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 ) ____________________________________)

SUR-REPLY OF HAWAIIAN AIRLINES, INC. TO UNITED AIRLINE’S REPLY

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 M. Berlin Dow Lohnes LLP 1200 New Hampshire Ave., NW Suite 800 Washington, DC 20036 (202) 776-2000 (202) 776-4725 (fax) jhill@dowlohnes.com perkmann@dowlohnes.com bberlin@dowlohnes.com

Counsel for Hawaiian Airlines, Inc.

December 18, 2013DOT-OST-2010-0018 2013 Sur-Reply of Hawa iian Airlines, Inc. Page 1 of 3

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 ) ____________________________________)

December 18, 2013

SUR-REPLY OF HAWAIIAN AIRLINES, INC. TO UNITED AIRLINE’S REPLY

Hawaiian Airlines, Inc. (“Hawaiian”) moves to file this sur-reply in response to United

Airlines’ (“United”) Reply to correct importa nt factual errors in United’s pleading.

In its Reply, United incorrectly alleged th at the Kona-Tokyo market has decreased by

34% since the last case. See UA-R-103. United erroneously compared the Kona MIDT sample

numbers from the last case, which had been expanded to reflect the full market size, with the raw

current MIDT numbers that have not been si milarly expanded in this case. Had United

compared the correct Kona numbers from the last case with the correct numbers from the presentDOT-OST-2010-0018 2013 Sur-Reply of Hawa iian Airlines, Inc. Page 2 of 3

case, it would have found that the Kona market is, as Hawaiian has shown, larger now than it

was in the last case. 1

Additionally, United’s comparison of the change in Kona’s share of total Hawaii traffic is

wrong for the same reason. United incorrectly sh owed that Kona’s share of Hawaii has dropped

from 6.8% in the last case to 4.0% in the curren t. The correct numbers are 4.4% for the last case

and 4.0% for the current case. 2 Since the Kona market is growing, the explanation for the

change is simply that Honolulu is growing faster . Honolulu, of course, has enjoyed the benefits

of nonstop service and added capacity, while Kona has had none of these advantages.

United has attempted to persuade the Departme nt by comparing apples to oranges in the

hope that the Department would not catch United’s sleight of hand. There is no question that

Hawaiian’s proposed Kona service maximizes pub lic benefit and should be selected for the

available Haneda slot pair.

1 See Exhibit HA-2012A-408 for both the unadjuste d and the adjusted MIDT numbers for KOATYO from the 2012 case. See Exhibit HA- 2013A-619 from the 2013 case. Comparing unadjusted to unadjusted, KOA-TYO passengers have increased during this period.

2 The correct calculation for 2012 is as follows (4.4%), the unadjusted MIDT for KOA-TYO from Exhibit HA-2012A-408 (57,641) divided by the unadjusted MIDT between Hawaii and the U.S. (1,295,832) from Exhibit HA-2012A-306. The correct calculation for 2013 is as follows (4.0%), the unadjusted MI DT for KOA-TYO from Exhib it HA-2013A-619 (58,847) divided by the unadjusted MIDT between Hawaii and th e U.S. (1,481,928) from Exhibit HA-2013A-306. Note that these numbers are not expanded to a ccount for direct bookings but that the KOA share would be the same if the MIDT was expanded.DOT-OST-2010-0018 2013 Sur-Reply of Hawaiian Airlines, Inc. Page 3 of 3

Respectfully submitted,

___________________________ ___/s/_____________________

Jonathan B. Hill J. Parker Erkmann Benjamin Berlin Dow Lohnes LLP 1200 New Hampshire Ave., NW Suite 800 Washington, DC 20036 (202) 776-2000 (202) 776-4725 (fax) jhill@dowlohnes.com perkmann@dowlohnes.com bberlin@dowlohnes.com Hoyt H. Zia Senior Vice President, General Counsel & Corporate Secretary Hawaiian Airlines, Inc. P.O. Box 30008 Honolulu, HI 96820-0008 Hoyt.Zia@hawaiianair.com

Counsel for Hawaiian Airlines, Inc.Exhibits from Hawaiian Airlines, Inc.’s 2012 Answer

### CALCULATION OF STIMULATION Exhibit HA-2012A-408 Docket OST-2010-0018 Page 1 of 2



### KONA

1 YE Feb. 2012 HNL-TYO O nboard Passengers 1,829,384 2 KOA Share of NRT-KOA When Both HNL and KOA Had Nonstop Service 8%
3 Estimated KOA Passengers With Service 146,351

4 Current Unadjusted MIDT KOA-TYO 57,641 Adjustment Factor to Account for Direct Bookings /1 0.35
5 Adjusted KOA-TYO Passengers 77,815

6 Stimulated passengers 68,536 ( Row 3 - Row 5)

1/ For purposes of comparability HA has used DL’s 35% MIDT adjustment factor.

### CALCULATION OF STIMULATION

(A) Year Ended Feb. 2012 scheduled passenger serv ice only from U.S. DOT, T-100 Data. (B) (A) plus 1 new daily flight. For SFO Bay Area ANA-SJC service is 5 roundtrips per week. (C) (B)/(A) -1 (D) Uses standard DOT QSI formula: Stimulation = ((Future Flights/ Current Flights)/(0.3741 + 0.5561( Future Flights/Current Fligh ts)))/1.075. (E) Year Ended Feb. 2012 scheduled passenger serv ice only from U.S. DOT, T-100 Data. (F) (E) x (D) (A) (B) (C) (D) (E) (F) Current Proposed Current Stimulated Annual Annual QSI Onboard Onboard Between TYO and: Flights Flights % Change Stimuation Passengers Passengers

Los Angeles (LAX) 6,320 7,005 11.6% 4.4% 1,309,284 57,608

SFO Bay Area - With ANA Service /1 3,181 3,701 16.3% 6.0% 659,580 39,575 SFO Bay Area - With ANA and UA Service 3,701 4,431 19.7% 7.1% 699,155 49,640

Seattle (SEA) - With ANA Service /2 1,411 2,141 51.7% 15.9% 306,178 48,682 Seattle (SEA) - With ANA and DL Service 2,141 2,871 34.1% 11.4% 354,860 40,454

1/ ANA announced SJC-NRT service (5 RTs per week) is factored in before adding in UA proposed service.

2/ New ANA SEA service is factored in before adding in DL proposed service. Exhibit HA-2012A-408 Docket OST-2010-0018 Page 2 of 2



### MAINLAND GATEWAYS

### THE HAWAII-TOKYO O&D MARKET IS MUCH LARGER THAN THE SECOND LARGEST U.S. STATE

793,773

326,558

94,183 88,841 87,748 1,295,832

86,634 86,201

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s YE June 2012 Tokyo MIDT Passengers Exhibit HA-2012A-306 Docket OST-2010-0018 Page 1 of 1

Hawaii Has Almost Twice the Tokyo Passengers as California with the Same Number of Designations

Current HND Designations: 3 3 1

Note: MIDT sample has not been expanded to account for direct bookings and does not reflect total market size.

Source: MIDT, via Travelport.Exhibits from Hawaiian Airlines, Inc.’s 2013 Answer

### CALCULATION OF KONA STIMULATION Exhibit HA-2013A-619 Docket OST-2010-0018 Page 1 of 1



### KONA

1 YE Apr. 2013 HNL-TYO* O nboard Passengers 2,008,298 2 KOA Share of NRT-KOA When Both HNL and KOA Had Nonstop Service 8%
3 Estimated KOA Passengers With Service 160,664

4 Current Unadjusted MIDT KOA-TYO* 58,847 Adjustment Factor to Account for Direct Bookings /1 0.35
5 Adjusted KOA-TYO* Passengers 79,443

6 Stimulated passengers 81,221 ( Row 3 - Row 5)

Note: The HNL-TYO market increased 211,993 in the first year after HND service and 365,087 through April 2013.

* Includes HND and NRT. 1/ For purposes of comparability HA has used a 35% MIDT adjustment factor th roughout the Haneda cases.

### THE HAWAII-TOKYO O&D MARKET IS MUCH LARGER THAN THE SECOND LARGEST U.S. STATE

779,736

357,440

103,124 102,277 90,640 1,481,928

89,186 84,561

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000

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ida YE September 2013 Tokyo* MIDT Passengers Exhibit HA-2013A-306 Docket OST-2010-0018 Page 1 of 1

Hawaii Has Almost Twice the Tokyo Passengers as California with the Same Number of HND Designations

Current HND Designations: 3 3 1 1

* Includes HND and NRT. Note: MIDT sample has not been expanded to account for direct bookings and reflects relative but not total market size. Source: MIDT, via Travelport.CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Reply of Hawaiian Airlines, Inc. was served this 18 th day of December 2013 via email transmission or U.S. mail on the following:

francis.heil@aa.com robert.wirick@aa.com sascha.vanderbellen@delta.com chris.walker@delta.com 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@state.gov cristinasa@state.gov info@airlineinfo.com

Ambassador Kenichiro Sasae Embassy of Japan 2520 Massachusetts Ave., NW Washington, DC 20008

_/s/____________________ Benjamin Berlin