The big expansion of flights between the US and Tokyo’s close-in Haneda airport is now set. While every airline that applied got something, some fared better than others. Delta is the big winner here, and it received enough slots that it should be able to close its old Narita hub entirely.
Today, US airlines can only fly into Haneda 6 times a day, and one of those must be overnight during off-peak times. But next year, an additional 12 slot pairs open up. Why does this matter? Well, Haneda is more convenient to most of Tokyo as well as Yokohama. Also…
So why does any airline fly to Narita? There was no choice. Haneda was the main Tokyo airport until Narita was built for international flights. Only in the last few years has Haneda been re-opened to international flying, but it has been heavily restricted. Every US airline has been clamoring for those slots because Haneda is the most preferred airport in Tokyo.
For these 12 new slot pairs, there were four US airlines that applied. Here’s what happened in order of preference as requested by each airline:
- American
- Dallas/Ft Worth #1 (Approved)
- Los Angeles #2 (Approved)
- Dallas/Ft Worth #2 (Denied)
- Las Vegas #1 (Denied)
- Delta
- Seattle #1 (Approved)
- Detroit #1 (Approved)
- Atlanta #1 (Approved)
- Portland #1 (Approved)
- Honolulu #1 (Approved)
- Honolulu #2 (Denied)
- Hawaiian
- Honolulu #3 (Approved)
- Honolulu #4 (Denied)
- Honolulu #5 (Denied)
- United
- Newark #1 (Approved)
- Chicago/O’Hare #1 (Approved)
- Washington/Dulles #1 (Approved)
- Los Angeles #1 (Approved)
- Houston/Intercontinental #1 (Denied)
- Guam #1 (Denied)
Curious how the feds came to this conclusion? According to the filing, this is how DOT went about awarding these slots.
…the Department has the ability to pursue a number of public interest goals by bringing first-time U.S. carrier own-metal Haneda service to major U.S. hub cities and U.S.- Tokyo gateways that currently lack U.S.-carrier operated nonstop Haneda service; by promoting a more geographically diverse and competitive U.S.-Haneda market structure; and by adding service and competition at the largest U.S.-Tokyo markets. The Department has tentatively decided that this approach best meets the Department’s stated goal of maximizing public benefits in this proceeding.
This seems like a fair allocation, but maybe I’m just saying that because I correctly guessed how the slots would be broken down by airline. I didn’t, however, get all the awarded destinations right, and I might quibble with a couple of the choices. I think the best way to look at this is by US city and not by airline, because that better reflects how DOT made its moves.
Honolulu
The Honolulu decision giving slots to both Hawaiian and Delta might seem somewhat curious. After all, Hawaiian already flies it once daily with another 4 weekly on the overnight. ANA flies it as well, and it just introduced massive A380s in the Narita-Honolulu market. There is no shortage of capacity between Tokyo and Honolulu. On top of that, this is a market that is highly skewed to benefit the Japanese traveler. Most people on those flights are not originating in the US.
That being said, it is a HUGE market at more than double the size of the LA-Tokyo market, the second biggest. Tourism is the life-blood of Hawai’i, and this will help to grow it further.
Giving one to Hawaiian isn’t a bad idea, especially in light of its pending Japan Airlines joint venture which creates more connectivity on the other side. As for Delta, this may be a mild surprise, but DOT saw an opportunity to create more competition in the market. That’s certainly understandable.
Los Angeles
There are already three daily flights from LA to Haneda (not to mention six daily to Narita), one each on American, Delta, and ANA. The ANA flight, unlike the others, is at night westbound. That created two opportunities.
First, United — ANA’s joint venture partner in the US — will fly to Haneda during the day. That will give the close partners coverage in the morning and night. United also said it would keep its LA-Narita flight, and that was music to DOT’s proverbial ears. This sounds like it might be a bad idea, but having a joint venture with ANA means it’s not completely insane.
Second, American will add a night flight creating competition with ANA. As of now, ANA’s LAX flight is the only night flight from the West Coast to Japan at all. That may be good for travelers, but I expect American will lose its shirt on this, as it does in many Pacific markets from LA.
Dallas/Fort Worth vs Houston/Intercontinental
Unlike in Los Angeles, American has a real chance to make a big, profitable Pacific gateway at Dallas/Fort Worth. That is probably why you saw American ask for two slot pairs to serve Haneda from there. It was given one, and that should have been a no-brainer. This is American’s mega-hub and Haneda service should work. But American wasn’t given the second slot pair. Why not? It’s because the DOT ran out of slots to hand out, and this one just didn’t add enough value to make the cut.
For United, on the other hand, Intercontinental is now the only hub that didn’t win a bid to get a Haneda flight. (Denver didn’t either, but that wasn’t requested.) What’s the difference between Dallas and Houston?
To start, United will have flights from Chicago, Newark, and Washington east of the Rockies while American will only have DFW. To put it another way, people who might only be able to connect via DFW on American would have many other options if they flew United, some that are more efficient than Houston would be.
In addition, United put Houston low on its wish list, after every flight but Guam. Guam may not have won a slot either, but that was a long shot anyway. It shouldn’t have gained a flight. All the other United hubs will serve the US well enough for now. If more slots come available, I imagine Houston would have a decent chance.
Portland vs Las Vegas
In the battle for small market service, Portland and Vegas were going head to head. Delta won the right to serve Haneda from Portland, but American was denied its chance to serve it from Las Vegas. Why?
American did put Vegas as its least preferred option while Delta put Portland as number 4 out of 6, but the problem was more complex than that.
DOT didn’t like that American could only connect people beyond Vegas to other hubs that already have service anyway. It appears the DOT wants connectivity, and Vegas wasn’t going to provide that… but neither would Portland. So what’s the difference there?
The short answer appears to be that there is already sustainable service to Narita from Portland while nobody has made it work from Vegas at all. Vegas is also more of a leisure market that is largely Japan-origin while Portland is more of a business market that has US-origin traffic. In the end, we don’t know if DOT just felt like it owed Delta something since it has no Japanese partner, but it wouldn’t shock me if that was part of the decision-making process.
All Delta’s Hubs But One Two
Delta really was the big winner here. Outside of Honolulu, it received one slot pair to use for each of its hubs that doesn’t have service today except one. Atlanta, Detroit, and Seattle get a flight, but New York/JFK does not. Of course, Delta didn’t even bother applying for a JFK flight, so that was a non-issue as far as the airline was concerned. (Oops, Salt Lake is a hub too, but again, that wasn’t requested.)
Delta deserved to get slot pairs for all these flights, especially since — unlike American and United — it has no partner in Japan to feed its flights at Narita. This along with the Portland slot should pave the way for Delta to pull out of Narita entirely, something that would be a real milestone for an airline with a long history (via Northwest) of hubbing at the airport. But it is the right thing to do. Tokyo isn’t about connections for Delta any longer, and Haneda is the airport you need to really serve Tokyo best. Delta finally has a substantial presence at the airport with these moves.
I did get some wrong when I was picking winners, and that left me wondering if a couple of these would have been better in other hands. For example, I was really curious to see if a Vegas flight might actually work. Now we’ll just have to see if someone wants to try it from Narita instead… some day And if I were betting, I’d say LA may have too much service. Then again, losing money in LA hasn’t stopped airlines from building up there in the past.
All that being said, these are minor nits. I can’t find much fault with how DOT handled this.
57 comments on “Delta May Now Walk Away From Its Old Tokyo Hub”
Next Chapter: What will the Japanese carriers do?
1. I assume ANA will fill in for UA at IAH, and possibly DEN. And a few more frequencies to other UA hubs already flown. Maybe a surprise destination or two in the mix. Will be interesting to see.
2. JAL. Will they add flights to HND from AA hubs without AA service? Maybe the second DFW frequency AA was denied. PHX/PHL/CLT/MIA. I think JL’s decisions will be the ones to watch.
Thoughts?
ChuckMO – Great question, and I can’t say I even know how many slots the Japanese carriers will get. So, that will drive what they end up doing. I wouldn’t expect ANA to use it for a place like Denver. It’d think it will look toward more important markets.
Japanese airlines have to use the same limited HND slots for other markets. I’d like to think that one or other of them would give MEL a crack, capacity to Japan from Australia has boomed in recent hears. Unfortunately all the times I have flown JA or QF’s MEL-NRT flights it has been Japanese leisure travellers and Aussies continuing on with Finnair to Europe on one of their competitive but assuredly low yielding codeshare fares.
Narita is not that bad. It’s worth paying the premium for the Kesei Skyliner, it tracks further north than the JR NeX so you are much safer from Godzilla attacks.
As a United frequent flier (and hence “fan”) I’d like to see ANA go after rival hubs (just as LH, KL, AF and BA do from Europe) rather than duplicate UA routes. Their only non-duplicate routes right now are JFK (unserved by UA), SJC (for the high-tech market) and SEA (DL hub). How about DFW, DTW and ATL so their own FF’s don’t have to connect via a UA hub.
I don’t see ATL as a good idea. Yes, it’s the busiest airport in the world, but it’s also mostly a huge connection point. Plus, most everyone in that area who is going to fly to business is probably going to fly Delta.
Sent via the Samsung Galaxy, an AT&T 4G LTE smartphone
Confession: I really opened this post for the Godzilla map!
Despite all of the hand-wringing that has gone on for ten years as Haneda has been gradually re-opened to US carrier flights, the DOT’s decision – assuming it is maintained as a final order – in reality returns Delta to a leadership position at Haneda which Northwest had in Tokyo for years. Other US airlines recognize that having joint venture partners is both a blessing and a curse in a market that was supposed to be Open Skies; let’s not lose sight of the fact that US carriers can start as much service as they want to every other airport in Japan except Haneda.
As much as United would like to say otherwise, the chances are very high that Narita will not remain viable as a transpacific airport. Previously, a minority of flights to Tokyo from the US were to Haneda but the most recent route awards – as well as the equal dozen that Japanese carriers will receive – allows nearly every US city that has supported flights to Tokyo to have them from Haneda. There is little reason for high value passengers that are necessary to support transpac flights to pay to fly to Narita. None of the existing Tokyo-US carriers are low cost so it is not reasonable to think that Narita can be sustained by low fare US-Tokyo flights as well as connections to elsewhere in Asia. While AA-JL and UA-NH can optimize their Japanese networks to flow local traffic over Haneda and connecting traffic over Narita, the Japanese market is shrinking and cutting fares will not stimulate more traffic because the root reason is a lack of population growth, not high fares.
It is also very likely that Hawaiian and American will both close their Narita stations – both because the economics of maintaining a station for a single flight (or at best two) is challenging but also because their Narita flights will underperform relative to their Haneda flights because AA and HA will be retaining NRT flights from the same US cities that will also support HND flights.
Delta already had 2 gateways to Haneda and adds 5 more including Honolulu, the only city which previously had two flights/day on the same US carrier, giving Delta very good coverage on Delta’s own metal with particular strength in the western US where connections can be made. The absence of JFK as a DL gateway to Japan is noticeable; DL previously operated NRT but said it would not attempt to operate NRT service alongside NH and JL’s HND flights – and so DL exited the NYC-Asia market.
Some may remember that DL asked to be able to move existing HND flights as part of the current HND route application process but the DOT denied that request. There is still a high likelihood that DL will move its MSP flight to JFK given that it now has DTW back as a Midwest gateway to HND and has already started MSP-ICN service and will likely win the right to start MSP-PVG. DL’s Asia network is heavily centered now around Japan – which is local market driven; ICN – which is connecting JV traffic driven; and China -which is China and non-JV driven flow traffic. Moving MSP-HND to JFK will allow DL to return to the NYC to Asia market alongside its new JFK-BOM flight. It is not lost on DL that the biggest market region difference between itself and UA from NYC is Asia. Given that this HND route case sets the future of DL’s Pacific network alongside the retirement of the 747s last year, there is a good chance that DL will move to build its presence from the NE US to Asia.
It is clear from these awards that Asia is a two US airline game; American’s efforts to build its own presence has come at great cost and did not produce the size needed to compete with DL and UA. AA will operate just one single flight to Japan that is not duplicated by DL or UA; LAX-HND is duplicated by one or both of DL/UA along with most other LAX transpacific routes and AA underperforms DL and UA in those competitive markets.
The DOT did not only what was right for the communities involved and in line with its previous HND route awards but also restored the balance in the most valuable part of the Tokyo market to Delta on its own metal. AA and UA cannot fully use all of the capacity on a joint venture flight as their own because of labor restrictions and AA and UA also will be focused on supporting their Japanese partners’ Tokyo hubs while DL has shifted its focus to everything in Asia besides Tokyo to flights outside of Tokyo. The Japanese government started a risky plan to consolidate international traffic at Haneda and put restrictive route controls in place as part of a phased-in transition to Haneda-US flights. With the majority of Tokyo flights soon to be operating from Haneda, the DOT restored the historic US carrier balance in Japan but also has allowed AA and UA to tie themselves to joint venture partners in a market where limited capacity at Haneda is best used for local Tokyo traffic.
“AA and UA to tie themselves to joint venture partners in a market where limited capacity at Haneda is best used for local Tokyo traffic.”
No irony lost on the airline that has MSP – ICN/PVG/HND, 3 flights that has connections written all over it – MSP-HND for behind-MSP connections, and the other 2 with double-connection bridge functions.
It’s funny how DL keeps talking Shanghai as if the nation is uni-metro-centric, but also forget that Shanghai is the fashion capital within China, and DL has zero nonstop JV presence between that and the fashion capital of North America.
If Delta hadn’t been awarded the Portland-Haneda route, surely they would have dropped PDX-NRT leaving PDX with no service to Asia.
I don’t think PDX was in danger of missing out on the HND slot. The Tokyo route has been running for 15 years and for 14 years before 2001 (when pre-merger DL pulled out). There’s a lot of corporate traffic that makes it self sustainable. If DL did lose out and pulled the route I suspect NH or JAL would have stepped in again from NRT. And I wouldn’t be surprised if DL added PDX/ICN as well. Pre merger DL ran both PDX-NRT and PDX-GMP in the mid to late 90’s.and currently the business market is booming to Asia.
All Delta’s Hubs But One? Is Salt Lake not considered a hub anymore? It used to have a flight to Tokyo until 2010 (originally a Northwest flight).
Ron – Doh! Fixed.
With Tokyo becoming an international spoke and ICN taking over the role of intra-Asia hub, what are the chances DL, as a distant third in alliance market share, will maintain seven flights a day years down the road?
Tokyo is a huge market but I don’t think any other non-Sky Team international stations have that much service (including HKG, which isn’t served at all), even without competition from two dominant local carriers.
Mark,
can you tell us what other Star and oneworld hubs have capacity restrictions as exists at Haneda? The answer is precisely ZERO.
As much as you want to believe that Delta will be at a disadvantage because of the larger number of flights they operate at Haneda, the treaty between the US and Japan specifies the same number of flights for carriers of both sides. In other words, the Japanese government has capped the number of flights that its own carriers can operate to the US which helps Delta which has the largest number of flights among US carriers.
It will be hard for a lot of people to admit that the supposed Open Skies agreement that allowed Open Skies actually has limited American and United’s ability to compete in the US-Japan market. There isn’t a single large airline market including ANY, let alone TWO, hubs for major US carrier alliance partners that limits the number of flights.
@DesertGhost,
it is precisely because Star and Oneworld offer service from NYC to Tokyo that Delta needs to do the same. The reason why Delta did not ask for NYC service is because it wanted to protect all of its existing US gateways to Tokyo and be able to move them to Haneda. So far as we know, the number of Haneda slots is capped for years to come. There will always be the ability to move rights from one city to another. It has already been done to Haneda.
AA will probably decide they can make more money operating a 2nd flight to Haneda on their own metal than from LAX. DL will likely realize they get more strategic bang for their buck by moving one allocation to JFK. The difference is that MSP-HND has been operated for more than 2 years and is likely eligible to be moved. None of the newly allocated routes can be moved for 3 years.
@The Zipper
Why does the USG need to fly out of NRT? If it wants to fly to Tokyo, HND can serve their needs as well as any passenger. If the USG is not willing to pay a high enough fare, other carriers won’t make money carrying them. If they are connecting beyond Tokyo, other hubs can work for Delta just as well. IIRC, Korean flies to more destinations in Japan than any other foreign airline.
“because it wanted to protect all of its existing US gateways to Tokyo and be able to move them to Haneda”
the airline repeatedly preaching the gospel of “beach markets are worthless junk yield hell holes” bids not just 1xHNL, but 2x.
Meanwhile, even at LAX, DL would offer 1 while rival JVs offer minimum 2 each, if not more, on top of whatever via NRT they decide to retain (believe tit. JL NH are both expected to use for SEA, so that’s no safe space for DL.
You wrote: @DesertGhost, “it is precisely because Star and Oneworld offer service from NYC to Tokyo that Delta needs to do the same. The reason why Delta did not ask for NYC service is because it wanted to protect all of its existing US gateways to Tokyo and be able to move them to Haneda. So far as we know, the number of Haneda slots is capped for years to come. There will always be the ability to move rights from one city to another. It has already been done to Haneda.”
——-
My response: My oft-stated view is that view is an example of “old airline business model” think. The airline industry is mature. It’s no longer a “growth” industry. As such, modern airlines need to concentrate their resources where they’re strong, not add lines on a route map just for the sake of market share. There are exceptions to this for the sake of building a comprehensive route network, but in general, profitability should be more important than market share for its own sake. Adding too much capacity reduces the profits for everyone. Many airlines went bankrupt because they didn’t learn that lesson. J.P. Morgan once observed that “Too much competition destroys all competition.” He was speaking about railroads (Morgan was one of James J. Hill’s biggest backers), but the same logic applies to all modes of transportation. There’s only so much demand for air travel. Deregulation opened up new growth opportunities by lowering overall fares, but how many airlines that came into existence post-deregulation are still flying? The answer is zero – unless one counts America West, whose name has been changed twice because of mergers (or to “protect the innocent” – boy am I dating myself with that reference).
At this point, U.S. airlines can’t change Haneda routes willy-nilly. Only the Japanese carriers can do that. U.S. slots have to go back to the DOT for reallocation. Delta wanted to change that (understandably, in my view), but its request was denied as part of the original order that opened up this slot proceeding. I do see a renewed request for flexibility in the future, however.
You also wrote, “AA will probably decide they can make more money operating a 2nd flight to Haneda on their own metal than from LAX.” From where is that second flight to Haneda going to operate? DFW? ORD? PHX? (just kidding!) — I responded to your Delta /JFK point as well as moving MSP-HND above. I believe the “two-year” window you refer to was for a backup authority for American to fly to DFW in the event Delta suspended MSP-HND.
Also, JetBlue. Came in after deregulation and is still around. Beside the point, though, I suppose.
It’s a good point. Accuracy is important.
I hope DL finds a way to keep serving SIN and MNL though. Maybe tag MNL through the existing NGO flight and SIN through KIX. It would be a shame for them to drop these services due to shutting down the Narita station.
I think DL will keep 1-2 NRT flights solely for GSA city pair awards. They would need lots of codeshare flights out of HND inter-Asia to make it work… if they want USG pax on their metal, if not then it doesn’t make any difference pushing everyone to use JV metal (KE) and having everyone connect at ICN.
For the most part, I agree that DOT got this right. Now the wild card is the Japanese carriers. Most of the speculation I’ve seen is that JAL and ANA will get 12 slot pairs between them. Since JAL got the “short end of the stick” last time and United got twice as many slots as American, I wonder if the Japanese government will “level the playing field” a bit (maybe a 5-7 split versus a 6-6 split on the assumption that there will be 12 slots allocated). I know virtually nothing about Japanese politics, so I have no clue about what will happen, especially since CF doesn’t know for certain. He’s far more plugged in than I.
What I will speculate about (again, with the disclaimer that I have nothing to go on except what I read on the Internet) is that there will probably be a reduction in flights to Narita – to no one’s surprise. All these new flights to Haneda will add capacity, much of it unneeded (of course, the carriers know much more about their financials than I do). If the profitability is as bad as the post suggests, that’s the only logical course to take. I agree that Delta is probably done at Narita, since it has no Japanese partner. The other two current joint ventures will adjust capacity. To reiterate, the various airlines have far more information than I do about their financials, so I’ll let them make those decisions. But, I can still make a few guesses. Based on Delta’s request, I don’t see it entering the New York market. Both ANA and JAL offer daily flights to both Narita and Haneda, and United will soon add Newark. If ANA also adds Newark, all bets are off. I do see JAL going to Chicago from Haneda and letting American resume its daily flight to Narita (which would be the only one). I can also see JAL adding a second DFW flight to Haneda and reducing its Narita presence from there. I also see it adding Honolulu, both because it isn’t currently in the market from Haneda and because of its new joint venture with Hawaiian (if it comes to fruition) – again at the expense of Narita. As for ANA, I have no clue. United was a clear winner in the Haneda sweepstakes because it proposed the most places that made sense (at least to me), especially Washington, D.C. ANA already flies to Chicago, Los Angeles, and New York.
Again, everything here is a guess.
@cranky, what do you think this will mean for Delta’s NRT to MNL route?
Daniel – I have to think that and Singapore will go away.
“Delta finally has a substantial presence at the airport with these moves.”
Are we defining “substantial” as 7 flights involving 1 *mandatory* beach market plus 6 North American gateways, LAX PDX SEA MSP DTW ATL ?
Cuz oneworld would have 12 total (JAL 3+6 AA 1+2), which still pales against Star’s offering total of 17 (NH 4+6+1 UA 1+4 AC 1)
ANA and JAL both has the freedom to enter or exit HNL-HND as they please along the way, but it would be naive to assume other players would allow anyone to move authorities without a bidding process.
Henry,
can you tell us how many crews American and United will be using each day at Haneda?
All of this talk about how much joint ventures will offer means nothing if you are an American or United employee that will watch their flights being taken over by JAL or ANA.
And, once again, AAL and UAL do not have more than half of the capacity of JAL and ANA’s flights because AA and UA labor contracts do not permit it.
And when NRT fails as a hub because all of the high yield traffic moves to Haneda regardless of the carrier, ANA and JAL will most certainly want to have their US partners help feed their Japanese carrier flights throughout Japan and Asia.
DL is likely out of the business of connecting traffic through a city where the Japanese government decided that capacity limitations would be good for their carriers despite the fact that no other major city in the world has capacity caps at one airport and Open Skies at every other airport in the country.
As hard as it will be to admit, AA and UA got suckered into joint ventures and using a limited access airport as their primary joint venture airport and connecting city to a global region. DL could see where it would end up and changed the game to make Tokyo a destination and Seoul a connecting airport.
I have no idea how long Tokyo articles will keep popping up on Cranky but Delta’s strategy will be shown to be the one that best maximizes the use of aviation assets in N. Asia.
that’s very much sour grapes for the airline that first wanted to buy JAL at bankruptcy then SkyMark at bankruptcy, within the same decade.
sure….. “maximizing aviation assets” by involving a connecting point that nearly always require circuitous routings to avoid DPRK airspace.
There’s a minor advantage of HND to counter any advantages of ICN/PVG – sizably less circuitous access for Shanghai-HONGQIAO and Seoul-GIMPO access. Sure, ICN/PVG both can access HND in return, but that type of routing from North America would be anything but cost and time optimal.
“…maximizes the use of aviation assets in N. Asia.”
What the heck is an aviation asset? And why are you so sure that is DL’s strategy the best? I’m sure that they would rather be (and always rather have been) in a JV with JAL rather than the position they are in now.
Seoul vs. Tokyo as a hub is fairly inconsequential geography-wise except connecting to domestic Japan/Korea fights, but hubs are generally stronger where there is more local traffic. Instead of trying to have a high capacity into Tokyo (local traffic) as well as Seoul (connecting), if they only had to focus on one (as was the case at Narita) that would be better for costs and passengers.
Regarding UA crews to Tokyo, two of the new HND routes are in addition to the NRT flights (from LAX and EWR), so UA crews will have additional TYO flying from this arrangement, additional flying that would not have come about without NH as a partner.
Interesting that AA didn’t bother asking for PHX…. that’s a bit, telling.
“Delta finally has a substantial presence at the airport with these moves.”
Are we defining “substantial” as 1 beach market plus 6 North American gateways, LAX PDX SEA MSP DTW ATL ?
Cuz oneworld would have 12 total (JAL 3+6 AA 1+2), which still pales against Star’s offering total of 17 (NH 4+6+1 UA 1+4 AC 1)
Henry,
“sour grapes” is from those who could not see that joint ventures in a market where there was not fully open markets and the complete ability for carriers on both sides to add new flights as they want
is bad for consumers and even worse for airlines that are part of such arrangements.
Consolidation left the US with 3 major global carriers even though historically the US had 2 airlines with a major presence in every global region…in the Pacific it was historically Northwest and Pan Am.
There would have been one airline left out given that there are two major global Japanese airlines and 3 US airlines. Delta tried to be one of the allied carriers but it simply would have put one of the other US airlines in the position Delta is now in.
The DOT has now made it clear THREE TIMES that non-allied US carriers are given priority in route allocations at Haneda because the market has joint ventures but not Open Skies. US Policy HAS ALWAYS BEEN that Open Skies are required for joint ventures. The US and Japan signed an agreement that allowed Haneda to become a gateway airport but on a restricted airport – but wiht joint ventures.
AA and UA ultimately chose to be a part of that arrangement. While DL wanted to do the same, it gave up and shifted its connecting traffic to Seoul as well as on nonstop China flights outside of the KE JV and outside of its own rights to Tokyo. The DOT gave DL the most flights to Tokyo Haneda exactly as was expected.
Joint ventures don’t create new capacity; they share what the two sides have together. You love to talk about how UA’s capacity is really UA plus NH’s – so UA can count on NH to fill the gap that UA now has. Do you not realize that NH expects UA to ALSO fill its gap? same principle is true for AA and JL.
UA and AA will get out of the JV what they brought to the table.
NRT will not be sustainable to the US given such a high percentage of capacity that will be available to HND which already gets a revenue premium on the same routes. Tripling the number of flights from HND compared to the present will only make things much worse.
“Sour grapes” is not being able to accept economic reality that has nothing to do with the players involved. Opening HND to transpacific traffic on a limited access basis was going to be a lose-lose situation. You and others can’t accept that DL saw this day coming as well as the day when NRT is no longer used as a transpac hub for premium carriers – which is the Japanese government’s stated intent. DL changed its strategy while AA and UA and their employees will lose as NH and JL rely on their US carriers to feed connecting traffic at a hub that cannot grow and where other hubs in Asia are better suited to compete for connecting traffic while DL is turning Tokyo into a spoke and not a hub where it will have a protected position because of the Japanese government’s policies.
it’s funny the one who brings up crew and labor at every turn, making it obvious which side of management v. labor you came from, want to pretend to talk about “economic concepts”, the thing that is a specialization of the management side of the equation, but hardly that of the labor side (of any airline) that spends all their days leaking internal memos to bloggers for street cred and brownie points.
Henry et al,
since you continue to believe that everything is divided by one side or the other, you, not me, want to try to look past the fact that joint venture partner flights are not crewed by the codeshare airline. in other words, United will not have as many flights ON ITS OWN METAL from Haneda as they currently operate from NRT plus their current single daily flight.
Of course, UA wants to believe that it can maintain NRT as a viable hub with NH and we will see if that is true but if NRT is not viable – which I don’t believe it will be – then UA just walked away from part of its Tokyo operation on its own metal in order to have a joint venture. I’m not sure how difficult it is to understand the concept – although accepting it may be reality.
And once again, I specifically said that DL’s plan may not have been to go-it-alone in Tokyo but they came to that conclusion AT THE VERY SAME TIME that AA and UA kept pushing for a plan that they knew would lead them to have a smaller HND operation than DL.
DL changed its Asia strategy based on that reality while AA and UA have continued to push the notion that they will have a joint venture with a Japanese airline that is working from a hub that is capped in capacity.
Dragging a dozen other non-Japan routes into a discussion about Japan is “sour grapes.”
As hard as it is for you to accept, Delta will have the largest operation at Haneda on its own metal and does not have to use ANY of its capacity to support a joint venture partner.
Delta could see NRT will not be viable and I will guarantee you that the amount of capacity at NRT from AA, JL, UA and NH that exists today at NRT other than what has been specifically said will be moved to HND will not be at NRT 3 years from now.
Whether DL saw the shift 10 years ago, it figured it out several years ago and changed its Asia strategy – which is being set in place with these new route awards.
AA and UA have persisted with a strategy that will leave them smaller in Tokyo than they are today.
i have no idea why you keep harping on the most minor part of the equation – the labor, especially anyone other than the 2 pilots.
and you sure you’re not projecting your personal woes regarding how labor is forced to be distributed with AF or KE and think others have signed identical contracts ?
and definitely zero irony lost on the airline that says “connecting traffic is for suckers” that literally just directed their subsidiary to launch BOM-LHR with even less of a business case than when 9W was alive, and have it wonderfully timed for a drowsy 3am departure out of BOM so it’ll meet all the westbound TATL morning bank when any traffic not heading to London is much better served via either CDG or AMS.
So yea, all the sour grapes you were yapping about HND vs ICN, i can just rehash your exact talking points back at you when talking about LHR vs. MUC.
“DL saw this day coming”
No, no it didn’t. As has been well-documented, they tried as hard as they could to get into a JV with a Japanese carrier. They failed, but not because they saw a future day coming when it may not be preferred to be in a JV. You may have a point with all of this, but if DL’s “strategy” here ends up being the preferred one it will be because they got lucky, not because they “saw it coming”.
i’ll add to that point too –
he claims they’re so visionary about avoiding avoiding the dual-hub self-cannibalization of connecting traffic opportunities as if HND/NRT is the horrorifying quagmire and ICN is the holy grail.
and definitely no irony lost on the carrier that specializes in partnering with those involving split hubs –
GOL with GRU/CGH, KE with ICN/GMP, AF with CDG/ORY, themselves with JFK/LGA, but the crown definitely goes to MU with PVG/SHA
(depending on your perspective one can even debate whether VA is unified hub at SYD are very split between SYD+MEL+BNE.
and, again, those statements sound more like someone that is worried about sour grapes than someone that is focused on business issues.
Delta does not operate flights from CGH any more than it does from ORY. Codesharing with Air France does not mean that Delta is in bed with everything that Air France or Gol or any other carrier does.
The fact that you CONTINUE to trot out one more handful of mud to throw shows that you are the one that can’t grasp the fact that Delta has indeed ended up with the most flights from Haneda and, no matter how hard you want to try to distract attention from that fact, NH flights are not fully UA flights and JL flights are not fully AA flights WRT capacity and staffing.
And most importantly, you can’t accept that AA and UA followed down the path of JVs at a capacity limited airport for service to the US and convinced themselves that they come out on top when they will actually take a step back in terms of local market revenue and share because AA and UA clung to a strategy that DL figured out that without a partner was not worth fighting for but rather replacing with a strategy that would leave Delta in the largest position at HND among US carriers.
Everything else is a distraction to that reality.
yes, it’s UA and AA “clinging” to the strategy when DL spent years talking about dismantling NRT, something UA has finished doing waaaaaaay earlier
and it’s those “clinging” to a strategy where DL tried bidding in bankruptcy court not just once, but twice, within a span of 10 years, getting rejected twice, while showing zero attempts at good faith negotiations for JV with KE by trying to pressure them with assigning them at the bottom pile of mileage accural charts where usually reserved for non-skyteam airlines of no synergy whatsoever, even going to the point of buying into China Eastern and pretending the regulatory framework would liberalize anytime soon,
somehow is the visionary of TPAC markets but manages to let SQ pre-emptively take away their business case for SEA-SIN.
AA’s LAX-Tokyo flights both overperform, hence Haneda gets a 77W next month. Care to clarify your comment?
Simon,
I’m not sure on what basis you believe AA outperforms on LAX-Tokyo but they aren’t the highest revenue or average fare flights to either Tokyo airport. AA’s remaining Tokyo flights do above average but that now consists of 1 HND and 3 NRT flights.
My position is that the NRT flights will remain but I counter that DL will not be the only carrier that will be dropping NRT flights as it gains HND access.
Fundamentally it doesn’t work to now have 75% of the US-Japan pre-HND capacity from NRT now operating out of HND. NRT is just not viable as a long-term hub for JL or NH and the Japanese government has said that many times their goal is to shift premium long-haul traffic from NRT to HND.
AA and UA simply part of traded their abililty to operate from HND for joint ventures with JL and NH.
Whether this topic remains active on CF or not, the reality will be validated one way or the other regarding the future viability of all carriers at NRT to the US.
I personally believe that DL’s ultimate decision – whether it was their first choice or not – will prove to give them more access to Tokyo and greater ability to flow traffic throughout Asia by not being aligned with a Japanese carrier, using Tokyo as a local market, gaining more access to Haneda based on the DOT’s policies, and use ICN as its JV connecting gateway.
You are free to come to a different conclusion now but I am certain that AA and UA’s strategy will be shown to have cost them access to Tokyo on their own metal.
should we dig up the old CF comment sections where you were also “very certain” DL knew what they were doing when randomly announcing SEA-KIX in the wake of SEA-HKG cancellation as if the 3rd time would be the charm, only to have the latter also cancelled so quickly, while excuses used for SEA-KIX were just about the same mentioned by skeptical critics at announcement that were condescendingly dismissed as “DL knows better than you”.
Isn’t SEA-KIX seasonal? I can book it for next April if I really wanted to.
who knows, cuz they look forever to even clarify which airport to fly for BOM, and how MSP-ICN would be scheduled as. Plus their announcement-non-announcement of LGW thinking they got there earlier than jetblue, as if that’ll serve as any meaningful deterrent to jetblue’s ambition.
an airline that gives you THAT much level of uncertainty for brand new exciting routes, imagine how they’ll actually deal with routes that are on “seasonal” life support involving 2 cities that aren’t supposed to be showing the same level of seasonality like it’s Australia or the Caribbean.
Can you someone tell me are these routre slot allocation set in stone, as in they must be used on these routes forever or given back, or after say 5 years the airlines can use the slots for whatever they want; different cities, rent them, sell to other airlines, etc.
NICK – Yes, these are for specific routes only and if they aren’t used for those routes, they have to be given back for reallocation. Delta proposed to have that changed, but it was shot down.
Delta asked to incorporate route transfers as part of the current HND route application process. The DOT denied DL’s request to incorporate route transfers as part of the route application process.
There is, and remains, a process to transfer DOT route awards to other gateways. it does trigger a public comment period etc. but the process does exist for HND routes. The only routes that are eligible to be transferred are those that have been operated for at least two years – which means all of the currently operating (as of today) US carrier HND routes.
I’m interested in your opinion, do you think MIA would’ve worked for American? Or does it fall into the same category as LAS?
Mike – My guess is the bigger issue is how American ranked preferences. It wanted both DFW and the LA flight before Vegas. So if American had put Miami down last, it still wouldn’t have gotten it. Also, while Miami is a hub, it still has the same issues as Vegas in that it won’t connect people efficiently to most other US cities. In that sense, it would have been like Houston for United – there were better options.
did DL actually “win” their chance to move everything, or they’re now actually stuck with an authority for a beach market that not only essentially forbade your own movement to other hubs, thn freedom they had while at NRT, but would allow very little flexibility regarding seasonality and day of week shifts around shoulder season.
You can re-read previous MSP-HND grant a while back to see how pissed DOT was by the giving DFW default authority shall DL attempt anything funny with MSP-HND. You can also read in the ORD-China dormancy dockets of why cant’ even sneak half a thing behind people’s back without both competitors instantly raising it with DOT.
they got to move ATL SEA PDX DTW, bravo.
The 5th beach market, they thought was heads i win (“i get HND authority i could move anywhere i want down the road”), tails you lose (“HNL-HND is infinitely large market so i can fill seats with zero advertising costs”), but has such strong conditions implicitly imposed, leads to the question one should ask – did they break they own wheel of Narita, but only to get a new and equally painful one out of Haneda ?
again, sour grapes about Hawaii, Henry.
Delta asked for HNL because they have had a historically strong relationship via NW and because DL makes far higher average fares in the market than HA or UA.
DL is not settling for a second class market because UA had too many routes to be able to get HNL moved to HND or because HA got awarded yet another HNL flight because it is the only route they can operationally support without question.
Grow up and accept that Delta won HNL because it is a viable, strong market that DL has served and will continue to serve.
the rest of your rambling about other route authorities is a spilled milk interpretation which is not supported by facts but only by your bias.
Instead of banging away on your keyboard on CF’s site, how about you actually read the DOT documents and if you did you would find out that it was American, not DL that tried to move its China frequencies.
i would actually say the same for you – the one reciting talking points and using verbosity as a proxy for comprehension, wanting to discuss larger concepts of economic costs but only to self reveal you’re the ones from the labor side of the equation but wanting to act like a SME for the management side of that too.
(ps : i’m actually neither side of that, in addition, work as neither a horizontal nor vertical vendor of any airline or airport, but i have, over time, worked in firms that aren’t accounting or consulting in nature, but have synergy partnerships with all AA, UA, and yes, DL. see if you can figure out which industry i’m in).
Well, if the market for Tokyo-HNL or any of the other slots suddenly crashes, they can just drop the route and lose the slot with no guarantee of getting it back. That’s not going to happen though short of another global financial crisis or something big like that though.
But since all of these are moving from Narita why is there any reason to think that they will do worse at Haneda? They had freedom to move flights around at Narita, but they never had to drop or move the flights to HNL or the hubs, which are the flights that will be at Haneda,
why would they be worse? how would you feel for a route your Japanese rivals could adjust at will (if the HA/JL JV is approved, you can even count HA as one being flexible in the framework) but you’d be scared to even make it seasonal 4x weekly without getting an earful from Hawaiian or DOT ?
both the strict operating demands from one of the prior SEA-HND rulings (the one DL chose to give up) and also in the MSP-HND ruling, you can see for yourself how DOT has no time anymore for those childish games … (and this is already arguably the most business friendly administration DL could ask for)
it’s also funny Miss Tim Dunn over there, the one wanting to sound authoritative about airline routes and opportunity costs but self-revealing by repeating showing his biggest concern in the least important factor in any question, is the one telling others to grow up. No irony lost indeed.
*repeatedly
They wouldn’t be worse than Narita, and so Delta shouldn’t have to worry about having to reduce frequencies seasonally. Historically, NRT-hub flights have done very well for DL (and previously Northwest), so there’s no reason to think that they would want to reduce frequencies.
For HNL specifically, why do you think would it perform poorly? It’s been operated for decades and done fine.
X
It will undoubtedly take months if not longer for you to accept what has happened over the past 10 years but let me lay it out for you.
– At the time of the NW merger, DL had precisely one route – ATL-NRT – to E. Asia.
– As a result of the NW merger, DL has become the 2nd largest carrier across the Pacific and that ranking has not changed during Delta’s restructuring of its Pacific operation.
-NW was the largest US airline in Tokyo for years and Delta will remain in the same position at Haneda. Delta is also the largest US airline in Seoul and that position will only grow. With the opening of Peking Daxing and additional current applications for PVG service, there is a good possibility that DL will grow to near parity in the mainland China market.
– Competitively, UA had a 20 year head start in growing its presence to Asia with the Pan Am asset acquisition 35 years ago. AA never acquired an entire transpacific route system and is a distant 3rd and the latest HND route awards reflect that as well.
– ALL of the current transpacific airlines from Asia and the US are for-profit companies. The NW transpac operation was not profitable. According to publicly available DOT data, DL is the only US airline that operates its transpacific network profitably – and in 2018, DL’s transpac network had a nearly 10% net margin. Despite its much larger size in Asia than any other carrier, UA’s network is not profitable.
– The transpac market place is not economically friendly right now; margins are pressured on both sides of the Pacific. Just as on its system as a whole, DL has figured out how to make money and grow (yes, DL’s transpac capacity in 2019 is growing), DL has figured out how to serve key markets AND make money.
Feel free to fling whatever mud you need to fling as you come to grips with these realities, Henry.
Delta is on the verge of successfully restructuring its transpacific network away from Tokyo as a hub and to Tokyo HND as a destination airport and a very large spoke. The future of MNL and SIN is not certain but I expect DL will announce the future of those two cities on its own metal shortly after the HND awards are finalized. You and others might be surprised at what DL decides since many are convinced that DL will just turn its presence in those cities over to KE codeshares and the JV.
What you cannot do – as much as you might like to do – is deny that DL has managed to successfully navigate one of the largest strategic challenges that any US airline has faced over the 10 years that Tokyo has been a regular discussion feature on this site as part of Japan’s intentional shift of international flights from NRT to HND. While other airlines will try to hold onto NRT as a hub, DL has adapted to what the Japanese government decided and DL will end up with the largest presence at HND on its own metal of any US carrier. And it will do so as the only US airline without a joint venture with a Japanese airline.
We’ll be here to help support you as you accept those realities but realities they are.