DL and UA make midwest to Asia 744 heaven

[BABABOOY]

Thought I love the 744, it hasn't been fun lately with their MTC delays.  
They have been showing their age lately.

 

[FWAAA]

Sounds like four are being retired, and probably won't return.    
 
Here is the letter sent to the Delta pilots:
 

With respect to the 747, last week Delta’s Network and Finance teams completed a re-evaluation of options to improve our international performance.
This analysis resulted in a decision to retire three 747-400 aircraft by the end of September, and an additional 747 before the end of the year. When we see opportunities to make the right long-term decisions for our customers, employees and the Company’s profitability, we make them as quickly as possible — consistent with the principle that “speed wins” as described in Rules of the Road.

By taking this step, we have the opportunity to re-gauge some capacity, primarily to help improve the Pacific entity’s performance.**Because of the accelerated 747 retirements, we have not awarded any of the posted 747 vacancies on this AE.

We will not, however, displace any 747 pilots in 2014.

We are also actively assessing options to reduce the need for any 747 Captain displacements in 2015 due to the accelerated retirement of these four aircraft.

We have notified the Association of these developments, and look forward to engaging in a discussion on mitigating displacements. More detail about our overall Asia-Pacific strategy will be shared company-wide this week. Please stay tuned.

 

[eolesen]

So much for the notion that the recent investment in cabin upgrades made them likely to stick around...

It's August as of tomorrow. Targeting end of September is pretty damn fast for this type of an action, unless these were shells already out of the schedule because they were heading into a MBV, D check, or whatever it is that DL calls their full enchilada overhaul.

The fence on the 744 and 777 comes down January 1. Not sure if there's a relationship there or not, but taking this action certainly would deter more of the DL guys from pursuing training on the 744.

 

[WorldTraveler]

there is absolutely a relationship and DL pilots have observed that there have been more retirements than replacements on both the 777 and 744 which pay the same.

Since both are at the "top of the food chain" it is alot easier to move some 744 pilots to the 777 than to allow a cascade of training events once the fence comes down

DL has made the point several times that the 744 is too big given the shift to hub to spoke flying in Asia.

So far, the 744s are heavily scheduled at DTW for the winter where fewer aircraft are required (essentially 2 per route) outside of NRT which ATL also will continue to have.

The cabin mods supposedly cost about $10M per aircraft and this is now the 2nd or 3rd year for most of the aircraft so there really isn't a huge loss of investment, esp. since some of the aircraft will remain in service for several more years - unless DL obtains more newer aircraft (either used or factory fresh) than had been expected.

It is also possible that part of the RFP involves some sort of bridge aircraft.

 

[Kev3188]

Active employees have just received an email from Glen Hauenstein outlining downgauges to certain routes currently flown by the Whale, and cancellations of a couple of others.

 

[metopower]

I don't know any DL 777 capt that whats to downgrade to the 744. (Hubs nrt ,terrible trip pairings ,.long school, no pay raise,old, terrible rest facilities,noisy cockpit ,no future. ) I'd fly it around the pattern a few times but not to work on.

 

[FWAAA]

Active employees have just received an email from Glen Hauenstein outlining downgauges to certain routes currently flown by the Whale, and cancellations of a couple of others.

Doesn't look too severe.   Someone posted this on Flyertalk:
 
ATL/LAX-NRT now 777
DTW-NGO now A330
NRT-HKG cancelled
NGO-MNL cancelled 

 

[commavia]

ATL/LAX-NRT now 777
DTW-NGO now A330
NRT-HKG cancelled
NGO-MNL cancelled 

 
All as expected (and predicted).  Once SEA-HKG started, the writing was on the wall for NRT-HKG, and the drawdown of the beyond-NRT feed necessitates reduced capacity from the U.S. (ATL/LAX).  MNL is a market that, from a yield perspective, probably makes sense to continue serving via NRT rather than shifting to SEA, but by cancelling NGO they can concentrate, reduce capacity, and hopefully raise the fare, and of course losing that continuing feed necessitates the downgrade of DTW-NGO, which will now be far more focused on DTW connections, and of course the local market (auto industry).  Seem like smart moves.

 

[700UW]

How can DL be pulling down the Pacific, our resident Airline Everything Expert says its profitable, lol?

 

[WorldTraveler]

The memo is avaialble to all DL employees and retirees via Deltanet. It validates what DL said on the earnings call of DL's desire to clean up the intra-Asia network which has been called breakeven based on strong TPAC performance but as the leisure Japan (beach markets) have deterioarated due to the yen devaluation, the bar is higher to weed out lower performing intra-Asia flying.

ATL is probably the only surprise but ATL-NRT is heavily dependent on connecting traffic at NRT.

cancelling HKG-NRT helps to push traffic over SEA-HKG and removes a very competitive route from NRT.

The NGO-MNL tag off of DTW-NGO was an inefficient routing and use of the 744 beyond NGO where the DTW-NGO premium traffic could not be replaced.

Given that DL has 2 744s per day (most days at NGO), this further increases the likelihood that DL will launch a US-MNL nonstop next summer which has been rumored.

also validates that DL is willing to push the 332s to routes that are nearly as long as the 772ER flies.

meto,
given that the 744s are leaving, the chances are much higher that there will be 744 pilots movign to the 777 than the other way around.

700,
we know this topic is way over your head but DL is not pulling down the Pacific where DL is the only US carrier that has been profitable on a year round basis. DL is pulling down INTRA-Asia flying.

 

[Kev3188]

 

Doesn't look too severe.

Agreed.
 
 

Seem like smart moves.

Also agreed (though I hate to see any reduction in Whale flying)...

 

[eolesen]

Flying hours will probably work out to be about the same, but there's little doubt that ASM's and FTK's will come down, and thus it does becomes a capacity reduction.

 

[WorldTraveler]

 

Doesn't look too severe.

Agreed.

careful you are taking the wind out of 700's sails (and sales).

 

[FWAAA]

I don't have any evidence, but I have always assumed that intra-Asia flying from the NRT hubs of both UA and DL is somewhat costly flying.   Looks like the USA-based pilots would rack up more hotel nights and on some shorter NRT-Asia routes would only fly 5 or 6 hours out or back with a day or two of mandatory rest at the spoke and/or NRT.  
 
Add it all up, and it has to be less expensive for ANA or JAL to do that intra-Asia flying and since UA and AA have immunized joint ventures with those Japanese partners, it makes more sense for UA and AA to leave those flights to those partners.   Without a joint venture partner,  DL will still have to fly some NRT-Asia routes or give them up entirely (SIN, BKK, MNL), but DL is helping itself with its new SEA hub, which overflies NRT and doesn't involve the inefficiencies of NRT-Asia flying described above.   
 
It's possible that DL could fly one or all of those far-flung routes nonstop from SEA, but those are really long, really expensive flights to operate, and I predict that nonstops to those cities will await much more fuel efficient airplanes and/or cheaper fuel prices (either by dropping or moderating while all other prices go up, making fuel a relative bargain to where it is today).   

 

[commavia]

Add it all up, and it has to be less expensive for ANA or JAL to do that intra-Asia flying and since UA and AA have immunized joint ventures with those Japanese partners, it makes more sense for UA and AA to leave those flights to those partners.   Without a joint venture partner,  DL will still have to fly some NRT-Asia routes or give them up entirely (SIN, BKK, MNL), but DL is helping itself with its new SEA hub, which overflies NRT and doesn't involve the inefficiencies of NRT-Asia flying described above.  

 
Precisely.  This has been the expectation and prediction of many of us for years - even while "certain" individuals told us over and over how strong Delta's present at NRT and in Japan was.  The reality is that Delta (and Northwest before it) was fighting a losing game against two larger, stronger competitors in their home market.  Rather than dumping capacity to bankrupt JAL, the inevitable outcome is that both JAL and ANA have leveraged their local market strength and accompanying economic advantages to drive Delta out of NRT market after NRT market.  And I don't think Delta is done yet - I still do not think NRT-PVG is going to be viable long-term, either.
 

It's possible that DL could fly one or all of those far-flung routes nonstop from SEA, but those are really long, really expensive flights to operate, and I predict that nonstops to those cities will await much more fuel efficient airplanes and/or cheaper fuel prices (either by dropping or moderating while all other prices go up, making fuel a relative bargain to where it is today).   

 
Yep.  By this time next year, a significant portion of the former Northwest hub at NRT will have been dismantled, with multiple NRT-Asia markets - including ICN, PEK, KHH, PUS and HKG - either shifted to nonstops to the U.S. or dropped entirely.  However, there are four markets that I could see Delta retaining from NRT going forward - MNL, TPE, BKK and SIN.  The first two are, in my estimation, likely too low-yielding to be profitably flown nonstop from the U.S.  TPE could maybe work from SEA but lower-cost competition from EVA and China are intense.  The second two are just way too far to be profitably flown nonstop from the U.S. - by any airline.