DL CEO hints at PVG hub

[WorldTraveler]

Delta Air Lines Inc. Chief Executive Officer Richard Anderson said he envisions creating an international hub in Shanghai to build on a growing relationship with China Eastern Airlines Corp.

When you think about what our strategy is long-term, we need to have a hub in Shanghai like the one we have in Amsterdam, Anderson told employees in a recorded message.



http://www.bloomberg.com/news/articles/2015-04-06/delta-ceo-sees-shanghai-hub-as-carrier-plots-growing-china-plan

DL is within one flight/day of being the same size as UA in terms of seats at PVG.

DL is also within a couple percent of the size of most other non-Chinese airlines at PVG.

 

[WorldTraveler]

DL's terminal relocation and expanded codesharing should help make it clear to DL the size of the potential for PVG as a hub.... perhaps they are even thinking of routing the SE Asia flights thru China rather than NRT.

and perhaps the 744s will finish out their days at DL flying to PVG rather than NRT.

 

[FrugalFlyerv2.0]

It's an interesting strategy to attempt to replicate at PVG with MU what DL inherited at AMS with KL.  I would think that for starters, DL needs more than the current 3 daily flights to PVG from the USA (SEA, DTW, and soon from LAX).  So any guesses as to what USA cities may see new DL service to PVG?
 
Also, does that mean that NRT has now become just a spoke?

 

[WorldTraveler]

DL has 4 flights/day to PVG including the flight from NRT.

and, IIRC, DL still has the largest single carrier presence across the Pacific from NRT and operates something around a half dozen flights beyond NRT.

that said, DL has to be thinking about the next steps for building its presence in Asia whether NRT exists with beyond service or not. It is still likely that DL will continue to operate its own metal service via an intermediate point to SE Asia - whether that be NRT or some other hub.

as for additional flights, many were expecting an east coast origin for PVG; DL has mentioned that it wants to restart ATL-PVG and JFK is always an option. Anderson also recently said that the 350 should open up new routes for DL from MSP.

I don't think DL will have difficulty finding

 

[commavia]

This just in: reality hints at this being P.R. spin much like "end-to-end networks," "MEM and CVG are safe as hubs," and "Delta wants to move its TYO hub to HND."
 
Anderson is a smart guy - I think he knows that Delta won't be building a "hub" (even in just the mostly-marketing sense that AMS is a "hub") anytime soon, for a variety of financial, operational and strategic reasons.

 

[WorldTraveler]

or maybe he is indicating that the US and China are not as far from being able to sign a treaty that would allow joint ventures - ala Mexico.

you see, DL is not stuck in the aviation environment of the 70s and 80s where traditional hubs like TYO, SEL, and HKG were what were needed for a company to succeed in a region.

DL is building its presence in Latin America and Asia to markets where the growth potential exists and developing relationships with other carriers in order to do it.

You WANT to believe that DL isn't really building a hub in China because if DL does it will ensure that AA is forever marginalized in Asia.

While AA continues to hold onto JAL and Tokyo as the means to serve the region and by adding its own services to China without partners, DL will be building its network around China - using its own aircraft as well as via partnerships. And it is very possible that DL could indeed obtain 5th freedom rights to operate its own services beyond PVG. Because of the schedules, a lot of the aircraft overnight in China as it is.

It has repeatedly been shown that DL is indeed strategically one step ahead of the rest of the industry.

The next few years will further confirm it.

 

[eolesen]

Agree, Comm -- it's just a glorified transit point. They still can't coordinate schedules or fares, and there's not an eggroll's chance in a dog pen that you'll see any liberalizing of the aviation markets. The Chinese are control freaks, and letting the US carriers operate their own flights beyond the gateways is about as likely as EK or EY being granted cabotage rights in the US.

 

[WorldTraveler]

that's what you WANT to happen because AA would be SOL if that happened.


let's be clear once again that AA is chasing a JV with a Japanese carrier as the only hope they have of any alliance relationship in the Pacific region and the last thing they want is to see the Chinese market actually develop into its own potential. And, let's also keep in mind that HKG is a part of China and any hope that AA has of having an alliance partner outside of Japan - which commavia repeatedly has told us is a dying economy - is to have a JV with CX.... but if DL can't have a JV with a mainland partner, then AA isn't ever going to have a partnership with CX.

Once again, AA wants to stop any progress because they will end up being surpassed by someone else that can succeed in the market better than they can.

and your belief that the Chinese airlines can't create the necessary framework to meet US government requirements for JVs is simply incredible when you consider what the ME3 pass off for Open Skies.

In fact, it is quite likely that Richard Anderson is using the whole situation with the ME3 as evidence of why China would meet US government requirements far more so than the ME3.

DL will develop a deeper partnership with its Chinese partners and be one step ahead of its competitors in the process.

 

[topDawg]

Agree, Comm -- it's just a glorified transit point. They still can't coordinate schedules or fares, and there's not an eggroll's chance in a dog pen that you'll see any liberalizing of the aviation markets. The Chinese are control freaks, and letting the US carriers operate their own flights beyond the gateways is about as likely as EK or EY being granted cabotage rights in the US.

This. 
 
Something Richard said on DeltaNet being taken way out of context by the media. 

 

[WorldTraveler]

good.

we'll put you down in the naysayer column that will be shocked when DL actually succeeds at developing deeper relationships with Chinese carriers that many like yourself and E think aren't possible.

 

[FrugalFlyerv2.0]

you see, DL is not stuck in the aviation environment of the 70s and 80s where traditional hubs like TYO, SEL, and HKG were what were needed for a company to succeed in a region.
 

 
Speaking of hubs in TYO, SEL and HKG:  Care to elaborate why DL would go ahead of trying to build up a hub at PVG with MU, instead of using Korean's hub?  They're already a skyteam member, what are the cons to DL establishing at ICN with KE a codeshare/JV they have with KL at AMS (or AF at CDG)?

 

[WorldTraveler]

because KE doesn't want to cooperate with DL. They want to dominate the relationship.

we have been over this before.

DL has antitrust immunity with KE; it is unknown if they use it but it is doubtful they do. DL has not chosen to develop a joint venture. I'm not sure what other airlines have ATI with a carrier that they don't use in a JV.

and despite what some want to believe, the Chinese carriers would LOVE to be in a partnership with a large US carrier that would increase their access to the far richer part of the market which Chinese carriers do not have never enough access to.

the notion that "the Chinese are the Chinese and can't be trusted to engage in open and fair business" while the US can sign Open Skies agreements with countries that subsidize their carriers far beyond anything the US has ever seen (words of the DOT) is nothing but racism.

 

[jcw]

Listen - we know where folks learned the double standard - bashing one set of competitors for state aid etc and then turn around and say we are going to setup a hub with an airline in almost the same position
 
It's good to see DL come to the realization of copying AA and UA and finding someone that will be partner with DL

 

[WorldTraveler]

get off of a.net.

You are merely parroting the same tired and inaccurate drivel that is said over there.

Chinese airlines are state owned but they do not violate int'l norms for the cost of services.

The ME3 do.

Again what is clear is that the AA fan club is out in fear because they are in the absolute worst position to compete in China and with or without JVs at other carriers, AA is strategically with its back up against a wall.

the best prayer AA has for competing in the Chinese world is HKG - a market that is becoming increasingly under mainland control and being forced to live with a shrinking economy - not unlike Japan.

but there can't be a JV with a HKG airline (CX) unless there are for mainland Chinese airlines which are much larger and have access to where the growth is taking place.

Even before a JV, it will be appear to the Chinese what strong codeshare relationships will do; that is exactly why DL has succeeded as much as it has with its growth to China. LAX-PVG even without a JV will be just one more route to China by DL on the way to a larger operation.

AA even without codesharing beyond the Chinese gateways will find its growth strategy in Asia failing.

And UA does have partners with whom it could establish JVs. AA will be the odd man out.

 

[jcw]

Please don't tell people what to read or not read - however it's still a state owned airline that gets aide from the state - do you understand the Chinese economy is centrally planned (I'm not making any positive or negative comments on how China runs it's economy - it's just a fact that if you are owned by the state your actions are planned by the state, hence you get state aide)
 
I'm glad DL is trying to find a partner to work with in Asia and mainland China - good luck to DL