DoT Awards Delta the Rights for Seattle – Haneda

 The U.S Department of Transportation last week tentatively awarded Delta Air Lines the right to serve Tokyo Haneda from Seattle, after a toughly battled contest among the major US airlines. The following post sums up in brief the reasonings made by each airline, and the grounds on which their competitors contetsed it. United States has four pairs of slots at Haneda as per the bilaterals, to be used between 2200-0700 L at Haneda. The original request was made by Delta, to move its Detroit – Haneda rights to Seattle, which led other airlines to file proposals to use the slots.

 

American Airlines : Los Angeles – Tokyo Haneda, daily Boeing 777

American proposes its service on the grounds that Los Angeles is the largest U.S mainland O&D market to Tokyo. It argues that the LAX-HND market is presently served by Star Alliance as well as SkyTeam alliance, thus the approval of oneworld member AA’s service on the route will pave way for better inter-alliance competition.

The competing carriers contended that the LAX – Tokyo market is already adequately served. United Airlines argued that the LAX – Tokyo market already has nearly twice the amount of service as the San Francisco – Tokyo market does, and that hence its proposal for a San Francisco – Haneda service would be of more benefit. Delta stated that in the event American launches a new daily service between LAX and HND, it will have to reduce its own service on the route. Hawaiian argued that AA’s track record of repeated cancellations on its New York JFK – HND service suggests that approving American for a LAX – HND service could be a waste of resources.

 

Hawaiian Airlines : Kona – Tokyo Haneda, daily Airbus A330

 

 Hawaiian asserted that of the four US airline services to Haneda, its Honolulu – Haneda service has been the most successful, and hence an award for its proposed Kona – Haneda route will make the best use of the slot pair. It further states that Kona – Tokyo is the second largest US – Tokyo O&D market without nonstop service from Tokyo, and is in fact the only city out of the proposals which does not have a nonstop service to Tokyo. While acknowledging that its proposal will largely serve passengers originating from Tokyo, it asserts that the introduction of a Kona – Haneda service will have a substantial positive impact on Hawaii’s tourism based economy.

The competing carriers argued that granting the slot pair for a Kona – Haneda service will place half of the limited Haneda slot opportunities in the stat of the Hawaii, and will thus not serve the public interest. Delta and United also argued that Hawaiian does not need a Haneda slot to start a Kona – Tokyo service since it can access Tokyo Narita more easily, and also questioned the timeline for the proposed service since Kona airport needs several updates to its facilities to enable a Tokyo flight.

 

United Airlines – San Francisco – Tokyo Haneda, daily Boeing 767

 

United stated that its San Francisco – Haneda proposal would maximize public benefits by combining the SFO gateway with numerous other online connection opportunities. It also argued that this will provide Haneda service in the second largest West Coast – Tokyo market, which is nearly three times larger than the Seattle market. It further argued that it is presently the only US airline serving Japan that is not permitted to serve Haneda using own aircraft and crews, and thus approving its service will establish competitive parity among US carriers at Haneda.

 

American argued that United should not receive an award since United and its Star alliance partner ANA already command the largest presence in the U.S.-Japan nonstop market, operating a combined 210 weekly nonstop frequencies compared to oneworld’s 118 weekly nonstop frequencies. Hawaiian argued that the San Francisco-Tokyo market already has abundant service, and that the market is not large enough to accommodate United’s proposed service addition. Delta contended that, if United were awarded a San Francisco-Haneda slot pair, it would reduce its San Francisco-Narita service, while Delta’s proposal would inject true new capacity to Tokyo.

 

Delta Air Lines : Seattle – Tokyo Haneda, daily Boeing 767

 

Delta mentioned that its proposal would make the most productive use of a US – Haneda slot pair, since Seattle is the largest US – Tokyo O&D market without any nonstop Haneda service. It also stated that through its own services, as well as the partnership with Alaska Airlines, it will provide one-stop service to Haneda from 42 points in the U.S. It further argued that given American – JAL and United – ANA were awarded Antitrust Immunity, they are able to access Haneda through the metal-neutral transpacific joint venture flights of their partners and that Delta is the sole independent network competitor against the two alliances in the US – Haneda market.

 

The competing carriers argued the viability of Delta’s proposed service given the size of the Seattle – Tokyo market and that its service will rely heavily on code-share service of Alaska Airlines. American argued that Seattle is the sixth largest Tokyo O&D market and the smallest market proposed in this proceeding, and points out that Los Angeles is the largest O&D market proposed in this proceeding.Hawaiian asserted that the Seattle market is not large enough to support additional Tokyo service and that Delta’s Seattle – Haneda proposal too would face the same fate as its earlier Detroit – Haneda service. United called Delta’s arguments based on metal neutrality misguided as the consumers would benefit from the antitrust immunity JV.

 

The DoT tentaive decision was:

We have tentatively decided that it is in the public interest to grant the motion of Delta to move its Detroit-Haneda slot pair to provide daily scheduled services between Seattle, Washington and Tokyo’s Haneda International Airport, rather than select an alternative use for that slot pair.

Since we last examined the allocation of Haneda slots in the 2010 U.S.-Haneda Combination Services Allocation Proceeding, we have had the benefit of two years of U.S. carrier experience operating within the limited arrival/departure-time window at Haneda. We also now have the benefit of knowing which U.S. gateways Japanese carriers have chosen to serve with their limited slot pair allocations – Honolulu and Los Angeles for ANA; and Honolulu and San Francisco for JAL.

Against this background, and having considered the entire record before us, we tentatively select Delta’s proposed Seattle-Haneda service. We tentatively find that Delta’s proposal would best serve the public interest by providing the first nonstop Haneda service on a significant mainland U.S.-Tokyo route that currently lacks any such service, thereby establishing a new U.S. gateway to Haneda. We tentatively find that Delta’s proposed service would further serve the public interest by providing a number of western cities with a first one-stop connecting opportunity to Haneda.

 

It is not yet clear whether the DoT has placed any restrictions on Delta as for the usage of the slot, following its withdrawal from the Detroit - Haneda services earlier. The full report is available here, and makes for a fascinating read of how important this coveted slot pair was for each of the airlines.

, , , , , , , , , ,

4 Responses to DoT Awards Delta the Rights for Seattle – Haneda

  1. polo ralph lauren 24 July, 2013 at 10:17 pm #

    Although from the subset of Very last. fm, a excellent site to look for by means of tunes is definitely by Turntable. fm

  2. fred perry uk 24 July, 2013 at 10:20 pm #

    My spouse and i established this particular up these days in my household test out laboratory using the objective regarding replicating this endeavours at work in Wednesday.

  3. ralph lauren sale 24 July, 2013 at 10:21 pm #

    We are the merely a passer-by. ALL RIGHT, Get away from a new anything in your blog only for your own return pay a visit to.

  4. tube marketing 19 September, 2013 at 9:51 am #

    I’ve learn some good stuff here. Certainly value bookmarking for revisiting. I wonder how so much effort you set to create the sort of magnificent informative website.

Leave a Reply