The US Department of Transportation (DOT) decided not to ground Delta Air Lines’ Seattle-Tokyo Haneda service. But like a parent upbraiding a teenager who has misused the family car, it lectured Delta on the carrier’s “virtual abandonment” of the route and imposed strict conditions on the airline’s future use of the coveted slot pair. Delta has objected to the conditions, but, like the teenager who wants continued access to the car, will probably live with the terms—even if it pouts about their “draconian” nature.

Meanwhile, American Airlines and Hawaiian Airlines both are disappointed they didn’t get Delta’s disputed Haneda route authority; in the end, DOT made no one happy. But the department did set new standards to which a US airline awarded a route authority must adhere, which will likely head off a rerun of the behavior that started the fracas in the first place.

Haneda, which is popular with business passengers because of its close-in access to Tokyo, started accepting international flights in 2010. US airlines are allowed to operate four daily round-trip flights to/from Haneda. Delta operates Los Angeles-Haneda service, United Airlines operates San Francisco-Haneda service and Hawaiian operates Honolulu-Haneda flights. The fourth Haneda slot pair belongs to Delta for Seattle-Haneda service, but the carrier flew the route so infrequently this past winter that it was almost stripped of the authority. According to DOT, Delta operated the service “for approximately only one week every 90 days between October 2014 and late March 2015.” This, Delta believed, technically adhered to DOT’s dormancy rule on route authorities.

But both American and Hawaiian petitioned DOT to review the slot pair, saying Delta was “squandering” it. American wanted to use the US’s fourth Haneda route authority to operate Los Angeles-Haneda Boeing 777-200 flights while Hawaiian desired the authority to operate Kona-Haneda Airbus A330-200 service.

During the review, Delta told DOT it had merely made a “seasonal” adjustment on the Seattle-Haneda route and would start operating it daily this spring, which was enough for DOT to allow Delta to retain the authority. However, rather than just take Delta’s word for it, the department mandated that the airline operate the route daily year-round and said it was ready to transfer the slot pair to American for LAX service if Delta misused the authority again. 

In a tentative ruling, DOT decided to keep the disputed slot pair with Delta instead of moving it to American or Hawaiian. But, DOT added, “Any failure by Delta (absent DOT authorization) to perform Seattle-Haneda service on two days of any seven-day period would mean the immediate loss of Delta’s authority.”

In the tentative ruling, DOT stated, “On too many days this past winter season, Delta provided no Seattle-Haneda service whatsoever. Delta’s virtual abandonment of the route … severely undercut the public interest basis” for awarding Delta the authority in 2013.

DOT selected American’s Los Angeles-Haneda service proposal “as a backup should Delta fail to meet its requirements in serving the Seattle market.” Delta said going forward it will “operate year-round, nonstop flights” on the route.

DOT said it believes Delta can “be relied upon to provide the service it now promises” despite “past conduct.”

In a filing to DOT following the tentative ruling, Delta said the stern service condition “deviates from past practice because, as far as Delta is aware, the department has never previously imposed such a strict 365-day-a-year service requirement.” Delta accused DOT of making an “exacting threat” that creates “improper incentives to maintain scheduled service at all costs, when flights might otherwise be canceled, delayed, or rescheduled out of safety or other operational concerns.”

DOT has put Delta in a bind. Either the airline operates Seattle-Haneda service daily year-round, even during periods in which the route may not be able to generate a profit, or American will be allowed to start competing with Delta head-to-head on LAX-Haneda—a high-demand route Delta now has to itself. So Delta will likely be forced to lose money on Seattle-Haneda if necessary to avoid competition on LAX-Haneda.

Hawaiian was perhaps the most upset over the DOT ruling. President and CEO Mark Dunkerley said DOT’s decision was “tremendously disappointing,” adding, “Sadly, by dismissing Hawaiian’s proposed Kona route … DOT has once more failed to appreciate the geography of the 50th state.” Hawaiian said DOT had decided the Kona route would merely be “additive” to the existing Honolulu-Haneda route.

“Kona and Honolulu are separate markets, separate communities and indeed are located on separate islands,” Dunkerley said, adding that DOT’s decision also revealed “a long-held institutional bias” in favor of business travelers and against leisure/tourism-oriented travelers.