It sounds cliché, but it’s true. We have reached the end of an era, one that dates back to the spoils of World War II. Assuming the government’s slot awards at Tokyo’s Haneda airport are finalized (there’s no reason to think that won’t happen), Delta will officially pull out of Tokyo/Narita airport entirely next spring. This not only marks the end of Delta’s Tokyo hub, but it also means the end of US airline fifth freedom flying in Japan.
In the wake of World War II, US airlines were tasked with being able to help rebuild air systems in Japan as well as in other losing countries like Germany. Northwest and Pan Am moved in and took advantage of fifth freedom rights — the ability to carry passengers between Japan and countries that weren’t the US. Both airlines built substantial operations. Pan Am’s was sold to United in the 1980s while Northwest’s became a part of Delta when the two airlines merged a decade ago.
These fifth freedom flights in Germany ended years ago as airlines restructured their networks, but in Japan, they soldiered on, largely because of the vast distance across the ocean. The introduction of new widebodies like the 787 helped to increase point-to-point flying over the Pacific. United started adding more flights from San Francisco that bypassed Tokyo, so remaining Narita flights started to wither. In the last couple years, United canceled its last flight beyond Tokyo into Asia.
Delta tried to do the same but its new and growing Seattle hub doesn’t support all the important markets the way that San Francisco does for United. So Tokyo remained an important hub for Delta, despite its declining status since the dawn of this decade. (You can read more about the history of that hub in this look back by Ned Russell at The Points Guy.)
In 2010, the Japanese government opened a limited number of slots for flights from the US into Tokyo’s Haneda airport. Haneda is more convenient for people in Tokyo (not to mention Yokohama) and is the preferred airport for business travelers. Also, as we all know, it lacks one key obstruction that blocks the path between Narita and Tokyo…
Those initial Haneda slots could only operate at night, and there were very few of them, but their mere existence marked the beginning of Narita’s eventual decline. Over time, more slots came available and airlines were allowed to fly during daylight hours. Delta wanted to move its entire hub over to Haneda, but it was never going to get that many slots to actually do so. American and United developed joint ventures with Japan Airlines and ANA respectively, so they were able to use Haneda as a hub thanks to the local airlines having extensive operations there. As a last gasp, Delta tried to take over failing Skymark, but ANA won that battle too.
Knowing that a Narita hub would eventually be unsustainable and a Haneda hub wasn’t achievable, the cuts began. This was accelerated every time new slots became available at Haneda. The fate was sealed when Delta and Korean signed their joint venture, making Seoul/Incheon Delta’s primary Asian focus.
Delta currently has slots to fly from Los Angeles and Minneapolis to Haneda. When the new awards are finalized for next summer, Delta will be able to move Honolulu, Portland, Seattle, Detroit, and Atlanta service over from Narita as well. That would leave two measly flights from Narita to Singapore and Manila. Those are quite obviously not going to work when Delta has no flights from the US to feed them. It was just a matter of when the cuts would come.
It is now official that the flight to Singapore ends September 21. But, surprise!, Manila will still have Delta service. It won’t be operating from Narita or from the US, but instead Delta will take its Manila flight and move it over to Incheon. Why? That’s a great question.
Delta has long had a lot of seats via Tokyo to Manila. That was one of the airline’s last 747 routes before the airplane was retired. It’s generally a low-yield market with a lot of volume. I had assumed a fair bit of that was coming from Japanese travelers, but if Delta thinks it can still support the service out of Incheon, then it must be more US-focused traffic than anything else. (That being said, I confirmed that Delta does have the ability to carry local traffic between Incheon and Manila.)
Korean does have two flights a day in that market, but they don’t match up well with US flight connections. Presumably this Delta flight will be a good third daily option that connects perfectly, but the details haven’t been released.
That flight won’t begin until next spring when the other flights move over to Haneda. When that happens, it will be the end of scheduled US airline passenger service between Japan and a third country.
Though Delta is leaving, not every US airline is following completely. Narita is becoming a more leisure-focused airport which is why United will continue Guam and both United and Hawaiian will still fly to Honolulu. American and United will also keep some service from their hubs, because there aren’t enough slots to move the entire operation to Haneda. That service can continue to be bolstered by the route networks of joint venture partners JAL and ANA anyway.
Is this a sad occasion? Not at all. It may be nostalgic, but everyone should be happier flying into Haneda and connecting via Incheon if they’re Delta loyalists. The only really sad thing about all this is that the conclusion of Delta’s Narita operations probably means my Godzilla map is nearing retirement. It’s been one heck of a run.
One important thing to mention is that the Korea-Philippine market is huge. It’s a mix of VFR (from both the Philippines and Korea sides, considering the sizable diaspora of each country in the other), tourism, and business. While there are already a lot of players in the market, due to limited slots in Manila, it actually isn’t reaching its full potential. People suspect this is actually the main reason why Delta kept the Manila flight but moved it to Incheon: Korean Air can’t get another slot to add capacity, so since Delta already has slots, KA will use Delta instead to serve the market further. Or at least, that’s the speculation that I read over at Airliners.net. Though of course, having actual Korea-Philippine demand probably doesn’t hurt either.
I flew on Northwest and later Delta’s MNL-NRT flights before, and anecdotally most passengers were Filipinos connecting to America along with some Japanese passengers, though I don’t know how that affected market dynamics. And the flights were always full (although apparently high-yielding), so I wonder if that is at least partly why it was MNL, not SIN, that was saved from the axe.
Well done (as always) Brett! I especially enjoyed the tear drop from Godzilla’s eye. Didn’t Delta briefly (and unsuccessfully) try to woo Japan Airlines away from American Airlines?
JDH – Yes they did during the JAL bankruptcy. Didn’t work.
“everyone should be happier flying into Haneda”
I don’t know why I should be happier as I have no interest in stopping in Tokyo. I much prefer flying Delta metal all the way to Singapore.
Our Asian destinations each year are Bangkok and Kuala Lumpur (DW’s home city). But we liked the Delta flights enough to access them through Singapore.
This year we are flying TPA-ATL-PVG-BKK-ICN-ATL-TPA combined with Malaysian Air flights BKK-KUL-BKK instead of the route we took in the Spring TPA-DTW-NRT-SIN-NRT-DTW-TPA combined with Malaysian Air flights SIN-KUL-SIN (we had gone to BKK and KUL just a few months earlier on another trip).
It is no surprise that Delta will leave Narita. The Japanese government said a decade ago that it intended to make Haneda the home to all premium/global airline international services and convert Narita to a low cost/leisure hub. As Delta failed at multiple strategies to gain slots at Haneda to move its beyond Tokyo operation from Narita, it said over and over again that it would close Narita.
Let’s be very clear, though, that Narita is not sustainable as a transpacific hub for ANY carrier. American’s flights from Los Angeles to Haneda get a 20% fare premium over Narita while UA’s HND flights from SFO get a 30% premium over NRT. Adding 24 additional flights to Haneda will leave virtually no local premium demand at NRT; AA, UA, JL and NH flights to the US cannot be sustained by connecting traffic to other points in Asia as well as low fare local demand. If Air Asia and other low cost carriers can make NRT to Asia work, they will be the transpacific carriers at NRT.
JL and NH could see that HND would be a limited access airport – not Open Skies as NRT or LHR or any other major global joint venture hub – and so enlisted their US partners to help provide bulk in gaining slots at HND. HND will be a no-growth hub because there are no more frequency allocations for US flights. UA, at the behest of ANA, says it will maintain a transpacific presence at Narita – in part because United cannot move its flights to Guam to Haneda and in part because ANA and JL will be smaller across the Pacific if they shutter Narita. American and Hawaiian will not maintain a presence at Narita for long because sheer economics will make their Narita flights far less profitable than from Haneda. ANA/UA and JL will eventually come to the same conclusion. The joint ventures between AA and JL as well as UA and NH will result in the wholesale transfer of significant parts of their Tokyo operations from the US carriers to their Japanese partners.
Delta will be the largest U.S. carrier at Haneda – and likely the largest foreign carrier – returning Delta to the same position that NW enjoyed before Narita opened.
Korean and Delta managed to fall into each other’s arms when they both needed each other. Incheon has virtually unlimited expansion potential and, at just a couple hundred miles west of Tokyo, provides a very powerful alternative to connect N. America to the Pacific Rim. Delta is already the largest non-Asian airline at ICN.
Delta chose to continue MNL service via ICN likely for the frequency limitations that MK03 notes. Just as with SIN for UA, Delta will be the only US airline w/ transpacific service to MNL – just via an ICN connection.
Delta is in a strong and growing position in China which stands separate from its Japan and ICN network – which together form the DL-KE joint venture. Chinese airlines will continue to pressure transpacific fares which means that DL’s future joint hubs w. China Eastern at Daxing and Shanghai will make it the best positioned US airline in China.
NW’s Tokyo hub was a holdout of WWII rebuilding policy but it wasn’t profitable. DAL’s A330-900s, A350s and 777s can now fly anything UA can fly with a 787 and do so at far lower costs than the 747-400s– if Delta sees profit potential to do so.
Finally, Delta’s transpacific network makes money now – over $300 million in 2018 – while it lost money in the early days after the NW merger. UA’s transpacific network – despite being one-third larger than Delta’s, loses money – about $80 million in 2018 while AA’s transpacific losses were 5X that amount on a smaller transpacific network that Delta. Despite cuts to Chicago service, American still lost money flying to Asia in the 1st quarter of 2019. AA’s efforts to build an in-house Asia network have been a financial failure and they will continue to cut esp. to China. UA says it wants to renegotiate its joint venture with ANA, not surprising given that UA has spent a huge part of the last ten years growing its transpacific network and has to share a large part of its revenues with ANA. All of the gee-whiz routes that any US airline serves come second place to being able to make a profit. Delta is very well positioned to grow a presently profitable network to Asia. Delta’s SEA and LAX terminal expansions will not be completed by the time the NRT to HND switch is made. The route changes that will take place in 2020 will lead to growth on Delta’s transpacific network in future years.
> American’s flights from Los Angeles to Haneda
> get a 20% fare premium over Narita while
> UA’s HND flights from SFO get a 30% premium over NRT.
I think for a 20-30% savings I will gladly take the risk of riding a train or bus by Godzilla’s den when visiting Tokyo :)
You and a lot of other people would take a lower cost alternative to NRT if it existed but that doesn’t mean that AAL and UAL can make money flying to NRT with their current international configurations. They need Norwegian configured 787s to make money in a market where most of the premium (and that does not mean just premium cabin) shifts to Haneda.
The difference in average fares between NRT and HND has grown in HND’s favor which clearly says the local market wants to go to HND.
AA/UA/JL and NH are not going to discount their flights from Narita; they are just not going to get the premium passengers – and that includes high value economy passengers.
do you realize that Delta gets higher average fares than United from the US mainland to Narita RIGHT NOW? Tell me what will be different about United’s airplanes at HND vs. NRT today that DAL manages to get higher average fares even w/ smaller business class cabins.
Delta has figured out that people who sit in Delta One cabins pay for it and don’t get upgraded. United still dangles huge premium cabins and then discounts aggressively. Remember the article about how much discounted business class passengers United carries from SFO to PVG for that large tech company?
You also missed that United has to share its revenues across the Pacific except to China with All Nippon. Tell me how you think All Nippon will react to United’s request to cut their revenues and tell me how well All Nippon’s plans for continuing a NRT hub will go when United says they would rather carry passengers to the rest of Asia on their own metal and keep the revenue than via NRT and share the revenue.
Think this through, Henry. UAL is losing money flying to Asia right now, will have fewer flights from the US to HND on its own metal and wants to renegotiate its joint venture even while NH needs UA’s help to fill NH’s hubs at BOTH NRT and HND.
oh, and at least two United hubs will not see service to HND on UA metal regardless of what happens to the JV. Do you think the UA employees there will be cheering NH’s flights to HND as UA pulls down its own NRT flights?
isn’t it tragic that UA’s 5 own metal HND flights will have more flat beds than 7 DL flights combined ? doesn’t sound like DL has much faith in their own ability to capture those high fare J pax at all.
“Delta will be the largest U.S. carrier at Haneda – and likely the largest foreign carrier – returning Delta to the same position that NW enjoyed before Narita opened.”
UA’s also the largest US carrier at Heathrow by the same metric so what’s your point.
Plus one of DL’s 7 routes will be to HNL for vacationing Japanese customers. Only 6 will be used to mainland hubs, just one more than UA’s 5 routes, with none of them bolstered by partner feed.
do you realize that Delta gets alot more local Tokyo revenue on its 4 mainland flights that will transfer to HND than UA does for its 4?
And Delta operated 767s on two of them – SEA and PDX – for a significant portion of the last few years.
UA carries a lot of passengers to Tokyo to connect to NH. That obligation will not go away when they move to HND. NH and UA might want to try to keep the connecting Asia traffic over NRT so they can maximize their local Tokyo traffic at HND but the NRT hub will not work w/o high value local Tokyo revenue.
And that high value local Tokyo revenue has already decided it prefers to fly from Haneda.
Delta has slowly pulled down its NRT hub so the 7 flights it has to Haneda will be focused heavily on the local Tokyo market. HND becomes a spoke where NRT was a hub.
DL already gets better revenue utilization of its Tokyo operation for local revenue than United. DL is shifting its connecting traffic to Seoul or on nonstops of its own – such as to China.
In the Edward Russell article linked above, the Delta officer said the loss of connecting traffic would kill the NRT hub. Doesn’t seem like a good sign for the sustainability of the seven HND flights without connecting traffic, especially since other major Asian destinations have already been cut.
While DL does have a large presence in Asia, it’s so surprising that their strategy doesn’t include any flights from NYC to Japan, Korea, or China, especially since they could have recently applied for a JFK-HND authority (which I’m guessing would have been approved).
see below regarding JFK-HND
DL never flew JFK to E. Asia other than Tokyo.
UA’s advantage in the NYC area is their Asia network. DL knows that and it is evident in UA’s average fare advantage for EWR as a whole.
The new Daxing airport in Beijing will eventually allow AA and DL (based on their alliance partners) to move to the new airport. There have already been other countries that have received authorizations to add flights to Daxing but remember it is reciprocal; US airlines won’t receive the right any later than Chinese airlines.
DL asked for LAX-PEK service several years ago and AA applied, called itself the underdog and won the authority. AA gets lower average fares from LAX to PEK than it does on some of its US transcon markets from LAX. They are holding out for China Southern to develop their Daxing hub. DL will undoubtedly ask for and win LAX and JFK to Daxing; China Eastern will be designated as a home carrier at Daxing.
Delta and Korean will have to work it out regarding both JFK and LAX to Seoul but Delta has already said they want to serve LAX on their own metal.
DL also said that if it restarts HKG it will be from JFK where it does well w/ financial service companies.
Remember that DL is stronger to Asia from the eastern US while United is stronger from the western US.
Delta is very focused on developing its network methodically. They bite off what they can chew. You can see that w/ their focus cities where it grew RDU, then Boston, and have now designated AUS, BNA and SJC as focus cities even as BOS growth will start to slow.
The same is true w/ JFK and Asia.
Delta’s priority over the past few years has been to fix its Tokyo operation, develop a partnership w/ KE and develop a strong position at PVG where it now serves the same number of US cities as UA.
PEK, developing ICN, and additional nonstops from the US to other parts of Asia will come in time including from JFK – not necessarily in that order. Moving a HND route to JFK will be part of the JFK buildout.
All told, it is well within the realm of possibility that Delta could operate several flights on its own metal from JFK to E. Asia within a few years.
I think at one point Delta did / is still doing widebody heavy maintenance in Manila, which may be part of the reason they’re continuing to fly there?
Bgriff – I’m not sure if that’s the case still or not, but they wouldn’t need to keep flying there to do maintenance. Besides, this will bring only one type of widebody into town, so others would have to be flown in anyway
True that they don’t need to fly there, but if the case to keep flying to MNL was otherwise marginal, that could have made the difference. The slots theory someone else mentioned does also sound compelling though.
Does DL really need 7 flights to HND, an airport with no local partner or meaningful feed? Yes it’s a big market, but so are HKG and SIN, cities not served at all by DL. Ed Bastian said in an earlier interview that NRT was a challenge with no alliance partner to provide feed. Not sure how the move to HND changes that.
Those seven flights out of HND will have approximately 400 less connections to feed them without the inbound flights from SIN and MNL that transferred connections to the NRT flights.
Seems like four, maybe five, flights would cover DL demand. Did they want the extra slots to keep them out of AA/UA hands?
DL can downguage a/c to satisfy the change from connection led NRT to HND O/D demand. TYO is a big enough O/D market and DL flights will get plenty of feed from US side.
Mark – Tokyo is a big and important market and Delta wants to be able to serve all of its hubs + the big Honolulu leisure market + Portland where it has important corporate deals. (Oh, but not JFK, which is still interesting.)
Agreed – The lack of JFK is interesting.
yes, Tokyo is still a very large corporate travel market. All of the AA and UA supporters are quick to argue that point – they just include their joint venture partners’ networks in order to talk about how well they serve Tokyo. Problem is that American and United employees do not work in the cabin or cockpit of JL or NH flights. If NRT doesn’t work – and it won’t any more than LGW or ORY worked after LHR and CDG opened for all US carriers. Or UA and AA choose not to serve MDW so as not to poach their ORD hubs. Or UA chooses not to serve HOU… or either of them serve Love Field…..
competing hubs in the same city for the same carrier don’t work.
as for DL on JFK to HND, they simply decided not to complicate their application with adding any routes they don’t currently serve to NRT. DL said it would stop NRT when JL and NH started JFK-HND flights under the principle above that HND gets higher average fares than NRT.
DL will likely now ask the DOT to allow it to move MSP-HND which has passed the two year mark for service.
AA will likely ask the DOT in a couple years to allow it to move one of its LAX-HND flights. A 2nd DFW flight is far more valuable to AA than a 2nd LAX flight.
United will have at least two hubs as well as HNL that support NRT service now that will not see UA metal service to HND. That is what you get with a limited access “Open Skies” agreement.
“competing hubs in the same city for the same carrier don’t work” — except JFK/LGA for Delta?
How many flights does Delta operate to London, Los Angeles, Salt Lake or Paris from LGA?
The two hubs complement each other because of the LGA perimeter restriction.
LGA is the preferred airport for NYC short-haul flights while JFK has the title for longhaul flights including to the west coast.
The two hubs combined have more seats than UA has from EWR. DL could not do that from either airport alone.
btw, BA and VS operate from both LGW and LHR but they serve different markets. AF operates from both ORY and CDG so you can have complimentary longhaul hubs even from the same city.
That is not what JL and NH are doing from Tokyo, though.
again, the Japanese government told us a decade ago what it was doing w/ Tokyo airport policy. It should be a surprise to absolutely no one that Delta is the first US-Japan carrier to follow the Japanese government’s intentions. A number of other carriers have already switched their entire Tokyo operations to HND.
“as for DL on JFK to HND, they simply decided not to complicate their application with adding any routes they don’t currently serve to NRT. ”
no irony lost from the airline that hasn’t served HNL to NRT in 2+ years.
not only has DL not served HNL-NRT for 2+years, DL allocated 33% of their entire application to route that is just the polar opposite of what you’ve stated.
DL could’ve won 6 slots this round if they bid #6 as JFK-HND instead of HNL-HND #2. AA could’ve won at least a 3rd one by bidding ORD instead of DFW#2. HA should’ve won at least a 2nd one by bidding KOA.
No one has realistically expected UA to win more than 3; some gloomy predictions even called for just 2; so winning 4 is definitely coming out ahead of expectations. UA got LAX purely because all 3 other competitors bid incorrectly for that 12th final coveted slot.
thank you for confirming you have no idea what you are talking about.
Delta 180 and 181 operate today between HNL and NRT as they have for years in the past and will until the flight is transferred to HND.
UA will have 5 flights/day at HND; DL will have 7 including HNL.
DL received enough frequency awards to move its remaining transpacific network – including Hawaii – to Haneda.
DL could choose to operate a larger aircraft from HND to HNL (or any other gateway) but they cannot use a smaller aircraft w/o risk of losing the rights.
DL made the call to do what it needed to do to restructure its Tokyo operation.
And they still make money doing so, Henry.
AA and UA should be so lucky.
but then again you’re also smart enough to think my real name is henry so what else can i say
but then again you’re also smart enough to think my real name is Henry so what else can i say =)
You also think that I am a flight attendant.
None of that changes the fact that DL will have the most flights at HND once the changeover happens, UA loses money flying the Pacific, and UA has said they want to renegotiate their joint venture agreement wiht NH.
And that Delta operates nonstop service on its own metal from HNL to NRT and has since the NW merger.
We can speculate and argue about a lot but I would suggest you do your research and get your facts straight if you want to contribute to this long-running discussion.
CF has done a good job of accurately tracking this 10 year saga.
NRT is winding down for DL but it is far from a stable or finished story for AA, UA, JL or NH.
Believe anything you want about UA Pacific, but an airline that is on a continuous expansion spree of announcing double daily SFO-HKG and applying for double daily EWR-PVG really doesn’t sound like losing money on the Pacific side to me.
On the other hand, the airline that is so bad at flying the Pacific they failed HKG from SEA MSP DTW, each time with a monopoly, doesn’t sound like a Pacific winner to me.
Delta should just give up Pacific flying and given back their authority to the DOT. The aircraft utilized for the Pacific routes can then be used on transcontinental and Atlantic flying.
Part of the reason that they don’t serve HKG and SIN is because there’s tons of competition for one-stop routings to get there, many of them over TYO, which eat up too much of the market and drive fares down too low to be competitive. There aren’t really any competitive stopping itineraries to get to TYO from North America though, and in part as a result TYO fares tend to be quite a lot higher than many other Asian destinations.
But other than that I think you’re probably right, DL asked for the most it could possibly justify based on a (it turns out correct) assumption that the DOT would roughly proportionally assign the slots relative to the size of the asks.
I wouldn’t be surprised if MSP is one of the first to go, despite being an older route, because it exists now only because DL tried to woo the DOT with a more “unusual” routing than some of their other hubs would have been, and once they won the rights to serve MSP-HND, they weren’t able to move that flight to a different US hub. Now that they have HND access amply covered from other hubs that offer both more connectivity and likely a stronger home market-to-Tokyo demand profile, MSP isn’t needed as badly any more. (MSP-NRT was presumably served largely, as you point out, because of the onward connections to SIN and MNL, as well as other places like BKK, PEK, PVG, HKG, and TPE not that long ago.) Beyond that it’s not clear what other routes might be next on the chopping block though, especially because — as they have done with the MSP route so far — they’ll be inclined to keep even a marginally performing route in order not to lose the slot.
For me, this will be a nostalgic moment. When I lived in Japan, it was all NWA/KLM and occasionally DL for our family on trips home or vacation (NWA to Guam and Saipan), and me on business. Last time I traveled to Tokyo, I flew into Haneda, but back from Narita on purpose. I wanted to experience the Narita Express train and the airport one more time.
Sad to see the Godzilla map go, and the Godzilla speech balloon in the article is priceless!
On the other hand, the Haneda approach is a thrill ride, especially when landing on 16L.
Hello Lord Snyder:
I will miss your Godzilla map most of all……………?
Just to put things in perspective – Phillipines is a nation of slightly over 100million but according to IMF has less total GDP than either Hong Kong or Singapore, tiny towns of 7.5mil and 5.6mil respectively. And guess which one DL chose to continue serving via cost-inefficient tags ?
The lowest GDP one.
The only perspective that is necessary is that Delta makes $300 million plus flying the Pacific while United and American both lose money.
American is shrinking back to its distant #3 position in Asia before it spent billions trying to develop its own network.
United signed a joint venture agreement with All Nippon that means that UA has to share far more of its revenues with NH than it wants to.
Why don’t you have a chat w/ Mr. Kirby if you don’t understand the predicament that UA is in? being the largest airline in a region is not a claim to fame if you don’t make money doing so.
MNL is obviously a profitable market regardless of the GDP whether you understand that a single 3 hour flight via a hub in Asia might be the most profitable way to serve that country – and be the only US airline that can do so on its own metal.
Once again, read MK’s comments above. KE can’t expand its flights. DL already has the right to serve MNL and will continue to do so.
With the most service to both HND and ICN of any US carrier, Delta is very much in a strong position to N. Asia from the US where low cost and Chinese competition is much lower.
I hope CF is just as vigilant in tracking the demise of NRT for other carriers.
AA supposedly has a large international route announcement coming up in the near future.
Where do you see figures on profit/loss in Asia? I see them report numbers on PRASM increase or decrease but not specific profit figures (PRASM can increase but still result in a loss).
There are different ways to report financials from a route (how much goes to which segment on a HKG-SFO-AUS fare?)
UA is the only airline that increased Tokyo service with these slot allocations (so UA employees should be happy compared to DL which will have less Asia flying), in addition to the announced new HKG flight, an application for another EWR-PVG, and double daily SFO-SIN.
UA has shown they are very willing to cut unprofitable flying so I think their route plans for Asia indicate a successful strategy.
@Joe : it’s painfully obvious DL flight attendant Tim Dunn is just pulling that $300m out of his posterior from the same place Boris Johnson and Nigel Farage pulled that GBP 350m a week for NHS figure.
Also, following Tim’s weirdo arbitrary definition of things, UA is the largest US airline into Shanghai PVG, NRT, PEK, HKG, TPE, KIX, and SIN, so i dunno what his point is about DL being largest US carrier into HND. Another flight attendant level mentality of only knowing how to parrot corporate talking points.
Oh yea, BOM DEL TLV SYD MEL AKL too if one wants to use the broadest definition of Asia-Pacific.
put down your pom poms and pitch fork long enough to read real financial data.
The age of flying the globe for status is over for all except government-subsidized airlines – and even those airlines are having to answer to their governments w/ reduced service.
You are stuck in the mindset of measuring value by network size. Doesn’t work that way.
If United’s strategies were as successful as you think they are, they wouldn’t be making just 2/3 of the money Delta does.
“The age of flying the globe for status is over for all except government-subsidized airlines – and even those airlines are having to answer to their governments w/ reduced service.”
no irony lost in the airline that wants to announce ICN-MNL tag for the pure purpose of servicing the US military –
aka government subsidized and flying around the globe for status
and ps : Mr. Tim Dunn, if that’s your real name, i work at a firm that has roughly 2x the net income margin as DL just about any single quarter, so u can take your lecturing elsewhere.
to be specific, in 2019-Q2, the firm i work for posted 24.3% GAAP post-tax net income margin and 30.6% GAAP pre-tax Op Inc margin. so yea, Mr Dunn, please take your lecturing about financial performance to companies less accomplished.
and what does how well your company does matter one iota about what UA or any other airline is doing to Asia – which is the focus of this discussion – or undo that you have stuck your foot in your mouth about easily verifiable facts?
You came out swinging when UAL’s own executives have admitted problems and I highlighted the natural consequences of the deals that UAL is party to – whether the current management team signed them or not.
Pipe down and accept that Delta’s position of NOT having a joint venture partner has landed them w/ more access to HND on its own metal than any other airline (and AA, HA, and UA ALL have joint venture relationships w/ Japanese airlines).
And then let it sink in to you that Delta has shifted its Asia connecting hub strategy to Seoul where there truly is Open Skies; UA can add as many flights as it wants – if it can figure out how to make money doing so.
When you factor in Delta’s growth potential from JFK to Asia as well as PEK, its LAX and SEA gateways to Asia, and new routes that both DL and KE will add from ICN, Delta could very easily end up with a larger Asia network than United – but, unless something dramatically changes including UA deciding to ditch NH or they agree to a massive renegotiation, DL will make a whole lot more money flying the Pacific.
And while the Pacific includes the S. Pacific, the vast majority of revenue is to E. Asia.
If you want to cheer companies that make top tier margins, then you should be cheering Delta whose Pacific margins are higher than most Asian airlines as well.
Of course, if you are not interested in high margins after all, then none of that matters.
Because you and the rest of the DL folks love using profit margin as to 1-to-1 correlation with being smart at doing business, and that no one is allowed at challenge the ones with DL’s profit margin … except the companies that do better.
So i’m just following the rules laid out by you and mentioning a large firm that is my employer that actually has nearly 2x the margin both at Op Inc and Net Income levels.
Note that ALL of the profit and loss as well as revenue information is reported by the airlines; the DOT is not making calculations other than what the airlines report. and the profits/losses by region do add up to parallel what airlines report on their bottom line financial reports to the SEC.
I have long wondered why UAL’s profits over the Pacific are so low. They get good average fares. now that Kirby is coming out and saying they want to renegotiate their joint venture agreement w/ All Nippon, it becomes very clear that the problem is that UA is giving away too much of what it has built. NH is less profitable than UA on a margin basis so they certainly don’t want to lose the money that UA is shoveling their way.
UA has indeed cut a lot of new transpac flights that have not produced well; they know what they are doing.
They apparently did sign an agreement w/ NH (and it was the former leadership team) that probably gave away too much of the farm when UA was capable of delivering a lot more on its own.
Continual chest pounding about how big UA is to Asia doesn’t mean much if the airline loses money – which costs UA employees profit sharing.
Add in that UA will very likely end up smaller in Japan because of the joint venture and there will be a lot of people that will see what UA did w/ NH as just as bad as pulling out of JFK and allowing Delta to have their slots because UA couldn’t read the tea leaves of the DOJ about the proposed slot swap
I am not sure if the 2nd EWR-PVG route application is moving forward but DL also asked for MSP-PVG. Even if DL moves MSP-HND, MSP already has an ICN flight and could end up w/ a PVG flight.
Again, regardless of what happens w/ JV renegotiations, HND is a no growth hub while ICN has enormous growth potential. DL will use HND to serve the local market while NH will have some expectation of UA helping to feed NH’s flights beyond both NRT and HND as long as the JV exists.
UA might well remain the largest airline to Asia from the US but size will mean little if it comes at the expense of UA employee jobs because of flights having to be covered by NH or lost profit sharing.
The BTS data is not a uniform way for airlines to report regional performance, as there are several ways to divide revenue between international/domestic itineraries. UA has been adding flights to Asia, which they have shown they would not do if they were producing losses. DL has been cutting flights in Asia, which they would not do if they were producing profits.
you do realize that United says it wants to renegotiate its joint venture with All Nippon?
You do realize that 40% of UAL’s ASMs to E. Asia are to Japan and only 35% is to mainland China (which cannot be part of the NH JV)?
UA wouldn’t be telling the world that it doesn’t get enough revenue for the efforts it has put into building its transpacific network if they were making the kind of money they think they should
Given that the domestic system is counted the same for all airlines and transatlantic methodology is very similar and Delta produces margins far superior to United across the board, it is denial to think that United’s financial results on the Pacific aren’t really what I and the DOT says.
UA is adding flights to Asia because it is trying to build a network on its own – and they are capable of doing so. They just signed (under the previous administration) a joint venture that gives away too much revenue while UA continues to shoulder most of the costs for its own flights.
DL cut flights to Asia because the NRT hub didn’t work and Delta could see that NRT was going to be replaced by HND. They reduced their NRT operation down to a size that they could win approval for complete transfer of its remaining TPAC operation to HND. They succeeded at doing that.
Delta operates 7 routes to Tokyo, the same number as NW did at the time of the merger. DL dropped SFO post merger and added SFO-SEA which connects to all of DL’s international flights there. DL already operated ATL-NRT at the time of the merger and that route will move to HND.
Trying to equate growth and reduction of capacity in a market like Tokyo (a hub that is being shifted between two airports) will yield a wrong conclusion.
Further, Delta’s growth in non-Japan Asia markets including China has been at a much faster rate than UA’s since the NW merger.
Sigh… what’s next? A demotion to DemiGodzilla?
Long live the FUGU hub!
i absolutely love the quintuple standards Mrs. Tim Dunn has over there – first whining how DOT needs to give them more slots because UA/NH and AA/JL JVs need to be counted as combined entities, then do 180 degree flips and use meaningless metrics like “DL is largest US carrier at HND” to discount any effects of JV.
quit being childish and just walk away or present actual facts that are relevant to the discussion.
Nobody is doubting that UA is larger. They just aren’t profitable.
The choice for the DOT was to either negotiate a deal that allowed Delta to move its Narita beyond flights to Haneda. The DOT was unable to negotiate such an agreement.
AA and UA jumped into the joint ventures as soon as they could get them. Delta did indeed try to acquire JAL (or a stake) while in bankruptcy but JAL decided to go with the smaller American to avoid antitrust concerns.
AA and UA might not have been able to see the endpoint but it was clear that a joint venture environment that involved an airport that is not Open Skies would lead to limitations in the ability to serve the market.
The DOT, not once, not twice, but three times, affirmed that Delta as a carrier without a joint venture partner was entitled to more frequencies to Haneda than American or United – and now Hawaiian.
If AA and UA could not see where this would all end up with them having less access on their own metal and Narita being worthless as a local market for full-service carriers after Haneda was opened as much as the Japanese government intends to open it, then it is Delta that managed to end up with the better end of the stick.
Be done with your name calling and accept the strategic and economic realities which were set in motion a decade ago.
and, yes, Kevin, NRT was an airline industry institution, and DL was never able to operate it with the glory that NW did. That era has come to an end as CF notes. The Japanese government succeeded at ending a US carrier hub in Tokyo; they also convinced AA and UA that they would gain something by allying with JL and NH. What AA and UA will get is job losses and a smaller network in Japan while propping up JL and NH.
Remember that Delta also acquired a Frankfurt hub from Pan Am and ended up closing it due to German reunification and LH’s much larger network. The German government never played games w/ other airline access and Delta can still freely expand its schedule from any German airport or anywhere else in the EU for that matter.
Just as it will be at Haneda, Delta is the largest US airline in the EU with more flights to more European cities than any other airline. and Delta also is set to have the world’s largest joint venture with AF/KL and VS focused at 3 of Europe’s largest airports.
The Hard Brexit that “Henry” references will only strengthen DL’s position in the EU.
The consolation is that DL will be the largest foreign airline at HND where NW once proudly operated before the Japanese government opened NRT.
Why would UA have job losses in Japan? They’re the only US airline increasing flights to Tokyo, as some of the HND flights are in addition to the existing NRT ones. Also, excluding the HNL flight, which will cater primarily to vacationing Japanese customers, DL will only have one frequency more than UA to mainland hubs, with the UA flights strengthened by the feed of connecting NH flights, feed which a DL officer said is crucial to the success of Tokyo flying.
to recap what I said before
1. UA’s ability to maintain its size in Tokyo – let alone grow it – is dependent on both NRT and HND lasting as hubs.
2. Because of the joint venture, AA and UA were never going to have as many frequencies as DL at HND. The DOT made that clear in three separate HND proceedings.
3. As I noted above and have said repeatedly, there is no example in the world of an airline operating parallel hubs from two airports in the same city. UA might serve NRT from some hubs (such as IAH and DEN) that it could not get frequencies to HND for, but the intra- Asia portion of the NRT and hubs are very similar in coverage. HND is actually a larger hub in terms of destinations served. The premium revenue already prefers HND; the addition of 24 new routes from HND to the US will leave virtually no high value passengers that will choose to use NRT, let alone enough to maintain multiple flights from the US.
4. NH can and likely will fill in UA’s network by serving DEN and IAH as well as HNL – but there is no way DEN and IAH will support flights to both NRT and HND. UA to NRT gets cut in time.
5. UA proposed maintaining service from LAX, SFO and EWR to NRT alongside its IAH and DEN service plus its HND hub. I simply do not believe that AA/JL or UA/NH can maintain
6. NH is dependent on UA’s feed to make its hubs work; UA says they need to renegotiate the joint venture agreement because UA gives NH too much money for connecting passengers via Tokyo.
Any inability to maintain UA’s NRT presence will result in fewer, not more jobs.
Further, UA has spent 10 years building out its transpacific network. Where else do they have opportunities? Contrast that to Delta which has a new joint venture hub at Seoul plus growing hubs at LAX and SEA and coming opportunities to expand in China.
People might be surprised to look back at today as the high point of UA’s Pacific network just as some celebrate the NW Tokyo hubs – at both HND and NRT.
I think the issue causing all this debate is you’re talking about what might happen in the future while the others are talking about what has happened. Without looking into the future, UA is adding flights to Tokyo while others cut, UA is about to add a second SFO-HKG flight (in addition to flights from ORD and EWR) while DL dropped the city completely. UA flies double daily SFO-SIN, another destination DL dropped completely.
Talking about JV revenue and UA wanting more (which doesn’t mean it’s currently producing losses, just that they want more profit), what might happen because Tokyo has two hubs (I think we all agree Tokyo is one of the few cities that has the traffic to support this, along with NYC, London, and Paris), and DL’s status in Europe only serves to muddy the waters to distract from what is completely quantifiable because it has already happened.
you seem like a pretty reasonable person.
Go back and read what CF has posted on the topic of DL’s NRT hub over the years. He maintains good archives and they are fairly easy to search.
Many of the same characters that participated in today’s discussion have participated in other discussions on this topic over the years.
Many of those same people were dead set in trying to argue that Delta was failing in Asia despite the fact that Delta’s network outside of Japan has grown more than any other US airline’s.
As of the date of the Delta/NW merger, the ENTIRE Delta/NW route system was centered at NRT. DL and NW BOTH had just received PVG authority – NW from DTW (which DL kept as part of a build up of DTW which has made DTW the largest US carrier transpacific gateway other than SFO). DL dropped ATL and then subsequently added it again.
If you or anyone else wants to approach the closure of DL’s NRT hub as what has been happened in isolation, then I don’t want to hear about what UA is doing in the future. No US airlines have loaded their new flights to HND so it is completely without confirmation what AA, HA or UA is doing in maintaining NRT or any other growth they will do.
There are a whole lot of people that are jumping to a whole lot of conclusions about Delta which I know they wouldn’t be making if American and Hawaii also announce they are closing Narita – which they very likely will do in the next few years. Likely sooner. Much sooner.
And not one of the global cities you noted above maintain dual hubs by the same airline – let alone TWO airlines w/ joint venture partners – as UA/NH and JL/AA say they will do.
The concept doesn’t work and not one of those cities has one international airport as far from the city center as NRT is from Tokyo compared to the other airport in that city.
You and United and others want me and others to believe that something will happen in Tokyo that has never happened anywhere else. And it will happen with not just one airline but three US airlines – and it will also happen w/ joint venture partners. Five airlines are going to do what isn’t done in any other city on the planet?
It. just. won’t. happen.
Anyone that thinks that NRT will be maintained w/ anywhere near the capacity that AA, UA and HA have to cities that will not get HND slots is in for a very rude awakening in the next few years.
And let’s keep one thing very clear.
The US DOT and DOJ have long-standing policies that only allow joint ventures w/ airlines in countries that have Open Skies.
The US and Japan did not have Open Skies until 2010 or so. Before that, carriers on both sides had to apply for route authority under limits that the 2 governments had agreed to.
Japan said it would agree to Open Skies but not including Haneda. Japan opened HND to the first US-Japan flights since NRT was opened – but there was not even 1 flight per US carrier that flew to Japan and they were at night. The DOT also said EVEN IN THAT FIRST CASE that Delta should be awarded two flights – with United getting none -because Delta had no joint venture partner.
Nearly a decade and 2 more HND route cases later, the end result re: HND is not much different from the way it started. DL is getting proportionately more HND access while AA and UA are getting less access because of their JV arrangements. There are endless statements by people on this site that DL would not win more frequencies – but that has happened 3X. read the archives.
The only additional point I am making here is that NRT won’t survive as a hub. Neither you or anyone else, including AA or UA or HA or NH or JL have provided any evidence that they will be able to overcome the issues that I raised about premium revenue shifts to HND and data overwhelmingly confirms that the shift of premium revenue has already taken place.
And, despite what some people want to think, the DOT did not change its prorate methodology to now favor HND.
The revenue and profits which each carrier reports to the DOT add up to the same totals that are reported in their financial statements which are filed in the SEC.
Airlines do have some freedom to prorate revenue using different methodologies – but no one has been able to tell me from what region revenues or profits should be taken in order to make another region – including the Pacific – profitable for UA. UA’s margins in EVERY REGION including the domestic system – are less than Delta’s.
so, no, we don’t get to just talk about an announcement that Delta has not actually released to the public. We talk about the whole situation, past, present and future because that is what the discussion has been about for ten years – and some of those same people who argued years ago against Delta’s ability to successfully restructure its Pacific network are still arguing against them doing that today.
Taipei, Bangkok and Busan might have made sense as part of DL or NW’s NRT hub at one point but they don’t make sense operating nonstop from the US.
Just as with the Frankfurt hub that Delta acquired from Pan Am, some of the destinations that were served in Europe received nonstop service from the US while others were dropped and the vast majority of those that were dropped STILL are not served by US carriers from the US. The same principle applies to the former NW NRT hub.
No one could see the outcome of the Frankfurt hub closure at the time – but it provides very important lessons about how DL’s Asia network will end up a few years down the road.
To focus the discussion on just what you want which is the imminent HND move, Delta alone has been able to transfer EVERY ONE of its remaining transpacific flights to Haneda. No other US carrier can say that.
Only if you want to argue that NRT and HND are equal – which they clearly aren’t and there is ample data to prove that- can you refuse to acknowledge that Delta is the big winner in the move from Narita to Haneda.
Delta figured out how to succeed in a very bad strategic situation which AA, HA and UA still want to act as if they will win in.
With AA, UA and HA ending up w/ less flights from HND than they have from both Tokyo airports right now, it is only if you disregard data and logic to call AA, UA and HA’s outcome a success.
Mark, don’t waste your time with the worthless loser Tim Dunn who makes like $42k a year. Inside his fantasy mind, serving the piss poor nations like Phillipines with cost-ineffective tags in 2020 from ICN is a win while surrendering Global Alpha cities like SIN and HKG isn’t a loss.
You forgot to mention the continent of Africa and the cities and countries Delta serves there.
But since we reduce air service to the ego of how important a city is to the rest of the world, why do we classify most of the cities in Latin America as “important?”
Honestly, who becomes the arbiter of what is worth serving based on the perceived value to the rest of the world.
How about you stop your defenseless and illogical egoism and self-aggrandizement and admit that Delta has simply succeeded in restructuring its Pacific network away from Tokyo being a hub to connect the rest of Asia to the US to one where Haneda – the most valuable airport in Tokyo – is a spoke in Delta’s network, Delta will be the largest foreign carrier there, and Delta is shifting connecting traffic to Seoul where there really is Open Skies, the way the US government intended joint ventures and Open Skies to work?
Figure out how to engage in real conversation based on facts and data and a mutual exchange of ideas instead of beating your chest in an attempt to make yourself look better at someone else’s expense.
Whether you figure out the second paragraph or not, Delta has managed to transfer its entire transpacific Tokyo operation to Tokyo Haneda airport which is where the Japanese government said full service carrier longhaul flights will be under the Narita-Haneda realignment.
On that basis alone, Delta has succeeded where no other US airline as well as NH and JL have yet to do so.
henry LAX – Personal attacks will not be tolerated in the comment section. Heated exchanges and disagreements are fine as long as they stick to the topic at hand. I will be watching closely and may consider blocking if this continues.
Lots of Americans fly to manila as well Singapore is a great city thoes flights should have gone to haneda as well.
RIP Godzilla Map. May you be resurrected at some stage in the future.
I’m going to miss Godzilla.
The US DOT finalized the Haneda awards today.
I realise this article is about HND slots, but in the comments, it was suggested that the South Pacific is unimportant. I take umbrage with that. I know nothing about revenues but I can look at operated flights. My home airport is AKL (Auckland, New Zealand). UA flies from SFO to AKL year round (with greater frequency in the Northern Hemisphere winter – our summer down under). They also fly to SYD year round from SFO, LAX, & IAH, and to MEL from LAX year round. They have announced flying from SFO to MEL year round from Oct 29. Finally, UA flies from LAX-PPT. AA flies from LAX to SYD year round and LAX to AKL in the Northern Hemisphere summer. DL only flies LAX-SYD year round. They ignore AKL completely. Thus looking at operated flights, UA wins hands down in the South Pacific for US-based airlines.