An interesting decision came out of the Department of Transportation (DOT) last week in regards to the fight over Delta’s Seattle-Haneda flight. In short, DOT said Delta could keep it, but only if it actually flew it. I like the decision.
Here’s a little backstory here for those who don’t recall. Delta started service to Tokyo’s close-in Haneda Airport a little while back from its growing Seattle hub. Haneda service is highly restricted, so the slots are coveted. Apparently Delta wasn’t doing so well on this route, so it put into place a bare minimum schedule for operation this winter. That schedule? Delta flew one week of flights for every ninety days, as required. That, of course, is entirely unhelpful to people who actually want to fly the route, and since Haneda is restricted, that was a real hoarding exercise that hurt consumers.
Enter, American. Though American had given up its one Haneda slot (flight from JFK) previously, the new management team decided it wanted to get back in, but this time from LA. So, American petitioned DOT to re-open the award and instead give the slot to American, which promised to actually use it. The petition was biting and angrily directed right at Delta. Hawaiian, not one to miss a good opportunity, jumped into the fray as well. Hawaiian agreed that Delta should be stripped of the route, but it wanted the authority to fly Kona to Haneda.
After some back and forth and the usual political gamesmanship, DOT made a decision last week. Delta gets to keep flying from Seattle to Haneda but it has to do it every day.
Quoting from the ruling, I can’t really disagree with DOT on this.
When the Department permitted Delta to introduce Seattle-Haneda service, it did so because it found that Delta’s proposed service would address a variety of public interest goals and would best maximize public benefits.
Delta was opening a new gateway into Haneda and that provided the most benefits to US-based travelers. That hasn’t changed. Sure, American flying from LAX would add another airline in Haneda, but it’s on a route that’s already flown by both Delta and ANA. And Hawaiian? Well, it would benefit Japanese tourists more than US-based travelers, but DOT also has an issue in that there is already a concentration of slots being used in Hawai’i. It wants to spread the wealth around. But the problem was clear…
Nevertheless, the Department recognizes that the positive attributes of Seattle-Haneda service remain meaningful only if Seattle-Haneda service is actually being provided.
Yes indeed, that is the problem. So how is DOT going to fix this? By adding a very restrictive condition to the authority.
Any failure, without a Department-granted waiver, to perform a Seattle-Haneda flight, and any failure, without a Department-granted waiver, to perform a Haneda-Seattle flight, on each and every day of every week (7 days a week, 365 days a year), will constitute a violation of Delta’s Seattle-Haneda authority subject to enforcement. Any failure, without a Department-granted waiver, to perform Seattle-Haneda flights, and any failure, without a Department-granted waiver, to perform Haneda-Seattle flights, on two days of any seven-day period (365 days a year) will constitute a default of Delta’s Seattle-Haneda authority and that authority will automatically expire.
So there you have it. Fly it every single day or you’re gonna be in trouble, Delta. And if you fail to fly it twice in a 7 day period, you automatically lose the authority. To further strengthen this, American was selected as the backup. If Delta defaults, then American automatically gets the authority, no additional proceeding required.
This kind of rule gives Delta some flexibility. If it has an airplane break, DOT is not going to take the authority away. But if it happens to have 3 planes break in a week, then it’s all over.
Assuming this order is finalized, what will Delta do? Is it worth losing a ton of money on the flight just to hold on to the authority, hoping profitability improves? Yes. According to a Delta spokesperson…
Delta thanks the U.S. Department of Transportation for its tentative decision to allow the airline to continue its service between Seattle and Haneda Airport in Tokyo. After an extensive review, DOT concluded that Delta’s Seattle-Haneda service provides the best public use of the available slot pair between the U.S. and Haneda Airport. Earlier this month, Delta resumed its nonstop service between Seattle and Haneda after a temporary seasonal suspension. Delta will operate year-round, nonstop flights between Seattle and Haneda as we continue to grow Delta’s international gateway at Seattle-Tacoma International Airport
There you have it. I’m sure American isn’t happy about this, but it’ll keep trying to get in one way or another. As for Hawaiian, it saw Kona to Haneda as a very specific opportunity. It doesn’t work from Narita, according to the airline, so Kona just doesn’t get Japan flights. Though Hawaiian isn’t happy about this, and says so publicly.
Despite other airline opposition, it’s hard to argue how this isn’t fair. DOT found the Seattle service to be the most beneficial in the first place. Now Delta actually has to operate it if it wants to keep the authority.
[Original scolding photo via Shutterstock]
It’s *easy* to argue that this isn’t fair. The argument goes like this: “Delta showed bad faith in its management of the slot, and we shouldn’t reward that behavior.”
Just being contrary, really. I don’t have any skin in this game..
But now that DL “has” to operate the route, that logic fails. DOT is now saying – either be on the route, or don’t. I think that is pretty fair. DL owns the slot and therefore should be given this “warning” or “2nd chance” to use it before losing it.
I don’t like that the DOT awarded AA “backup” authority. In my opinion, things change in the industry so much, that this may come back to bite them in the future. On top of that, LA-TYO has so much service, I think this will lead to lower prices and more consumer benefit.
Didn’t DL want to move the slot out of SEA at one point and it got rejected?
My concern is that US airlines can take this as permission to squat on landing rights. They can feel confident that the slot won’t be taken away from them without a warning, and they can make the decision to fly it or forego it at that time.
The decision says that the backup authority expires after two years. That is double the normal one-year backup authority period; the reasoning was that American proposed substantially the same service at the original proceeding back in 2011, and so their plans appear relatively stable.
Noah – I don’t recall Delta trying to move the slot out of Seattle. Delta successfully petitioned to move the slot from Detroit to Seattle but I don’t remember the airline trying to move it again.
“Delta showed bad faith” is an understatement. Cranky neglects to mention that Delta started with Detroit service, which it pulled and transferred to Seattle. (In contrast, when American found that JFK-HND didn’t work — the slot times available for HND arrivals and departures just don’t work well for flights to the eastern US — they did the honest thing and gave the slots back to the department.) Not to mention the fact that Delta won the LAX-HND route over AA explicitly because DL promised to fly a 747 while AA would fly a 777 and the DOT wanted a larger plane. Well, Delta quickly switched to a plane that’s smaller than the 777s that AA would still be flying (since they don’t have a smaller plane capable of flying LAX-Asia).
Alex Hill – Why isn’t it the “honest” thing for Delta to move the slot from Detroit to Seattle? DOT had to allow that, but why wouldn’t Delta try?
Notice Delta says only “year-round service,” not “daily year-round.” I don’t think we have seen the end of this fight over conditions on Delta.
I think Kona has a bigger problem that it is not currently a port of entry into the United States, thus CBP facilities would have to be established for them to fly the route.
i believe JAL used to operate flights from NRT in late 1990’s to early 2000’s, I seem to recall seeing a JALways 747 on the ramp at KOA at that time. So CBP facilities may already be there (although might have to be renovated/improved).
The inbound flight first stopped in HNL.
um, no. The inbound flight was nonstop to KOA until 2012. CBP was on arrival at KOA.
The outbound flight was via HNL.
when i flew it in 2009, the nonstop JL NRT-KOA service was served by a 767. maybe it used to be a 747 previously.
Mid to late 90’s I was at Kona airport and since it’s all outdoors a JAL 747 did come in and park real close to the rod iron fence at the boarding area and it was loud. Two trucks with stairs pulled up and people started walking off and into the building near where it stopped.
OhioExile – Kona was a port of entry until 2012 but the feds shut it down then. There’s no reason they couldn’t find a way to open it back up if there was a flight that wanted to use it. But yeah, not as simple as the other airports which already have it.
I see this as an implicit admission of failure on the DOT’s part. If your rules are so loose that airlines can squat on a slot and yet only rarely actually fly it, something is wrong with the rules, not just with the airlines taking advantage of them (not to defend Delta, but seriously, the DOT should have foreseen the possibility of this happening).
Going forward, the DOT needs to have hard constraints and rules like this in similar situations and slot awards, essentially telling the recipient airline(s), “You’re getting the slot for now, but you had better fly the route at least 6x weekly, or have a d@*n good reason as to why you couldn’t, else your competitors would love to have the slot.”
Since these routes are rare, you would have thought the Feds would have had wording in the first place that it was a use it daily or don’t ask at all. That would not count for anything the airline can’t control like weather, airport closure or day of flight mechanical issues.
I agree an automatic AA award isn’t right and it would be a waste for HA in Hawaii since it’s a lot of leisure travel and NRT if just fine for that.
Actually this is not uncommon for airlines to run seasonal routes. All of them do it.
But in this case Delta is in the process of building a hub in Seattle so that they can feed traffic to the downtown tokyo airport. I think once that hub is up and contributing passenger to this route it will be profitable.
Most flights to Asia are controled by the home country guaranteeing the home town carrier 50 % of the traffic. In tihs case JAL and ANA are virtually locked in for half and the other carrers all split the other half.
Running a seasonal route is one thing, but running a seasonal route that vastly underutilizes highly-competitive limited slots is another.
Cranky, I agree with both you and the DOT that, once Delta promised to provide year-round service, the substance of AA’s objection drops away and this was the only reasonable solution, much as I dislike rewarding Delta’s bad faith.
However, I think you’re being unfairly hard on AA’s old management. They wanted LAX-HND too; in the original HND proceeding, LAX was their first choice and JFK their second. Delta won LAX because of their dishonest promise to use a 747. Given the crummy departure times and HND, no US airline was able to make an east coast flight work. AA did the honest thing and gave the JFK slot back to the department while DL moved it (with DOT permission) to SEA, which doesn’t work all that well despite the fact that decent timings are possible (hence this proceeding). We have every reason to believe that AA’s old management would have been just as interested as the new team in jumping on an opportunity to get the LAX-HND slot they wanted from the beginning.
And AA may get the last laugh after all; their protest forced Delta to run a flight year-round when it apparently wasn’t anywhere close to profitable this winter. Maybe Delta makes it work, but more likely is that Delta either bleeds red ink on this route all winter or AA gets the slots after all.
Excuse my ignorance, but per the comments it sounds like HND doesn’t work from east coast cities due to flight time restrictions? I’m quite sure AC does make it work from YYZ, what’s to stop DL from doing this flight from DTW? Personally I’d rather take a short hop to my international gateway than trvel 3+ hours crammed into a narrow body flying into SEA and then head across the pond. HND already has plenty of service from other west coast cities. I get that DL wants to dig in at SEA but why throw good money after bad here? Seems like a case of airlines having a little too much money to waste on turf wars.
The US carriers are only given slots that arrive at HND between 10 PM and 7 AM and depart HND between midnight and 7 AM. Those times don’t allow reasonable departure or arrival times on the US east coast. Air Canda’s YYZ-HND flight (AC5) looks like it lands at 15:35, so I guess the Canadian airlines are allowed decent landing slots in HND.
See Cranky’s post from October 13, 2014: http://crankyflier.com/2014/10/13/americans-application-to-take-one-of-deltas-slots-at-tokyo-haneda-airport-is-a-fun-read/
Looks like roughly a 13-14 hour blocktime from JFK to Tokyo, with Tokyo 11 hours ahead of NYC… Any chance a ~7p departure from JFK work work? If my math is right, you’d be getting into Tokyo at ~10p, which I know would not be ideal… Or maybe a 1130p or 1155p departure from JFK or BOS, cruise a bit more slowly, try to arrive at HND around 4a or 5a local time, in time for a 655a Tokyo time departure?
Not sure if my math is right, and I know those options would not be ideal, but would they be THAT bad?
The schedule American operated was this:
JFK 610p – Haneda 1015p
Haneda 640a – JFK 515a
The reason for the early return was to try to give it some connectivity. A flight leaving at midnight would arrive around 1030p, blowing any connecting opportunity. Of course, this meant it was a huge waste of aircraft time, sitting overnight in Tokyo.
Ah, forgot about connections, thanks.
DL flies this route with a 767. What’s the ideal aircraft for this route (in or out of DLs fleet)? The DL flight is a change of guage SLC-SEA-HND. Could this work as a thru (same equipment) originating JFK, DTW, ATL to SEA -HND?
PF – I’m guessing the ideal aircraft is a Cessna 172 considering how these route work. But a 767 isn’t bad for the route. Can’t really do a through flight to the east coast the way the flight times work. It’s good for intra-West connections but not much else.
Why wouldn’t it work?
The SEA-HND leaves at 7:39pm, so an early afternoon departure out of JFK/DTW/ATL fits perfectly.
The return is a bit trickier with the arrival into SEA at 5:28pm, but jiggle things around a bit and it could connect to the current DL1542 red-eye at 9:15pm.
Arcanum – Well, if you’re going to have a 4 hour layover between segments on the return, then it’s not going to show up favorably in availability anyway. And I can’t imagine DL would be well-suited to push the departure from Haneda to be later than 1205a.
The neat part for American is that this is a win-win. Delta has to fly the route, which means they are likely to lose money, at least for part of the year. That helps American. And, if Delta decides not to fly the route, American wins by default.
The one saving grace for Delta is that fuel prices are down, so the losses won’t be as bad as a year ago.
Kona???? Surely they jest
I don’t agree with anything Richard Anderson does, or did with NW, but a simple decision to begin the flight in ATL or SLC with a stop in SEA would seem to hold out more promise, if DA really had any intention to really fly the city pair anyway. I flew the Delta A330 service from SLC to Narita a number of times. I don’t know to what level the State of Utah or SL Chamber of Commerse subsidized the route or gave a ticket guarantee, but it was never less than 3/4’s filled. I had connected in DEN, LAS, even MSP because of the timing and I never had a problem with late arriving connections or weather problems in SLC, seemed pretty slick. With their route being DC’ed I don’t think passengers out of SLC would complain about a SEA stop on their way to Tokyo.
How come Final Order is pending?
What’s the status? As 2015 comes to a close, DL still is not flying the route. Was the order ever confirmed? AA is not flying LAX-HND either.
Seattle Flier – Yep, AA starts it on Feb 11.