Delta looking to move NRT hub operations to HND

[Kev3188]

http://www.star-telegram.com/2013/07/30/5043005/delta-ceo-calls-for-open-skies.html#storylink=cpy


"Richard Anderson said Wednesday that protection of domestic carriers is holding back foreign airlines such as Delta. Japan is a key Asian market for the U.S. airline.
He told a press conference he wants to move Delta's Tokyo base to Haneda Airport from Narita International Airport because Haneda is closer to downtown Tokyo, but the government is creating obstacles."

 

[jimntx]

Well, let's hope DL has better luck than AA had vis-à-vis Haneda. When we asked for slots there we got something like a 3am arrival slot and a 4:30am departure slot--not prime landing rights. Plus, the 1.5 hour difference was not enough time to clear customs, clean the plane, and get it catered and boarded for departure.

Note to FWAAA: I am well aware that these are not the actual arrival/departure times we were awarded. They are examples. Feel free to jump in, give the actual times down to the second, and make some kind of snide remark about the fact that no one but you knows the real truth.

The point is that the Japanese government does not want anyone but Japanese airlines using Haneda.

 

[WorldTraveler]

This is a highly relevant article given that 10% of DL’s revenue is to/from/thru Japan which amounts to about $4B/year. DL will work incredibly hard to figure out how to win as a result of the changes in Japanese aviation.

Of course, ANA and JAL want to shake post WWII dominance US-Japan flights first by NW and now DL. There has been a clear bias in allowing int’l routes to/from other countries to move to HND compared to US flights.

ANA and JAL want to be able to tap into their hubs at HND and leave DL’s hub at NRT with no local traffic. While HND is a much larger hub for JAL and ANA than NRT, they still have to get passengers from the US to HND in order to gain the benefits of the larger hub. Right now doing that is limited by the slot times as well as the number of flights each has to HND. It simply isn’t worth their while to use slots to
DL has been successful in convincing the US DOT to not give the Japanese carriers anything that would allow them to gain an advantage over the US carriers and this was shown with the HND awards. DL is as well positioned with US mainland- HND flights each of the Japanese carriers and their alliance partners.
As a few primetime HND slots open up, DL will ensure that there are enough for DL to benefit as long as ANA and JAL benefit or no one benefits. DL’s track record in Washington and with route cases would indicate they can make their case be heard in Washington. The chances of DL gaining enough slots to move its entire hub from NRT to HND are not high but they probably don’t need to do that in order to continue to dominate US-Japan travel. In fact, DL’s best outcome is probably to gain a few primetime slots at HND and the same for ANA and JL but enough to really give anyone the ability to walk away from NRT. DL’s NRT hub could still be very viable with smaller aircraft; they are operating 4 large and costly 744’s/day this summer and into the future which shows how much revenue they move thru NRT and how much the operation could shrink and still be viable.

DL isn’t relying just on politics to win in the HND case. DL’s int’l growth at SEA ensures that DL has the ability to carry traffic from the US to Asia in the most efficient manner and keep US-HND slots for the local market to the greatest degree possible even if very few overall slots are added overall. Most likely scenario is that DL will gain several more US-HND flights along with ANA and JL which is enough to shift much of the local market to HND but not enough for ANA and JL to gain the benefits of their large hubs. NRT as a hub is reduced in importance for most US passengers. NRT could begin like LGW w/ focus on regional and leisure traffic and low fare carriers. DL could choose to continue operating many flights on smaller aircraft (330s and 767s) and operate intra-Asia flights on narrowbody aircraft with much greater focus on local traffic.

Japan also has major policy considerations involved in allowing HND to become the domestic and int’l airport for Tokyo. US-Japan traffic is the largest portion of NRT’s int’l operation as an airport…. Not only is HND not large enough to move that all to HND but it is doubtful they really don’t want to see NRT collapse which is what will happen if US-Japan operations all move to HND.


Jim,
part of the problem with AA at HND is the east coast - HND market doesn't work given the time zone differences; AA acknowledged that with its request to move its JFK-HND flight to LAX but the DOT said that AA must follow the same procedure DL followed which was to abandon the market and then start a new route case. Given that LAX-HND is already served by DL and ANA, the chances are slim that there would be justification for reawarding the slot to AA - which is why they continue to settle for what they have and probably hold out hope for a daytime slot. Presumably, JL is also helping eat part of the losses as part of the joint venture.

 

[FWAAA]

Well, let's hope DL has better luck than AA had vis-à-vis Haneda. When we asked for slots there we got something like a 3am arrival slot and a 4:30am departure slot--not prime landing rights. Plus, the 1.5 hour difference was not enough time to clear customs, clean the plane, and get it catered and boarded for departure.

Nope, you're confusing PEK with HND. It was PEK where AA requested "normal" Asian arrival and departure times and yet was awarded middle-of-the-night slots that were not commercially viable.

At HND, AA got exactly the slots it requested. Problem is, USA-based airlines (among others) can arrive no earlier than 10pm and must take off no later than 7am. IIRC, they cannot depart HND until midnight.

Note to FWAAA: I am well aware that these are not the actual arrival/departure times we were awarded. They are examples. Feel free to jump in, give the actual times down to the second, and make some kind of snide remark about the fact that no one but you knows the real truth.

Nice to see that the ad hominem attack characteristic isn't affected by advancing age like memory can be. Carry on and have a great day!

The point is that the Japanese government does not want anyone but Japanese airlines using Haneda.

I agree that Japanese protectionism is evident in the limited hours permitted the USA-based carriers.

 

[jimntx]

Nice to see that the ad hominem attack characteristic isn't affected by advancing age like memory can be. Carry on and have a great day!

Don't you think objection to ad hominem attacks is rather hypocritical given your statement about age? All I did was invite the obvious because everyone knows you wouldn't be able to resist.

 

[WorldTraveler]

Regarding PEK, all of the new routes that have been added over the past few routes (at least by US carriers) have had difficulty because of slots including AA’s ORD-PEK, DL’s SEA-PEK, and DL’s DTW-PEK. However, AA’s ORD-PEK and DL’s DTW-PEK have received improved slot times with AA arriving several hours earlier and DL’s DTW flight arriving in the mid-afternoon with a late afternoon departure back to DTW.

As for HND, the key seems to be the size of the local market and the time zones involved. DL’s LAX-HND average fare is quite high but they have downgraded to a 767-300ER along with the introduction of SEA-HND, also on the 767-300ER, both with flat beds. There is no realistic chance of connections beyond HND so success is all about the ability to connect within the US as well as the local market.

DOT data for the first quarter of 2013 which was published in Aviation Daily shows that DL’s Pacific network was profitable, the only US carrier’s Pacific network that was profitable. That is particularly significant in light of the Japanese gov’ts decision to devalue the yet given that DL’s Pacific network is the most Japan-centric and the largest US-Japan network. DL managed to get capacity out, esp. in the beach markets which are most impacted by the devaluation. DL’s CASM is also the lowest.

DL’s Pacific RASM also was not negatively impacted in the 2nd quarter which just ended but AA’s and UA’s was. However, AA added capacity outside of Japan. Part of the analyst community’s concern with UA’s performance is that their Pacific RASM decreased even though they are less dependent on Japan than DL is.
The devalued yen does present challenges to transpac travel but there have long been currency movements that affect airlines. It is possible to succeed despite those challenges and there are examples of carriers that have succeeded.

DL’s efforts to protect its profitable Tokyo operations are not unexpected. This won’t be the last time you will hear DL put forth legislative and political pressure to not allow DL’s competitors to benefit at DL’s expense. Let’s also not forget that NW moved its Tokyo operation from HND to NRT several decades ago even after NW put forth considerable effort to help rebuild JAL post WWII. Even though the Japanese carriers would like to be freed from NW/DL’s dominance in Japan, DL will put up a fight to protect a system that NW built and the Japanese worked within for decades after the war.