Order 20 1 2

- 8

- 2 0

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Departme nt of Transportation

on the 1 7 th day of A ugust , 20 1 2

Served: A ugust 17 , 201 2

ORDER

Summary

By this order, we institute a proceeding to determine if it is in the public interest to grant the

motion of Delta Air Lines , Inc. (Delta) to move its Detr oit

- Haneda slot pair for scheduled

combination services to the Seattle

- Haneda route, or whether the public interest instead calls for an alternative use of that slot pair.

Background

Under the Memorandum of Understanding between the United States and Jap an, sign ed 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 By

Order 2010

- 7

- 2, issued July 6, 2010, we allocated the fou r slot pairs as follows: 1) one slot pair to Hawaiian Airlines, Inc. (Hawaiian) for Honolulu

- Haneda service; 2) two slot pairs to Delta

,

one for Los Angeles

- Haneda and one for Detroit

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

- Haneda service. 2

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 permitted prior to midnight; and 3) extra sections are not permitted.

2 Not selected in that proceeding were American for one slot pair for Los Angeles

- Haneda service;

Continental Airlines, Inc., for one slot pair for Newark

- Haneda service; Continental Micronesia, Inc., for one slot pair for Guam

- Haneda service; Delta for one slot pair for Seattle

- Haneda and one slot pair for

Honolulu

- Haneda services ; Hawaiian for a second Honolulu

- Haneda service ; and United Air Lines, Inc. (United) for one slot pair for San Francisco

- Haneda service. Motion of

DELTA AIR LINES, INC.

in the matter of 2010 U.S.

- Haneda Combination Services Allocation Proceeding Docket DOT

- OST

- 2010

- 00182 Motion of Delta

On July 30, 2012, Delta filed a motion requesting authority to move its Detroit

- Haneda slot pair

to the Seattle

- Haneda route

. Delta states that Eastern U.S.

- Haneda service is underperforming

relat ive to West Coast

- Haneda service, and that Seattle allows for a more attractive and consumer friendly schedule to better fit with the Haneda operating window. Delta further states that Seattle is the largest U.S.

- Tokyo market without nonstop Haneda servic e, and that this proposal would be supported by convenient connections with Delta’s own network and through

its code

- share arrangement with Alaska Airlines, Inc. (Alaska). Delta asks the Department to
institute any necessary pro ceedings as quickly as poss ible to enable Delta to change gateways.

Responsive Pleadings

We received answers from Alaska, American, Hawaiian, United

, the Delta Master Executive Council of the Air Line Pilots Association (Delta MEC) , and the Port of Seattle

. Delta filed a

consolid ated response to the answers filed by American, Hawaiian, and United. 3

The Delta MEC, the Port of Seattle, and Alaska all support Delta’s motion

, each stating that Delta’s proposal would benefit the traveling and shipping public in Seattle and the entire Pacific Northwest region.

United asserts that the Department selected Delta’s Detroit

- Haneda service proposal in the 2010

U.S.

- Haneda Combination Services Allocation Proceeding, specifically because of Delta’s proposal to offer daily Detroit

- Haneda servic e. United argues that Delta has failed to deliver the

Detroit

- Haneda service that it proposed , and urges the Department to withdraw Delta’s Detroit

Haneda slots and reallocate th em to United for the San Franci s c o

- Haneda service it proposed , but

was not se lected for

, in 2010.

Hawaiian also opposes Delta’s request and asserts that the Department should initiate a proceeding to reallocate the slot pair. Hawaiian states that it would actively participate in a proceeding to seek new Haneda slots so that it co uld institute a second daily Honolulu

- Haneda flight.

American states that it has no objection to Delta’s request, provided that all carriers holding Haneda slots are granted equivalent relief. United and Hawaiian both oppose American’s

alternative.

In i ts response, Delta takes issue with the objections and alternative proposals of Hawaiian and United, and asserts that that it stands ready to demonstrate the merits of its Seattle proposal in any further carrier selection proceeding that the Department dee ms necessary. Delta further states that it has no objection to the approach proposed by American.

3 Delta’s response was accompanied by a motion for leave to file an otherwise unauthorized document. We will grant the motion.3 Decision

Delta was awarded the slot pair at issue here based upon a complete evidentiary record in a carrier selection proceeding in which we considered c ompeting applications and submissions

from a number of interested parties. The decisions we reached in that earlier proceeding reflected specific public interest determina tions as to each of the carrier proposals and gateways selected. In evaluating Delt a’s current request, we believe that the public interest again calls for our proceeding only on the basis of a complete evidentiary record. In light of the answers received in response to Delta’s motion , we have determined that this record should reflect not only the arguments and evidence Delta might present in support of its proposed shift to the Seattle gateway, but also the arguments and evidence of other carriers in favor of transferring

Delta’s Detroit

- Haned a authority to a different U.S. carrier and U.S. gateway. We have therefore decided to institute a proceeding to develop the necessary record and to determine the disposition

of the Detroit

- Haneda slot pair that would best serve the public interest

.

Proceeding and Eviden tiary Requ irements

We are instituting this proceeding to determine , based on a fresh evidentiary record, whether the public interest would be best served by allowing Delta to transfer its currently

- allocated Detroit

Haneda slot pair to Seattle

- Haneda or
, instead, by an alternative disposition of the Detroit

Haneda slot pair

.

Our principal objective in this proceeding will be to maximize public benefits . In this regard, we

will consider which proposal will most likely result in service that best meets the needs of the traveling an d shipping public. We will also consider the effects of Delta’s Seattle

- Haneda proposal, and each alternative service proposal

, on the overall competitive environment, including effects on the market structure and on competition in the U.S.

- Japan market. In addition, we will consider other factors historically used for carrier selection, where relevant.

Should we be favorably disposed towards selecting an alternative gateway for Haneda, whether Seattle or otherwise, w e would expect to allocate the slot p air for an indefinite term, subject to a

start

- up condition and our standard 90

- day dormancy condition. For any slot pair not used for a period of 90 days, the allocation with respect to that slot pair would expire automatically and revert to the Departme nt for reallocation.

We have decided to use written, non

- oral show

- cause procedures under Rule 210 of our regulations (14 CFR 302.210) in deciding this case. We find no material issues of fact that would warrant an oral evidentiary hearing in this case. We are also simplifying our procedures and evidentiary requirements, consistent with securing an adequate decisional record with the least possible delay and without unnecessary cost to the interested parties

.

Except for procedural dates, all responsiv e pleadings should conform to Part 302, Subpart C of the Department’s regulations (14 CFR Part 302). All s ubmissions should be filed with the Department of Transportation, 1200 New Jersey Avenue, S.E., West Building Ground Floor,

Room W12

- 140, Washington, D.C. 20590, in the captioned Docket, and we would expect to see4 the following information for the forecast year, defined as the 12 months ending December 31,

2013. 4

1. Complete service proposals including proposed routing, date for instituting service,

and s ingle

- plane schedules. If a carrier is relying upon connecting traffic, it should provide proposed nonstop

- to

- nonstop connecting schedules. If a carrier intends to offer seasonal service, it must so state and specify the period during which the

seasonal services would be offered.

Proposed schedules should contain flight numbers, complete routings from origin to destination (including behind

- gateway and beyond

- gateway points, if the carrier is relying upon connecting traffic, and elapsed time for servic es), departure and arrival times in local time, equipment types (including seat configuration by class of service and the cargo capacity available), days scheduled, classes of service offered, and the limitations, if any, on the number of seats available f or each class of service;

2. A brief description of the types of scheduled service the carrier currently provides, if any, between the United States and Tokyo, Japan, including whether the services are

direct or code

- share operations and whether they are sea sonal or year

- round;

3. A statement describing the benefits of the carrier’s proposed service to the public interest;

4. A statement as to whether or not the aircraft to be used in the proposed schedules are on hand or on order. If on hand, indicate where an d the extent to which those aircraft are currently being used. If on order by purchase or lease, indicate when they will be

delivered and how the aircraft will be financed. Indicate whether the aircraft to be used comply with FAR

- 36. If not, indicate pl ans for achieving compliance;

5. Estimated number of gallons of fuel to be consumed by aircraft type on an annual basis as a result of the proposed service, and indicate the availability and method of obtaining the necessary fuel;

6. A statement as to whether the carrier would accept a condition requiring i nstitution of service by a date specified by the Department , and, if so, w hat date the Department

should specify.

To the extent that any of the requested information has already been provided on the record,

carriers may refer to that information in supplemental pleadings. Carriers may, of course, also

4 The original filing s hould be on 81⁄2" x 11" white paper using dark ink (not green) and be unbound without tabs, which will expedite use of our docket imaging system. In the alternative, parties are encouraged to use the electronic submission capability available through the Re gulations.gov Internet site ( http://www.regulations.gov ) by following the instructions on the web site. Additionally, service by

facsimile or electronic mail is authorized. Parties should include their fax numb ers and email addresses on their submissions and should indicate the method(s) of service used on their certificates of service.5 submit any additional information beyond that requested if they believe it would be useful to us in reaching a decision.

Procedural Timetable

In light of ou r goal of reaching a prompt final decision, we intend to process this case on an accelerated procedural schedule. Therefore, we are establishing the following procedural

schedule for submissions:

Petitions for Reconsideration: A ugust 24, 2012

Answers to Petitions: A ugust 29, 2012 Applications /Supplements/Amendments : A ugust 27, 2012

Answers: S eptember 6, 2012 Replies: S eptember 13, 2012

In consideration of the accelerated schedule, as discussed above, we authorize service by

facsimile or electronic mail. Parties should include their fax numbers and/or e

- mail addresses on

their submissions and should indicate on their certificates of service the methods of service used. App licants not using facsimile or electronic mail must provide an original and five copies of all submissions to the Department of Transportation, Dockets, no later than the dates indicated. Please also provide an electronic copy of all responsive pleadings to: Esta.Rosenberg@dot.gov

and Brett.Kruger@dot.gov

.

ACCORDINGLY,

1 . We institute a comparative carrier selection proceeding in Docket DOT

- OST

- 201 0

- 0018 , to
be de cided by written, non

- oral procedures under Part 302 of our regulations (14 CFR Part 302.210);

2. This proceeding will consider whether the public interest calls for permitting Delta Air Lines, Inc. to transfer its currently allocated Detroit

- Haneda slot pair for scheduled combination

services to the Seattle

- Haneda route, or whether the public interest calls for an alternative use of that slot pair;

3

. We defer action on the motion of Delta Air Lines, Inc., until the completion of the proceeding

institu ted in paragraph 1;

4 . Applications and other responsive pleadings should be filed in accordance with the procedural schedule set forth in this order; and6 5 . We will serve this order on Delta Air Lines, Inc.; Alaska Airlines, Inc.; American Airlines

, Inc. ; Hawaiian Airlines, Inc.; United Air Lines, Inc.; the Delta Master Executive Council of the Air Line Pilots Association; the Port of Seattle; all certificated U.S. combination carriers operating large aircraft; the U.S. Department of State (Office o f Aviation Negotiations) ; the

Federal Aviation Administration ; and the Ambassador of Japan in Washington, D.C.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

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