Yesterday Delta posted a new item on its News Hub entitled “Q&A with APAC SVP: Delta remains committed to Asia despite Haneda agreement.” Note that it says Delta remains committed to Asia, but it says nothing about Tokyo. In fact, Delta has actually decided to being unwinding its Narita hub by cutting three more routes, following through on earlier threats.
Delta’s position in Japan has been perilous for a long time. I know I’ve told this story many times on the blog already, so I’ll keep it brief. Delta inherited the spoils of World War II when it acquired Northwest. The airline’s Tokyo hub was the center of its Asian network. But as aircraft have gained better range, the reliance on Tokyo has waned. Still, Tokyo is an important global city and Japan is a huge market despite its shrinking population.
United and American both found salvation with joint ventures with ANA and JAL respectively. But Delta has been forced to go it alone. The big issue in Delta’s mind is access to Haneda. The close-in, convenient airport with a godzilla-free approach is preferred to more distant Narita, but it’s restricted.
Recent loosening of rules has given Delta two daily flights at Haneda, but that’s not enough for it to move its entire hub. With United/ANA and American/JAL having no shortage of slots, in the long run, Delta thinks it’s going to be in big trouble. The only people going to Narita will be those looking for a cheap deal, if Haneda ever fully opens up without restriction. And Delta doesn’t like being in that position.
It has used this stance to try to lobby the US government to block any further Haneda liberalization unless it can move its entire hub from Narita. That’s a non-starter and though Delta’s efforts may have succeeded in slowing down progress, there’s no stopping the eventual evolution. Delta has threatened that cities would lose Tokyo service from the US and its whole hub would be in jeopardy. In the long run that seems possible, but in the short run it appeared to be just speculation. Apparently that’s not the case as Delta has begun a new round of pull-downs.
The first shot was fired a few months ago when Delta received temporary authority to fly from Los Angeles to Haneda during the day. Starting this fall, Delta is canceling the Narita flight and only operating the Haneda one from there. Now that this is positioned to become a permanent route authority, don’t expect Delta to bring Narita back.
Yesterday, Delta said it would cancel three more routes. Most notably, Delta will no longer fly from JFK to Narita. That is a fairly remarkable drop considering how important New York is to Delta. That will leave United/ANA with 1 daily flight from JFK to Narita, one to Haneda, and one from Newark to Narita. In addition, American/JAL will have 2 daily flights from JFK. I can only assume Delta is losing so much money in this market that it can’t even justify the strategic value. Either that, or it’s trying to send some kind of message about how devastating the Haneda situation will be. I’ll stay positive and assume it’s the former.
Delta is also canceling flights from Narita to Osaka and Bangkok. The Osaka flight was entirely about connecting passengers. So maybe with the loss of feed from LA and New York, that route no longer makes sense (if it ever did). Delta will continue to fly from Osaka to Guam and Honolulu, but that’s for the Japanese market. Americans who want to get to Osaka on Delta will either have to backtrack via Seoul or Shanghai and connect on a partner or just take the train from Tokyo.
Bangkok is a dot that will be wiped completely off Delta’s map (excluding codeshare). On this one, I just assume it’s low-yielding and there’s not enough traffic to bother continuing to fly it. There could also be some operational moves going on here that make it easier to schedule the now-shrinking operation without this flight. Again, it’s partner or bust here.
This leaves Delta with a fairly small hub at Narita. It continues to serve Manila, Shanghai, Singapore, and Taipei within Asia. Of those, only Shanghai is also served from the US. It wouldn’t shock me to see any of those flights disappear. Delta also serves its beach markets in Guam, Honolulu, Palau, and Saipan. Those are almost exclusively for Japanese travelers. They’re leisure routes, so they have a better chance of surviving at Narita.
From the US, once the Haneda award is finalized by the government, I’d be shocked if the Minneapolis-Narita flight didn’t go away since Delta will begin Minneapolis-Haneda. That would leave only Atlanta, Detroit, Portland, and Seattle with flights to Narita. It does make you wonder if Portland can survive. The other three, however, are more about US-originations that flow through those hubs. I think those will have to remain for some time. But if Delta gets a few more Haneda slots…
It’s fascinating to watch Delta pull down its operation at Narita. This could position Delta to get more Haneda slots whenever further liberalization occurs. Or it could rub the feds the wrong way and have the opposite effect.