I’ve already gotten you up to speed on Delta’s request for DOT to allow airlines to pick which gateway they use for up to 2 of their Tokyo Haneda flights, and today it’s time to dig into United’s counter-arguments.
United is particularly unhappy with Delta since that airline has been able to extract the most Haneda slots out of any US carrier… yet it never is happy and is always trying to change the rules of the game. I assume that this — along with Delta’s attempt to get behind a loosening or elimination of the perimeter rule at Washington/National — has really put United’s government relations team on edge, because they arranged a media call to discuss the airline’s response last week. They have decided not to hold back in showing their displeasure.
I’ll go through United’s more relevant arguments here, but as always, read the full filing for more.
“Delta Does Not Paint a Realistic Picture of U.S.-Japan Demand Recovery”
Delta says that demand sucks, and it gives this chart in its filing:
Some of this is not a surprise. After all, Honolulu flying is primarily Japanese origin, and that market is far further behind in the recovery than US origin. That’s why Honolulu looks so pathetic on that chart.
More broadly, this is an important point of contention. United notes Delta is putting its thumb on the scale by showing demand levels overall for both US and Japanese originating travelers. That helps Delta to skew demand downward to plead its case when it full well knows that it will take more US point of origin in its markets like all mainland US carriers. (Again, Honolulu is an outlier and is almost entirely Japan origin. Delta has no business flying this route anyway.)
United says that from US origin, demand is now at 73 percent to Tokyo — above the average US long-haul demand — and rising rapidly now that the last COVID restrictions have gone away in Japan.
United isn’t just spouting off numbers. As it says, “And for the avoidance of doubt, United is anticipating a full return of demand in Summer 2023 and thereafter.”
The Mystery of the $10,000 Delta Ticket
United held a media call when it filed its objection, and it led off by talking about the “mystery” of the $10,000 Delta ticket. United says Delta is trying to create a self-fulfilling prophecy by keeping demand down on the routes it wants to reallocate. How so? Well, just take a look at Portland.
As mentioned, the waiver allowing airlines to not use their slots expires at the end of October, so both Honolulu and Portland are in the schedule after that. But Delta has pulled back inventory to only sell full fare in all classes of service on the Portland route. That means even in coach it’s $10,000+ roundtrip. It isn’t doing the same in Honolulu, which is odd, but maybe that’s because demand is dead on that route anyway.
United thinks Delta is trying to suppress demand with artificially high fares so it can then show DOT that demand is dead and it needs flexibility. I don’t see this the same way as United. I think Delta is simply not planning on flying this route. It hopes it can get the flexibility to use the authority to fly from another gateway, but if not, it’ll just walk away from the slot. Delta really doesn’t want to take a bunch of bookings which it will just have to refund or rebook. To me, this is just a pragmatic way to deal with the situation while Delta waits to see how it plays out.
“The Department Should View Delta’s Proposal with Skepticism Given its Operating History at Haneda”
I already talked last week about some of Delta’s checkered past on how it has dealt with its Haneda presence. While I don’t disagree that the airline’s history is concerning, to me this argument is a distraction. Delta has the right to propose whatever it wants. If the suggestion is sensible, then who cares what the airline’s history is? Judge the proposal on its merits.
There is plenty of drama in this proceeding, but I tend to take a different, more measured view of the whole thing than all the airlines involved. That being said, I agree with United’s suggested outcome.
DOT has awarded these slots based on the specific gateway that will be used. If it had awarded slots based solely on airline with flexibility on gateway, it may have come to a different conclusion in the initial award. So to now change the game just because the pandemic is over and things are different — even though Delta made a similar proposal pre-pandemic — would seem to be a mistake.
If Delta doesn’t want to fly to Honolulu or Portland, it should give the slots back as American did at JFK long ago and then let them go out to be reallocated through a DOT route case.
To that, Delta says it’s an issue of time:
…slot-pairs forfeited for underutilization and/or returned to the Department’s pool for reallocation will cause a gap in service – depriving consumers of the benefit of a scarce asset during the pendency of a multi-month Department administered proceeding.
So which is it Delta? Is demand so weak that you can’t fly or is it so strong that we just can’t afford to wait the months required to do a full proceeding to reallocate them? The airline is tying itself in knots here, but I can’t blame it. Why not try everything in your arsenal to keep your slots before giving up?
The reality is that Delta tried to get as many slots as it could during the previous proceedings, threatening doom and gloom if it couldn’t get them because it doesn’t have a Japanese partner. Thanks to that effort, Delta pulled in more slots than it otherwise would have. Now it is trying hard to keep those slots but repurpose them as it sees fit, and that doesn’t seem right.
DOT should go back to a proceeding. Delta can participate and ask for a second Atlanta or whatever it is that it wants. We already know that United will ask for Houston/IAH — something that would seem to provide much greater benefit than a second flight in any other existing market — and Guam, a market that I think would be a giant waste of a slot. Maybe American wants to try for a second DFW and maybe Hawaiian — well, nevermind, Hawaiian can’t even fly what it has now thanks to Japanese-origin weakness. I would think it would sit this one out.
While the idea could be floated that the whole original allocation should be scrapped and they can redo it without any gateway designation, that is risky and I don’t imagine any airline would be willing to play that game. That means DOT should just reallocate unused slots under the current system. If Delta doesn’t want to fly to Portland or Honolulu, the airline should give them back and hope that it can win them for a new gateway in a new proceeding.
75 comments on “United Thunderously Disagrees with Delta’s Plan for Tokyo/Haneda Slots”
To me it sounds like one cranky corporation wining about another with a little… hey look over there / slight of hand.
What makes you think DL shouldn’t be flying HNL to Tokyo? A decade ago a colleague in network planning said it was a top 3 most profitable route for DL.
And Guam tourism from Japan is strong market, and curious about US military travel demand. What makes that a bad market you think?
Ben – Well, the nature of Delta’s Japan operation has changed dramatically from the old days. Back when Northwest was there, it was heavily invested in Japan point of sale dating back to when it got the Japan rights out of the spoils of WWII. It operated a hub there with extensive service throughout Asia and into the Pacific where Japanese travelers wanted to go. Now, that has all been abandoned with Guam, Palau, and Saipan ending in 2018. Delta’s relevance in Japan point of sale has shrunk dramatically with the elimination of most routes that matter, now only serving the US market. Honolulu is the one market that has almost no US point of sale, so it’s a relic of the past that doesn’t fit into Delta’s network any longer.
As for Guam, I’m not saying whether or not it’s a bad market. I just find it to be a waste to use a Haneda slot to serve a market that has interest to very few Americans. It may end up being a decent market, but I would personally like to see that well down the list once markets that are more important to US travelers get enough service. That, however, is just my personal opinion and now how DOT operates when it doles out awards.
*Helpful perspective on Delta’s legacy there. Their Pacific focus seems to have shifted North to Seoul with the Korean Air partnership, rather than running the legacy NWA operation out of Narita. *
*As for Guam, is there an easy way to measure pre-pandemic daily passenger flows from Tokyo-Guam? And size that against a city like Houston or Atlanta (non-connecting)? While its only ~160K population (Guam) proximity and leisure connection may present much higher pre-pandemic demand than long-haul from a Southern continental US hub might? *
Ben – On Guam, are you talking about Guam originating passengers or total local market? The local market to Tokyo is much bigger than the local market from a place like Houston or Atlanta. Using Cirium ARC/BSP data, 2019 daily passengers each way were 878 in Guam, 80 in Houston, and 66 in Atlanta. But, of those Guam passengers, about 15 were Guam origin while Houston was about 40 and Atlanta was just under 30. Of course, in Guam there isn’t a connecting play but in a place like Atlanta or Houston it’s all about connecting flows.
Guam may be less appealing to US carriers since it’s mainly lower-yield tourism business and there’s already a Korean LCC (Jeju Air) flying between Guam and Tokyo-Narita, as well as UA and JP. I doubt UA could get much of a premium moving this business to HND.
United lost one-stop connectivity from the mainland hubs to Guam when flights moved from NRT to HND in places like ORD, IAD, and (for the time being) LAX. United likely sees the highest priority for advocating GUM-HND service as providing those one-stop connecting options from all US hubs to Guam and two-stop service from every destination served by United.
That’s not it. UA can’t sell connections from the US to Guam via Tokyo as that’s a violation of cabotage laws. The only way that’s allowed is if the layover in Tokyo is more than 24 hours, in which case it isn’t a layover anymore. The flights to Guam are for people moving back and forth between Tokyo (and Japanese points beyond) and Guam.
This isn’t right – you can definitely buy flights from US to Guam via Japan with normal (say 2 hour) connections. An example – look up SFO to GUM; it’ll connect you in NRT.
You are correct, of course. As a US carrier UA can sell those tickets and carry that traffic. Mental lapse on my part. I was thinking of foreign carriers, which cannot, such as when KE (I think) got in trouble a few years ago for US to Guam connections over ICN.
*That makes a lot of sense. There are ~20K US Military Troops + Families in Guam. I’d imagine that alone generates a lot of both leisure and Government business traffic for UA which has a small hub in Guam. There may be a compelling angle to support the growing bases there as more DoD resources shift to the Pacific. *
GUM-HNL-LAX/SFO/others is a pretty sensible routing to get to the mainland, and is a shorter distance with the same number of stops for most destinations.
NW/DL used to have a sub-fleet of 757s that flew their Intra-asia routes, which worked really well. About 10 years ago, I got to fly from Narita to Saipan when DL was flying 3x daily on the route. Retiring that sub-fleet had a lot to do with dismantling the “beach-route” network.
How do these other airline responses factor into the DOT decision, if they do at all?
If DOT is against the idea but all airlines are in favor, is it approved? If DOT is neutral but the airlines are split, does DOT go with the majority of airline viewpoints?
In this case it’s three airlines in favor versus one airline against, though the one airline against has the most thorough argument. Does that matter?
Mark – They take it all into account and address all of the points in the decision they make at DOT.
Where in law or practice does it say that US airlines should only carry US originating traffic – and that a US airline should not consider foreign point of sale? Should UA not be permitted to carry S. America traffic – which is overwhelmingly S. America point of sale in total numbers? In reality, UA partner ANA operates A380s from HNL to HND and UA would love to see ALL US carrier competition eliminated.
UA’s motives are very clear from its filing. It thinks that by forcing Delta to operate flights that don’t work, Delta will drop those routes and allow the DOT to re-award those frequencies – to United. Since Delta has operated its Pacific network at a profit while United has been willing to repeatedly lose money, UA knows that DL won’t tolerate continued losses. But UA has more slots at HND through its JV than any airline or JV so the chances of UA getting more slots are slim to none. UA and NH are willing to flood the market w/ capacity and lose money, monopolizing the market. The DOT is UA’s unwanted cop to ensure fair competition.
UA is trying to protect its US carrier monopoly from NYC/NJ to East Asia since DL and AA both previously served NYC to Japan on their own metal but currently don’t. DL is the only real competitor to UA across the Pacific; UA can see that DL has become the largest carrier in NYC based on the number of flights even w/o serving E. Asia – and UA knows that DL will likely add both HND and ICN (Seoul) from NYC in time – which will significantly put a dent in UA’s NYC – E. Asia network since UA cannot currently fly EWR to China or HKG.
UA and others continue to conflate nighttime and daytime HND slots; UA never received any and they simply are not on any basis equal to the current day time slots – which AA, DL and HA all operated as granted pre-covid.
PDX is a niche transpacific market – UA knows that because it once operated PDX-TYO. Portland has forced business out of the city because of liberal policies while the TYO market was heavily dependent on Nike which learned to reduce its transpacific business travel during the pandemic – just like many companies in Silicon Valley. DL also is pulling PDX-ICN.
Delta’s request is supported by American and Hawaiian. The intensity of United’s shrieking shows their fear that more benefit than are harmed by DL’s request and UA is indeed the party that will most be harmed by gateway flexibility.
Tim, outside of events like SARS or severe recessions, where have you seen that UA is willing to continually run its Pacific operation at a loss? You say this in almost every post but I haven’t been able to find anything to back this up.
Also, is this data you might have current or from 5-10 years ago? Are you saying US has been running losses on the Pacific all along and now they want to increase their losses even more by going double daily on SIN, double daily on HKG, double daily on ICN, 777-300 to TPE, daily to KIX, all of which are stations closed? Not to mention they’re currently operating their full HND slot portfolio while DL is letting almost 30% of their slots remain dormant.
You’re saying that, even though UA says their Pacific operation is profitable they’re actually driving losses? You’re saying that UA is breaking the law by misleading investors?
*They break out some financials by region — has anyone looked at the $UAL investor relations reporting to dig into this claim? *
Mark,
ALL US carriers provide data on their profits for each of their geographic regions – domestic, transatlantic, transpacific and Latin America. The DOT doesn’t calculate carrier profitability but the airlines provide it.
United reported losses on its transpacific network for 2017-19 which were peak years for the industry. AAL showed much larger losses for an even longer time. Both execs have admitted in the past 2 years that they flew China and HKG routes that didn’t make money; Delta stopped flying to HKG and also didn’t have as many routes to China. UAL’s losses have turned around now that their HKG and China network is much smaller.
None of which changes that UA/NH are already the largest carriers between Japan and the US based on their joint venture. They also have gateway flexibility together because Japanese carriers have it. United wants desperately to argue that Delta should be stuck w/ routes that don’t work even as NH and JL have repeatedly moved routes.
UA desperately wants Delta to prevent Delta from being able to move its routes to the Eastern US where it is much stronger – and also threatens UA’s nonstop monopoly among US carriers from the NE US to E. Asia.
Ghost gets it. He isn’t a broken record.
I believe Jason H is onto something. Delta might want to operate MSP-HND in the summer and HNL only in the winter.
I know you keep saying that they lost money in the Pacific, but I’m looking for an actual source.
Either way, you’re using data from 4-6 years ago. I hope you don’t still think UA is unprofitable across the Pacific. 2017-2019 is a lifetime ago for the industry, especially pre and post-COVID.
google “bureau of transportation statistics net income all regions” and you will find the source. It is public.
And the point is not that UA is still losing money but that it was willing to do so when it was the largest carrier across the Pacific even in the best of times for the industry. If they were willing to do that even 5 years ago when they were the largest carrier to Asia, there is nothing to say they wouldn’t do it again now in order to maintain or gain market share.
UA’s goal from its response is clearly to corner the market and grow its size while seeing other carriers shrink.
AA is very small in comparison because it realized it cannot continue to lose money.
HA is very weak financially.
UA would love to see DL smaller and weaker.
btw, Bloomberg is saying that a big DL order could come from Airbus very soon – which is likely to include the A350-1000 as I have stated.
IF the deal materializes, DL will have by far the most cost efficient transpacific operations and UA will lose its ability to maintain both its size and its margins against a much larger and more efficient transpacific DL network.
ATL, LAX and JFK to HND could probably all support A350-1000s.
I reviewed the 2018 annual earnings report and the executives said the Pacific was doing well. If anything, they hinted at the potential for weakness over the Atlantic (clearly not an issue today).
So, since there’s no reference to Pacific losses from the executives who would know, unless you’re claiming they broke the law, and since you’re talking about something from 6 years ago, can we deem it irrelevant?
Tim, so that you can also stop mentioning DL’s huge fleet growth and how they’ll achieve industry dominance, please review JonNYC’s tweet about UA’s staggering fleet growth.
Both the “new narrowbody” and also the “787” increases are incredible. UA already has more 787s than DL’s A350 count, including the 16 that aren’t even delivered yet. DL won’t even have enough planes to reinstate all of the flying they flying they dropped, much less catch up to UA’s impressive growth.
https://twitter.com/xJonNYC/status/1658107828366630915
Tim doesn’t understand how revenue accounting works as it pertains to DOT reporting. Delta is the most overall profitable carrier in the US. That’s all the DOT data says if you know anything about it. There’s zero standard in how airlines report that data tim references
He’s been told this 30x but loves a fake talking point so still repeats it over and over and over
Max,
Tim breaks records, you don’t. DL was the most profitable carrier over the Pacific and Latin America in 2022. DL aided by the LA JV brought in a commanding $2 million in Latin America which is the best on record that the airline has done for 2022. Tim is exactly right that the A350-1000 is the best fit for JFK. It’s why DL ranked JFK and even BOS higher than PDX and 2xHNL for its HND route authorities.
DL reconfiguring the 777s for AI was always the long term plan to accelerate in the A350s. Especially when the A330-200 beats the 777-200ER as the most economical wide body among US airlines. DL prefers to buy wide bodies secondhand vs. narrow bodies since wide bodies are much more cost effective to reconfigure. All of DL 777s were old and leased, so impairments costs were minimal for the airline anyways.
For years, management at DL has been trying to convince analysts to green light the A350-1000. But the analysts kept saying nonsense such as “Most routes are well served by the A350-900” “A350-1000 would create an additional sub fleet” “Only niche routes would be well served by the A350-1000.” Crazy analysts, this is DL not WN.
The fact that DL market share is just over 50% recovered from the end of 2019 vs. UA at just over 66% and AA at over 75% shows that the other majors cannot replicate the same strategy.
Finally, Tim’s point on ANAs A380 serving HND-HNL speaks for itself.
lol. Somehow missed Tim using his alterego and replying to me with… nothing at all that I said anywhere…
I’m happy for you or sorry that happened, but I ain’t reading all that text
Tim,
No one wrote or implied that U.S. carriers may only carry U.S. originating traffic.
Not to mention you’d think US originating traffic would be a helluva lot more relevant to the US DOT when making decisions about how to best serve the US.
I think what Cranky was trying to suggest is that HND-HNL is a poor market for DL and HA since it’s primarily a Japan-originating leisure market, with a much smaller US-originating and business component than the mainland-Japan routes. 20 years ago, HNL’s Ewa Concourse would be filled every morning with JAL 747s (with an ANA or two down at the end). I don’t know how Japan’s outbound leisure market is recovering.
Another issue is that Japan-Hawaii leisure was also dominated by package tour operators like JTB. Unless that’s changed Delta and Hawaiian would need to do deals with those tour operators to drive their passengers to them instead of JAL and ANA in order to appreciably move the needle on Japan-originating bookings.
1. Of course there’s no rules about where traffic originates. However, the DOT is an American entity, whose focus is providing benefit to American travelers. As you point out Delta has no JV partner in Japan, which means it relies even more heavily on the American point of sale, compared to American and United. Asia originating traffic heavily leans towards Asian carriers; this is a fact. UA’s South America has nothing to do with Asia. Therefore it’s ironic that Delta chose to show the overall number, rather than the American number. The only reason to do that would be to make demand circumstances seem worse than they actually are for Delta, which is certainly what they did.
2. While you point out UA made losses 2017-19, the losses actually decreased over that period. And United made a $222.4 million profit over Asia in 2022. Delta’s profit in 2022 was just $70.0 million. There are plenty of reasons why an airline would choose to take a loss for a few years, such as allowing a new market to mature. I don’t see how that indicates that UA is aiming to flood the market with capacity and monopolize the market.
3. If JFK was such an amazing market, why didn’t Delta request it back in 2019? According to you, they could have easily gotten it, yet Delta’s one denial was for a 2nd flight to HNL, a market they now say is too weak.
I think it’s safe to say Delta messed up and now they want a way to fix it, which is understandable from their point of view but annoying for everyone else who played by the rules. Tim Dunn won’t admit that though, and the more of his comments I read the more I’m convinced he’s a bot/paid employee of Delta than an actual commentator lol
These same comments are littered across multiple aviation websites.
thank for acknowledging that UA really did lose money flying the Pacific.
AA and UA execs both said on earnings calls that they lost money on SOME transpacific routes.
DL had a strong corporate contract w/ Nike that supported PDX. It was a niche market that supported a transpacific route but the market changed. If JL or NH operated PDX-HND, they could change the way the route is served and AA and UA benefit. DL’s request – which is supported by AA and HA – is about the most far access – which UA does not want to see.
UA is clearly desperate to keep DL out of the NE US to Asia market – and it is absolute a given that DL will start JFK-HND and perhaps BOS. The A350-900 has seat costs comparable to or better than the B787-9 and carries more passengers even in comparable configurations and offers better economics than the 777-200ER/LR that DL previously used from the East Coast to Asia.
As for fleet, the same UA execs that spoke about losses to Asia specifically said that UA would use part of its 787 order to replace its 767s. Without knowing how much of the 787 order will be used to replace the 767 fleet, it is no more accurate to say that UA has more widebody growth potential than AA or DL – we simply do not have details.
We do know that UA has the largest fleet of 777-200/ERs which are the least economical widebodies in the US airline fleet – and that is backed up by DOT data. AA and DL retired widebodies while UA will spend NOW to replace less efficient aircraft. DL would love to compete using A330-300s that are 15% more fuel-efficient or the A330-900s and A350-900s that, like the 787-9 are 25% more efficient per seat.
A large order for more Airbus widebodies from Delta will further ensure that Delta has the most efficient fleet among US airlines and also among many global airlines.
Many people want to believe that UA is this runaway international success while failing to acknowledge that there are valid structural reasons why UA has not been as financially successful and also that DL is capable of ordering planes and growing.
This gateway flexibility request is just part of DL’s international growth plan for the 2020s that will allow DL to significantly cut UA’s advantage both in size and in profitability. HND is just part of the international strategic initiatives that DL will be rolling out.
Tim, did you not yet look at JonNYC’s slide about UA’s fleet growth? Very few of them will be to replace retiring widebodies. There is a staggering amount of growth in store for UA, both on the narrowbody and widebody fronts.
https://twitter.com/xJonNYC/status/1658107828366630915
Since, according to you, network is all about whether an airline has Airbus widebodies, are you going on record and saying that DL will reopen all the stations they closed, while also opening all the stations UA has opened? DL will overtake UA in the Atlantic and Pacific, since A350s are the key to success, something only DL realizes?
Or, as so many others say, a large plane runs the risk of diluting yields unless it’s on a large hub to partner hub route?
A very large number of united aircraft are simply going to replace regional jets and also very old united mainline aircraft.
It’s rather obvious that you love to see united as this invincible force, and Delta as a weakling but you will be surprised in the next couple of years at what Delta is able to build. Delta and American chose to retire aircraft while United did not. Both have far more efficient aircraft right now than United. Delta also happens to have more aircraft on order for immediate delivery in the next few years and that is even before the new order
United has a few more dots on its route map in Asia but to Europe they are about the same and Delta is ahead in Africa. United is operating one flight per day to India plus DXB. He’s huge structural advantage with you think united has doesn’t exist, especially in the United States.
I have family who work for and have retired from both United and Delta. Both are great airlines, but I know they both have relative strengths and weaknesses.
It’s your obvious bias that promotes DL over everyone else, no matter what the situation or whatever irrelevant data you have to include, that detracts from the conversation.
As with most areas in life, it’s ok to admit when your side has done something wrong and the other side has done something right.
Kudos to Mark, thanks for the common sense rationale often missing from our bipolar, black/white, left/right, right/wrong society. Sad that it even infects an aviation blog like this.
So now it’s “some” Pacific routes? That’s very different from a blanket statement of running the Pacific operation at a loss.
Seems normal for an airline to have stronger and weaker routes in each region.
Anyway, the whole thing is irrelevant. I’m not sure why you keep bringing it up in every thread. It makes your whole argument less credible when you throw everything at the wall to see what sticks.
Mark,
Tim speaks facts whether you like it or not. Delta is the largest carrier to Asia south of the 49th parallel and north of 47th. Seattle as DLs primary Asian gateway serves 3 Pacific markets for DL, more than any other US, Canadian, or even Mexican carrier in Seattle.
DL isn’t just the largest carrier to Africa, it regularly blocks seats, sometimes up to 100 seats blocked, on the eastbound JNB-ATL sector during NS making it the largest seat blocker in Africa. UAs 787-9 has slightly better performance on JNB-EWR, so UA needs to add more seats then subsequently block those same seats to beat DL in that regard.
UA also runs a premium heavy configuration which drives up yields but decreases CASM. DL understands this is a faulty strategy and plans to configure many of its future wide bodies more densely. CASM is the most important financial metric as the yield curve only flattens after roughly 600 or so seats which is why the A380X doesn’t make much sense.
DL is the most profitable carrier in Africa which is why it’s the first US airline to disclose its Africa earnings separate from the rest of the Atlantic system.
Thanks for the laugh!
Great breakdown as always CF. Agree with United here that the slots were allocated based on routes and therefore DL shouldn’t be able to just swap them around as they see fit.
I know I sound like a broken record (and boy! am I dating myself with **that** reference! LOL!!!), but I must point out what I feel is a flaw in Cranky’s and United’s logic. That flaw is that ANA and JAL, United and American’s Joint venture partners, have the ability to move their slots at will. If my math is correct (and please correct me if it isn’t), that means that about 70% of those two partners’ overall Haneda slots can be moved around to match market demand. So, as I see it, Delta’s request to allow it to flex about a third of its slots isn’t asking for any kind of special treatment.
An airline applying to the DOT for regulatory changes it feels are in its best interests is protected by the First Amendment to the U.S. Constitution. So is the right to respond to that application. “… (T)he right of the people … to petition the government for a redress of grievances.” is vital to our way of life.
I am curious as to why the Japanese carriers seem to have no restrictions while the US carriers are fighting for these HND slots.
Regardless of why that’s the case, the US DOT must allocate these limited US resources for US airlines in the way that most benefits US originating travelers.
If DL’s case for serving other airports is so strong, they should be confident in their ability to win back the slots based on those merits.
Ghost – I don’t see how this is a flaw in my logic. The entire point is that DOT made these awards based on specific routes being flown. If it had made a decision based on just the airline and not route, it may have come to a different conclusion. So, it should either stick with what it has or it should redo the entire Haneda route case and divvy the routes up based on airline alone.
Maybe the flaw in logic isn’t yours, but the DOT’s/federal government’s (depending on whether the restrictions were issued by the DOT, or were part of the treaty that allowed the extra authorities). My rationale is simple: If the Japanese carriers can move Haneda slots around, American carriers should, logically, have the same freedom. But I keep forgetting that logic and politics tend to be mutually exclusive.
CF
You raised a valid point, which I addressed elsewhere. I should have acknowledged that.
To further amplify (overthink?) my original point and acknowledge Cranky’s valid counterpoint: Delta, American, and United at least implicitly agreed to the DOT’s restrictions when they applied for their Haneda slots. So Delta’s petition to change the rules is an attempt to renegotiate what they agreed to. On the other hand, there’s an equally valid point to be made that one carrier shouldn’t be at a major disadvantage to its competition. It will be interesting to see what happens.
Under the current rules, can slots be split between two airports? Or do you think that could easily be negotiated?
Even if demand to MSP and PDX are weak, they could work each as 3/4 per week, resulting in fewer slots given up to be reallocated. Or maybe MSP 4/week and ATL 10/week if that would help persuade their case to the DOT.
Jason – You mean if they went to a route case again, could they split it up that way? I don’t actually know, but you’d think it would be possible.
It could work in two ways. Either they go back to assigning routes and ask for split frequencies as you describe, which could give them a better chance of getting/keeping them.
The other way (although probably too late now) would be if they had gone to the DOT with this plan instead, saying “we will keep the same destinations but want a bit of flexibility on frequency” rather than “let us change everything”. Then they might be more likely to get it and United’s objections would be a weaker if they still serve the same variety of cities they asked for earlier.
Those sound like good ideas. So DL should give the slots back and pitch these good ideas to DOT who will then decide which two good ideas best serve the interest of US passengers instead of leaving it up to DL’s sole discretion which is likely to change again a few years down the road.
Several people as well as United are making statements that the US DOT should be focused on the US originating market and not the total market. That is absolutely not the case; nowhere in US aviation protocols with Japan and nearly every country are there restrictions on which carriers should serve which “side” of each international market.
The DOT recognizes that air services connect 2 cities from two foreign countries and they consider the TOTAL market size.
UA wants to argue that DL should only focus on the US side because it has seen the least decrease and is bouncing back. The reality is that UA’s TOTAL Japan market isn’t any stronger than DL’s – UA is just able to – and is selling connecting traffic over Tokyo to other cities in Asia and THAT is not a factor in DOT route award decisions in limited access markets. DL probably has more Japan point of sale precisely because it does not have a Japanese partner.
and if the size of even the US side of a market is a factor, NYC is a larger market than PDX or MSP – which explains why UA is screaming so loud to not allow DL to move ANY route because their own argument will fall flat. PDX was scheduled with an A330-200 and any flight from the East Coast will be on an A350- which has 75 more seats in the current DL configuration.
Some people will argue for maintaining rigid rules but that is not the basis of Open Skies – of which HND is an anomaly not seen in other Open Sky agreements – and preserves the market power and gateway flexibility that AA and UA have through their joint ventures – but which DL and HA do not have.
Ghost is right again that there is a right to argue in one’s best interest. The DOT simply has to do what is best for the nation – and DL’s request helps far more than it hurts with UA being the loser, as it is in the DCA outside perimeter flight proposal.
What did UA ever do to hurt you?
Maybe he’s the guy who made the United broke my guitar video.
If the DOT opens these back up to competition, it would be interesting to see of American’s brings back their proposal of LAS-HND.
It’s a interesting leisure play, and with MGM’s joint venture awarded Japan’s casino operator bid there would presumably be corporate demand for flights out of LAS as well (although with the casino site in Osaka, LAS-KIX may make more sense).
although the focus has been on Delta, AA operates 2 LAX-HND flights, one of which is a redeye westbound – and it likely does not do well.
They could petition to move it to DFW but MIA could also finally get a Tokyo flight of its own or AA could add/re-add one of its other hubs.
What AA does could be more interesting than what DL does – which likely heavily favors JFK and BOS.
AA has one flight to NRT from DFW. I think they would use one of the LA slots to convert it to HND. They would then also be done with NRT.
If I were sitting at the DOT, the one move that would tick me off more than any other would be that $10,000 tkt on sale. That’s false advertising regardless of the carrier. Whether it is legally deemed so is Irrelevant to me…it’s morally wrong.
DL should take a leaf out of the virgin Australia books by flying a 717 with a few drums full of extra jet-a in the back. Basic economy passengers can be employed to pump it into the main tanks in return for extra biscoffs.
Pleased to see Godzilla’s home make it back on to the map. However according to notes documentary Shin-Gonzilla, he is on team NRT because he destroyed both the monorail and Keikyu line.
Am I correct that NRT is essentially open, that any airline can start service there in a more typical open skies type arrangement?
Bill – Yep. Plenty of room there now!
Is there any estimated timeline on a DOT decision? An October start date for these flights doesn’t leave a lot of time to sell tickets if DL has to operate them.
first, we all owe CF a big thank you for hosting a very spirited 2 weeks of policy related discussions.
It is clear there remains plenty of competition in the US airline industry and the ideas presented here reflect that.
Everyone should be very careful when arguing that someone else is biased, esp. when they are convinced they have “the truth”
DL and UA have both held the titles of largest US airlines across the Atlantic and Pacific over the past 10 years so it is clear that the international market competition is largely between those two.
DL has long been the most profitable of the US global carriers and also has been willing to speak up and pull back when market dynamics are not favorable for profits. Those that argue against UA’s losses in certain markets as execs said should be able to tell us why UA’s profits across the Atlantic and Pacific trail Delta in far more quarters than it does not.
AA and DL both retired widebody aircraft during the pandemic, hindering their ability to re-add capacity last summer – which UA clearly benefitted from. Now, UA has an older, less fuel efficient fleet while DL is taking delivery and putting in service far more new generation aircraft (including the ex-Latam A350s) than UA by a fairly long shot. UA will have to use a significant portion of its new aircraft deliveries to replace older, less fuel efficient aircraft – and that is true both internationally and domestically.
DL has 2 fairly young JVs – with Korean and Latam- that have enormous potential and are just getting started.
In terms of revenue by global region, DL and UA are simply not that far apart even if UA has more “dots” on its route map.
And, at the heart of the discussion here, UA is clearly far more interested in protecting the status quo – not just at DCA but also HND – even though they stand pretty much alone in both of those positions – not just among airlines but also among consumers.
Both airlines have aggressive lobbying teams and it is now time to see which side succeeds more in convincing lawmakers and regulators.
btw, JNB-ATL is the longest route from S. Africa and Boeing widebodies as a rule have higher engine thrust to takeoff weight ratios – which hurts DL. DL clearly is saving far more money on fuel with its A350s than it is losing on revenue on JNB-ATL due to blocked seats – but DL clearly wants to fix the A350-900s performance issues – and their aircraft order is certain to do that.
NH flies NRT to HNL, not from HND.
This is the most ridiculous statement ever posted to this blog:
“UA is clearly far more interested in protecting the status quo – not just at DCA but also HND – even though they stand pretty much alone in both of those positions”
United stands alone in these positions? You can’t be serious!
How many airlines joined Delta’s petition regarding DCA? Zero point zero.
I’m not sure what’s more obvious – your ability to draw conclusions such as these from thin air (or even in the face of contraindicated facts) and boldly state them as incontrovertible facts. Or your propensity to breathlessly spout reams of irrelevant data (such as conveniently bifurcated financials that you can’t cite references for and airplane orders that haven’t even been placed much less delivered) as substantiation for what you posit to be virtual certainties in the future.
Facts are facts whether you or I like them or not.
the source for all of the financials was indeed cited and they aren’t of my creation.
UA is indeed the only one of the 4 US airlines serving HND that has NOT supported DL’s HND proposal.
CF did a pretty good job of “calculating” who wins and loses by the DCA proposal which has now been put on the table in the form of a bill, not a DOT proceeding. Other than AS, which serves DCA through exemption slots, UA is the loser. You are not going to see the response in the same form as the HND route case – because the mechanism for seeking change is different.
EVERY US airline publishes their fleet delivery plans in their financial statements. For 2023 and 2024, Delta will put more widebodies in service including the used ex-Latam A350s, than United. For 2023 as a whole, Delta is putting more aircraft into service including the used B737-900ERs than UA. Since UA only has published aircraft delivery plans by fleet type and year through 2024, we simply do not fully know UA’s fleet plans. Delta’s new widebody order will come and it will be of a size to match United’s fleet replacement and growth plans. The huge advantages that many think UA has not just for fleet growth but also for international revenues are just simply not there
Multiple people accurately noted that the “someone else has to lose in order for me to win” are caustic in conversations such as we have had over the past 2 weeks. It is precisely those that think that UA has an untouchable advantage that are those w/ bias.
btw, NH flies the A380 on NRT to HNL but serves HNL from both HND and NRT.
“EVERY US airline publishes their fleet delivery plans in their financial statements. For 2023 and 2024, Delta will put more widebodies in service including the used ex-Latam A350s, than United. For 2023 as a whole, Delta is putting more aircraft into service including the used B737-900ERs than UA. Since UA only has published aircraft delivery plans by fleet type and year through 2024, we simply do not fully know UA’s fleet plans. Delta’s new widebody order will come and it will be of a size to match United’s fleet replacement and growth plans. The huge advantages that many think UA has not just for fleet growth but also for international revenues are just simply not there”
Nothing quite as amusing as you sticking to this strange talking point and repeating it all over the internet even though you know it has no basis in any kind of fact. United has a massively larger order book than delta both domestic and international. That order book is there today. And, even based on reporting, it will remain massively larger than Delta’s theoretical orders. MASSIVELY Larger yet you still find some weirdly myopic way to try to make your unusual “Delta has a future like no other; United is done in the Pacific” argument against any possible set of facts out there.
If you think Scott Kirby’s order book is there just to maintain the status quo, you really have no idea about him or the industry. He’s been very outspoken about United’s growth internationally and domestically. Some of the order book is for replacement but it will come as a surprise to no one that the A350, 787s, and XLRs are largely for growth, not replacement. To suggest otherwise is just trying to put your head in the sand and yell “Delta rules”.
Max,
If you don’t see the hypocrisy of what you just wrote which screams “United rules” why accusing me of yelling “Delta rules,” then I’m not sure that all of the effort we all put into aviation social media is accomplishing anything.
You simply have no idea what aircraft from ANY airline will be used for growth or replacement but, with the oldest fleet among US airlines and the most fuel INEFFICIENT international fleet among large global carriers, United has no choice but to use alot of its aircraft orders for replacement – or they will continually be at a cost disadvantage.
And Delta ALREADY has almost 3 dozen widebody aircraft due for delivery just until 2025 – so the 100 787s that UA has on order is “only” 70 more than DL – and DL doesn’t have to replace any more fleet types than UA; both have 767s that will be replaced sometime in the next 10 years. UA has said they will use some of their 100 787 orders for 767 replacement while Delta has not.
As long as you continue to yell “United rules” when I have NOT said “Delta rules or United is done in the Pacific” but instead “not so fast. Delta at the minimum in the international market and a whole lot of other carriers in the domestic market have something to say about Scott Kirby’s growth plans,” then we can expect this kind of friction every time something comes up – and that shouldn’t be happening.
The world is big enough not just for Delta and United but also for a whole lot of other carriers.
Delta, in the last two weeks, has launched two very significant initiatives that could affect how well United is able to execute its plans and could well shift industry power to players other than United, including Delta.
United’s wide body order book is larger than Delta’s entire wide body fleet. If that doesn’t say everything… I don’t know what will ever convince you. Not that facts ever would…
And if you knew anything about me, I’m not a United fan, or an AA fan, or a DL fan. But I do dislike ridiculously dogmatic statements from fanboys trying to talk about a 6 month sliver of a wide body order book as some kind of giant win for Delta internationally.
And per your inefficient fuel bit… No, the 77E or 772 are not as fuel efficient as an A350 (and Delta’s older A330s aren’t as efficient as United’s 787s), obviously, but United’s next-gen wide bodies, today, already vastly outnumber Delta’s and that will only continue in the future with United’s order book. But let’s not forget Delta’s 767 fleet that appears fuel efficient on a seat basis because they pack the seats in vs United. It’s the same plane but a different seat layout. You constantly try to use fuel efficiency per seat as a comparison metric when it has nothing to do with a plane’s overall fuel efficiency but is simply a reflection of how densely Delta packs its wide bodies vs United’s preference for more J seats since United has better hubs to sell them vs DL.
Facts matter, Tim. Obfuscating and using partial information to scream “rah rah Delta” doesn’t add anything to the conversation.
Delta’s entire widebody fleet as of today (airfleets) numbers 154. United ordered precisely 100 787s. Your statement is simply not factually accurate.
Fuel efficiency and revenue generation comparisons between the big 3 comes straight from their respective annual reports for 2022.
American’s fuel bill for 2022 was $13.8 billion to generate $49 billion in total operating revenues, burning 3.9 billion gallons of jet fuel at $3.54/gallon.
Delta’s fuel bill for 2022 was $11.5 billion to generate $50.6 billion in total operating revenues, burning 3.4 billion gallons of jet fuel at $3.36/gallon.
United’s fuel bill for 2022 was $13.1 billion to generate $45 billion in total operating revenues, burning 3.6 billion gallons of jet fuel at $3.63/gallon.
Delta generated more total revenue than any other airline while burning far less fuel and paying less for each gallon and more than $1.6 billion less for the year than United and $2.3 billion less than American.
And the chances are still better than average that AA, DL and HA will be allowed to move 2 HND routes (UA will be able to if it wants but probably won’t) while DCA will be opened to more outside perimeter flights.
How about waiting for your next reply until there is a decision in at least one of these two cases and you have “facts” that are accurate?
Max,
You ignorant octopus. UA ONLY has 45 A350s on order. DL is expecting delivery of additional A350s in the next few years to bring a total of 44 in service. Add in DLs 787 order plus additional options, and that brings in a grand total of 44 A350/787 of orders and deliveries for DL.
UA has what 70ish 787s delivered, 100 on order and additional 100 on options? Using industry standard accounting practices, we subtract the 787 options from the 787 orders. Then we take the A350 orders and subtract that from the 787 deliveries. That leaves UA with only 30 or so of the latest and greatest generation wide bodies. So your claim that UAs wide body order is greater than DLs fleet is simply and undisputedly inaccurate.
I didn’t mention United and Haneda. You tried to move the goalposts.
You claimed United stands alone in the Haneda and DCA disputes. So I asked how many airlines joined Delta’s petition regarding DCA. I even offered the answer (zero).
Ipso facto, United is not standing alone in that position. Actually it’s Delta standing alone.
You did not address this before changing the subject. Again.
Cranky – I’m wondering how KIX may or may not play into this discussion of connecting in Japan to Guam. Mark and George mentioned KIX. Years past, on NWA, I had nice flights with them to Guam originating in Minneapolis. Sometimes the outbound flights connected in Narita, but I most of my return flights connected in KIX (which had a really cool-looking inside architecture of support tubes/beams).
KIX – There is nothing stopping anyone from adding in KIX if they want.
Haneda is the only airport that’s restricted.
@cranky : talk about grading on a scale
you either support every single carrier having 100% flexibility on every Haneda slot, or support no flexibility for everyone.
You can’t have it both ways by saying you wanna see DOT bend rules just for delta alone because poor ole’ delta is suffering a USD JPY exchange problem that’s somehow unique to them.
no one told them to bid for HNL instead of JFK.
And news flash for Delta – HND HNL is doing poorly not because of JPY, but because of ANA’s Flying Honu.
Talk to people actually in Japan and they’ll tell u people are going out of their way to fly the A380 to Hawaii, even if that means Narita. You can say their consumer demand behavior is irrational, but u can’t solve irrational demand with rational supply.