Recently in Analyses Category

 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.

 It all began on a sunny Thursday, the 6th of September, in Sydney, and how far we have come in a little more than 30 days would have certainly been beyond imagination had we not experienced it firsthand. Beginning with the Qantas - Emirates alliance and on to Qatar joining oneworld to the Etihad tie-up with Air France - KLM, the recent events have very possibly shifted the global alliance axis forever.

 The initial announcement of an Emirates tie-up with Qantas, was unexpected by many - despite the fact having been a very badly kept secret in the last few days running up to the announcement. Qantas would end its JBA with British Airways, terminate its Frankfurt route, suspend its European services via Singapore and switch those to Dubai. The worst impacted from the announcement, appeared to be British Airways - which had been a faithful partner to the flying Kangaroo for several decades. Initially agreed for a ten year term, the EK-QF partnership was nothing short of revolutionary.

Even before the warmth of that news had gone away, the Emirates chief architect Tim Clark set the stage on fire by announcing that they were discussing a similar potential partnership with American Airlines, another oneworld member.

 This raised considerable concerns over the future of the global airline alliance axis - only for it to take an even more revolutionary tale a few days later.

 Rumours soon spread of a oneworld alliance event due in New York on the 8th of October. The rumour had it that the chiefs of American Airlines and British Airways would join to announce a new member to the alliance. Who that member would be? Many believed that this would be the long rumoured Qatar Airways partnership coming to fruition, while some others argued that it could well be Etihad or Emirates. And some others believed that it is the announcement of a merger between AA and US Airways, and the subsequent entry announcement of US Airways into oneworld. Proving many others wrong, it became Qatar Airways which was invited to the oneworld alliance on the 8th of October. The airline would be the first of the three largest Middle Eastern airlines to join an alliance and will bring with it fifteen new destinations to the alliance. The same event has elevated oneworld to a new position in the alliance scene, as it now appears to possess much superior connectivity opportunities in comparison to its rivals.

Stealing the show the same evening in another corner of the world was a four-airline-alliance led by unaligned Etihad. Fast growing Etihad together with oneworld member AirBerlin (in which it holds a stake) will link a code-share partnership with SkyTeam members Air France and KLM. The airlines plan to initiate their quad-directional partnership as soon as 28th October, the start of the Winter 2012 scheduling season.

The tie-ups of these giants have quickly made the airline world a different place. A British Airwasy passenger may now begin its journey in Kigali, transit at Doha and reach London. A Qantas passenger may start their journey in Warsaw and connect onto a Qantas Airbus A380 at Dubai. A KLM passenger may now fly on a KLM flight to Abu Dhabi and connect on an Etihad flight onto Seychelles. The consolidation and partnership scene in the industry seems to have taken to a new level, and the next logical partnership now appears to be possible between arch-rivals Emirates and Lufthansa. Emirates now lacks a European partner while both of its large Middle Eastern rivals do, while Lufthansa lacks a Middle Eastern partner which both of its large European rival groups now possess.

 The industry partnership axis has shifted, and it may not be over yet...

Disclaimer: The opinions expressed above are the author's own and do not reflect or represent those of his employers or clients. Every effort has been made to ensure that the facts are completely accurate.

Triangular routes were a popular medium for many airlines some time back. It allowed them to serve two airports, most often in two different conutries - but are only a few hundred miles apart - by a single flight.
It was perceived that this will help the airline cut down on the expenses, for you will serve two points with just a little bit of extra fuel. But as the industry evolved, and the fuel price rose, this perception proved wrong.
The double landing charges, handling costs and the other expenditure outdid the saving in terms of fuel cost. And the capacity allocation for the two destinations and hence the yield management turned out to be a nightmare for some airlines.
Now we are seeing most airlines delinking their triangular flights, and instead using terminator flights with smaller capacity for both stations. Surely, this will aid during a high fuel environment. However, you also run with the risk of a higher unit cost, if fuel prices, ever, come down sunstantially.
How long will we see the triangles? Only the fuel price will tell.

Air Seychelles' new managing owner, Etihad Airways, has opted to provide the island nation airline with additional aircraft capacity as the cooperation between the two evolves further.
Under the new arrangement, some routes presently operated by Air Seychelles will see Etihad aircraft being operated with the former's callsign, effective 1st May. While this could also hint at a possible maintenance related need at Air Seychelles, it could well also be the gradual beginning of a refleeting programme at the airline.
The routes presently planned to be operated by Etihad, under the Air Seychelles code, are as follows
- Seychelles - Abu Dhabi, thrice weekly, to be operated by Airbus A330-200
- Seychelles - Johannesburg, twice weekly, to be operated by Airbus A330-200
- Seychelles - Mauritius, twice weekly, to be operated by Airbus A320
The GDSs are presently showing some contradicting data on the continuation of this service after May, and we will have to wait for a few more days to find this out accurately. With a more modern fleet, and with the aim of achieving cost synergies through fleet commonality, it is quite possible that Etihad may look into replacing Air Seychelles fleet with the same aircraft types that it uses. Is this the beginning of a such move? Let us know in the comments.

In an interesting turn of events, American Airlines has revealed on the GDS that it will be deploying Boeing 777 aircraft twice daily, on the Miami - Los Angeles service, from April onwards.
The new schedule is as follows..
AA299 MIA0810 - 1025LAX 772 D
AA271 MIA1115 - 1330LAX 772 D

AA1520 LAX1155 - 2020MIA 772 D
AA252 LAX1415 - 2210MIA 772 D
While it could simply be due to utilization concerns - June is usually not a month where AA deploys a 777 on the MIA-LAX route. Also interesting to note is that American will be introducing a Miami - Seattle flight from the same date, while it will also upgrade one of its Miami - London Heathrow flights to a 777.
In the event that the 777 becomes a regular stay (either seasonally or year round) on the MIA-LAX route, it could signal a step change in American's strategy. The deployment of a widebody, earlier than usual, on a trunk domestic route out of its key hubs - at the same time making a number of capacity improvements from the same hub - could indicate both a revitalised focus on Miami as a major AA hub as well as an attempt to increase its yield in a now very disciplined (capacity-wise) market.
This, together with US Airways' purchase of multiple web domains containing 'American Airlines' could tell a very interesting tale. But only the time can tell us for sure. Let us all wait and see...

Admittedly or not, it is clear that most of the big name LCCs today have adopted some level of connection potential to their networks. It is too significant a revenue stream to be ignored, and implementing a such system - specially internationally - is quite easy. Just schedule the majority of your westbound flights to operate during one half of the day and the eastbound flights during the other half. And you've easily got a basic connectivity potential.
This emerging trend is rapidly closing the ever minimizing gap between full service and low cost carriers.
The connectivity certainly increases the revenue potential for any LCC - and not going to a large scale connectivity oriented hub structure means that they could still keep the costs low. Technological improvements have added the ability of booking connectivity pairs to most reservation systems. The end result is that not only has the connectivy business become more lucrative, but quite easy to implement too.
The lower prices of a LCC connection makes it a better option to the price-conscious traveler; even if there is an extra step of booking two city pairs seperately.
This has opened more chances for those LCCs wishing to move upmarket, and the higher yields will only make that choice more attractive to many. The hybrid-ization of the LCC is not going to stop anytime soon. And the gap between the LCC and the FSC is fast closing.