BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

____________________________________ ) Applications of ) ) HAWAIIAN AIRLINES, INC. ) ) Docket DOT

- OST

- 2010

- 0018 UNITED AIRLINES, INC. ) )

in the matter of 2010 U.S.

- Haneda )

Combination Services ) Allocation Proceeding ) ____________________________________)

OBJECTION OF HAWAIIAN AIRLINES, INC.

Communications with respect to this document should be addressed to:

Mark B. Dunkerley

President & Chief Executive Officer

Hoyt H. Zia Senior Vice President, General Counsel & Corporate Secretary Hoyt.Zia@hawaiianair.com

Mark K. Arimoto

Associate General Counsel

Mark.Arimoto@hawaiianair.com

Hawaiian Airlines, Inc.

P.O. Box 30008

Honolulu , HI 96820

- 0008 Jonathan B. Hill

J. Parker Erkmann Benjamin Berlin Cooley LLP

12 99 Pennsylvania Ave., NW

Suite 7 00 Washington, DC 20004 (202) 842

- 7800 (202) 842

- 7899 (fax) jhill@ cooley .com perkmann@ cooley.com

bberlin@ cooley.com

Counsel for Hawaiian Airlines, Inc.

Ma r ch 10, 2014DOT

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- 2010

- 0018

201 4 Objection of Hawaiian Airlines, Inc.
Page 1 of 5

BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

____________________________________ ) Applications of ) ) HAWAIIAN AIRLINES, INC. ) ) Docket DOT

- OST

- 2010

- 0018 UNITED AIRLINES, INC. ) )

in the matter of 2010 U.S.

- Haneda )

Combination Services ) Allocation Proceeding ) ____________________________________)

March 10, 201 4

OBJECTION OF HAWAIIAN AIRLINES, INC.

Hawaiian Airlines, Inc. (“Hawaiian” ) submits this O bjection in response to the

Department’ s Order to Show Cause (Order 2014

- 2

- 23) issued on February 28, 2014 in the

above

- captioned docket tentatively awarding the single slot pair at issue in the proceeding to

United Airlines’ proposed service from Tokyo’s Haneda Airport (“Haneda” or “HND”) to San

Francisco over Hawaiian’s applicatio n to serve Haneda from Kona , Hawaii

. Specifically,

Hawaiian objects to the Department’s conclusion that its “tentative selection would best benefit

the U.S. traveling public

, ” concluding that United would serve a “mix of business and leisure

traffic origi nating in both the United States and Japan.” Order 2014

- 2

- 23 at 4

- 5

. By focusing on

the origin of United’s traffic , the Depa rtment moved the goal posts since the Order instituting

this proceeding in which it declared: “Our principal objective in this pr oceeding will be toDOT

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201 4 Objection of Hawaiian Airlines, Inc.
Page 2 of 5

maximize public benefits” without reference to the origin of the traffic to be served. Order 2013

-

11

- 9 at 2, Nov. 14, 2013 . Because Hawaiian’s proposed Kona service would attract significant

numbers of Japan

- originating passengers, it would stimulate the most traffic and spur the most

economic grow th. 1 Indeed, in its Answer, Hawaiian submitted evidence that its proposed Kona

service would result in $75.4 million in incremental spending in the United States compared to

only $16.5 milli on in incremental spending resulting from United’s proposed service. 2 Hawaiian

therefore respectfully submits that grant of its application would maximize the public benefits by

providing a viable service in a market that is not over served and provid ing the most economic

benefit to the United States, as reflected in the record

.

In addition, in its final order, Hawaiian requests that t he Department affirm the public

interest benefits of foreign originating traffic and the tourism it facilitates

. In 2012, President

Obama expressly recognized the importance of promoting travel and tourism in the United States

by issuing an Executive Order establishing a new Task Force on Travel and Competitiveness. 3

The Task Force subsequently issued a report acknowle dging the importance of transportation

policy on the promotion of tourism. 4 The Department previously has recognized the importance

1 Consolidated Reply of Hawaiian Airlines, Inc. at 4

- 5, Dec. 16, 2013; Consolidated Answer of Hawaiian Airlines, Inc. at 28

- 31, Dec. 9, 2013).

2 Consolidated Answer of Hawaiian Airlines, Inc. at 29

- 30, Exhibit HA

- 2013A

- 615. Hawaiian also submitted evidence that the incremental spending will increase U.S. GDP by $135.6 million

and create an additional 1,393 U.S. jobs. See id. at HA

- 2013A

- 614, 616. Both figure s are more than quadruple the benefits of United’s proposal. See id.

3 Executive Order 13

, 597, 77 Fed. Reg. 3373 (Jan. 24, 2012).

4 Task Force on Travel & Competitiveness, National Travel & Tourism Strategy (2012), at 3 (available at: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&pageid=295021 )DOT

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201 4 Objection of Hawaiian Airlines, Inc.
Page 3 of 5

of the promotion of tourism in this very docket. In tentatively awarding Hawaiian its initial

Haneda slot pair in 2010, th e Department found that the economic benefits of increasing Japan

originating visitors justified the award of Haneda authority to Hawaiian :

We have taken into account Hawaiian’s acknowledgement that the large majority

of the Honolulu

- Tokyo market consists of Japan

- originating leisure traffic. However, we tentatively find that, in addition to the service and competitive benefits outlined above, Hawaiian’s service would benefit the local Hawaiian economy. Tourism is the dominant industry in the local economy , and Japan

originating visitors comprise a significant percentage of travelers to Hawaii. The Department has previously found benefit to the Hawaiian economy to be an affirmative public interest factor worthy of decisional weight in our regulatory proceed ings. 5

The nearly four years of experience since that initial award have proven the Department correct.

Hawaiian’s existing Haneda

- Honolulu service has been a smashing success with significant

public and economic benefits. 6

T he Show Cause Order appears to contradict th e Department’s prior conclusion by

disproportionately crediting U.S. originating traffic: “ a more diverse mix of business and leisure

traffic originating in both the United States and Japan” is “precisely the type of traffic that would

be nefit most from access to Tokyo’s downtown Haneda airport

. ” Order 2014

- 2

- 23 at 5. Indeed,

(“ Travel and tourism are critical to the American economy. This growing industry offers significant potential for job creation across all regions of the country. Fed eral policies on matters ranging from national security to transportation and from trade to natural resources management affect travel and tourism, and its potential for growth .”) (emphasis added).

5 Order 2010

- 5

- 7 at 9, May 7, 2010 (citing Expanded Air Se rvices at Hawaii International Airports , Order 99

- 12

- 10, issued December 10, 1999).

6 Consolidated Answer of Hawaiian Airlines, Inc. at 12

- 13 and accompanying exhibits (concluding that Hawaiian’s Haneda service has resulted in $365.1 million in U.S. exports, $657 million in U.S. GDP growth and nearly 3,000 new U.S. jobs)

.DOT

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Page 4 of 5

United’s arguments 7 and the Show Cause Order

, at least by implication, suggest that U

. S

.

originating passengers provide greater benefits to the United States than foreign originating

passengers. This is simply not true. Unlike foreign originating passengers, U.S. originating

passengers spend dollars overseas for the benefit of the destinati on country. Foreign originating

pas sengers spend in the United States for the benefit of the U

. S

. econ omy , and the government

treats these expenditures as U.S. exports. 8 Precisely because the bulk of Hawaiian’s traffic on

the proposed Haneda

- Kona route w ould be Japanese originating, the service would increase U.S.

exports, generate economic growth and create jobs in the United States. 9

Hawaiian therefore requests that the Department reverse its initial decision and award the

Haneda frequency to Hawaiian for its proposed Kona service and, at the very least, affirm in its

final order the public interest benefits of service that stimulates tourism and economic growth in

the U.S.

Respectfully submitted,

7 Answer of United Airlines, Inc. at 1 , Dec. 9, 2013 (“ Hawaiian proposes to serve a small

gateway t hat would offer comparatively far less benefits to U.S. consumers”).

8 Task Force on Travel & Competitiveness, National Travel & Tourism Strategy (2012)

, at 3

n.4.

9 See Consolidated Answer of Hawaiian Airlines, Inc. at 12

- 13 and accompanying exhibits.CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Objection of Hawaiian Airlines, Inc. was

served this 10 th day of March 201 4 via email transmission on the following:

francis.heil@aa.com

Robert.wirick@aa.com

sascha.vanderbellen@delta.com

chris.walker@delta.co m dan.weiss@united.com Thomas.bolling@united.com steve.morrissey@united.com lhalloway@crowell.com gmurphy@crowell.com esta.rosenberg@dot.gov robert.finamore@dot.gov brett.kruger@dot.gov paul.gretch@dot.gov todd.homan@dot.gov john.s.duncan@faa.gov

urskr@sta te.gov cristinasa@state.gov

info@airlineinfo.com

/s/ Benjamin Berlin