Delta May Now Walk Away From Its Old Tokyo Hub

The big expansion of flights between the US and Tokyo’s close-in Haneda airport is now set. While every airline that applied got something, some fared better than others. Delta is the big winner here, and it received enough slots that it should be able to close its old Narita hub entirely.

Today, US airlines can only fly into Haneda 6 times a day, and one of those must be overnight during off-peak times. But next year, an additional 12 slot pairs open up. Why does this matter? Well, Haneda is more convenient to most of Tokyo as well as Yokohama. Also…

So why does any airline fly to Narita? There was no choice. Haneda was the main Tokyo airport until Narita was built for international flights. Only in the last few years has Haneda been re-opened to international flying, but it has been heavily restricted. Every US airline has been clamoring for those slots because Haneda is the most preferred airport in Tokyo.

For these 12 new slot pairs, there were four US airlines that applied. Here’s what happened in order of preference as requested by each airline:

  • American
    • Dallas/Ft Worth #1 (Approved)
    • Los Angeles #2 (Approved)
    • Dallas/Ft Worth #2 (Denied)
    • Las Vegas #1 (Denied)
  • Delta
    • Seattle #1 (Approved)
    • Detroit #1 (Approved)
    • Atlanta #1 (Approved)
    • Portland #1 (Approved)
    • Honolulu #1 (Approved)
    • Honolulu #2 (Denied)
  • Hawaiian
    • Honolulu #3 (Approved)
    • Honolulu #4 (Denied)
    • Honolulu #5 (Denied)
  • United
    • Newark #1 (Approved)
    • Chicago/O’Hare #1 (Approved)
    • Washington/Dulles #1 (Approved)
    • Los Angeles #1 (Approved)
    • Houston/Intercontinental #1 (Denied)
    • Guam #1 (Denied)

Curious how the feds came to this conclusion? According to the filing, this is how DOT went about awarding these slots.

…the Department has the ability to pursue a number of public interest goals by bringing first-time U.S. carrier own-metal Haneda service to major U.S. hub cities and U.S.- Tokyo gateways that currently lack U.S.-carrier operated nonstop Haneda service; by promoting a more geographically diverse and competitive U.S.-Haneda market structure; and by adding service and competition at the largest U.S.-Tokyo markets. The Department has tentatively decided that this approach best meets the Department’s stated goal of maximizing public benefits in this proceeding.

This seems like a fair allocation, but maybe I’m just saying that because I correctly guessed how the slots would be broken down by airline. I didn’t, however, get all the awarded destinations right, and I might quibble with a couple of the choices. I think the best way to look at this is by US city and not by airline, because that better reflects how DOT made its moves.

Honolulu

The Honolulu decision giving slots to both Hawaiian and Delta might seem somewhat curious. After all, Hawaiian already flies it once daily with another 4 weekly on the overnight. ANA flies it as well, and it just introduced massive A380s in the Narita-Honolulu market. There is no shortage of capacity between Tokyo and Honolulu. On top of that, this is a market that is highly skewed to benefit the Japanese traveler. Most people on those flights are not originating in the US.

That being said, it is a HUGE market at more than double the size of the LA-Tokyo market, the second biggest. Tourism is the life-blood of Hawai’i, and this will help to grow it further.

Giving one to Hawaiian isn’t a bad idea, especially in light of its pending Japan Airlines joint venture which creates more connectivity on the other side. As for Delta, this may be a mild surprise, but DOT saw an opportunity to create more competition in the market. That’s certainly understandable.

Los Angeles

There are already three daily flights from LA to Haneda (not to mention six daily to Narita), one each on American, Delta, and ANA. The ANA flight, unlike the others, is at night westbound. That created two opportunities.

First, United — ANA’s joint venture partner in the US — will fly to Haneda during the day. That will give the close partners coverage in the morning and night. United also said it would keep its LA-Narita flight, and that was music to DOT’s proverbial ears. This sounds like it might be a bad idea, but having a joint venture with ANA means it’s not completely insane.

Second, American will add a night flight creating competition with ANA. As of now, ANA’s LAX flight is the only night flight from the West Coast to Japan at all. That may be good for travelers, but I expect American will lose its shirt on this, as it does in many Pacific markets from LA.

Dallas/Fort Worth vs Houston/Intercontinental

Unlike in Los Angeles, American has a real chance to make a big, profitable Pacific gateway at Dallas/Fort Worth. That is probably why you saw American ask for two slot pairs to serve Haneda from there. It was given one, and that should have been a no-brainer. This is American’s mega-hub and Haneda service should work. But American wasn’t given the second slot pair. Why not? It’s because the DOT ran out of slots to hand out, and this one just didn’t add enough value to make the cut.

For United, on the other hand, Intercontinental is now the only hub that didn’t win a bid to get a Haneda flight. (Denver didn’t either, but that wasn’t requested.) What’s the difference between Dallas and Houston?

To start, United will have flights from Chicago, Newark, and Washington east of the Rockies while American will only have DFW. To put it another way, people who might only be able to connect via DFW on American would have many other options if they flew United, some that are more efficient than Houston would be.

In addition, United put Houston low on its wish list, after every flight but Guam. Guam may not have won a slot either, but that was a long shot anyway. It shouldn’t have gained a flight. All the other United hubs will serve the US well enough for now. If more slots come available, I imagine Houston would have a decent chance.

Portland vs Las Vegas

In the battle for small market service, Portland and Vegas were going head to head. Delta won the right to serve Haneda from Portland, but American was denied its chance to serve it from Las Vegas. Why?

American did put Vegas as its least preferred option while Delta put Portland as number 4 out of 6, but the problem was more complex than that.

DOT didn’t like that American could only connect people beyond Vegas to other hubs that already have service anyway. It appears the DOT wants connectivity, and Vegas wasn’t going to provide that… but neither would Portland. So what’s the difference there?

The short answer appears to be that there is already sustainable service to Narita from Portland while nobody has made it work from Vegas at all. Vegas is also more of a leisure market that is largely Japan-origin while Portland is more of a business market that has US-origin traffic. In the end, we don’t know if DOT just felt like it owed Delta something since it has no Japanese partner, but it wouldn’t shock me if that was part of the decision-making process.

All Delta’s Hubs But One Two

Delta really was the big winner here. Outside of Honolulu, it received one slot pair to use for each of its hubs that doesn’t have service today except one. Atlanta, Detroit, and Seattle get a flight, but New York/JFK does not. Of course, Delta didn’t even bother applying for a JFK flight, so that was a non-issue as far as the airline was concerned. (Oops, Salt Lake is a hub too, but again, that wasn’t requested.)

Delta deserved to get slot pairs for all these flights, especially since — unlike American and United — it has no partner in Japan to its flights at Narita. This along with the Portland slot should pave the way for Delta to pull out of Narita entirely, something that would be a real milestone for an airline with a long history (via Northwest) of hubbing at the airport. But it is the right thing to do. Tokyo isn’t about connections for Delta any longer, and Haneda is the airport you need to really serve Tokyo best. Delta finally has a substantial presence at the airport with these moves.


I did get some wrong when I was picking winners, and that left me wondering if a couple of these would have been better in other hands. For example, I was really curious to see if a Vegas flight might actually work. Now we’ll just have to see if someone wants to try it from Narita instead… some day And if I were betting, I’d say LA may have too much service. Then again, losing money in LA hasn’t stopped airlines from building up there in the past.

All that being said, these are minor nits. I can’t find much fault with how DOT handled this.

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