BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Motion of DELTA AIR LINES, INC. In the matter of 2010 U.S. - Haneda Combination Services Allocation Proceeding ) ) ) ) ) ) ) Docket DOT - OST - 2010 - 0018

CONSOLIDATED ANSWER OF DELTA AIR L INES, INC . Communications with respect to this document should be addressed to: Glen Hauenstein Executive Vice President

– Network Planning

& Revenue Management Robert J. Cortelyou Senior Vice President

– Network Planning Andreas Renner Director

– Int ernational Network Planning DELTA AIR LINES, INC. 1030 Delta Boulevard Atlanta, Georgia 30320 Andrea Fischer Newman Senior Vice President

– Government Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 Alexander Van de r Bellen Managing Director

– Government Affairs

& Associate General Counsel DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 (202) 842
- 4184 sascha.vanderbellen@delta.com

September 6, 2012BEFORE THE DEPARTMENT OF TRANSPORTATI ON WASHINGTON, D.C.

Motion of DELTA AIR LINES, INC. In the matter of 2010 U.S. - Haneda Combination Services Allocation Proceeding ) ) ) ) ) ) ) Docket DOT - OST - 2010 - 0018

CONSOLIDTED ANSWER OF DELTA AIR LINES, INC . Delta has requested permis sion to use its previously allocated slots to provide Seattle with its first and only nonstop Haneda service. Three carriers have filed competing applications: United seeks to provide a second daily service on the San Francisco
- Haneda route; American woul d provide a third daily flight on the Los Angeles
- Haneda route; and Hawaiian Airlines seeks a second pair of Haneda slots to provide additional service to Hawaii (which currently has three Haneda flights). As we show below, Delta’s Seattle
Haneda proposal will provide superior public benefits, unmatched by any of the competing applicants. I. Executive Summary Seattle is the largest U.S.
- Tokyo O&D gateway that does not have nonstop service to Haneda. It is the also the largest west coast business center without Haneda service, placing Seattle and the Pacific Northwest region at a disadvantage to the existing west coast gateways of San Francisco and Los Angeles. Delta’s proposal will create the following public benefits:

• Seattle will be established as a new gateway, providing 114,000 annual Tokyo passengers with new nonstop access to Haneda. 1 New intergateway

1 See, DL
- 201 (MIDT data adjusted to account for direct sales).Delta Answer Page 2 competition will be created with San Francisco and Los Angeles which both have one or more Haneda flights.

• 32 cities will receive round - trip connec tions, and an additional 10 cities will receive one - way connecting service to Haneda via Seattle. Seattle’s geographic location provides the largest catchment area and best network coverage of the United States.

• The Pacific Northwest region will gain i ts first convenient access to Haneda because the existing west coast gateways are too far south and unreasonably circuitous.

• The Delta/Alaska domestic marketing alliance will allow Alaska Airlines to bring its Seattle network into play, improving service and competition for U.S.
- Haneda passengers. Alaska and its employees will benefit from the additional traffic flowing across their system. Delta’s request to improve the utilization of its Haneda slots by moving them from Detroit to Seattle is clearly in the public interest. Delta’s request is also consistent with market - based principles that are fundamental to U.S. open skies policy. Delta recognizes that the Haneda bilateral compromise creates a unique limited entry situation within the Japan open s kies agreement. The Department’s current distribution of Haneda slots promotes rough parity between the alliances with Delta having two slot pairs, Star two slot pairs, and oneworld three slot pairs. However, while Delta is limited to the Haneda gateways selected in the 2010 route case, Star and oneworld have commercial discretion to select their own Haneda gateways and redeploy the Haneda slots operated by ANA and JAL under their metal neutral joint venture alliances. This flexibility, combined with the dominant incumbent hubs operated by ANA and JAL at Haneda, creates significant advantages for Star and oneworld. The Department can improve market - based competition at Haneda

– and generate important new nonstop and network service benefits

– by allowin g Delta the flexibility to operate from its preferred U.S. mainland gateway at Seattle. It is both reasonable and commercially necessary for Delta to make network adjustments to improve under
- performing flights. While Delta respects the regulatory requir ement for this comparative selectionDelta Answer Page 3 proceeding, it would not be in the public interest for the Department to strip Delta of the Haneda slots it needs to compete with the U.S.
- Japan immunized alliances. The loss of a slot pair would marginalize Delta in t he U.S.
- Haneda marketplace, leaving Delta with just a single daily flight to compete against the multiple daily transpacific flights and large Haneda hubs operat ed by Star and oneworld. This would increase market dominance by the U.S.
- Japan ATI alliances, and undermine Delta’s ability to compete in the U.S.
- Tokyo and U.S.
- Japan marketplace. The following points highlight the key deficiencies of the competing Star and oneworld alliance proposals: United

• United operates a metal neutral joint venture with AN A, the largest hub operator at Haneda. A further award to United/Star would undermine alliance competition with Star and oneworld each having three Haneda flights to Delta’s one .
• San Francisco already has nonstop Haneda service (on JAL), and United and AN A have discretion under their metal - neutral joint venture to add a second daily flight if that is the best use of the slot pair for the alliance. San Francisco should not receive a second Haneda flight at the expense of Seattle’s first nonstop service.

• Un ited will rationalize San Francisco
- Narita service, canceling out the benefits of its proposed Haneda flight. United admits that it intends to operate “at least one daily Tokyo Narita flight”

– whereas United currently operates two daily Tokyo Narita flig hts for seven months of the year. (UA app at n.4) By contrast, Delta’s daily full year
- round Seattle
- Narita service will be maintained and the new Haneda flight will produce true incremental benefits. American

• Los Angeles already has two daily nonstop Han eda flights, and American/JAL have the option to add a third under their metal - neutral Joint Venture.

• An award to American would create a less competitive distribution of Haneda slots, with oneworld holding four opportunities, Star two, and Delta one.

• Amer ican has already rationalized its JFK - Narita flight (with American flying JFK - Haneda and JAL flying JFK
- Narita). American is currently reducing Los Angeles - Narita from daily to 5 weekly. Should American receive additional Haneda slots, the Department can expect American to fully rationalize its Los Angeles - Narita flight, as it did at JFK, thereby canceling out the benefits of its Haneda proposal.Delta Answer Page 4
Hawaiian Airlines is also an applicant for Haneda slots. Hawaiian proposes to reestablish nonstop service between Tokyo and Kona, Hawaii. This route was previously operated by JAL for fourteen years
-- from June 1996 to October 2010. Hawaiian does not need an award of Haneda slots to reestablish Tokyo
- Kona service . The United States secured an open skies ag reement with Japan, with the limited exception of Haneda. The open skies agreement includes Tokyo Narita, which is far and away the largest Japanese gateway to Hawaii. Yet, Hawaiian fails to offer any competitive service from Tokyo Narita, preferring ins tead to concentrate on protected limited entry routes and niche markets. If Hawaiian wants to offer Tokyo - Kona service, it is free to do so at Narita. Hawaiian does not need a further allocation of limited entry Haneda slots to provide this service. De lta’s service proposal is superior to Hawaiian’s because:

• Seattle and the Pacific Northwest have no nonstop service to Haneda, whereas Hawaii has three daily Haneda flights.

• Seattle nonstop service will benefit 114,000 nonstop Tokyo O&D passengers vs. 80 , 0 00 at Kona.

• Seattle service will benefit U.S. travelers while Kona service will benefit Japanese tourists

.
• Kona does not have functional CBP/FIS facilities, and there can be no certainty that these facilities will be available at Kona in the near future, i f at all.

• Delta’s proposal will preserve and enhance competition among the U.S.
- Japan network competitors at Haneda; Hawaiian’s proposal would consume Haneda limited entry authority for a niche market that can readily be served using open skies rights.Delta Answer Page 5 I I. Delta’s Seattle - Haneda Service Proposal Will Maximize Public Benefits. A. Delta’s Proposal Will Preserve 3 - Way Alliance Competition at Haneda and Enhance the Competitive Market Structure. When it first allocated the Haneda slots at issue, the Department did not weigh the impact that the pending United and American ATI applications would have U.S.
- Haneda and U.S.
- Tokyo service and competition. (Order to Show Cause, 2010
- 5 - 7, page 8; Final Order 2010 - 7 - 2, page 6). However, now that United and American ha ve been granted antitrust immunity with their Japanese partners, DOT has properly indicated that in considering Delta’s request to move its Haneda slots from Detroit to Seattle, DOT intends to consider the “overall competitive environment” and “market stru cture.” Order 2012
- 8 - 20, page 3. Permitting Delta to serve the Seattle gateway in competition with San Francisco and Los Angeles will satisfy the DOT’s competition and market structure objectives. The two immunized U.S.
- Japanese alliances have inhe rent advantages over Delta, which does not have a Japan alliance partner. As a SkyTeam member and major U.S.
- Japan competitor, Delta is the only carrier capable of offering a competitive alternative to the west coast Haneda services of American/JAL at San Francisco and United/ANA at Los Angeles. The DOT has consistently sought to promote inter - alliance competition. 2 By approving Delta’s request, the Department will ensure that the two large immunized alliances are not allowed to eliminate competition in the U.S.
- Haneda and U.S.
- Japan markets.

2 See O rder 2009 - 7 - 10, page 17 (“We also examined the changes in inter
- alliance competition.... The ability of the ‘non
- hub’ alliance members to compete at [a hub of another alliance] can benefit both bu siness and leisure passengers.” ); Order 2010
- 2 - 8, page 28 (“[ E] n h anced inter - alliance competition is beneficial for consumers across many markets....”)Delta Answer Page 6 B. Delta’s Seattle - Haneda Proposal Will Create Important Service Benefits for the Traveling Public Seattle is the largest U.S.
- Tokyo O&D mark et without Haneda service. DL - A - 101 . In addition, the Seattle gateway com petes with San Francisco and Los Angeles for U.S.
- Tokyo traffic and is disadvantaged in not being able to offer service to Haneda. DL - A - 207, 407. Delta, together with its partner, Alaska Airlines, will be able to offer convenient nonstop - to - nonstop Haned a service at Seattle from 42 points in the United States

– extending the benefits of Haneda service to the Pacific Northwest region and throughout the United Sates. DL - A - 102, 103, 206, 406. Delta has built a successful international gateway at Seattle an d will succeed in the Haneda market as it has in other international markets. Seattle’s demographic and business metrics support the establishment of Haneda service at the Seattle gateway. Seattle ranks near the top of 50 U.S. metropolitan areas in catego ries such as exports, growth, and household income. And, in 2011, two - way trade between the State of Washington and Japan surpassed $24 billion. (Answer of Seattle, p. 2). Yet, unlike the other major west coast business centers of San Francisco and Los Angeles, Seattle does not have any service to Tokyo’ s preferred downtown airport. DOT can best achieve the public interest objectives it seeks to attain in this proceeding by allowing Delta to offer Haneda service at the Seattle gateway. This will
ena ble Delta to better compete on the west coast with the services of the immunized alliance carriers.

III. Delta’s Haneda Proposal is Superior to Those of United, Hawaiian and American.
A. United ’s Proposal Would Undermine Allianc e Competition and Prod uce Fewer Benefits than Delta’s. United’s proposal to provide a second daily flight at San Francisco should not be selected at the expense of Delta’s proposal to provide Seattle and the Pacific NorthwestDelta Answer Page 7 region with their first and only Haneda flight. Un ited’s proposal would undermine competition in the U.S.
- Haneda and U.S.
- Tokyo marketplace by taking Haneda slots from Delta, the only effective network competitor to Star and oneworld, and concentrating them in the hands of Star
-- the largest immunized U. S.
- Japan competitor with the biggest Haneda hub. DL - A - 105, 106, 201

. Star currently holds 2 U.S.
- Haneda slot pairs (placing Star on par with Delta/SkyTeam). DL
- A - 201 . However, unlike Delta, Star has the ability to select and change the Haneda gateways o perated by ANA under the metal - neutral joint venture with United. If Star wanted to add a San Francisco
- Haneda flight, United and ANA can jointly plan and implement that service today with no need for regulatory relief from DOT. DL - A 203. Delta can only offer beneficial new competitive service at Seattle if DOT grants Delta’s motion. United’s application is disingenuous. United ignores the fact that it has a major antitrust immunized alliance with All Nippon Airways (ANA) covering the U.S.
- Haneda, U.S.
- Japan, and U.S.
- Asia marketplace. In fact, in 47 pages of text and exhibits, ANA is mention ed only once at footnote 8, where United concedes the existence of a codeshare relationship, but gives no hint as to the comprehensive nature of its joint venture

. United’s forgotten ATI partnership with ANA is central to the Department’s consideration of this case

– and to maximizing U.S.
- Haneda service and competitive benefits. The U.S.
- Japan antitrust immunized alliances are a defining characteristic of the U .S.
- Haneda and U.S.
- Japan marketplace. Throughout the antitrust immunity proceeding, United vigorously argued that antitrust immunity was necessary for United and ANA to achieve “metal neutral” benefits and efficiencies, including joint route planning, re venueDelta Answer Page 8 sharing, and a single integrated network covering all of their U.S.
- Japan service. See, Application of ANA/United/Continental (December 23, 2009, Docket OST
- 2009 - 350). As urged by United and ANA, the Department found these benefit to be significant

. DOT agreed to approve U.S.
- Japan immunized alliances on the basis of the substantial benefits that Star would be able to achieve through “a truly metal neutral network”
-- In the current environment, the two sets of parties are unable to cooperate on fa res , route coordination , and other business plans on a network - wide basis because of the risk of a legal challenge. As such, the carriers are currently unable to implement many of the provisions that would deliver the most significant consumer benefits: jo int pricing, joint scheduling , and network coordination

. . . . Absent the ability to share revenues and establish a truly metal - neutral network , the alliances would also lack the commercial incentive to fully integrate their networks ." Japan ATI Show Cau se Order 2010
- 10 - 4 at 15 (emphasis added)

. In its current application, United has abandoned all claims of benefit (or even recognition of) its metal neutral Joint Venture with ANA. United asserts that it should be authorized to serve Haneda “with its own U.S. aircraft and crews.” (p.1) United goes on to claim that its service would “provide increased competition in the U.S.
- Japan market by adding a fourth U.S. carrier at Tokyo Haneda, [and] by introducing new carrier competition for behind hub points . . .” (pp. 3
- 4) United’s “new carrier” competition claims in this case cannot be reconciled with fully integrated network and metal neutral joint venture claims it made in the ATI case. United cannot be a “new competitor” at Haneda because it has alrea dy been effectively merged with ANA for purposes of U.S.
- Japan service and competition. As correctly stated by the Department when it approved the United/ANA immunized alliance: "The intended commercial effects of the ATI Applicants’ respective joint bus iness agreements are similar to those resulting from a merger." Japan ATI Order 2010
- 10 - 4 at 5.Delta Answer Page 9 United cannot have it both ways. Either United and ANA are competitively merged and commercially integrated members of the Star ATI alliance or United and A NA have failed to realize the claimed benefits of their ATI alliance and should no longer be entitled to the benefit of antitrust immunity. The Department’s grant of immunity enables United (and American) to have access to Haneda through the metal - neutral transpacific service s and hub operations of their Japanese partners. Delta’s only ability to compete at Haneda is though its two direct flights. United’s application should be denied on the basis of alliance and competition considerations alone. How ever, United’s San Francisco proposal is also inferior from the standpoint of service benefits: First, San Francisco enjoys Haneda service today, whereas Seattle is the largest U.S.
- Tokyo gateway without nonstop service to Haneda. DL - A - 207. In carrier selection cases, the Depar t ment has long emphasized the importance of “ provid[ing] consumers with the special convenience of nonstop service in a market that does not receive it.” Order 98
- 12 - 33 at 7. Delta’s Seattle
- Haneda proposal would create this imp ortant new convenience, while United’s proposal would merely duplicate existing nonstop service on the San Francisco - Haneda route. Furthermore, United and ANA have flexibly within their alliance to offer San Francisco
- Haneda service at their discretion, b ut Seattle will only receive Haneda service if the DOT approves Delta’s request. DL - A - 202, 203. Second, Delta’s proposal is superior from the standpoint of network service benefits. Seattle would be established a s a major new gateway to Haneda in the Pac ific Northwest region. Despite strong economic ties and a vigorous two - way trade relationship with Japan, Seattle and the Pacific Northwest have no effective service to Tokyo’s preferred downtown airport. Existing West Coast gateways in California are n ot viable for Pacific NorthwestDelta Answer Page 10 passengers, because they involve more than a thousand miles of additional ci rcuity in each direction. DL - A - 205 . Because Seattle lies on the great circle route to Tokyo for the most U.S. cities, Seattle can provide effect ive intergateway competition with San Francisco and Los Angeles throughout the United States. United and Delta/Alaska would provide the same number of ro und - trip connections (32), DL
- A - 206 ; however, in most cases travel via Seattle is less circuitous, and Seattle would benefit more cities in underserved regions of the country that lack convenient Haneda connections today. Id. Third, Delta will add true incremental service and capacity at Seattle, adding new daily Seattle
- Haneda service while maintaining d aily, year - round service to its Narita hub. United will produce fewer benefits because it will rationalize San Francisco
- Narita service, canceling out the benefits of its proposed Haneda flight. United admits that it intends to operate “at least one dail y Tokyo Narita flight”

– whereas United currently operates two daily Tokyo Narita flights for seven months of the year. (UA app at n.4) Net of Narita cancelations, United would add less than half the new flights and capacity Delta would bring to the marke tplace. DL - A - 204. B. Hawaiian Can Operate Tokyo - Kona Service Using Open Skies Authority; Hawaii Already Enjoys a Disproportionate Share of Haneda Service. Hawaiian proposes to reestablish nonstop service between Tokyo and Kona, Hawaii. This route was previously operated by JAL for fourteen years from June 1996 to Octobe r 2010. DL - A - 303

. Kona no longer has a functional CPB/FIS inspection facility, and Hawaiian concedes that the timeline and ability to resume international service at Kona is uncertain in light of these constraints. (HA App

. at n.2). Hawaiian does not need an award of Haneda slots to reestablish Tokyo
- Kona service . The United States secured an open skies agreement with Japan, with the limited exception of Haneda. The open skies agr eement includes Tokyo Narita, which is far andDelta Answer Page 11 away the largest Japanese gateway to Hawaii. Yet, Hawaiian fails to offer any competitive service from Tokyo Narita. Instead, Hawaiian seeks out protected niche markets (such as Haneda), and secondary citie s such as Sapporo, Fukuoka, and Osaka. DL - A - 304. Hawaiian boasts that it has opened three new Japan gateways in the last two years. But all of Hawaiian’s new gateways combined generate fewer passenger s than Narita, which Ha waiian conspicuously avoids. Id. If Hawaiian wishes to initiate Tokyo
- Kona service, it is free to do so at Narita. Hawaiian does not need a further allocation of limited entry Haneda slots to provide this service. As detailed in Hawaiian’s open application, it has implemented a broad expansion strategy in the Hawaiian - Japan and Hawaii - Asia markets. While the Department may have been justified in providing Hawaiian preferential new entrant treatment in 2010, by its own account Hawaiian is now an established and successful incu mbent. Hawaiian should be expected to take advantage of the Tokyo Narita open skies opportunities available to it today. Finally, while Haneda - Hawaii service is an attractive commercial proposition for carriers, 3 it is not necessarily in the public inte rest to have so many limited entry opportunities concentrated in a single state. Hawaii receives three Haneda flights today, and a grant of Hawaiian’s application would result in half of all bilaterally authorized slots being concentrated in Hawaii. DL - A - 302. Haneda - Hawaii flights are used almost exclusively by Japanese leisure passenger and do not produce benefits for the U.S. traveling public. DL - A - 307,308.

3 Delta would welcome the opportunity to provide Haneda - Honolulu service. Delta is the only Tokyo - Honolulu competitor that does not have the ability to provide serv ice from Haneda, placing Delta at a competitive disadvantage to Hawaiian, Star, and oneworld. Delta requested, but did not receive Haneda - Honolulu slots in the 2010 proceeding.Delta Answer Page 12 In summary, Delta’s service proposal is superior to Hawaiian’s because:

• Seattle and the Pacif ic Northwest have no nonstop service to Haneda, whereas Hawaii has three daily Haneda flights. DL - A - 302, 309.

• Seattle nonstop service will benefit 114,000 nonstop Tokyo O&D passengers vs. 80, 000 at Kona. DL - A - 301.

• Seattle service will benefit U.S. travel ers while Kona service will benefit Japanese tourists

. DL - A - 307.

• Kona does not have functional CBP/FIS facilities, and there can be no certainty that these facilities will be available at Kona in the near future, if at all. DL - A - 306.

• Delta’s proposal wil l preserve and enhance competition among the U.S.
- Japan network competitors at Haneda; Hawaiian’s proposal would consume Haneda limited entry authority for a niche market that can readily be served using open skies rights.

C. American’s Proposal to Provi de a Third Los Ang e les - Haneda Flight Would be Detrimental To Alliance Competition and Produce No New Service Benefits. Oneworld already holds the three U.S.
- Haneda slots pairs

– more than any other U.S.
- Japan competitor. Los Angeles has two daily nonst op Haneda flights, and American/JAL have the option to add a third Los Angeles ser vice under their metal neutral j oint v enture. An award to American would undermine the competitive distribution of Haneda slots, with oneworld holding four opportunities , S tar two, and Delta one. DL - A - 401

. All of the alliance competition considera tions discussed above at pages 7 - 9 with regard to the United/ANA immunized alliance are fully app licable to American/ JAL

. In the interest of brevity, we incorporate those argumen ts by reference and will not repeat them here. Delta’s Seattle
- Haneda service will create important nonstop service in the largest U.S.
- Tokyo market without this benefit, and establish a large new hub network in the underserved Pacific Northwest Region. DL - A - 405, 406, 407. American’s proposal wouldDelta Answer Page 13 add a third daily flight to the well served Los Angeles
- Haneda marketplace, and contribute no new network benefits beyond those provided today by Delta and United/ANA. Id. American has already rationalized its JFK - Narita flight (with American flying JFK
Haneda and JAL flying JFK
- Narita). And, American is currently reducing Los Angeles - Narita from daily to 5 weekly. Should American receive additional Haneda slots, the Department can expect American to full y rationalize its Los Angeles - Narita flight, as it did at JFK, thereby canceling out the limited benefits of its Haneda proposal. DL - A - 404.
IV . Conclusion Delta’s request to establish Haneda service at the Seattle gateway will improve Delta’s utilizati on of its Haneda slots, enhance consumer benefits, and promote competition on U.S.
- Haneda routes. As show above, the competing applications of United, American and Hawaiian would produce fewer benefits and in fact undermine the public interest objective s the Department seeks to achieve in this proceeding. For these reasons, we respectfully urge that Delta’s motion for flexibility to use its Haneda slots at the Seattle gateway be granted.
Respectfully submitted,

_________________________________ Ale xander Van der Bellen Managing Director, Government Affairs

& Associate General Counsel DELTA AIR LINES, INC.C ERTIFICATE OF SERVICE A copy of the foregoing Answer has been ser ved this 6th day of September, 2012 , upon the following persons via email: Francis.Heil@aa.com Robert.Wirick@aa.com dan.weiss@united.com thomas.bolling@united.com lhalloway@crowell.com gmurphy@crowell.com howard.kass@usairways.com ben jamin.slocum@usairways.com jhill@dowlohnes.com paul.gretch@dot.gov keith.glatz@dot.gov esta.rosenberg@dot.gov brett.k ruger@dot.gov todd.homan@dot.gov urskr@state.gov eugene_alford@ita.doc.gov info@airlineinfo.com Tim.OMalley@alpa.org Ishiwata.K@portseattle .org Safora.I@portseattle.org Kyle.Levine@alaskaair.com Megan.Lawrence@alaskaair.com

# Delta Answer Exhibits

Section I: Delta’s Seattle - Haneda Service Proposal Will Maximize Service and Competitive Benefits Section II: Rebuttal to United Airlines Section III: Rebuttal to Hawaiian Airlines Section IV: Rebuttal to American Airlines

# Section I: Delta’s Seattle - Haneda Service Proposal Will Maximize Service and Competitive Benefits

# Seattle is the Largest US Mainland - Tokyo Gateway Without Haneda Service

• With HND service now established at LAX (x2) and SFO, SEA is the largest West Coast
- Tokyo gateway without Haneda service

481,791 293,257 246,782 84,359 37,707 LAX JFK SFO SEA DTW US48 - Tokyo Annual Passengers YE July 2012
HND Service No HND Service Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 101 Page 1 of 1

Source : MIDT Note: Delta estimates SEA
- TYO true market size to be approximately 35% higher (114,000) due to sales not captured via MIDT (dire ct bookings, data from non
- participating GDS’s).

# Seattle is an Ideal West Coast Gateway to Haneda Delta and Alaska Provide Nonstop Service to 62 U.S. Points

Note: Includes service operated by Alaska/Horizon Source: August 2012 schedules, Diio Mi Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 102 Page 1 of 1

To ANC, FAI, JNU, SIT, KTN 

### Haneda

# Seattle is Geographically Positioned to Optimally Connect U.S. Traffic to Haneda

• Seattle connections are less circuitous versus other West Coast gateways for points across the US

— including the Pacific Northwest, the Southeast and the East Coast

SEA is a more direct route to HND for the most US cities



## SEA

SFO Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 103 Page 1 of 1

# Two Delta US - Haneda Routes are Required to Maintain Competitive Balance

• The DOT’s instituting order in this proceeding emphasizes competition and market structure benefits
• Today US
- HND capacity is balanced between the three major alliance groupings

3

2 2

oneworld

AA/JL Skyteam DL Star NH/UA US - Haneda Slot Pairs by Alliance Group Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 104 Page 1 of 1



### HNL 777 JFK 777 SFO 777 HNL 767 LAX 777 LAX 332 SEA 767

### All Nippon Airways, 43%
Japan Airlines, 35%

Other Japanese

Airlines, 17% All Non - Japanese Airlines, 5% 

# Japanese Carriers Control 95% of Haneda Slots

Source: Counts based on August 2012 scheduled passenger operations. Does not include non - scheduled or cargo operations. 

### 524 daily operations

58 daily operations Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 105 Page 1 of 1



### 422 daily operations

214 daily operations

# Delta Provides the Only Broad - based US - Tokyo Alliance Competition to Star and oneworld

Source: August 2012 OAG schedules 

### Delta 27% United/ANA 41%

American/JAL 24% Foreign Flags 8% U.S. Mainland - Tokyo Transpacific Seat Share



# Delta Does Not Have a Japanese Carrier Partner Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 106 Page 1 of 1

# Section II: Rebuttal to United Airlines

# An Award to United Results in a Less Competitive Distribution of Slots among the Alliances and Undermines the Competitive Market Structure at Haneda Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 201 Page 1 of 1



### 3 3

1

oneworld Star Delta US - Haneda Slot Pairs by Alliance Group

HNL 777 JFK 777 SFO 777 SFO 777 HNL 767 LAX 777 LAX 332 SEA 767

# United Ignores its ATI Partnership with ANA and the Metal - Neutral Benefits Claimed to Justify Immunity

“United’s proposed San Francisco
- Haneda flights will enable it to provide U.S.
- Tokyo Haneda service through its San Francisco hub with its own U.S. aircraft and crews”

— Application of United Airlines Inc, DOT
- OST
- 2010 - 0018

“The Pacific JV will foster “metal neutrality”

– a commercial environment in which joint venture partners share common economic incentives to promote the interests of their alliance over their individual corporate interests.” “...the Joint Applicants will harmonize their joint network and become indifferent as to which partner collects the revenues and operates the aircraft on a given itinerary .”

— United/ANA ATI Application, DOT
- OST
- 2009 - 0350 Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 202 Page 1 of 1

# United Ignores its ATI Partner ANA Which Could Operate SFOHND Today

• Any of ANA’s current Haneda frequencies can be used to serve San Francisco under the metal neutral ATI with United

Origin Destination Operating Carrier Alliance Equipment Eligible for SFO move HND LAX NH UA/NH 777 YES HND HNL NH UA/NH 767 YES Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 203 Page 1 of 1

# Delta’s Seattle - Haneda Proposal Will Add More Than Twice as Many Flights and Seats to the Marketplace than United

• United admits it intends to operate “at least one daily Tokyo Narita flight”

– whereas United currently operates two daily Tokyo Narita flights for seven months of the year
• Delta’s daily year - round Seattle
- Narita service will be maintained and the new Haneda flight will produce true incremental benefits

163,520

81,238 730
302

Delta SEA United SFO Annual Incremental Seats and Flights in West Coast - Tokyo Markets

Seats Flights Seats Flights Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 204 Page 1 of 1

# Passengers Throughout the West Coast Can Conveniently Travel via Seattle – But Pacific Northwest Passengers are Inconvenienced by Travel via SFO

SEA

SFO Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 205 Page 1 of 1

SFO - HND SEA - HND Nonstop Mileage 5,160 4,803
SFO - SEA - HND SEA - SFO - HND Combined Connecting Segment Mileage 5,482 5,839 Circuity (%) 6% 22% Circuity (Miles

Roundtrip) 644 2,072 The Pacific Northwest and Alaska are more direct to HND via SEA

# Delta and United Provide a Similar Number of Round - Trip Connections, but Delta will Better Serve the Pacific Northwest Region

UA SFO Connections DL SEA Connections To ANC, JNU, KTN

Carrier Total N. Am. RT Connections East Coast RT Connections West Coast RT Connections Pacific NW RT Connections United 36 8 28 9 Delta/Alaska 32 3 29 18 *Pacific Northwest defined as Washington, Oregon, Montana, Idaho, Alaska and Western Canada; West Coast defined as West of Te xas . Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 206 Page 1 of 1

# San Francisco Already Has Nonstop Haneda Service While Seattle Has None

2

1

0 LAXHND SFOHND SEAHND US West Coast – Haneda Flights by Gateway Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 207 Page 1 of 1

# Section III: Rebuttal to Hawaiian Airlines

# Seattle - Tokyo Is Much Larger Than Kona - Tokyo Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 301 Page 1 of 1



### 84,359 58,944 29,526 20,630

SEATYO KOATYO Seattle - Tokyo is 43% Larger than Kona - Tokyo

Source : MIDT, YE Jul 2012 Note: Delta estimates true market size to be approximately 35% higher due to sales not captured via MIDT (direct bookings, da ta from non
participating GDS’s). 

### ~114,000
~80,000

MIDT True - Up

# Current Distribution of HND Slots Is Concentrated In Hawaii, While The Pacific Northwest Has No Service Today Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 302 Page 1 of 1



### 3

2

1 1

0 HNL LAX SFO JFK SEA Daily HND Frequencies December 2012

# JAL Served Tokyo - Kona For More Than 14 Years From Narita; Open Skies Opportunities Are Available to Hawaiian to Resume Service On The Route

93 217 366 360 357 351 359

293 364 364 359 363 357 359
301

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 JL/JO Annual NRT - KOA Departures

Source : DOT, T
- 100 Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 303 Page 1 of 1

# Hawaiian Can Fly Additional Hawaii - Tokyo Service Today But Chooses Not To Do So Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 304 Page 1 of 1



## • Hawaiian avoids service at Tokyo Narita

– the largest Japanese gateway to Hawaii
• Hawaiian selects markets where there is less competition

– including HND and secondary Japan cities outside of Tokyo

0 7 7 7 3 0 58

14 14 7 0 0 NRTHNL HNDHNL KIXHNL FUKHNL CTSHNL NRTKOA Hawaiian and Competitor Weekly Japan Frequencies (Dec 2012 schedule)

Hawaiian Competitors

# Narita - Honolulu Is 46 Times Larger than Haneda - Kona Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 305 Page 1 of 1



### 878,180

346,115
39,639 19,305 NRTHNL HNDHNL NRTKOA HNDKOA TYO - Hawaii MIDT Passengers for YE July 2012

Source : MIDT 

## • Hawaiian avoids Open Skies competition at Narita and seeks a protected limited entry advantage at H aneda

# Hawaiian’s Application Depends on the Uncertain Ability to Add FIS Capabilities in Kona Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 306 Page 1 of 1



## “The initiation of Hawaiian’s service from Haneda to Kona may require updates to CBP/FIS facilities at K ona International Airport . Hawaiian already has reached out to the appropriate state and local officials to address this potential issue so that the facility satisfies current Department of Homeland Security standards in time for Hawaiian’s proposed start date for Kona
- Haneda.”

-- DOT
- OST
- 2010 - 0018 2012 Application of Hawaiian Airlines, Inc. p.4 footnote 2

# Seattle - Haneda Will Benefit US Travelers Whereas Kona Haneda Will Benefit Japanese Tourists

33,132

1,484

SEA KOA

US Point - of - Sale Passengers Between the US and Tokyo Year Ended July 2012

Source : MIDT Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 307 Page 1 of 1

# Hawaiian’s Kona Proposal Would Benefit A Small Segment Of The US Population, While Delta’s Seattle Proposal Will Benefit Almost The Entire US Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 308 Page 1 of 1



## • Kona service would benefit only Hawaii, which enjoys plentiful existing Haneda service
• Seatt le service would benefit 49 of 50 US states by way of the connections Delta and Alaska Airlines provide via Seattle

307,385,237

1,360,301 185,079 US49 State of Hawaii Island of Hawaii US Census Population Data for 2010Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 309 Page 1 of 1 

# Pacific Northwest Passengers Are More Inconvenienced By Lack Of Non - Stop Seattle - Haneda Service Than Kona - Haneda Passengers Are By Lack Of Kona - Haneda Service

• KOA
- HND via HNL is only 0.1% more circuitous than KOA
- HND nonstop service
• SEA
- HND via LAX is 34% more circuitous than SEA
- HND nonstop service
• SEA
- HND via SFO is 22% more circuitous than SEA
- HND nonstop service

SEA - HND KOA - HND Nonstop Mileage 4,803 4,013
SEA - LAX - HND SEA - SFO - HND KOA - HNL - HND Combined Connecting Segment Mileage 6,441 5,839 4,017 Circuity (%) 34% 22% 0.1% Circuity (Miles

Roundtrip) 3,276 2,072 8

# Section IV: Rebuttal to American AirlinesDocket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 401 Page 1 of 1 

# An Award to American Results in a Less Competitive Distribution of Slots among the Alliances and Undermines the Competitive Market Structure at Haneda

LAX 777 HNL 777 JFK 777 SFO 777 HNL 767 LAX 777 LAX 332 SEA 767 4

2

1

oneworld Star Delta US - Haneda Slot Pairs by Alliance GroupDocket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 402 Page 1 of 1



## “Only the closer cooperation made possible through a joint venture based on metal neutrality

– or indifference as to which airline actually carries a customer

– will maximize the consumer benefits that immunized alliances make possible.” “By providing for the broad sharing of revenue on a metal neutral foundation, the JBA will ensure that American and JAL act for the benefit of

– and are compensated for their contribution to

– the alliance as a whole.”

--- American/JAL ATI Application ,DOT
- OST
- 2010 - 0034 (12Feb2010) 

# American Ignores its ATI Partnership with JAL and the Metal - Neutral Benefits Claimed to Justify Immunity

“Delta’s Detroit - Haneda authority should be reallocated to American Airlines to operate service between Los Angeles and Haneda.” “Global alliance competition between Los Angeles and Haneda is limited to Star and SkyTeam . There is no Los Angeles - Haneda nonstop service operated or marketed by oneworld .”

--- Application of American Airlines Inc. ,DOT
- OST
- 2010 - 0018 (27Aug2012 )Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 403 Page 1 of 1



## • Any of JAL’s current Haneda frequencies can be reallocated to serve Los Angeles under the metal neutral ATI joint venture with American

Origin Destination Operating Carrier Alliance Equipment Eligible for LAX move HND SFO JL AA/JL 777 YES HND HNL JL AA/JL 777 YES HND JFK AA AA/JL 777 NO 

# American’s Proposal Ignores its ATI Partner JAL, Which Could Operate LAXHND Today

# Delta’s Proposal Would Introduce Incremental West Coast Capacity While American’s Proposal Would Not Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 404 Page 1 of 1



## • Delta’s daily year - round Seattle
- Narita service will be maintained and the new Haneda flight will produce true incremental benefits
• American will rationalize their LAXNRT frequency in favor of LAXHND
• American has completely canceled JFK - NRT and relinquished this market to JAL
• American is already reducing LAX - NRT this winter (7x to 5x weekly in January 2013)

163,520

0 730

0 Delta SEA American LAX Annual Incremental Seats and Flights in West Coast - Tokyo Markets

Seats Flights Seats FlightsDocket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 405 Page 1 of 1 

# Passengers Throughout the West Coast Can Conveniently Travel via Seattle – But Pacific Northwest Passengers Are Inconvenienced By Travel Via LAX

SEA

LAX The Pacific Northwest and Alaska

are more direct to HND via SEA

LAX - HND SEA - HND Nonstop Mileage 5,487 4,803
LAX - SEA - HND SEA - LAX - HND Combined Connecting Segment Mileage 5,757 6,441 Circuity (%) 5% 34% Circuity (Miles

Roundtrip) 540 3,276

# Delta’s Seattle Proposal Provides More Unique Roundtrip Connections and Better Service to the Pacific Northwest than AA’s Los Angeles Proposal Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 406 Page 1 of 1

DL SEAHND AA LAXHND R/T connection cities without direct TYO service 25 14

R/T connection cities with direct TYO service 7 10 Total 32 24

Unique US Roundtrip Connection Cities Based on Summer 2012 IATA Schedules

AA LAX Connections DL SEA Connections To ANC, JNU, KTN

To ANC

# Los Angeles Already Has Nonstop Haneda Service While Seattle Has None Docket DOT
- OST
- 2010 - 0018 Exhibit DL - A - 407 Page 1 of 1



### 2

1

0 LAXHND SFOHND SEAHND US West Coast – Haneda Flights by Gateway