Order 20 1 4

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Depart ment of Transportation

on the 7 th day of J anuary , 20 1 4

Served: J anuary 7 , 201 4

ORDER ON RECONSIDERATION

Summary

By this order w e gran t the petition of Delta Air Lines, Inc. (Delta) for reconsideration of Order

2013

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- 9 in the above captioned proceeding. On reconsideratio n, we deny the relief requested.

Background

Under the Memorandum of Understanding between the United States and Japan, signed on October 25, 2010, four daily slot pairs are available to carriers from each country to provide

scheduled combination services between the United States and Tokyo’s Haneda Airport. 1 As a result of two prior carrier selection proceedings, b y Order s 2010

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- 2 and 2013

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- 4, the four slot pairs have been allocated as follows: 1) one slot pair to Hawaiian Airlines, Inc. (Hawaiian) for

Honolulu

- Haneda service; 2) two slot pairs to Delta Air Lines, Inc. (Delta) , one for Los Angeles

Haneda and one for Seattle

- Haneda services; and 3) one slot pair to American Airlines, Inc. (American) for New York (JFK)

- Haneda service.

On October 23 , 2013 , American advised the Department that it would discontinue its New York (JFK)

- Haneda service on December 1, 2013, and that American was returning to the Department the slot pair allocated to it by Order 2010

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- 2 , effective December 2 , 2013.

United Airl ines, Inc. (United), and Hawaiian each filed an application seeking the slot pair. United proposes to begin nonstop service between San Francisco, California, and Haneda

. Hawaiian proposes to begin nonstop service between Kona, Hawaii, and Haneda

.

1 The scheduled operations are subject to the following conditions: 1) U.S. operations at Haneda are permitted between 2200 and 0700 hours local time; 2) departures from Haneda to a point in the 48 contiguous U.S. states are not permit ted prior to midnight; and 3) extra sections are not permitted. Petition of

DELTA AIR LINES , INC.

in the matter of 2010 U.S.

- Haneda

Combination Services Allocation Procee ding Docket DOT

- OST

- 2010

- 00182 In lig ht of the competing applications and responsive pleadings filed, the Department instituted this proceeding by Order 2013

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- 9, and invited U.S. carriers to file or supplement applications

for the one slot pair currently allocated to American for New York ( JFK)

- Haneda services . We received no additional applications besides the two already submitted.

Petition of Delta

On November 19, 2013, Delta filed a petition for reconsideration requesting that the Department expand the scope of this proceeding to cons ider amending the terms and conditions of the previously

- allocated Haneda slot pairs. S pecifically , Delta requests that the Department permit U.S. carriers that currently hold U.S.

- Haneda slot pairs to use those slot pairs at any U.S. gateway, without fir st obtaining specific Department approval.

In support of its request, Delta state s that the U.S.

- Japan marketplace is rapidly evolving, making it important that U.S. carriers have flexibility to respond to marketplace changes as they occur

without the nee d for successive carrier selection proceedings. Delta states that it has no immediate plans to change its current services at Los Angeles and Seattle, but that gateway flexibility would allow carriers to adapt to the changing competitive environment. Del ta states that such flexibility would be consistent with the Department’s treatment of U.S.

- Brazil frequencies , citing Order 2004

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- 25 in which the Department allow ed all carriers holding Brazil frequencies gateway flexibility

, instead of limiting such fle xibility to only those carriers holding unrestricted frequencies

.

On November 22, 2013, Hawaiian filed an answer in opposition to Delta’s petition. Hawaiian

asserts that Delta’s proposal would radically change the basis on which the Department evaluates limited entry route proceedings, including the Haneda slot allocations, shifting from a route

based evaluation to a carrier

- based evaluation. Hawaiian argues that Delta’s proposal has far

reaching policy implications that would require more attention than can be accomplished in this proceeding to allocate one slot pair. Hawaiian further argues that reliance on the Brazil precedent, cited by Delta, is misguided because there the Department sought to correct an imbalance between carriers holding frequencies with U.S. gateway flexibility and carriers without such flexibility. Hawaiian states that the only issue before the Department now is the

allocation of the one slot pair returned by American.

Delta supplemented its petition on November 26, stating that U.S. carriers should be free to use their allocated slots to respond to market demands so as to maximize customer and public

interest benefits

.

Hawaiian filed a surreply on November 29, 2013, maintaining its opposition to Delta’s request.

Hawaiian furt her argues that

, should the Department grant Delta’s request, then all of the existing U.S.

- Haneda slot awards should be reviewed and the slot pairs re

- allocated under the

new public interest criteria to be established by the Department

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2 Delta and Hawaiian further set forth their positions in additional pleadings filed December 9, 2013, and December 16, 2013, respectively.3 Decision

We h ave decided to grant Delta’s petition for reconsideration, and on reconsideration, to deny the relief requested.

G ranting Delta’s request would involve a fundamental change to the character of the current proceeding

, requiring new public interest criter ia and substantial additional procedures. We see no persuasive basis for pursuing such an approach in this proceeding , especially when the petitioning party itself cites no immediate need for the change it requests

.

Delta cite s our Brazil decision as pre cedent for its request . However , that decision expressly

states that “we would not necessarily be prepared to follow this same approach in other markets

, ”

and that our action regarding Brazil was “limited to the specific circumstances and context

before u s.” 3 We do not find that Delta has adequately demonstrated that the current
circumstances and context as to U.S. carrier Haneda services call for the same actions as we were prepared to adopt in Brazil.

Against that background, we do not find that the public interest would be served by granting Delta’s request.

ACCORDINGLY,

1 . We grant Delta Air Lines, Inc. (Delta)’s petition for reconsideration of Order 2013

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- 9, and upon reconsideration we deny the relief requested ; and

2 . We will serve this ord er on all parties to the proceeding

.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at http:// www.regulations.gov

3 Order 2004

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- 25, at 2

- 3.