BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Motion and Application of

AMERICAN AIRLINES, INC.

in the matter of 2010 U.S.

- Haneda Combination

Services Allocation Proceeding Docket DOT

- OST

- 2010

- 0018

MOTION AND APPLICATION OF AMERICAN AIRLINES, INC.

Howard Kass

Vice President

– Regulatory Affairs

Robert A. Wirick

Managing Director, Regulatory and International

Affairs

Abigail Donovan

Director, Congressional and Federal Affairs

American Airlines, Inc.

1101 17th Street, N.W.

Washington, DC 20036

(202) 326.5153

howard.kass@aa.com

robert.wirick@aa.com

abigail.donovan@aa.com Charles A. Hunnicutt

Patricia N. Snyder

Thompson Hine LLP

1919 M Street, NW

Suite 700

Washington, DC 20036

- 1600

(202) 263.4189

charles.hunnicutt@thompsonhine.com

patricia.snyder@thompsonhine.com

October 2 , 2014BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Motion and Application of

AMERICAN AIRLINES, INC.

in the matter of 2010 U.S.

- Haneda Combination

Services Allocation Proceeding Docket DOT

- OST

- 2010

- 0018

MOTION AND APPLICATION OF AMERICAN AIRLINES, INC.

American Airlines , Inc. (“American”) respectfully requests the Department to grant this motion to

withdraw one daily U.S.

- Haneda frequency from Delta Air Lines (“Delta”) 1 , and to reallocate that

frequency to American. Delta just announced that it is reducing its Haneda service for the upcoming

winter season. American would use that frequency between Los Angeles and Haneda year

- round, service

that would be substantially superior to Delta’s near

- dormant Seattle

- Haneda service

. American

vigorously opposes any use of the se valuable Haneda rights on a seasonal basis

, and we stand ready t o use

the m fully on a year

- round basis

. The Department should not allow Delta to squander these valuable

frequencies, which the United States worked hard to obtain

, and for which there is unmet demand

.

News reports indicate that Delta intends to operate only a limited winter season service in the

Seattle

- Haneda market

. 2 This is consistent with Delta’s most recent filing in the Official Airline Guide

(“OAG”) , which contains proof of Delta’s planned underutilization of its Seattle

- Haneda service , as

shown in the following table :

1 Although the Haneda route rights are sometimes referred to as slots, they do not give carriers a right to a specific time

of operation, as an airport slot would. In substance, they are a right to operate a daily service, usually referred to as fr equencies,

and we adopt that terminology here.

2 J. Gillie, Delta cancels it s Seattle

- Tokyo Haneda Flight for the Winter

, T HE N EWS T RIBUNE

. COM

, Sept

. 26, 2014,

http://www.thenewstribune.com/2014/09/26/3400761_delta

- cancels

- its

- seattle

- tokyo.html?rh=1 .(“[Delta] is canceling non

- stop

service for much of the fall, winter and early spring on its Sea

- Tac

- to

- Tokyo Haneda flight.”). See also, B. Drum, Delta to

suspend the Seattle/Tacoma

- Tokyo Haneda Route for the Winter

, W ORLD A IRLINE N EWS

. COM

, Sept. 21, 2014

, http://worldairlinenews.com/2014/09/21/delta

- to

- suspend

- the

- seattletacoma

- tokyo

- haneda

- route

- for

- the

- win ter/

.Motion and Application

Of American Airlines, Inc.

Page 2 of 7

DELTA’S PUBLISHED HANEDA OPERATING SCHEDULE FOR WINTER 2014

- 15

Source: Exhibit AA

- 1 , using OAG schedules (viewed 9/29/2014)

.

Week Scheduled Weekly Flights

Between Seattle and Haneda

October 5, 2014 0

October 12, 2014 0

October 19, 2014 0

October 26, 201 4 0

November 2, 201 0

November 9, 2014 0

November 16, 2014 7

November 23, 2014 0

November 30, 2014 0

December 6, 2014 0

December 13, 2014 0

December 20, 2014 0

December 27, 2014 0

January 4, 2015 0

January 11, 2015 0

January 18, 2015 0

January 25, 2015 0

Febru ar y 1, 2015 0

February 8, 2015 2

February 15, 2015 5

February 22, 2015 0

March 1, 2015 0

March 8, 2015 0

March 15, 2015 0

March 22, 2015 0

March 29, 2015 3

TOTAL 17Motion and Application

Of American Airlines, Inc.

Page 3 of 7

As the Department is aware, the frequency is subject to the condition that it will become dormant

and revert automatically to the Department if it is not used for a period of 90 days

. The table above

shows that Delta plans to operate a daily service for one week every 90 days

– just en ough to keep the

frequency from going dormant and reverting to the Department for reallocation

. O ut of 182 possible

operating days, Delta plans to operate on only 17 days

– less than 10 percent of the total days. This

limited service provides no consumer benefit s

.

1. U.S. Airlines Returned to Haneda Despite Delta’s Obstructionism

.

The Department worked long and hard to restore U.S.

- carrier access to Haneda

, after more than three

decades of absence. Throughout the course of the multi

- round negotiations to gain Haneda access for

U.S. carriers , Delta saw the U.S. Government’s ( “ USG ” ) goal as a threat to its Narita hub

. Delta opposed

any U.S. compromise on open skies unless it would deliver complete flexibility to move Delta’s entire

portfolio from Narita to Haneda . A lthough it was clear that such a position would derail the U.S.

- Japan

talks, Delta garner e d powerful political support for its position and brought enormous pressure on USG

negotiators

. Today, Delta continues to oppose efforts that would introd uce new service to Haneda unless

Delta’s objective of moving its entire Narita hub to Haneda is ensured in any new agreement.

Despite Delta’s opposition during the open skies negotiations, the USG was successful in

securing four daily frequencies (or slot pairs) for U.S. carriers to serve Haneda. Six U.S. airlines

compete d for those four opportunities

. 3

Nevertheless, the Department entrusted half of its hard

- won access to Haneda to Delta in the 2010

U.S.

- Haneda frequency case. 4 There , Delta argued that it would serve more U

. S

. cities than the gateways

3 Order to Show Cause, Order 2010

- 5

- 7, 2010 U.S.

- Haneda Combination Services Allocation Proceeding, Docket DOT

OST

- 2010

- 0018 ( served May 7, 2010).

4 Final Order, Order 2010

- 7

- 2, 2010 U.S.

- Haneda Combination Services Allocation Proceeding, Docket DO T

- OST

2010

- 0018 ( served July 6 , 2010).Motion and Application

Of American Airlines, Inc.

Page 4 of 7

on the U

. S

. East Coast could. 5 Delta also claimed it could provide better service than the other applicants

because “Detroit boasts a large local market to Tokyo with 33,000 annual O&D passengers.” 6 Delta

argued that it would make the most efficient use of the Haneda frequencies by using a Boeing 747

- 400

with a 403

- seat capacity at Detroit. 7

Then, i n 2012 , having over

- promised the Department of the consumer benefits it would deliver

with a daily Det roit

- Haneda service

, Delta was forced to return and ask for a second chance, this time at

Seattle. At the time, American and others voiced concerns that Seattle was the smallest market proposed

in the proceeding and questioned the viability of the service . But Delta promised the Department

significant competition and transportation benefits

. Delta claimed that Seattle

– Haneda was a “unique

new product in a new time channel that will drive increased demand” for Delta flights. 8 T he Department

once again placed its confidence in Delta and allowed the gateway to be moved from Detroit to Seattle

. 9

Delta has again failed in its promises by operating only a seasonal service in the Seattle

- Haneda

market

. 10 Seattle is an ideally located West Coast gateway to J apan and a city of growing importance to

Delta. If Delta still cannot make Haneda work, Delta’s frequency should be reallocated. Delta should

not be given a third bite at the apple.

Unlike Delta, when American decided to terminate its JFK

- Haneda service, American did not

hoard the frequency by providing just enough flights within the 90

- day dormancy period to stave off

automatic reversion to the Department . Instead, American notified the Department of its withdrawal

,

allowing reallocation.

5 Answer of Delta Air Lines, Inc., 2010 U.S.

- Haneda Combination Services Allocation Proceeding, Docket DOT

- OST

2010

- 0018 at 17 (March 1, 2010).

6 Id. at 11.

7 Id.

8 Consolidated Reply of Delta Air Lines, Inc. at 14, 2010 U.S.

- Haneda Combination Services Allocation Proceeding,

Docket DOT

- OST

- 2010

- 0018 (Sept. 13, 2012).

9 Final Order, Order 2013

- 2

- 4, 2010 U.S.

- Haneda Combination Services Allocation Proceeding, Docket DOT

- OST

2010

- 0018 ( served Feb. 5, 2013 ).

10 E xhibit AA

- 1 (showing Delta’s underutilization).Motion and Application

Of American Airlines, Inc.

Page 5 of 7

American is today proposing a credible, well

- considered service plan that responds to the demand

in the market, unlike Delta, which is essentially deserting Seattle

. We urge t he Department to seize this

opportunity to restore the public benefits for which it negotiated.

2. American Would Make Better Use Of The Haneda Frequency.

American has designed a realistic, achievable service proposal that would take advantage, to the

extent possible, of connecting banks of flights within the United States, 11 but would focus on some of the

characteristics that make the U.S.

- Haneda market different from the U.S.

- Narita market. American’s

entry into the Los Angeles

- Haneda market further s the Department ’s goals by improving the competitive

structure of the U.S.

- Haneda market.

American propose s to begin service between Los Angeles and Haneda on January 1 5 , 2015, using

a 247

- seat B

- 77 7 aircraft

. 12 American will offer daily service , which will better meet demand than

Delta’s seasonal offering and will fully use these valuable operating rights

. 13 Further, since Los Angeles

is a hub for American

, its service will provide connections to other U.S. destinations.

American’s proposal also responds t o U.S

- Haneda market characteristics that reflect the severely

restricted operating hours at Haneda . First, American will focus its service specifically at Tokyo O&D

passengers in the Los Angeles region, with a convenient late afternoon Los Ang e les departure and an

early evening arrival back in Los Angeles.

Second, American has chosen a U.S. West Coast gateway, Los Angeles, instead of an interior

U.S. gateway like Chicago or Dallas/Ft. Worth. It is clear that Haneda curfew restrictions make ser vice to

interior U.S. gateways infeasible at this time

. American discontinued its New York

- Haneda service due

to unsustainable losses , the result of unattractive schedules forced by the curfew. Delta also tried to

operate from an interior U.S. point with no success. Indeed, in the most recent Haneda frequency

11 Exhibit AA

- 2 (American’s service proposal).

12 Exhibit AA

- 2 (American’s service proposal).

13 Exhibits AA

- 2 (American’s service proposal).Motion and Application

Of American Airlines, Inc.

Page 6 of 7

allocation proceeding, the only applicants were for San Francisco and Kona. As long as the curfew is in

place, the schedules that result make viable service from interior U.S. points unattractive t o consumers

and airlines

. 14

Finally, American’s re

- entry into the market will achieve the goals the Department had hoped to

achieve in the 2010 allocation by improving the competitive structure of the U.S.

- Tokyo market

. 15 Not

only will American’s service compete head

- to

- head with Los Angeles

- Haneda incumbents Delta and All

Nippon Airways , but it will also enhance overall competition to the U.S.

- Tokyo market, as Los Angeles is

the largest continental U.S. gateway to Tokyo. The demand in the Los Angeles

- Tok yo market is robust

enough that six carriers today operate Los Angeles

- Narita flights

. A new U.S. e ntrant into Haneda will

provide important competition in the Tokyo market

.

In sum, American ’s proposal will achieve a convenient and well

- time d Los Angeles

- Haneda

schedule for consumers travelling to or through the largest West Coast U.S.

- Tokyo market

. The proposal

will also inject new competition into the Los Angeles

- Tokyo market; thereby ensuring consumers have a

variety of options when travel ling to Tokyo. Finally, it will further the Department ’s goals of fostering

competition and maximizing public benefits from limited

- entry route rights

.

3

. Delta’s Poor Service Is Thwarting the Department’s Goals; Reallocation to

American would Further The m.

Delta’s efforts to hold onto its frequency allocation are thwarting the Department’s goal of

making the most effective use of its hard

- won Haneda rights. The Department’s long

- standing policy is

that it is in the public interest to redeploy dormant li mited

- entry rights as soon as possible, 16 and Delta’s

14 American recognizes that there may be a need for modifying the Haneda operating restrictions. American looks

forward to working with the Department to do so upon its entry into the Haneda market.

15 Final Order, Order 2010

- 7

- 2 at 6, 2010 U.S.

- Haneda Combination Services Allocation Proceeding, Docket DOT

- OST

2010

- 0018 ( served July 6 , 2010)

16 Order 2008

- 10

- 20, 2008 U.S.

- Brazil Combination Frequency Allocation Proceeding, Docket DOT

- OST

- 2008

- 0307

(served Oct. 21, 2008) (“As we have stated many times before, it has been the Department’s longstanding policy not to permit

valuable operating rights to remain unused for an extended period of time, particularly when another carrier has firm plans t o use them, and the carrier holding authority does not.”); see also

, Certificate Duration in Limited Entry Markets, F inal Rule, 51 Fed.

Reg. 43181 (Dec. 1, 1986).Motion and Application

Of American Airlines, Inc.

Page 7 of 7

Seattle

- Haneda service will be effectively dormant for the coming winter season. 17 The Department

should withdraw the allocation and reallocate it to American for its proposed daily, year

- round service

.

American will provide substantially superior service to Delta’s winter operating season plan. I n

its policy statement on authority in limited

- entry markets , the Department gave as an example of

substantially superior service “a proposal to provide daily s ervice in a market receiving three weekly

flights.” 18 Since Delta would effectively offer no service in the Seattle

- Haneda market, American’s

proposal to provide year

- round daily service more than meets that test. American’s service also furthers

the Depa rtment’s goals of ensuring that carriers meet market demand and yield consumer benefits,

whereas Delta’s service is unresponsive and has no public benefits.

5. Conclusion

American urges the Department to end Delta’s squandering of valuable frequencies. We

respectfully suggest that the Department could do so now by granting American’s motion to withdraw the

valuable Haneda frequencies from Delta forthwith

– and give consumers an opportunity to benefit from

the proposal that American presents here to bring better service to the market and make more effective

use of the U.S.

- Haneda frequencies

. 19

Respectfully submitted,

Howard Kass

Robert A. Wirick

Abigail Donovan

17 Exhibit AA

- 1 (showing Delta’s underutilization).

18 Certificate Duration in Limited Entry Markets, Final Rule, 51 Fed. Reg. 43181, 43184 (Dec. 1, 1986).

19 American also seeks such other and further relief as the Department may decide.CERTIFICATE OF SERVICE

I

, Abigail Donovan

, certify that, on October 2, 2014 , I caused to be served a copy of the

foregoing Answer of American Airlines, Inc. by email upon those addressees listed below:

EngleTS@state.gov ( Department of State )

paul.gretch@dot.gov (Department of Transportation)

brian.hedberg@dot.gov (Department of T ransportation)

brett.kruger@dot.gov (Department of Transportation)

sascha.vanderbellen@delta.com (Delta)

chris.wa lker@delta.com (Delta)

jhill@cooley.com (Hawaiian )

dan.weiss@united.com (United)

thomas.bolling@united.com (United)

glindsey@lawa.org ( Los Angeles World Airports)



### _____ ______________________ Abigail DonovanExhibit AA

- 1

Page 1 of 7



## Delta Is Underutilizing Its Valuable Haneda Frequency Allocation

Winter 2014/2015 Schedule

Source: OAG (viewed 9/29/2014)



### Month Total Number of

DL Operated Flights

(SEA

- HND Nonstop)

October 2014 0

November 2014 7

December 2014 0

January 2015 0

February 2015 7

March 2015 3

TOTAL 17Exhibit AA

- 1

Page 2 of 7



### Number of Delta Seattle

– Haneda Operations in October: 0

Month Date Day of Week DL Operating

SEA

- HND Nonstop

October 1 Wednesday No

2 Thursday No

3 Friday No

4 Saturday No

5 Sunday No

6 Monday No

7 Tuesday No

8 Wednesday No

9 Thursday No

10 Friday No

11 Saturday No

12 Sunday No

13 Monday No

14 Tuesday No

15 Wednesday No

16 Thursday No

17 Friday No

18 Saturday No

19 Sunday No

20 Monday No

21 Tuesday No

22 Wednesday No

23 Thursday No

24 Friday No

25 Saturday No

26 Sunday No

27 Monday No

28 Tuesday No

29 Wednesday No

30 Thursday No

31 Friday NoExhibit AA

- 1

Page 3 of 7



### Number of Delta Seattle

– Haneda Operations in November: Only 7

Month Date Day of Week DL Operating

SEA

- HND Nonstop

November 1 Saturday No

2 Sunday No

3 Monday No

4 Tuesday No

5 Wednesday No

6 Thursday No

7 Friday No

8 Saturday No

9 Sunday No

10 Monday No

11 Tuesday No

12 Wednesday No

13 Thursday No

14 Friday No

15 Saturday No

16 Sunday Yes

17 Monday Yes

18 Tuesday Yes

19 Wednesday Yes

20 Thursday Yes

21 Friday Yes

22 Saturday Yes

23 Sunday No

24 Monday No

25 Tuesday No

26 Wednesday No

27 Thursday No

28 Friday No

29 Saturday No

30 Sunday NoExhibit AA

- 1

Page 4 of 7



### Number of Delta Seattle

– Haneda Operations in December : 0

Month Date Day of Week DL Operating

SEA

- HND Nonstop

December 1 Monday No

2 Tuesday No

3 Wednesday No

4 Thursday No

5 Friday No

6 Saturday No

7 Sunday No

8 Monday No

9 Tuesday No

10 Wednesday No

11 Thursday No

12 Friday No

13 Saturday No

14 Sunday No

15 Monday No

16 Tuesday No

17 Wednesday No

18 Thursday No

19 Friday No

20 Saturday No

21 Sunday No

22 Monday No

23 Tuesday No

24 Wednesday No

25 Thursday No

26 Friday No

27 Saturday No

28 Sunday No

29 Monday No

30 Tuesday No

31 Wednesday NoExhibit AA

- 1

Page 5 of 7



### Number of Delta Seattle

– Haneda Operations in January : 0

Month Date Day of Week DL Operating

SEA

- HND Nonstop

January 1 Thursday No

2 Friday No

3 Saturday No

4 Sunday No

5 Monday No

6 Tuesday No

7 Wednesday No

8 Thursday No

9 Friday No

10 Saturday No

11 Sunday No

12 Monday No

13 Tuesday No

14 Wednesday No

15 Thursday No

16 Friday No

17 Saturday No

18 Sunday No

19 Monday No

20 Tuesday No

21 Wednesday No

22 Thursday No

23 Friday No

24 Saturday No

25 Sunday No

26 Monday No

27 Tuesday No

28 Wednesday No

29 Thursday No

30 Friday No

31 Saturday NoExhibit AA

- 1

Page 6 of 7



### Number of Delta Seattle

– Haneda Operations in February: Only 7

Month Date Day of Week DL Operating

SEA

- HND Nonstop

February 1 Sunday No

2 Monday No

3 Tuesday No

4 Wednesday No

5 Thursday No

6 Friday No

7 Saturday No

8 Sunday No

9 Monday No

10 Tuesday No

11 Wednesday No

12 Thursday No

13 Friday Yes

14 Saturday Yes

15 Sunday Yes

16 Monday Yes

17 Tuesday Yes

18 Wednesday Yes

19 Thursday Yes

20 Friday No

21 Saturday No

22 Sunday No

23 Monday No

24 Tuesday No

25 Wednesday No

26 Thursday No

27 Friday No

28 Saturday NoExhibit AA

- 1

Page 7 of 7



### Number of Delta Seattle

– Haneda Operations in March: Only 3

Month Date Day of Week DL Operating

SEA

- HND Nonstop

March 1 Sunday No

2 Monday No

3 Tuesday No

4 Wednesday No

5 Thursday No

6 Friday No

7 Saturday No

8 Sunday No

9 Monday No

10 Tuesday No

11 Wednesday No

12 Thursday No

13 Friday No

14 Saturday No

15 Sunday No

16 Monday No

17 Tuesday No

18 Wednesday No

19 Thursday No

20 Friday No

21 Saturday No

22 Sunday No

23 Monday No

24 Tuesday No

25 Wednesday No

26 Thursday No

27 Friday No

28 Saturday No

29 Sunday Yes

30 Monday Yes

31 Tuesday YesExhibit AA

- 2

Page 1 of 2



### AMERICAN AIRLINES

Los Angeles

– Haneda Nonstop Service

Effective

January 15, 2015

AA 169 Flight

Number AA 170

Daily Frequency Daily

B772 Equipment B772

1705 Los

Angeles

(LAX) 1825

| ^

| |

| |

v |

2300 Tokyo

Haneda

(HND) 0130

12:5 5 Elapsed

Time 9:55Exhibit AA

- 2

Page 2 of 2



### AMERICAN AIRLINES

Los Angeles

- Haneda Service

Annual Operating Statistics (Daily)

Summer and Winter

Aircraft B772



### Departures 730



### Segment Miles 5,488



### Plane Miles 4,006,240



### ASMs 989,541,280



### Fuel Burn

(Gallons/Hour) 2,320



### Fuel Consumption (000 Gallons) 17,867



### Seating Configuration

First Class 16



### Business Class 37



### Economy Class 194



### Total 247



### AIRCRAFT AVAILABILITY

- American will use aircraft

currently in its fleet.

American operates 47 Boeing 772s (247 seats)

FUEL AVAILABILITY

- American anticipates no difficulty in

obtaining fuel

from existing suppliers at Los Angeles and Haneda.