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.