Originally Posted by
MSPeconomist
This still doesn't explain why HKG flights are so unprofitable. CX is a full service carrier and has lower labor costs than USA carriers, but it's certainly not a LCC/ULCC, not are there any doing TPSC from HKG (or nearby airports) AFAIK. Airport fees might be high for HKG but surely not very far out of line with other major airports. HKG is a business market which also has leisure travel, so I would expect at least a signficant fraction of the TPAC seats to/from HKG to sell for high fares. It's a long route, but not compared to other major airports in Asia, so while it's expensive to carry all the fuel for a nonstop, again this wouldn't be way out of line compared to other airports in Asia.
It shows a piece of the pie. The biggest reason HKG is gone is because there is a lot of crap capacity across the pacific right now. United and American are choosing to stay in HKG because they are willing to lose money, Delta's management isn't.
and if you look at the margins/profits for the three you can generally see that Delta is MUCH more conservative.
FWIW I disagree with the conservative nature because I believe HKG is a very important market. Them leaving and CX filling the void on HKG-SEA means they will either have to A) start DTW-HKG back again, a long flight with a low local market B) try to run CX out of Seattle and I'm not sure Delta is willing to lose the money to do that C) bring HKG back from JFK and/or LAX both markets that have a metric s**t ton of capacity to Hong Kong as it is.
Originally Posted by
MSPeconomist
It also doesn't seem terribly uncompetitive to offer routing to HKG through NRT (RIP), although slots at HND are constrained and valuable while I'm not sure DL would be allowed to operate intraAsia flights out of partner hub ICN (which also seems farther out of the way than a Tokyo connection).
I'd say there is all of .01% chance of Delta staying at NRT now that they got the slots to move everything to HND. If they do I would expect any tag flights to be SIN/MNL well before HKG and even with that it will still require a XXX-SEA/DTW-NRT-HKG flight that no HVC in their right mind would do. Japan isn't going to give them HND slots for anything that isn't US flights. Part of the reason of this joke of an open skies with Japan was to kill United and Delta's 5th freedom rights and protect JL/ANA.
Delta can operate 5th freedom flying from ICN* because it is an open skies market, but most places they would do so they will just let KE do the flying for them.
*not 100% on China. I would assume they can but their might be something in the US/China/HK bilateral(s) that prevent that. Note, China, including Hong Kong, is not included in DL/KE joint venture due to the US/China Bilateral.