US major Delta Air Lines, unhappy after losing its appeal over conditions set by the US Department of Transportation (DOT) for it to retain traffic rights to fly between Seattle and Tokyo Haneda, has announced it is no longer interested in serving the market and will end its flights at the end of September 2015.
The carrier said in formal correspondence with the DOT that it feels it is “not commercially feasible” to continue operate the slots allocated to Delta for Seattle-Haneda service on a consistent daily basis year-round because of variable year-round demand and a lack of partner operator in the Japanese market at the airport, close to downtown Tokyo.
Although there is effectively an open skies agreement in place between the US and Japan, operations into Haneda Airport remain restricted by bilateral agreements due to its limited international capacity and access remains limited to times when Narita, the main international gateway to Tokyo is closed.
While, Delta says it “would prefer to continue to develop Seattle-Haneda service in competition with the American Airlines / Japan Airlines and United Airlines / All Nippon Airways alliances at Haneda, these factors mean that it will return the slots to DOT.
Delta said it has “worked hard” to develop Seattle-Haneda service under what it describes as “difficult operating conditions” imposed by the US-Japan bilateral agreement. “We have relied on dormancy rights to adjust our services in response to seasonal market conditions,” it said, and that “demand for Seattle-Haneda service is highly variable, peaking in the summer and declining in the winter”.
In order to provide a smooth transition and avoid disruption to currently booked passengers, Delta plans to operate Seattle-Haneda service under the terms of the government order until September 30, 2015, when its last eastbound flight will depart Tokyo for Seattle. “We will then return the slots to the Department for reallocation effective October 1, 2015,” it said.
After being informed of Delta’s decision, American has immediately accepted its backup authority. In a letter to the DOT’s director of the office of International Aviation, Paul Gretch, American Airlines’ vice president regulatory affairs Howard E. Kass said: “On June 17, Delta informed the Department that it will return the Seattle-Haneda slot pair to the Department effective October 1, 2015. Pursuant to the backup authority awarded to American in Order 2015-6-14, American hereby accepts the returned slot pair and will inaugurate Los Angeles-Haneda service.”
The US major has yet to announce its operational plans for the route, which will see it compete directly with Delta Air Lines, but said it will meet the 60-day start-up condition set by the Department in its Final Order earlier this year. “We will provide additional details of the Los Angeles-Haneda service to the Department in the coming weeks,” said Kass.
The US DOT ruled in March this year that Delta would be allowed to continue operating the Seattle – Tokyo Haneda route, but with strengthened conditions and protective measures to maintain a year-round daily service in the market. This followed the DOT instituting a carrier-selection proceeding the previous December to determine whether current service between Seattle and Haneda should be reallocated to another airline after the US major reduced its frequency from daily to a basic seasonal schedule.
Following American’s decision, every US carrier serving Japan will now have one pair of Haneda slots. Delta has said that despite returning its traffic rights, it would still look to grow its activities in Tokyo but only once Japanese authorities are willing to open Haneda Airport under normal open skies terms and allow Delta to relocate its Tokyo hub operation to the preferred airport.
Until then it said it “remains strongly opposed” to any further changes to the Haneda operating rules as any incremental or phased deal effective before then would “be harmful and unfair to Delta as a Narita hub operator”.
Our analysis of Sabre Airport Data Intelligence O&D demand statistics shows that the Los Angeles - Tokyo Haneda market is significantly larger than Seattle - Tokyo Haneda and although it suffers its own seasonal variations, these are less severe and its scale means it can more easily accomodate year-round services, especially when the point-to-point demand can be supported with onward connections, even though scheduling of the Transpacific flights into Haneda makes these difficult.