It is apparently regulatory week here on Cranky, and I’m going to spill into next week with another two-parter, this time looking at the situation at Tokyo’s Haneda Airport.
Delta has been struggling to fully use its Tokyo/Haneda slots in the face of what it says is wildly-decreased demand, and so it is asking for a little relief from the Department of Transportation (DOT). United — quite likely still smarting from Delta’s decision to back the weakening or removal of the perimeter rule at Washington/National — has filed a very strong disagreement with Delta’s proposal. I’ tend to side with United in this fight. I’ll get to United next week, but first, we need to understand what Delta wants.
Let’s start with a little background. For many years, all flights from the US to Tokyo landed at Narita Airport to the north of the city while more-convenient Haneda was reserved for domestic and a handful of near-international flights. Once a new international terminal was built at Haneda, the restrictions began to shrink and a limited number of slots were made available for flights from the US, some for Japanese carriers and the rest for US carriers.
Why does anyone care which airport they use in Tokyo? Well, I think we all know why….
The reality is that Haneda is just more convenient and is highly preferred in the Tokyo area, not to mention in Yokohama to the south. The reasons don’t really matter. The point is that the US carriers were falling all over themselves to score their share of slots at Haneda. DOT created a proceeding (actually this happened in more than one) that would dole out slots not only by airline but also by origin gateway in the US. The race was on.
When all the slots were handed out, Delta was the clear winner. It had waged a pity campaign. United had its big partner ANA and American had its big partner Japan Airlines. Delta had none, and its poor little hub at Narita would shrivel to nothing. It needed to move all its flights to Haneda or the world would end. DOT bought this argument.
There were two rounds of allocations and though there have been some changes, the current state of affairs has Delta with 7 of the daytime slots, United with 5, American 3, and Hawaiian 2. (Hawaiian actually has a third split between Honolulu and Kona, but that’s the only night-time slot pair which really only works for Hawai’i flying anyway.)
This award enabled Delta to pull out of Narita entirely, and it seemed to be a happy camper. Except it wasn’t. Delta didn’t ever like the rigidity of having slots awarded to specific gateways on the map. It has tried previously to get DOT to stop requiring which gateway gets used in a slot award. DOT denied that plea.
Delta has also tried to play games with frequency. Seattle wasn’t doing well back in the day, so Delta flew it once every 90 days as technically required. DOT forced Delta to actually fly it regularly or it would take it away. There’s more, but you get the point.
Delta’s track record isn’t great, but that isn’t stopping the airline from trying this again. Delta is now saying that every airline that has slots should be able to use two of their allocation to go anywhere they want instead of having to stick to the gateway that was awarded, at least for a three-year trial period.
This is rather convenient for Delta since the current waiver which allows airlines to not fully fly their Haneda authorizations expires at the end of the IATA summer season toward the end of October. Delta so far has only been flying 5 of its 7 slots with Honolulu and Portland (OR) remaining suspended, and it will have to start flying them unless it can catch a break.
Though Delta doesn’t say as much, the obvious goal here is for Delta to take Honolulu and Portland and move them elsewhere, maybe one to Atlanta, one to Detroit? Delta hasn’t said that either.
And what are Delta’s arguments?
- Evolving Passenger Demand Attributable to the COVID-19 Pandemic Warrants Reconsideration of the Gateway-Specific U.S.-HND Framework.
- The Current Gateway-Specific U.S.-Haneda Framework Deprives Consumers of the Robust Competition and Enhanced Flying Options They Deserve.
- Grant of the Requested Relief Would Enhance Competition and More Closely Align the U.S.-Haneda Slot Environment with Longstanding Open Skies Principles.
- Limited U.S.-Haneda Gateway Flexibility is Squarely in the Public Interest.
- The Authority Sought is Consistent with Applicable Law and Department Precedent.
You can read the entire filing if you’d like to get the full story. But basically, Delta says that demand between the US and Japan is weak, the world is different post-pandemic (strange since Delta tried to get the same flexibility before COVID), and giving freedom to airlines to choose how to use their slots is more consistent with an Open Skies framework (forget that highly limited slots are by nature inconsistent with the idea).
American strangely filed a quick response with a very short letter saying “yeah, cool, we agree.” American today has 1x daily to Dallas-Fort Worth and a whopping 2x daily to former Pacific hub LAX. You can be sure American would love to move at least one of those to DFW if not both (or maybe move one to might-eventually-be-Pacific-hub Seattle) if it got the chance, so sure, why not ride some coattails?
United however, put much more effort into its a response, a pointed attempt to force Delta to relinquish the slots if it won’t use them so that others can claim them through new proceedings.
There’s a lot of noise in that United filing, but the idea overall is sound. Picking that apart, however, will have to wait until next week.
Tim Dunn response in 5,4,3,2 1…..
Delta Begs the Feds to Let It Alter Tokyo Haneda Flights. That should read… Tim Dunn Begs the Feds to Let It Alter Tokyo Haneda Flights.
Have you ever noticed DL is a real stickler for playing by the rules? Until it wants to change them that is. Flying the SEA flight every 90 days? Ridiculous!
Let me help things along:
Delta is currently being a pain in the a** in whining to regulatory officials worldwide. Higher maintenance than a Jersey housewife.
How many Jersey housewives do you know?
Just what I see on TV, which reminds me of the protagonist in this particular story.
We could also say “as high maintenance as a British car” if you prefer.
Shocked that there isn’t a single flight from JFK to Haneda. Since these slots were awarded by airline and by city, I’m assuming that was also true prior to the pandemic.
I can’t believe DL wouldn’t have been falling all over itself to get a flight there instead of PDX, HNL, SLC. Now that I think about it, that’s probably what they’re doing now!
DL historically plays to their strengths, so if they were going to start JFK-TPAC, I would guess ICN would be the higher priority for the connectivity it unlocks. They lost their shirts on JFK-NRT back in the day with the wrong a/c (747/777) so maybe there’s something to be said about sticking a 359 on there that would help this time around. But with business traffic impaired and loyalty towards the JP legacy carriers, it feels like an uphill battle.
Don’t get me wrong, I think JFK would be considered. I think ATL#2 makes a ton of sense. Then it becomes a toss up with DTW#2, JFK, SLC, etc.
There are flights from JFK to HND, an average of about 2.5 per day (just looking at this month as an example), but they’re flown by the Japanese airlines, with NH having about 1.5 per day and JL 1 per day.
Plus UA from EWR.
Oh I apparently misunderstood the graphic. That makes more sense but I still think, given DL’s emphasis on NYC, they’d want a flight on their own metal especially since there isn’t any skyteam flight from NYC to Tokyo.
Oh yeah, EVERY time I see Brett’s epic map of Tokyo, I hear this in my head:
I’m sure I’m not the only one!
Same here! Saw them live a couple of times back in the day.
It’s not just you!
Nope, it plays in my head too!
It’s not clear what Delta thinks it can do better with its slots, though it does seem clear (even before COVID) that maybe they just have too much TYO capacity in general. Back when NRT was a “hub” they could at least justify some of the incoming US feed with an ever-shrinking number of onward connections offered — at various degrees of commercial viability, but at some not-too-long-ago points in time they did manage to match 3-4 of the daily flights from the US with onward capacity, which they did fill even if probably not at world-beating yields. It was never clear there was enough TYO demand to absorb the capacity without the onward flow, especially for a market like PDX, and even less clear now.
This will probably remain an aggregate US-Japan-level demand problem even if they get this flexibility, but I guess at least they could make a go at something like JFK and BOS service for a bit before giving up entirely?
Does not having a Japanese airline in skyteam makes it hard to balance demand? I’ve noticed some good award deals to Japan on United, but none of them continue to other counties. Has Japan demands remained weak, but other parts of Asia demand is higher?
Finally a reference to Godzilla!
Narita/Haneda stories always get the Godzilla reference. It’s how they keep the airports apart so there isn’t one gigantic taxiway between them with a new runway birthed near Godzilla’s home.
Wherever DL’s slots are awarded, I can’t believe they need seven flights a day to HND, especially with no partner and no beyond-HND traffic. Why not have four or five healthier flights instead of seven that don’t perform as well?
It seems like they’d be better off with NRT flights instead of HND. Then they could fly wherever they want.
Most of their passengers are either DL frequent flyers or people flying them for the low fares they’ll have to offer to get people to fly a non-preferred carrier. Those people would be willing to fly DL to either NRT or HND.
On the surface, that might sound reasonable. However, you have to consider that if DL didn’t apply for those routes, then AA / UA most likely would have.
Therefore, the same capacity would still be there, but other airlines would control the capacity and pricing. I think DL would rather be in control of that.
It is indeed regulatory week and I am glad that CF connected the two issues you dealt with – DCA and HND – because they both have the potential to come at a cost to United but they both help multiple parties including consumers. United’s objection to both proposals is because they benefit from limiting access due to their market strength in both the Washington DC and Tokyo metros.
It is important to note that the US agreed to Open Skies with Japan in return for allowing joint ventures to be formed between AA/JL and UA/NH. Before the US/Japan Open Skies agreement, all longhaul international travel from Japan was from Narita airport. Unlike nearly every other Open Skies agreement, the Japanese government has limited access to Haneda airport based on the number of frequencies for each side as well as the markets which can be served – which is what effectively killed Delta’s Narita hub. Delta could not transfer any of its beyond Tokyo intra-Asia flights to Haneda; US carriers have a limited number of flights from HND while there are no limits on the number of US flights at Narita.
Japan has slowly opened HND to US flights, first w/ nighttime only flights which did not work from the continental US and then a few daytime US markets in the first round followed by the current number of flights. AA, DL and HA received nighttime flight awards – most of which did not work – while UA was not allowed to receive any HND flights until the first round of daytime flights. UA/NH has more flights than AA/JL. The SEA flight noted above was a nighttime flight.
The last round of HND flights was awarded access DURING COVID. All of DL’s currently awarded routes mirror exactly what DL flew before the current HND routes were awarded – after DL ended all intra-Asia flights.
There is no evidence that UA’s Tokyo local market routes are doing any better than AA, DL or UA and UA did not argue that in its objections.
AA supports allowing HND routes to be moved while HA will probably not be able to use all of its HND awards unless it adds flights nonstop from the continental US to Japan. The only equitable solution is to fully open HND to US carriers and US flights.
Just to be clear, are you ok when DL does things to limit competition to help their own cause?
Yes. Yes he is. He’ll just come up with some double talk about why it’s not really limiting or move the goalposts. So transparent.
What killed off Delta’s NRT hub was that it’s an obsolete strategy from the days of Pan Am/NWA when aircraft didn’t have range to make long haul markets beyond jumping off points such as Narita/Heathrow work. Northwest did not adjust to changing times and Delta quickly realized it was unsustainable and continuously chipped away at the hub post-merger. United by contrast started building SFO to support nonstop service on its own metal and today relies on Tokyo for connections that it cannot profitably serve on its own metal due to insufficient yields. This is analogous to how Delta today is using Incheon with KE, but DL can also support fewer nonstop destinations profitably due to the fact that they have less optimal hubs for transpacific flying. SEA is probably their best shot, but they face space constraints and competition with Oneworld carriers.
In the last allocation, Delta got literally everything they asked the DOT for except a second HNL frequency as compensation for their relatively weak position in Tokyo. They could probably have attempted JFK-HND daytime with an A350- yes there’s competition, but it’s a large market for which DL has a strong position on one end and a compatible aircraft. Did they even request this when daytime slots were being given out? No, but they did apply for and get PDX, a limited-size market where they have no feed on either end. This is not a position that has radically changed from 2019. They’ve now decided they don’t want to fly it and are trying to stifle demand by selling Economy for 10,000+ USD to justify killing it (if they can keep the slot, of course).
The reality is that Delta is structurally weaker in Japan than United/ANA, or JAL/AA due to factors both within and outside its control in the past and present. If it can’t support its current network where it got virtually everything it requested to fly, it shouldn’t get to squat on slots it can’t make money with. Even if HND were fully opened, the outcome we’d see is Delta shrinking if they can’t make what they have today work with Japan as an endpoint.
Yes DL did get everything they asked for in the most recent iteration, which was essentially a government subsidy to about for its weak overall position in Japan and unwillingness to continue at NRT.
Okay fine. But now a few years later they decided that they don’t like the gift they were given? And the government did them a favor by only granting one HNL flight! Asking for HNL 2X and PDX shows their lack of foresight. They should have focused on connecting traffic through hubs and high yield routes, not double daily runs on a highly competitive vacation route and a small US market with no connectivity.
DL’s arguments sound consistent with any airline that deals with the regulatory ramifications at airports. Always trying to find ways to adjust regulations to optimize their needs. No different than UA (IAD / EWR come readily to mind) or AA with their myriad of issues with regulations in the northeast.
What is the timeline for a DOT decision, and what will they take into consideration?
Do the other airline viewpoints make a difference? Is it a vote, with three (DL, AA, HA) against one (UA), or does DOT just reiterate the rules that were established then the slots were granted?
Mark – Delta made a motion to DOT and American and United both filed responses. DOT will make a decision, but I don’t know of any timeline for this.
I tend to agree with Delta for one important reason which hasn’t been mentioned: The Japanese carriers, JAL and ANA, have the freedom to move their route authorities as they see fit. U.S. carriers don’t have that same freedom. To me, that gives the American/JAL and United/ANA joint ventures a big advantage. To remedy that, I think it’s reasonable that Delta should at least be allowed to flex a similar percentage of its authorities in the same manner as its joint venture competitors. But I can also see the argument to allow United and American to flex a few of their authorities, too. Either outcome is okay, as long as the overall percentages of fixed and flexible authorities are roughly equivalent.
I’ve missed seeing Godzilla’s home. I’m glad he’s still alive and kicking,
As I read it, the flights were awarded to specific cities. If an airline doesn’t want to fly that route, another airline should have the opportunity to do so. If no one is willing to fly the route, an auction/raffle/pie eating contest can be used to move that slot to a new city.
I remember when Haneda was an “Almost International” airport. That was back in the 80’s and 90’s when the only international service out of Haneda was China Airlines (Taiwan) when they flew through Tokyo. At the time the Japanese government kept China Airlines and CAAC in separate airports (CAAC used Narita) as so to not violate the whole One China policy. That lasted until the early 2000’s when Japan finally woke up and told China Airlines to move out of Haneda to Narita…only to circle that all back and make Haneda the “old-new” Tokyo International Airport.
And now Delta, United, and American are chafing over slots? What is old is new again it seems.
With DL charging over $10,000 for round trip economy tickets for PDX-HND, it seems like they have no intention of operating the flight, regardless of DOT decision.
I don’t see the logic of even considering the origin city. Why not allow the airlines to determine where the slots are most needed? I thought we were past the CAB-era policies where the government gets to decide which cities get air service and how many flights. Each airline should be allowed to use their slots for whatever they want.
There is ample evidence that flights from HND command higher revenue than flights to the same destination from NRT and that was known by the time the current round of HND flights became available. Thus, Delta had the choice of maintaining its hub at NRT, including the ability to fly beyond NRT to other parts of Asia, or get a part of the higher revenue local Tokyo market at Haneda. With a strengthened partnership with Korean to connect traffic beyond NE Asia, it was obvious that Delta had no need to maintain its hub at Narita.
The local Tokyo demand situation for AA and UA flights to HND is not any better than for DL; the difference is that AA and UA can fill their flights – if they do at all – with low yield connections to other destinations in Asia – traffic that Delta is now carrying over Seoul.
Delta was given more flights at HND because it did not have a Japanese partner – and Delta still has fewer flights to the US from HND than AA/JL or UA/NH. As Ghost notes, the Japanese carriers were free to put their HND flights wherever they wanted and also have had the freedom to move flights – which they have exercised. Delta is therefore structurally disadvantaged by being locked into specific city pairs that JL and NH do not have – and by default neither do AA and UA because of the joint venture.
Delta isn’t asking for something that the DOT wouldn’t also grant to other US airlines.
DL will undoubtedly be asking for a decision in time for the next IATA scheduling conference for spring 2024 so they need a decision by the fall of 2023.
So Delta, which was essentially irrelevant on US-TYO flights, not having a Japan partner, and tried (and failed) to wrestle JL away from AA and OW, got the prize everybody would want in Tokyo. The ability to consolidate everything at the preferred airport. Now, DL can’t make money on these flights, and wants to alter the rules….OK. Got it.
Great summary lol
you didn’t get it quite right.
Northwest first, and then Delta, was the largest carrier regardless of nationality between the US and Japan, flying 747s on many routes.
It should have been obvious that the Japanese carriers didn’t like having a foreign carrier operating a major hub on Japanese soil and their efforts to get rid of the NW/DL NRT hub culminated in reopening Haneda to longhaul international traffic – where NW was the largest foreign carrier before the forced move of all longhaul international traffic from Tokyo to Narita.
When Delta proposed the JV w/ JAL, it was clear that combining the largest carrier with anyone else was uncompetitive – just like what has happened between American and Latam in Latin America.
So, JL won AA which is now the smallest of the 6 carriers (2 Japanese and 4 US) flying between the US and Japan.
AA didn’t wrest JL from DL but JL had to choose AA in order to get a partner small enough to pass government approval.
You also forgot to note that Delta is the only US carrier that consistently made money flying the Pacific in the late 2010s and is projected to make more money than any foreign carrier this year even while paying its employees industry leading wages.
DL is the largest foreign carrier at Haneda, Delta’s Japan flights are part of the DL-Korean joint venture which combined w/ the hub at Seoul has the potential to make Delta the largest US carrier across the Pacific, but this time making a whole lot more money than they did before.
Irrelevant? not in the least.
DL is not the largest foreign carrier at Haneda. They currently operate five flights a day, the same as UA, but with smaller planes than the 787-10s UA operates.
Also, it’s very unlikely DL will overtake UA as largest carrier across the Pacific. UA serves many cities DL closed, including HKG, where UA just announced resumption of double daily service from SFO. The one flight is currently packed, driving the need for a second flight.
The Delta joint venture with Korean is very young.
Delta has 16 A350-900s on firm order over the next 3 years, all will be the highest weight versions, and they will be used across the Pacific including to Singapore. The 18 remaining A330-900s will be used across the Atlantic.
The whole purpose of the request to move Haneda routes is to access strong markets. Delta will operate 7 flights to Haneda
And that is before the expected order for A350-1000s which will ensure that Delta will have the lowest seat costs across the Pacific among US carriers for at least a decade.
Oh tim… the way you take account for an A350-1000 order that hasn’t happened. It’s ludicrous.
It may still, but you have no idea of the delivery slots, but everyone knows it will pale in comparison to United’s actual 787 and A350 order book ON RECORD TODAY.
Per Haneda… you already know how silly you sound. You just enjoy the attention.
Tim, United has up to *200* 787s on order, 100 of them firm, with deliveries starting next year. I don’t think you’re aware of that since you mentioned the 16 A350s for DL will make them the largest.
Also, you never answer why the A350s aren’t used domestically on every route, if they’re the planes that offer the lowest costs. I already know the answer, but I’m not sure you do since you only mention the seat costs of the plane without the other half of the equation.
There is no value or need to argue about specific aircraft order size – that is the stuff of egos.
Delta and United are both publicly traded companies and provide investor guidance of aircraft deliveries by fleet type by year. Delta provides that guidance through 2025 while United provides it through 2024.
Delta has 6 A330-900s due for delivery this year, 9 in 2024 and 3 in 2025 – which is the end of the A339 order book. DL has 7 A350-900s due for delivery in 2024, 6 in 2025 and 3 after 2025 (presumably 2026) which is the end of the A350-900 order book.
United has 2 787s due for delivery this year and 8 in 2024 – with 92 firm orders in 2025 and beyond. We simply do not know the subtypes of 787s or the deliveries by year beyond 2024.
Delta has 24 new widebody deliveries in the same 2 years of 2023 and 2024 during which United has 10 787s. Perhaps UA will take more than 9 787s in 2025 – which is the known number of widebodies DL has on order in 2025 but that is the only way UA will begin to overtake DL’s widebody delivery schedule in the next 3 years.
It is a given that DL will buy more widebody aircraft but it sees no need to buy 100 airplanes at a time; Kirby said that delivery slots were tight and yet there have been multiple large orders after the UA order with delivery slots coming within the next few years. Neither Airbus or Boeing are sold out of widebody production.
UA specifically said that part of its 787 order is to replace 767s but not 777s. If UA wants to hold onto its 77 777s – which are far less fuel efficient per seat than any aircraft in the DL widebody fleet, DL couldn’t be happier to compete with UA on that basis. UA has the oldest widebody fleet among US carriers – and the 767 fleets between the two is of comparable age.
The A350 is the most fuel efficient WIDEBODY LONGHAUL aircraft per seat among US carriers in DL’s current configuration EXCEPT for the the B787-10 at United; that is known from current DOT data. The A330-900 offers seat costs within 2% of the 787-9. DL simply ALREADY has a far more fuel efficient widebody fleet and doesn’t need to spend near as much either to grow its fleet because its fleet is already more efficient and DL has more widebodies due for delivery in the next 2 years.
UA has punted the A350 order for years; we have no idea when deliveries are even supposed to begin – if they ever do.
UA is the only carrier that consistently believes it needs to use domestic configured widebodies in domestic service – and use the oldest 777s to do so. DL uses widebodies for international routes or in international configuration on domestic routes.
How do you figure DL was irrelevant in the US-TYO market? After the merger in 2008 and for over a decade it was the largest carrier to Japan and served 19 cities from its Narita hub. And since 2010 when HND has opened up to international traffic, DL has and continues to be the largest US carrier to HND. With the hub closure the consolidation to HND they have the most slots in HND, the preferred airport. UA and AA rely heavily on their respective partners to turn a buck in the Japan market, while DL is doing just fine going it alone. They’re only asking for the same flexibility the Japanese carriers are already allowed to have in the agreement, which is to shift to more profitable gateways.
“”””” I’ tend to side with United in this fight.’ll get to United……….”””””
Oh Brett, when your kids get home from school have them give you a typing lesson…..LOL
All of the history that’s been bandied about back and forth here is irrelevant to the current issues at hand, as is all the hand wringing about the relative Asian market shares of the various carriers. Airlines are recovering from an almost unprecedented downturn in traffic, as well as responding to differing regulations in response to the pandemic. The travel market to Asia may be very different in 18 months. Then again, it may not. Maybe we should wait to see what happens before we jump to too many conclusions.
those are wise words, Ghost, but remember that airlines have always operated “mobile factories” and figure out how to move their operations where there is the opportunity to make money.
Let’s also not forget that Delta, the most senior of the remaining US airlines, is nearly 100 years old and has adapted to enormous market changes. AA, WN and UA along w/ a number of others have done the same and will do it again.
Delta’s request – which again is for all US airlines serving Haneda – is about gaining the flexibility to adapt to changing market conditions; that flexibility is core to the way the free market works, is completely absent in the way the DOT is managing HND access for US carriers, and is also absent from Japanese carriers.
Like the DCA perimeter case, Delta is asking for market liberalization. 45 years after the US domestic market was regulated, the government still has enormously long tentacles that restrict the freedom of US airlines. Delta is simply trying to give everyone -including Delta – the freedom to adapt to changing markets in the very same way that every other airline has benefitted.
It is also worth noting that Delta supported domestic deregulation while United, among others, did not. Some people cling to the status quo while others embrace new opportunities and figure out how to adapt and win.
Apparently, you missed the point. What happened in 1978 has little effect on these specific issues.
To deregulation: The end result was massive consolidation – as William Seidman correctly predicted would happen. It can be argued that the airlines that have survived, whether they supported deregulation at the time or not, found ways to adapt and grow. Even the world’s only perfect airline had to file for Chapter 11 protection. So your point on deregulation is moot. In fact, you made the point about airlines adapting in your first paragraph, then contradicted yourself when you wrote about which of them supported and opposed deregulation. The individual airlines’ stances on deregulation had absolutely no bearing on what actually happened.
To the issues at hand: I tend to agree that some amount of “liberalization” would be beneficial to all concerned. But I tend to doubt everyone will be happy with everything that gets done – even if that turns out to be nothing.
To all who whine about the various positions the carriers take, they’re all doing what they feel is in their best interests. When did that become a crime? In fact, “(P)etition(ing) the government for a redress of grievances” is protected by the First Amendment of the U.S. Constitution (which I paraphrased). Doing what one feels is in one’s best interests is human nature. That’s not a felony.