Delta negotiating major SEA gate expansion

[WorldTraveler]

no one has doubted the decreasing viability of NRT as a hub.

You have repeatedly tried to conflate the downsizing of NRT as a hub with DL's loss of share in the Japan local market.

Not only has DL maintained its share in the US-Japan local market despite removing segments from the NRT hub, but DL has remained profitable in its Asian flying while moving flights from NRT to SEA to allow nonstops directly from the US.

if you'd like to talk about the decreasing influence of Japan as a US-Asia connecting point, then we are on the same page.

but don't try to argue that DL is losing share in the US to Japan or US-Asia market because they are not. They are simply rerouting passengers that connected over NRT to nonstops from the US.

and based on DOT data, DL has increased its US-Asia revenues in those markets where connections via NRT have been removed.

It is not clear how many more markets DL will cut from NRT since it depends on what they choose to fly nonstop from the US but the new 333s will dramatically reduce the cost of operating flights to NRT.

Given Anderson's statement about DL's intentions to grow SEA, they clearly believe there are not only a whole lot more in'tl markets that DL can support from SEA but they also believe they can add a lot more domestic markets. Given that DL's SEA hub already has multiple int'l banks, further domestic growth will also involve multiple flights per market for many cities which puts DL in the position of being a global carrier from SEA using the shortest routes to Asia from the continental US which should dramatically increase DL's profitability across the Pacific compared to carriers that have significant operations to Asia from the southern part of the US.

Factor in that DL like UA will continue to operate from LAX to Asia - all 3 currently operate 2 flights/day from LAX to Asia - DL will be in the position to have a very potent two hub west coast system.

specific to this topic, if Anderson is willing to say that DL is close to the final stages of a deal with SEA for expansion, they have probably agreed on price, general location, and overall timeline and are working on details at this point.

hopefully there will be an announcement before the end of the year along with news on further aircraft purchases.

 

[FWAAA]

DL carries TEN TIMES more passengers between the US and Japan as a destination than AA does.

And AA's share of the US-Japan market has SHRUNK.

Perhaps I was wrong. It wasn't JL that has been virtually shut out of the US-Japan market; it has been AA. AA has less than 4% of the US-Japan market. They are nothing but a pitiful afterthought. Correct me if I am wrong but AA operates 3 routes to NRT and ORD didn't even operate on a daily basis during the peak summer. AA is a distant third from LAX and has been trying for years to try to ditch LAX-NRT and replace it with HND. AA does so poorly on LAX-NRT that it is willing to fly in the middle of the night to HND in hopes of being able to connect to JL at HND rather than continue to lose money connecting traffic at NRT.

This ratio (in the bolded part) has become your new favorite stat.   What would it be if you excluded the Japan-Hawai'i O&D?   
 
If AA has been marginalized as you proudly proclaim, then it's a good thing that AA got JAL to stay with Oneworld instead of joining ST.   With an immunized joint venture,  AA+JAL isn't quite as irrelevant as you claim.   

 

[Kev3188]

 
Correct - I believe KHH was cancelled pre-merger.  Nonetheless, it is representative of just how long this general (downward) trend - of fewer flights, and smaller aircraft - predated Delta, and was actually quite evident - and well-discussed by many of us - before the merger was ever even completed.

 
Correct. Same with KUL, for that matter...

 

[WorldTraveler]

This ratio (in the bolded part) has become your new favorite stat.   What would it be if you excluded the Japan-Hawai'i O&D?   
 
If AA has been marginalized as you proudly proclaim, then it's a good thing that AA got JAL to stay with Oneworld instead of joining ST.   With an immunized joint venture,  AA+JAL isn't quite as irrelevant as you claim.

from the mainland, AA has about 7.5% of the US-Japan market, slightly less than JL has.

and yet AA and JL combined have half of the share that UA has and UA has less share than DL has. UA/NH combined have about a 5% share premium over DL alone but DL still gets more revenue because DL has an average fare premium to both AA and UA.

and lest you think that the JL JV is AA's savior to/from Japan, all it has done is provide a JV over which AA can connect low yield traffic to other parts of Asia, much of which is available on other carriers nonstop from the US including now on AA's own flights to China.

So, the downsizing of NRT as a hub is no more of a salvation for AA than it is a burden to DL. Traffic is moving to nonstops across the Pacific; the reason why the economics of DL's NRT hub lasted as long as they did was because DL had such a large average fare premium compared to the other US carriers and carried more US-Japan traffic than NH and JL combined.

Now that the yen devaluation has made local US-Japan traffic worth less, the economics of NRT as a hub are even less favorable.

but they are equally less favorable for NH and JL as they are for DL.

and further, the principle of currency devaluation is just as much of an issue for AA in Latin America as it is for DL in Asia. The difference is that AA doesn't hub IN Latin America which means they cannot shift traffic to other routes; instead they must simply cut flights - which is what they are doing.

 

[eolesen]

Anyone notice how WT never fully answers FWAAA's question?... It's pretty well known that Hawaii and Guam are a huge chunk of US-Japan traffic, particularly from the JP point of sale.

 

[robbedagain]

On that subject of hawaii isnt JL the largest foreign carrier at HNL? E Ive notice that regarding wt it just doesnt shock me one bit typical mgmt stooge

 

[WorldTraveler]

Anyone notice how WT never fully answers FWAAA's question?... It's pretty well known that Hawaii and Guam are a huge chunk of US-Japan traffic, particularly from the JP point of sale.

no, I answered the question.

and to repeat since you are hard of brain, even looking at mainland flying, AA plus JL still have HALF of the share that UA has (AA and JL each have about 8% with JL having slightly more) while DL is over 35% - the largest carrier in the US and Japan local market.

Further, even though JL has an average fare premium over DL, AA's is so much below DL's - and the same trend exists with NH and UA - that DL still has an average fare premium compared to AA/JL and UA/NH.

AA and JL"s entire capacity between the US and Japan - which includes connections is still less than DL's.

Hawaii and Guam doesn't change the reality that AA/JL combined carries less than 1/2 of what DL carries in the US-Japan market and DL is NOT losing its share of the US-Japan local market while it restructures the Pacific to move connections over NRT to nonstops from the US

and, yes, robbed, JL is the largest foreign carrier in Hawaii but leisure traffic from Japan to Hawaii is precisely what has been hardest hit by the yen devaluation. it doesn't take a rocket scientist to realize that a falling foreign currency is bad news for US airlines.

DL carries less Japan-US traffic than they did before the yen devaluation and yet still is the largest carrier between Japan and Hawaii and gets an average fare premium to every carrier including JL. UA and HA get average fares that are half what DL gets. JL does better but still doesn't get the quality of fares that DL does.

DL quite simply gets premium fares from Japan to Hawaii, just like NW did when they were the dominant carrier.

 

[topDawg]

DL quite simply gets premium fares from Japan to Hawaii, just like NW did when they were the dominant carrier.

huh? Delta is pulling back on the beach flying. 
 
Your telling me they are cutting cause they are top dog? Talk about moral victories then. Woohoo we aren't losing quite as much money as the other guys. 
 
Honestly, Leo is that you? 

 

[WorldTraveler]

you have proven over and over again that you don't understand basic economics.

Yes, market leaders OFTEN influence capacity to maximize revenue.

you do realize that DL reduced ATL-EWR to 717s while UA was operating RJs and then as soon as UA decided to throw in mainline, DL upgraded it to M80s - like it was before.

Do you not GRASP that DL reduced capacity to protect its market position and push fares up when it could but it wasn't and isn't willing to keep the capacity down just because UA decides to add capacity?

whether you understand it or not, DL gets a revenue premium to the industry flying from Hawaii to Japan and also have the largest share of hte market .

 

[topDawg]

you have proven over and over again that you don't understand basic economics.

lol thanks for the laugh killer. 
 

Yes, market leaders OFTEN influence capacity to maximize revenue.

I don't disagree. 
 
Market leaders(profitable) also don't constantly say the weakness in the yen is killing them in the beach markets and they will continue to pull back. 
 
Delta might be the market leader in beach flying. Right now its a money pit. So again, moral victories. 
 

you do realize that DL reduced ATL-EWR to 717s while UA was operating RJs and then as soon as UA decided to throw in mainline, DL upgraded it to M80s - like it was before.

lol. This is how we know you don't know what you are talking about. 
 
ATL-EWR and DTW-EWR were being used for training. Not only pilot training but it was a chance to make sure that Delta had a line station on both ends in case something went wrong. Now that the fleet has grown Delta is reducing a few 717s off of ATL-EWR. Also DTW-EWR is losing most of its 717 flying also.  
 

Do you not GRASP that DL reduced capacity to protect its market position and push fares up when it could but it wasn't and isn't willing to keep the capacity down just because UA decides to add capacity?

wait what? Your drifting all over the place here. 
 

whether you understand it or not, DL gets a revenue premium to the industry flying from Hawaii to Japan and also have the largest share of hte market .

Oh I understand it completely. As i said, being the leading in a loss leading or marginal flying market is a moral, WT pissing contest bullet point. 

 

[WorldTraveler]

bullcrap.

DL didn't put 717s on ATL-EWR because it was a good place to train crews.

they put 717s into EWR because the plane fit the market profile at the time.

DL pulled back on Japan-beach market capacity because they recognize that in order to push yields up, you reduce capacity.

I'm sure you also wouldn't get it but DL was one of the few airlines that flies Japan to the beach markets that didn't see its yields decline in the last quarter. And DL's yields between the US and Japan are also not falling while other carriers' still are.

it is always a risk when a market leader chooses to cut capacity. AA did it on JFK-LAX and DL added capacity.

JL has actually added beach market capacity - and their yields went down but their total revenue went up. They are comfortable that they can increase their revenue via beach markets.

JL is watching its value as a connecting airline at NRT fall so they have to grow revenue someplace. DL has a lot of options as to where to deploy aircraft. DL thinks it can do better with its aircraft than to throw that capacity back into Japan-Hawaii.

whether you understand it or not - and you clearly don't - DL is making profit maximizing decisions that allow it pull capacity from the market, push up yields, and still maintain market dominance.

 

[Kev3188]

bullcrap.

DL didn't put 717s on ATL-EWR because it was a good place to train crews.

I seem to recall that being  exactly why that was the first place the 717 flew in revenue service...
 

 

[WorldTraveler]

doesn't matter.

DL doesn't just pick a market off of the route map and decide they want to put 717s there because EWR is a NEAT place to do pilot training. There are scores of cities within 2 hours flying time of Atlanta.

They chose 717s because the 717 was big enough to be a mainline product and allow DL to reduce capacity and force up fares.

I'm sure it is lost on you, but DL's average fare on ATL-EWR was up by well above the average for either ATL or NYC. UA's average fare was up even higher - twice what DL's average fare was. Problem for UA was that they were losing passengers who weren't going to put up with an RJ so they added mainline aircraft. DL added capacity back.

guess what? average fares will almost certainly fall.

DL didn't fly the 717 to EWR because they wanted 717 pilots to know how to handle delays. They flew the 717 to EWR because it was a mainline jet in a market where UA was heavily using RJs. DL was able to offer a mainline product and win in the marketplace.

it is the same philosophy that is used in most of the markets the 717 serves; DL offers mainline service against other carriers and still manages to get an average fare premium and maintain market leadership.

whether on the Pacific from Japan to Hawaii or on the domestic system, the principle is the same.

thankfully, DL has people in the GO who understand market based principles to network mgmt.

 

[Kev3188]

doesn't matter.

Oh?

thankfully, DL has people in the GO who understand market based principles to network mgmt.

Indeed. And some of those people work in Tech Ops, ACS, OCC, Dispatch, Flight Ops, and more. And they all work together to make sure things like introducing a new fleet type works out well.

 

[WorldTraveler]

and they could have done the same thing to umpteen other cities.

DL chose ATL-EWR for market reasons.

period.

for you to try to argue otherwise shows, no confirms, how little you understand how about your employer manages to generate billions of dollars in profits that support you.

DL makes solid business decisions based on profits; the operation repeatedly has to adapt to the needs of marketing. introduction of a new fleet type is no different