motytrah

I think retiming the flights is the biggest issue. Assuming ICN replaces most Interport routes ex-NRT then you run into the issue that currently the routes are timed to accommodate USA departure times. If KE moves the longer flights earlier they lose the benefit of DL traffic being additive to their own. Instead they are simply taking on the load risks of DL's Interport connections while sharing the revenue.

Simply put: Who loves getting to SIN at 4:30am? Certainly not anyone doing ICN O/D. If the routing and timing was clear cut I'm sure DL and KE would have had a joint venture years ago.

I also think with KE's acquisition of OK they may be more concerned with their European expansion rather than accommodating DL's desires to ditch the hard parts of a large TPAC network.

MikeyZBT

I just want to see us being able to earn full Delta MQMs on all Korean Air flights. The rest is gravy.

pbarnette

This assumes that KE has no incentive to connect traffic between the US and Asia and doesn't already compete in that space, which isn't the case. I think they could do it without changing timings that badly.

I think that KE is in trouble if they can't compete on both fronts. And it ain't DL ditching the "hard" parts, but ditching the stupid parts.

MSPeconomist

In your SIN example, I'd rather leave SIN at 12:30 am to ICN than 5:30 am to NRT. On my last trip, I returned through ICN.

BTW, KE has an interesting cshared check in lounge at SIN for elites and premium cabin passengers. They also sent me to a rather decent contract lounge in T2.

motytrah

Hmm, I really didn't assume that and I seemed to sum it up pretty clearly in the part you neglected to quote:

There's no question KE could make some money here. Be that as it may I think a simple JV is lopsided in DL's favor and they'll have to sweeten the pot on the revenue and risk side of the equation to get KE to bite.

Stupid is firing your APAC VP right out of the gate resulting in contractual lapse of Affinity credit cards. That's little fiasco resulted in most of the APAC customers having their branded credit cards cancelled out from under them. Stupid is striping High Status APAC customers of regionalized benefits without notice... then giving them back... then taking them away again. Stupid is watching FAs try to speak a foreign language by talking louder at the customer because they got rid of most of the APAC crew bases.

I agree with that. I've always felt the scheduling was a balance between resourcing and presenting a competitive itinerary. Folks experienced with the slog of something like SIN-NRT-USA would certainly see the merit in taking a redeye. Others may bulk at the total travel time. My avoidance of KE has been more about booking issues (I think other people have summed up the issues pretty well).

Detroiter

In my work life I was part of a team negotiating a JV with Kia. Our team leader (who was born in Korea) said, "In Korea, first you sign the agreement, then you negotiate". And it was true. That was the most tempestuous JV in the history of the world. Koreans are proud to a fault, and don't want to be seen as junior partners to anyone.

MSPeconomist

I can easily believe this. DL could be in for a shock when they learn about Korean culture and customs in business. In fact, these differences could explain some of the problems that DL and KE have already experienced just in being members of the same alliance.

FireEmblemPride

Turning NRT into an O&D airport with smaller planes would be entail a huge risk and make them uncompetitive against JAL+AA and UA+NH, who collectively have greater access to HND, the rest of Japan AND carry an intra-Asia network.

Maybe if DL got their wish and received 20+ HND slots and formed and empowered StarFlyer, would they would remotely stand a chance.

Maybe if DL went after CI next and can rely on them to carry pax from TPE to MNL/BKK/SIN...

kettle1

I remember a "culture", KE was suspended from SkyTeam for a couple of years. A look back from a 2002 NYT article:

http://www.nytimes.com/2002/03/26/bu...hun-lists.html

Wow how memories fade. If you want to know how it was back then this old NYT's article sums it up.

KE and DL need to work together. It is a win-win for everyone.

kettle1

That would be even better! ^ CI is a great carrier and that would work great for me in TPE.

pbarnette

No, I read what you posted. I simply disagree that timing is the big stumbling block.

Actually, stupid is believing you have any sort of valuable foreign flyer base when schedule, size, revenue, and market position tell you otherwise. Stupid is throwing money at a customer base comprised primarily of package tour operators. Stupid is pursuing strategies that destroy shareholder value and force you into bankruptcy.

The strength of NW in the ex-APAC and intra-APAC market is a myth. From the beginning of the merger, DL acknowledged that the intra-port flights overwhelmingly served connecting passengers going to/from the US. There is no evidence that they were lying. Running a hub on foreign soil to extend a network like that is stupid and expensive. Don't believe me? Ask QF. Or ask UA.

pbarnette

There doesn't seem to be much evidence that HND is the preferred airport for US-Tokyo traffic. Quite the opposite in fact. This was true for AA as well, despite having a JV partner at the other end.

Pathfinder813

Koreans are generally a very proud people and a lot of it stems from Korea's history. I like to tell people who don't know too much about Korea's history that Korea is like the Poland of Asia; any time the Chinese and Japanese wanted to fight, they fought in Korea similar to the Germans and Russians fighting in Poland. Also, since Korea was taken over by Japan, I think Koreans especially want to beat out Japanese companies now. A lot of people I've talked to in Korea are happy to see Samsung doing better than Sony and Hyundai now being able to compete and surpass the Japanese auto industry.

You can see that KE and OZ are trying to do the same here and I'm thinking they need to do a JV with DL to bring on more success.

I think some of the DL people need to learn how to drink soju and makgeolli. Korean businessmen will trust DL more if they can down soju/makgeolli and then sing the night away at karaoke Delta, if you're reading this, hire me and I'll help you guys smooth things out with KE

Definitely agree with this. Interestingly enough, it was this move that really changed Korean corporate culture. It became more acceptable for people in business to question their bosses, albeit respectfully, to make better improvements and become more innovative. It's a large reason why many Korean corporations have become household names now.

I think KE offers a better network than DL and that DL really benefits from doing a JV. I think what KE will win out on the JV is not necessarily DL's US network but more importantly, KE becomes much more marketable in the US. I feel that many Americans still think of Korea as that other country we had to go help before Vietnam and also think of North Korea. I think that marketability is much more important than getting a better US network.

ClipperDelta

I really don't understand how some of you continue to think that DL is in the weaker position here relative to KE in terms of wanting a JV. Sure, DL approached KE about a JV, but DL has had plenty of experience in deriving benefits out of JVs with AFKLAZ and now with VS, and knows that both parties tend to gain from a JV.

DL is the one who made a $1.5 billion operating profit in Q2 2014, while KE has been barely profitable this year (small operating profit in Q1, operating loss in Q2). In Q2 2014, KE showed a 5% drop in US-originating point-of-sale revenue for its transpacific system, more than any of its other operating regions except Japan. Like it or not, DL's alienation of KE with the reduced mileage earning opportunities, as well as the loss of DL domestic US codeshares has hurt KE more than it has hurt DL. The fact that there are reports of both sides talking about a JV indicate that KE has started to alter its thinking about a potential partnership across the Pacific with DL.

kop84

There is no room for this kind of level headed analysis on FT!