Delta Turns Away From Tokyo in Favor of Seattle

For many years, Delta and United had very different operational strategies for Asia. United long ago shifted from focusing on its Tokyo hub to overflying Tokyo to points beyond thanks to the strength of its San Francisco hub. Delta never had that key west coast gateway, so it continued to focus on Tokyo… until now. The build-up of the new Seattle hub means Delta is de-emphasizing its Tokyo operation.

Delta Trades Tokyo for Seattle

The economics of all this make perfect sense. If you’re in the US, would you rather first fly to SFO and then get to your final destination with one stop? Or would you rather fly to a Delta gateway in the US, then fly to Tokyo, and then get to your final destination? Naturally, you want the former, and that’s why United’s hub at SFO is so valuable. But Delta never really had that option previously because it didn’t have a west coast hub. What was it going to do, run flights from Salt Lake to Asia? Yeah, right. And of course, a place like Detroit, which does have several nonstop options, is too far east to serve much of the country.

So Delta did the best it could. It flew from the big west coast cities to Tokyo (LA, San Francisco, Portland, and Seattle) and then carried people from there to the rest of Asia. That was a Northwest legacy from when the Tokyo hub was won in the spoils of World War II. Back then, it made more sense, but more recently Delta has realized that it wasn’t adequately serving the demand in the US. It was time for a strategy shift.

Delta has rapidly added flights from Seattle to Asia as part of its build-up, growing well beyond the legacy Tokyo flight. There is now a new Tokyo/Haneda flight (we’ll see how long that lasts) to complement the Tokyo/Narita option. You’ll also find nonstop service to Beijing and Shanghai. Most recently, Delta added Seoul/Incheon and Hong Kong. Osaka/Kansai failed (a city United serves from San Francisco), but otherwise, Delta serves the largest cities in Asia just as United does. United’s only other Asian cities from San Francisco are Taipei and Chengdu, both coming online next year. So Delta will serve the big cities it needs. (Delta also has an Amsterdam flight, a Paris flight, and soon, a London flight in the works for those heading over the Atlantic.)

Of course, you can’t just throw a bunch of long haul airplanes in a gateway city and call it a day. Then you’d be Pan Am and you’d be failing miserably. That’s why it always seemed so smart for Delta to tighten up its relationship with Alaska Airlines. Alaska dominates domestic travel from Seattle and can provide perfect feed into Delta to support those international flights.

At least, that’s how it looked originally, but now Delta has decided to put more and more of its own airplanes in the market instead. Outside of its hubs and Honolulu, Delta had never really done much into Seattle domestically. Now, however, Delta is building up its own service in big west coast markets. By next summer, there will be 7 daily flights to LA (which you could call a hub now anyway), 7 to San Francisco, and 5 to Vegas.

There’s no way Delta is going to replace Alaska’s service to so many other key cities from Seattle, but the airline has clearly made the decision that at least on big routes, it wants to own the customer. Look at San Francisco as a great example.

By adding these 7 daily flights, Delta can provide utility to people in San Francisco by sending them through Seattle. In exchange, it can now cancel the nonstop flight from San Francisco to Tokyo. (It goes away March 29 and was probably losing a bunch of money.) This makes Delta more self-sufficient. It also has apparently empowered the airline to kill the codesharing agreement with Korean Air via Incheon once it has its own flights from Seattle. I still think that’s a mistake.

With fewer people needing to go through Narita, Delta can then start to cut back on intra-Asia Tokyo flights. There is no longer a flight to Seoul, or Guangzhou, or Busan…. The remaining intra-Asia flying can largely be categorized into two groups. Group 1 is made up of those cities that are either too far or too weak to justify nonstop service from the US (Bangkok, Manila, Singapore, and Taipei). Group 2 is made up of Pacific islands where there just isn’t enough demand from the US to fly nonstop (Guam, Palau, and Saipan). Other than that, there are only 3 outliers. Beijing, Shanghai, and Hong Kong may do well enough to stand on their own. Or maybe they will disappear as the Seattle hub strengthens.

Naturally, this opens up a lot of questions. What will happen to Delta’s relationship with its Asian partners, especially Korean which it seems to hate. And more importantly here at home, what will this mean for the relationship with Alaska? It’s clear that Delta has settled on a strategy of shrinking Tokyo in favor of Seattle. But what that means for the airline’s partners is still up in the air. For travelers, however, it means more one-stop options.

[Original Tokyo photo via skyearth / Shutterstock.com]
[Original Space Needle photo via Lonnie Gorsline / Shutterstock.com
]


50 Responses to Delta Turns Away From Tokyo in Favor of Seattle

  1. The only question I have for this is why Salt Lake would have been a bad choice. After living there a while, I know many people out there who are fiercely loyal to delta. Now I know someone may say they tried the Tokyo flight before. But that flight left because Portland offered them an incentive to move the flight there that Salt Lake wouldn’t match.

    • Salt Lake City, a fine city, has a population of about million. With the exception of the handful of local people a day an Asia flight would be entirely made up of connecting traffic. Why would you do that when you could launch from the Seattle area of 4 million, with much stronger economic-backed O&D demand, connecting traffic from the entire Pacific Northwest thanks to Alaska, and a catchment area that reaches, realistically, into the British Columbia lower mainland region around Vancouver?

    • Fred says:

      A big problem with Salt Lake City (and Denver for United) is that SLC is simply a longer distance than west coast cities, but also there are often significant performance penalties on top of that due to it’s elevation and temperature in the summer. There would have to be fuel stops fairly often to many destinations, or use airplanes that are too large to be efficient, both of which make flying from there much less feasible than other hubs.

    • BOS says:

      SLC is also at 4200′ above sea level. Combined with the additional distance inland from the Pacific, it significantly reduces the options for planes or introduces significant payload penalties.

  2. Vasukiv says:

    If you live in San Francisco, I’m not sure why you would want to fly through Seattle to get to Asia when you have United and many Asian carriers already flying non-stop through there (also true for LA). The only reason I could think would be if you were loyal to SkyTeam. Still, does that justify 7 flights a day to each city with United and Alaska also competing on those routes? And I think Alaska flyers are fairly loyal to that airline—certainly my experience has been that they are superior to Delta in terms of service.

    • I don’t think he was suggesting people who live in San Francisco would prefer to fly out of Seattle…. although many would if it was cheaper. The point was that United using SFO as a one-stop hub to Asia versus Delta’s a place in the U.S., then Tokyo, then the final destination was more compelling.

    • CF says:

      Vasukiv – Well people are flying from San Francisco via Tokyo to the rest of Asia today, so either they’re loyal to Delta or they just like cheaper fares. But I agree, the 7 flights certainly aren’t needed for that. It’s also an effort to pick up business in that local market. That’s why United has responded angrily, even though Virgin America may be the one who hurts the most with its weak schedule.

  3. Neil S. says:

    I know everyone hates SkyTeam, but I’d rather connect to SEA from SFO or LAX and get full MQMs (vs. Korean) and have a better chance at upgrades (as a Platinum on DL.)

  4. Ben in DC says:

    Despite all the talk about the sky falling on Alaska Airlines, I really think what Delta is doing is more about building its international hub, and much much less about crushing Alaska. Think about it: there is not enough gate space in Seattle for Delta to build a competing hub against Alaska. I’m already wondering where they are going to put the planes for all these new domestic flights. The S Concourse is bursting at the seams, and there’s not exactly a glut of available gates at SEA. And considering the airports already high costs, I don’t see airlines lining up to help fund an airport expansion that only benefits Delta. I think the AS/DL partnership is still important, but neither airline was happy about how the code-share was working. AS would rather focus on their core customers, without bumping them for some cheap DL feeders, and DL would rather handle the passengers for their entire itinerary. DL will never be able to cover all the ground AS does, so while certain core routes may work for DL, they are still going to need the AS bulk to fill all those international flights (short of a merger – a deal the DOJ would actually have a case against). And let’s not forget that DL is using regional jets against mainline service from AS and now UA, which is up-gauging all of its service to mainline in response to the DL move

    • I tend to agree with Ben. I think the other important part of this is realize that Delta may have done their calculus and realized that there just isn’t enough capacity on AS for what they’ll need connecting to their Asian flights, so they added their own capacity. I’m not sure DL is legally allowed to go to AS and suggest that they run more flights.

      • BOS says:

        Agreed – and DL still relies on AS for service from a number of key non-hub cities in the Delta network – Boston for example, my home airport. Ironically, I spoke with a couple who were flying to SEA from LHR and connecting via Boston onto AS to Seattle. It’s somewhat of a long layover I think, so it must have been a deal.

    • CF says:

      Ben in DC – I think you’re right. It’s not the end of the world for Alaska, but you’d certainly rather have Delta complementing you than overlapping you, if you’re Alaska. (Get more airplanes if there’s enough demand to serve a route profitably.) I’m still not quite sure what’s going on here, but I have a lot of theories. I’m talking to some folks over the next couple of weeks and plan on doing a much more focused look on Alaska and its partners once I’ve been able to talk to people.

    • john says:

      Ben Nailed it – I think Alaska kinda shrugged when DL added more RJs on these routes. “Eh – they want to carry some of their own folks on RJs? Fine – more room for our folks, hopefully at a better RASM.” That being said, if DL was to drop out of MileagePlan as an elite-earning partner…it would make the AS MP program less worthy.

  5. S*A*A*D says:

    Pre-NW Delta tried a Pacific operation ex-PDX using L-1011s. Didn’t work for a number of reasons. UA in SFO, NW in SEA, DL needed a gateway it could control. Old planes, no natural flow to the rest of their network (double conx galore via ATL or SLC), no large local population by numbers or ethnicity. KIX, SEL (at the time) and NGO came and went, NRT stayed.

    They marry NW and inherit a loyal base in SEA. Makes sense. Partnering with Alaska also makes sense. Flow from the D48 also more natural. Long-haul easier to operate: planes are newer and fly farther. Positioning is strong between Star bases at SFO/UA and YVR/AC.

    NRT can be de-emphasized because of long-haul technology which the Rim carriers are exploiting from their end as well: CX, CA, CI, KE, OZ, etc. They’re reaching beyond their bases and overflying NRT’s congestion and landing fees; they and UA, as mentioned, have been doing it for years, actually, so if anything, DL is late to the game. I agree that it doesn’t make NRT less valuable as a destination or regional market, just not as necessary.

    DL must now determine if there is a large enough Asian population in SEA to continue to build? Nothing compares to the markets in LA or SFO in that regard on the East Coast so can their SEA op work as a true gateway where Los Angeles and San Francisco both serve large home populations?

    If this “thinning” continues the question is how the nonstop service TO Tokyo from the US will be affected. Will routes get cut because they no longer combine as a hub or will planes simply get downsized (787/A350) as Tokyo becomes more of a spoke for non-Japanese carriers?

    • S*A*A*D says:

      I meant West Coast.

    • CF says:

      S*A*A*D – The only thing that I think saves a lot of US-Tokyo service is the joint ventures between AA/JAL and UA/ANA. So while Delta might cut back more, UA and AA can continue to funnel people into their partners in Tokyo to get to a lot of destinations that they’ll never be able to serve nonstop from the US.

  6. Huh? If you are going to Japan, what diff does it make where your 1-stop is as long as there is a good chance to continue? Seattle, SF, LA? The logic should say which 1-stop point gets you more passengers. As for the Delta flight to Tokyo/Haneda, if this is the 1am flight from LAX it is really a 3 way shared flight actually run by ANA. This is a good choice if you fly ANA to another domestic airport in Japan as you arrive very early (before 6am local) in Haneda and your luggage is handled for you.

    • CF says:

      William Chinn – I’m not sure I’m following what you’re saying. The point is for people traveling beyond Tokyo. Not those stopping in Tokyo.

      The Haneda flight being discussed is Delta’s new flight from Seattle. Delta also operates it from LA and that’s a different flight than the one ANA operates.

  7. Ed says:

    DL competes strongly against AS. Perhaps that will reduce AS’s value, and make it an easier take-over target? Why wouldn’t DoJ approve? A lot of water has to flow under the bridge – but I see this as a long term eventuality!

    • CF says:

      Ed – Certainly one of the theories that’s been put out there. Why wouldn’t DOJ approve? This would probably be more anti-competitive than the AA/US merger. Not only would you be removing a competitor to Delta on some overlap routes, but you’d be removing a partner from American, reducing their utility.

      But I wouldn’t really look at this from a DOJ perspective anyway. It does make sense for Delta to want to do that if it thinks the network can survive without feed from American and other oneworld partners. I think much of the network would shrink if Delta took over.

      • There used to be an old saw that if DL bought AS much of the AS network would immediately become unprofitable when labor rates etc were adjusted to DL levels. I just took a peek at some of the CASM rates and I’m not sure that is still the case. It appears that DL’s CASM is only about 8% more than AS’s, which means the flights might not be as profitable, but AS has been in the really profitable area. CF is this going to be in your view of AS?

        • CF says:

          Nick – My concern isn’t as much about the cost side of things but rather on the revenue side. Normally when a big network carriers takes over, you can increase your revenues a fair bit. But in this case, you would also lose all that traffic from American. So I haven’t really dug into how much American sends to Alaska, but it does concern me.

  8. I’m also disturbed by the image. Cranky Delta is riding the Space Needle to Tokyo while drinking Starbucks? I’ve always considered the Space Needle to be Seattle’s phalic symbol, although its much smaller than most folks expect.

  9. I liked the “””””There is now a new Tokyo/Haneda flight (we?ll see how long that lasts)…”””””

    After hearing that AA is going to cancel JFK-HND and the SEA-HND was a move from another DL gateway, is nonstop to Haneda from the USA not as great as the airlines thought when they all wanted those few routes? Is the operating time and lack of connections dooming USA-Haneda nonstops?

    • BOS says:

      The issue with Haneda is the timing of the slot pairs awarded to the US airlines. They’re horrible for the east coast and marginal for the west coast.

    • CF says:

      David – And to further what BOS says, the connections are terrible too. With these flights arriving later in the evening, there are no connections once you get to Haneda.

  10. A says:

    I’m not so sure I agree with the logic that most people would want their layover in SEA over NRT. Granted I live in a city with non-stop to NRT. I would much rather get on a 777 locally and fly into Tokyo in a large comfortable plane and then change planes and get on another “large comfortable plane.”

    So sitting here in the midwest I’d do what I can to avoid single aisle aircraft and if that means making a connection in Japan – so be it. Also, SEA is a fine airport but nothing superb in terms of me wanting to get stuck there for several hours.

    • CF says:

      A – I’m not suggesting people care about laying over in Seattle vs Narita. I’m suggesting that they prefer laying over once in Seattle vs twice in Narita and some other US gateway.

  11. Ron says:

    Somewhat off-topic, but I thought I’d mention it: Delta’s technical integration with its code share partners leaves something to be desired. Last week I tried booking an itinerary on airfrance.us which involved some Delta segments. The web site kept taking me all the way through payment, only to bounce at the end with a cryptic message to call customer service. I called the next morning (they’re closed at night) and the agent kept getting the same problem, but she eventually figured it out: the initial Delta segment from LAX to MSP had been pushed back, creating an illegal connection, but the schedule change wasn’t updated for the Air France code share. So the Air France system saw availability and therefore kept trying to book what it saw as a legal connection, only to get bounced each time the ticketing request went to Delta (and without any helpful indication of where the problem was).

    Five years ago I encountered a similar failure to update schedule changes between Air France and Delta (in the opposite direction), and even wrote to Delta and commented on it on Cranky Flier on 2008-10-31. Doesn’t look like they’re eager to fix the issue.

    In the end the glitch worked out to Delta’s advantage, because in the time it took to figure out the problem a better flight option came down in price, wholly operated and marketed by Delta, and that’s what I ended up booking.

  12. Christophe says:

    I would think that another reason is that they want to be able to offer a first class (business) experience on DL from some destinations instead of having to rely on a third party service for the feeders…
    Love the image !

  13. Huey Lewis says:

    If you live in Bay Area or LA, you would never choose to fly into SEA then connecting to Asia unless you want skymiles.

  14. Eric C says:

    I thought he Seattle FIS was capacity limited. Is that still the case? Just how much more can Delta grow without hitting facility limits?

  15. Marsh F says:

    Over the summer, the Port of Seattle unveiled a skybridge plan for int’l arrivals to the S satellite. The plan includes converting five more gates on the A concourse to international arrivals, which by 2018 would bring the airport’s total for international capable gates to 17. Plus, we could see Emirates, Lufthansa, or Hainan pulling an Air France/SAS and eliminating service altogether down the road. Not saying DL eats up all that capacity, but it’ll probably have the option of acquiring some of it.

  16. bobsmith says:

    Being a Portland resident- I’m hopeful the non-stops from PDX to Amsterdam and Tokyo will stay. Any thoughts?

    • CF says:

      bobsmith – Like Scott in his recent comment, I do have to wonder about the Portland – Narita flight. I don’t know details of what kind of corporate deals might be keeping that flight alive, but the one saving grace is probably that it can be flown with a 767 and doesn’t require a bigger, more expensive airplane. But as Narita shrinks, that provides fewer options for connections beyond Tokyo to help fill that plane. And now people in Portland can fly Delta by connecting via Seattle on Horizon to Delta to cities beyond Tokyo. So I would probably be worried about that.

      Amsterdam is a different story in that there is a big hub on the other end with Delta’s joint venture partner. That’s not going to shrink. But that flight is probably always teetering on viability anyway. Still, I would think Tokyo would go before Amsterdam would.

      Scott – Interesting to think about Minneapolis. People would freak out if that flight disappeared up there, but then again, that doesn’t mean it’s the wrong idea. (I really don’t know.)

      • Phil says:

        As a Portland resident I also wonder about the PDX-NRT and PDX-AMS flights. I agree that the two flights are different given the JV on the AMS end and lack of the same at NRT. While SEA really isn’t that bad of a connection point, I would much rather make that connection in an Asian or European hub with nicer facilities, go through passport control and customs at my home destination in Portland, and avoid Horizon’s Q400 regional aircraft on PDX-SEA.
        AFAIK, PDX-AMS seems to be holding its own. I was on that flight twice this year, and both times the A330-300 was full in both service classes.

  17. Scott says:

    Interestingly, no one has raised the question of what this move means for PDX-NRT, which is now Delta’s only non-hub transpacific gateway. That route was incentivized a few years back, but those incentives have since ended. The PDX-NRT market isn’t that big — Delta connects a lot of PDX passengers over the NRT hub to other cities in Asia.

    To a lesser degree, I also question how long MSP-NRT survives. There are a handful of cities Delta serves only from MSP, but how many of those mostly-tiny markets have high-yield passengers connecting to Tokyo specifically? (Plus, a lot of those heartland cities served only from MSP are probably the first to get axed as more 50-seaters are pulled from the fleet.) The rest of the traffic connecting to NRT via MSP could easily be funneled through DTW, JFK, ATL or SEA.

    • AFAIK Delta’s strategy was to pull the 50 seaters, replace those routes with 75 seaters, and replace the 75 seaters with 717s or something similar. There might be less frequency to those tiny markets, but I don’t think DL is dropping them outright.

  18. Dale says:

    Correction please. This may be a bit off topic but I’ve been noticing a lot of people have been referring to SEA as just “Seattle”. It’s actually Seattle/Tacoma and the city the airport is in is called Seatac. Just like MSP is Minneapolis/St. Paul not just Minneapolis. RDU is Raleigh/Durham not just Raleigh and DFW is Dallas/Ft. Worth not just “Dallas”.

    • Geez, $100k from Tacoma 69 years ago still gets people’s knickers in a knot! ;-) I’m surprised Bellevue and Redmond haven’t made a claim so the airport for the airport to be known as Seattle-Tacoma-Bellevue-Redmond Airport.

      Do you insist that the I90 bridge be called the Lacey V. Murrow Memorial Bridge instead of the I90 floating bridge?

  19. Daniel says:

    I doubt that the Narita hub will be around in 10 years. Either Delta will get it’s way and be able to move the hub to Haneda or they will just establish overflights with the 787s coming online in 2020.

  20. sjc user says:

    1) I still think United has a stronger hold on Asia with their SFO operation as opposed to whatever DL builds up at SEA. SFO is the stronger O&D market for Asian operations.

    2) DL still needs AS to bring service to it’s new SEA Asian gateway. DL does not have enough capacity to go beyond SFO/LAS/JAC and the domestic hubs it serves anyway without dehubbing CVG or something else. But, I’m really hoping for a fare war on the Bay Area – SEA route as I have a wedding up there this year.

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  23. NRT is has been one of my great NW/DL pleasures, it will be a shame if it goes away. I always do everything I can to avoid connecting in the US, especially on return and wish they would keep adding NRT flights rather than SEA.

  24. Michael Tang says:

    DL made a mistake . What about HKG connection to SFO? Now , it will take 2 stops. I will no longer take Delta again.

    I was with Northwest and now Delta. Due to historical reasons, I have been travelling Delta for the past 10 years.

    From HKG to SFO, we have other airlines offering better service and with further connection to NYC or Canada.

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