BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D. C. 

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2010 U.S.-HANEDA COMBINATION SERVICES : DOT-OST-2010- 

ALLOCATION PROCEEDING : 0018 

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

 

ANSWER OF AMERICAN AIRLINES, INC. 

TO OBJECTIONS TO SHOW-CAUSE ORDER 2010-5-7 

 

Communications with respect to this document should be sent to: 

VIRASB VAHIDI WILLIAM K. RIS, JR. 

Senior Vice President - Senior Vice President - 

 Planning Government Affairs 

American Airlines, Inc. American Airlines, Inc. 

P.O. Box 619616, MD 5634 1101 17th Street, N.W. 

DFW Airport, Texas 75161 Washington, D.C. 20036 

 

KENJI C. HASHIMOTO CARL B. NELSON, JR. 

Vice President – Strategic Associate General Counsel 

 Alliances American Airlines, Inc. 

American Airlines, Inc. 1101 17th Street, N.W. 

P.O. Box 619616, MD 5635 Washington, D.C. 20036 

DFW Airport, Texas 75261 (202) 496-5647 

 carl.nelson@aa.com 

ROBERT A. WIRICK 

Director, Regulatory 

American Airlines, Inc. 

P.O. Box 619616, MD 5635 

DFW Airport, Texas 75261 

(817) 963-0394 

robert.wirick@aa.com 

May 24, 2010 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

 WASHINGTON, D. C. 

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

2010 U.S.-HANEDA COMBINATION SERVICES : DOT-OST-2010- 

ALLOCATION PROCEEDING : 0018 

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

 

ANSWER OF AMERICAN AIRLINES, INC. TO 

OBJECTIONS TO SHOW-CAUSE ORDER 2010-5-7 

 American Airlines, Inc. hereby answers the objections 

filed on May 17, 2010 to show-cause Order 2010-5-7, May 7, 

2010, which tentatively allocated four daily Haneda slot-pairs 

by awarding one to American to operate nonstop service from New 

York (JFK); two to Delta to operate from Los Angeles and 

Detroit; and one to Hawaiian Airlines to operate from Honolulu. 

Two other applicants, United and Continental, did not receive 

authority. 

 The Department’s proposed JFK-Haneda award to American 

should be made final without delay so that we can undertake 

preparations to begin service this fall for the benefit of the 

traveling and shipping public. As shown in our application on 

February 16, 2010, American’s daily B777 service will substantially enhance consumer choice in the New York-Tokyo O&D 

market, as well as offer convenient on-line connections for 

behind-gateway cities including Boston, Washington (DCA), 

Raleigh/Durham, Miami, Orlando, and St. Louis. 
- 2 - 

 New York is the second largest O&D market (after Los 

Angeles) between the U.S. Mainland and Tokyo, with 338,868 

annual passenger bookings in 2009. There has been no scheduled 

service by U.S. or Japanese carriers from the U.S. to Haneda 

since Narita opened in 1978. With almost 70 million annual 

passengers, Haneda is the fourth busiest airport in the world, 

after Atlanta, Chicago, and London Heathrow. The Department is 

correct to conclude that the second largest Mainland-Tokyo O&D 

market should receive new service to Haneda, and that American 

should be the selected carrier. 

 In Order 2010-5-7, the Department found that “the public 

interest favors meeting the need for Haneda service in the second largest overall mainland U.S.-Tokyo O&D market, New York” 

(p. 10). As between American (JFK) and Continental (Newark), 

the Department decided that “an award of Haneda rights to 

American should enhance alliance competition by improving the 

competitive posture of American and oneworld in the U.S.-Asia 

market as compared to the SkyTeam and Star alliances” (p. 11). 

 Objections to the show-cause order were filed by 

United, Hawaiian Airlines, and Continental, and comments were 

filed by Delta. 
- 3 - 

 1. United

 United’s objections focus on Delta and Hawaiian 

Airlines. However, in a footnote, United “takes issue” with 

(but does not object to) the Department’s “asserted” justification for its tentative award to American (p. 1 n. 1). 

United’s potshot is without merit. Clearly American should 

have access to Haneda in order to promote balanced interalliance competition among the three global alliances. The 

Department correctly found that Star and SkyTeam “hold significant positions” in the U.S.-Asia and U.S.-Japan markets, 

and thus a Haneda award to American “should enhance alliance 

competition by improving the competitive posture of American 

and oneworld” (p. 11) 

 As American and JAL showed in their joint application of 

February 12, 2010 for antitrust immunity (DOT-OST-2010-0034), 

“between the U.S. and Japan, Delta/Korean is the largest 

competitor measured by capacity, with 31% of seats in the 

market. The proposed United/Continental/ANA alliance will 

account for 31% of U.S.-Japan seats as well. Today, JAL 

accounts for 24.6% of U.S.-Japan seats, while American operates 

8.8%, which means the proposed alliance will bring oneworld 

into competitive parity with Star and SkyTeam with 33%” 

(p. 27). 
- 4 - 

 Under its reorganization plan announced in April (see 

www.ar.jal.com/region/en/aboutjal/press/index), JAL proposes to 

retire all of its B747-400 aircraft by the end of 2011, to 

reduce frequencies between JFK and Tokyo, and to terminate 

service at Kona. Accordingly, oneworld’s comparative ranking 

with Star and SkyTeam will diminish. The Department’s analysis 

is clearly correct, and United’s assault-by-footnote on American’s selection should be disregarded. 

 2. Hawaiian Airlines

 In its 4-page paper, Hawaiian Airlines argues generally 

in support of its proposal to operate two daily flights between 

Honolulu and Haneda. But Hawaiian does not specifically object 

to American’s JFK-Haneda award, and thus provides no reason for 

the Department to overturn it. 

 Hawaiian asserts that “a review of the order demonstrates that [Hawaiian’s] second slot pair was not even considered, let alone compared, to [the] choices presented by 

other applicants” (p. 4). That is not so. As the Department 

stated, “having only four slot pairs to distribute, we 

recognize that the proposals that were not selected would 

generate benefits, but we tentatively conclude that those 

benefits do not outweigh the competitive and service benefits 

that we anticipate from our tentative selections” (pp. 11-12). 

 
- 5 - 

 The Department appropriately declined to assign half of 

the available slots to a single route, particularly Honolulu, 

which is dominated by Japan-originating leisure passengers and 

which Hawaiian could have entered at any time by operating to 

Narita. 

 3. Continental

 Continental’s objections “do not contest the basic 

awards” (p. 2), but instead take the Department to task for not 

granting backup authority. The Department’s rationale for not 

doing so is clearly articulated in the show-cause order: 

“Should any of the selected carriers not begin its proposed 

services, we tentatively find that the public interest would be 

best served by allowing us to award any unused rights on the 

basis of a fresh record” (p. 12). See also 2007 U.S.-China 

Frequency Allocation Proceeding, Order 2007-2-10, February 8, 

2007, p. 7, denying Continental’s similar objection to the 

absence of a backup award in that proceeding (“there is no 

indication that United, as an established carrier in the China 

market, will not begin its service. If the frequencies awarded 

to United revert to the Department, we believe we can take 

timely action to select another carrier”). 
- 6 - 

 However, if the Department now accepts Continental’s 

position on this point and does decide to award backup rights, 

American would not object, since we have no intention of 

leaving the JFK-Haneda route unserved, and the issue would be 

effectively moot. 

 4. Delta

 Delta filed comments rather than objections, asking the 

Department to finalize the tentative order as quickly as possible (p. 2). American likewise urges prompt issuance of the 

final order so that all of the winning applicants can make 

arrangements to start service in October, including opening a 

new station at Haneda. 

CONCLUSION

 For the foregoing reasons, the Department should 

affirm the show-cause order on an expedited basis, and grant 

one Haneda slot-pair to American to operate daily nonstop 

service between New York and Haneda, the second largest U.S.-

Tokyo O&D market. 

 Respectfully submitted, 

 ___________________________ 

 CARL B. NELSON 

 Associate General Counsel 

 American Airlines, Inc. 

May 24, 2010 
CERTIFICATE OF SERVICE

 

 I hereby certify that I have this day served the foregoing 

document by email on the following persons: 

 

sascha.vanderbellen@delta.com jhill@dlalaw.com 

scott.mcclain@delta.com bill@mietuslaw.com 

sametta.c.barnett@delta.com mgoldman@sgbdc.com 

kquinn@pillsburywinthrop.com rsilverberg@sgbdc.com 

bkeiner@crowell.com dhainbach@ggh-airlaw.com 

mrosia@crowell.com mcmillin@woa.com 

bruce.rabinovitz@wilmerhale.com eskraft@jamhoff.com 

jeffrey.manley@united.com dpdean@jamhoff.com 

bob.kneisley@wnco.com dkirstein@yklaw.com 

robert.land@jetblue.com jyoung@yklaw.com 

msinick@ssd.com donna.kooperstein@usdoj.gov 

cdonley@ssd.com dwight.moore@ustranscom.mil 

gbleopard@fedex.com jim.ballough@faa.gov 

dvaughan@kelleydrye.com byerlyjr@state.gov 

kevin.montgomery@polaraircargo.com recohn@hhlaw.com 

jrichardson@johnlrichardson.com cjsimpson@zsrlaw.com 

lhalloway@crowell.com pmurphy@lopmurphy.com 

efaberman@wileyrein.com lachter@starpower.net 

mroller@rollerbauer.com anita.mosner@hklaw.com 

howard.kass@usairways.com rpommer@atlasair.com 

benjamin.slocum@usairways.com gmurphy@crowell.com 

sophy.chen@hklaw.com russell.bailey@alpa.org 

david.heffernan@wilmerhale.com 

 

 

 _______________________________ 

 CARL B. NELSON, JR. 

May 24, 2010