FlyerTalk Forums - View Single Post - Delta Cancels DTW-HKG effective August 30th
Old Jun 25, 2012, 10:32 am
  #84  
BizJet
 
Join Date: Nov 1999
Posts: 3,511
I think the comments suggesting that DL is "losing" and UA and CX are "winning" in the US-HKG market are a bit overstated.

If you listened to DL's and UA's Q1 earnings calls and some of the recent investor presentations (there was one in Boston in the end of May), you'd hear both airlines discuss significant weakness they're seeing in China, compared to a much stronger demand environment in Japan. United has said one of the reasons DL posted stronger Q1 results than UA is that UA is over-exposed in China compared to Delta. Delta, which is much bigger in Japan than United, benefitted from strong Japan performance, while UA suffered due to lagging demand in China.

Delta is very aggressive about managing capacity and will try to turn on a needle to respond to the demand environment. That's what we're seeing here - it couldn't keep DTW-HKG at profitable fare levels, so it'll pull back the flight and continue to serve the HKG market through NRT.

CX has also indicated weakness in US-HKG and is looking to draw back some capacity.

I'll grant that DTW is probably a weaker gateway than SFO/ORD/EWR, but I think what we're seeing here is simply good business by Delta: a low tolerance for loss-making routes; not necessarily that UA and CX are profitable and Delta wasn't.
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