SERVICES ALLOCATION PROCEEDING : :

----------------------------------------------- -------------------------

ANSWER OF UNITED AIR LINES, INC.

Communications with respect to this document should be sent to: Hershel I. Kamen Senior Vice President

– Alliances , Regulatory & Policy UNITED AIR LINES, INC. 1350 I Street, N.W. Washington, DC 20005

- 3389 Steve Morrissey Managing Director

– Regulatory Affairs & Policy UNITED AIR LINES, INC. 1025 Connecticut Avenue, NW Washington, DC 20036 (202) 296

- 2337 steve.morrissey@united.com
J une 14 , 201 1 Daniel A. Weiss Managing Director

– International & Regulatory Affairs Thomas Newton Bolling Vice President & Associate General Counsel UNITED AIR LINES, INC. 1600 Smith Street 15 th Floor

- HQSLG Houston, TX 77002 (713) 324

- 5606 thomas.bolling@united .comBEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

------------------------------------------------------------------------ : In the Matter of : : 2010 U.S.

- HANEDA COMBINATION : Docket DOT

- OST

- 2010

- 0018 SERVICES ALLOCATION PROCEEDING : :

-------------------------------- ----------------------------------------

ANSWER OF UNITED AIR LINES, INC.

Delta 1 has not been providing Detroit

- Haneda service since March , and it apparently has

no plan s to provide the B

- 747

- 400 service it promised in this proceeding . Nonetheless, Delta has asked the Department to extend for another 12 months Delta’s ability to waste the slots

-- a valuable public resource

-- it secured for Detroit

- Haneda service. Although Delta’s curren t request is based on the extraordinary consequences of the ear thquake , tsunami and nuclear power plant damage in Japan, long before that tragedy Delta sought and received authority to del ay the institution of service. When Delta did institute service , it ceased after approximately one month

. In light of Delta’s con tinuing failure to provide the Haneda service it proposed, the Department should withdraw Delta’s slots for daily Detroit

- Haneda service and award them to United so it

1 Common names are used for airlines.Answer of United

Page 2
can offer daily nonstop B

- 777 San Francisco

- Haneda service just as it proposed originall y in this proceeding. 2 United states as follows in support of its position: 1. When the Department awarded Delta half of the Haneda slots available for U.S. carriers on July 6, 2010, it gave the carriers an unprecedented amount of time (until January 29, 2011) to institute their new flights. Nonetheless, Delta sought an extension of time to i nstitute its new flights alleging demand would be at its nadir in January and February. Delta began Detroit

Haneda B

- 747

- 400 service on February 19, 2011 , but suspended service on March 24, 2011, barely a month after it began. Although Delta now plans to re - institute service using significantly smaller B

- 777 aircra ft on June 16, it seeks authority to postpone or suspend some or all of that service until June 2012. 2. Delta’s proposals in this proceeding emphasized t he importance of the 403

- seat B

- 747

- 400 aircraft it promised to operate, arguing that “the 403 seat capacity of the 747 will .

. . maximize the value of the scarce Haneda slots that are available to U.S. carriers” because the “shortfall of available nonstop options emphasizes the importance of injecting a s much nonstop capacity in the .

. . market as pos sible when awarding these frequencies. ” 3 Delta also said it “will use large capacity 747

- 400 aircraft for maximizing service, competitive and public interest

2 United has today sought renewal of its San Francisco

- Guangzhou dormancy waiver but, unlike Delta, has volunteered to relinquish its authority if another carrier wants to utilize it promptly. See United’s June 14, 2011, moti on in Docket DOT

- OST

- 2007

- 28567.

3 See Delta’s March 1, 2010, Answer in this proceeding at 11, 14 (emphasis in original). Delta off

ered aircraft larger than the B

- 777 on t he Los Angeles

- Haneda route for approximately one month before it suspended service, and it is now reinstituting Los

- Angeles

Haneda service with the B

- 777 aircraft it derided as too small for the Los Angeles

- Haneda route

.Answer of United

Page 3
benefits” and provide “63 percent more capacity” than B

- 777 aircraft

. When Delta requested its first waiver of the dormancy requirements in this proceeding, which had already allowed significantly longer time than usual for the institution of services usi ng the new authority, Delta

em phasized that its “two new B

- 747

- 400 services .

. . will be in troducing substantial new capacity with more than 800 new daily nonstop seats per day each way

. ” 4 Delta will now use 268 or 276

- seat B

- 777 aircraft , a 30% reduction in the number of seats it promised to offer in this proceeding, on its Detroit

- Haneda and Los Angeles

- Haneda route s . 3. Although Delta has had 11 months since it was awarded slots and eight months since the U.S.

- Japan agreement permitting the flights was effective to plan and market i ts Haneda flights, Delta has failed to operate any Detroit

- Haneda flights over a period of nearly four months since the or iginal start

- up date in January. Delta has been delinquent in starting and maintain ing service as well as using aircraft far smaller than those it pro mised to operate on both its Detro it

- Haneda and Los Angeles

- Haneda route s . 4. None of the Department’s decisions granting dormancy waivers cited by Delta supports such ex traordinary relief when another airline seeks to offer the service it proposed using the same authority

. Although the D epartment’s Order 2003

- 4

- 8 granted all the major international U.S. airlines dormancy waiv ers as a result of the Iraq war, that blanket authority expired 11 months later, only short

- term renewals were approved in specific markets, and the Department denied a similar bla nket exemption requested on the basis of high fuel prices and adverse economic conditions in Order 2008

- 7

- 6. T he Department has granted dormancy waiver applications, to which no airline objected, for institution of United’s San Francisco

- Beijing

4 See Delta’s September 7, 2010 motion in this proceeding at 2.Answer of United

Page 4

service, but it put United on notice that “should other U.S. carriers currently authorized to serve the U.S.

- Chin a market file applications for authority, we reserve the right to reconsider our decision here to determine whether or n ot that decision continues to be in the public interest.” (See March 25, 2009, approva l in Docket DOT

- OST

- 2007

- 28567) Similarly , when the Department waived Delta’s dormancy requirements for Argentina and Brazil frequencies it said “Delta has, until recen tly, been actively conducting operations in the ma rkets involved, and has, until now , not sought a dormancy waiver.

. . . no other carrier expressed an interest in using the frequencies at issue,” and “we are putting Delta on notice, as we have other carri ers in similar circumstances, that there should be no expectation that that an additional requ est will similarly be granted.” (See February 28, 2003, Notice of Action Taken, Dockets DOT

- OST

- 1999

- 6210, 1998

- 6284 and 2002

- 11711 at 2 ) N o other airline obj ected to the extension of American’s dormancy waiver for its Chicago

- Beijing authority or the various dormancy waiver extensions sought by Delta for its Ch ina service or sought to use those rights awarded to American or Delta

. In sharp contrast, Delta has already had nearly a year since the award of its Haneda authority to institute the Detroit

- Haneda service it proposed in this proceeding , is not offering the services it proposed , and secured a previo us dormancy waiver on the route

. When the Department denied an American request for extension of a dormancy waiver it said “When we selected Americ an over a competing applicant .

. . . we did so based on public interest findings deriving from the speci fic features of its proposal ” and Americ an “would not be resuming the .

. . operations we contemplated in selecting it .

. . and the public interest findings of the Order would no longer beAnswer of United

Page 5
applicable.” 5 More important , United is vigorously seeking to use the slots awarded to Delta for San Francisco

- Haneda serv ice. 5. Delta’s own motion makes it clear that Delta’s Detroit

- Haneda flights are uneconomic even if operated by far smaller aircraft than De lta proposed in this proceeding. Delta’s 30% reduction i n seats from its promised B

- 747

- 400 flights to its B

- 777 flights exceeds the decline in U.S.

- Japan traffic cited by Delta, but Delta’s planned operations with B

- 777 aircraft will nonetheless be so unecon omic that Delta has sought a 12

- month extension of its dormancy waiver. 6 As Delta itself notes, its Detroit

- Haneda service is a dead end at Haneda with no traffic connecting in Japan, unlike Delta’s Narita hub, where connecting traffic is plentiful. Moreover, Delta’s Detroit

- Haneda flights would divert traffic from Delta’s own Detroit

- Narita service. Delta wil l be able to maintain a presence at Haneda if it continues operating its L os Angeles

- Haneda flights since Los Angeles is a far larger local market than Detroit

- Haneda and

can also draw traffic from other major U.S. cities. The fact that Delta’s Detroit

- Ha neda flights are uneconomic should not deprive the traveling public of additional U.S.

- flag flights serving Haneda. Granting Delta’s request would have the effect of precluding United from operating
U.S.

- Haneda flights with its own U.S. aircraft and crews and preclude United from offering the nationwide public benefits that would flow from introducing nonstop United flights between its San Francisco hub and ANA’s Haneda hub to the benefit of passengers throughout both hub networks.

5 See Order 2002

- 3

- 24, Docket DOT

- OST

- 2000

- 7844 at 2. 6 Hawaiian has presented data indicating that Delta’s Detroit

- Haneda flights were woefully uneconomic even before the tragic earthquake in Japan. See Hawaiian’s April 7, 2011, application and con solidated answer in this proceeding at 2

- 4.Answer of United

Page 7

CERTIFICATE OF SERVICE
I certify that I have this date served the foregoing document on the following persons in accordance with the Department’s Rules of Practice: carl.nelson@aa.com sascha.vanderbellen@delta.com jeff.morgan@del ta.com howard_kass@usairways.com benjamin.slocum@usairways.com jhill@dowlohnes.com kandace.bender@flysfo.com john.martin@flysfo.com challock@newark/newyorkrbp.org sbaer@panynj.gov john.allen@faa.gov

Annalei Avanceña International Regulatory Advisor United Air Lines, Inc. June 14 , 2011