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DL applies for Haneda slots: ATL/LAX/MSP

DL applies for Haneda slots: ATL/LAX/MSP

Old Apr 26, 16, 12:21 pm
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Originally Posted by mnbp View Post
DOT cares about the travelling public, not individual carriers. It seems clear that the travelling public would be better served by three viable carriers / joint venture partnerships serving HND vs two. For this reason the DL case for three slot pairs seems the only way DOT could balance the US48-HND market. If DOT doesn't award DL three slots, wouldn't that leave only two carriers / partnerships serving the vast majority of the US48-HND market? What would that do to prices? That would be DOTs main concern I believe.
Exactly. I am pretty sure that the DOT doesn't carry a grudge as some here think they should.

As to the idea that they would seek to balance USA-TYO and not USA-HND... Well, nothing is stopping AA or UA from serving NRT if they don't get HND slots.

Personally, I think they should auction the authorities. That would be the best way to ensure you get the carriers that want it the most. And it pads the coffers of the DOT while you are at it. Win-win.

Last edited by pbarnette; Apr 26, 16 at 12:32 pm
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Old Apr 26, 16, 12:31 pm
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......

Last edited by pbarnette; Apr 26, 16 at 12:31 pm Reason: Dupe
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Old Apr 26, 16, 12:49 pm
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Any ideas of when the DOT will make their decision?
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Old Apr 26, 16, 1:39 pm
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Originally Posted by CLTRob View Post
Any ideas of when the DOT will make their decision?
Soon.

From
ORDER INSTITUTING PROCEEDING AND TO SHOW CAUSE

2016 U.S.-HANEDA COMBINATION SERVICES
ALLOCATION PROCEEDING
DOCKET DOT-OST-2016-0048

Procedural Timetable
In light of the Department’s goal of reaching a prompt final decision, the following procedural schedule for submissions has been established:

Petitions for Reconsideration: March 29, 2016
Answers to Petitions: April 5, 2016
Objections to Show Cause: March 29, 2016
Answers to Objections: April 5, 2016
Applications: April 12, 2016
Answers: April 26, 2016
Replies: May 3, 2016
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Old Apr 26, 16, 1:42 pm
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Doesn't this mean that the DOT will announce their decisions today?
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Old Apr 26, 16, 1:45 pm
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Originally Posted by MSPeconomist View Post
Doesn't this mean that the DOT will announce their decisions today?
No. "Answers" due today are each airline filing documents why the other airline's proposals are wrong.
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Old Apr 26, 16, 1:48 pm
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Then, does "replies" = decisions, or do the airlines respond to each others' "answers"?
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Old Apr 26, 16, 1:56 pm
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Originally Posted by MSPeconomist View Post
Then, does "replies" = decisions, or do the airlines respond to each others' "answers"?
Here's the sequence.

DOT issues "Order instituting proceedings"
All have the opportunity to "Petition for reconsideration" of the above.
All have the opportunity to respond to others petitions in "Answers to petitions"
All have the opportunity to file "Objections" to the order instituting proceedings.
All have the opportunity to file "Answers to Objections"
and so on.

On 4/14/2016 DOT granted petitions for reconsideration and issued an Order with an updated schedule:

Resumption of the Proceeding
In view of the decisions above, the Department is revising the remaining procedural schedule for
the proceeding as follows:
Applications: April 21, 2016
Answers: May 5, 2016
Replies: May 12, 2016
So I was mistaken. April 26 is no longer the next milestone date, it is May 5. The last opportunity to comment will be the "Replies" which are due May 12. Then it will be up to DOT to decide.

Follow all the fireworks here:
Docket DOT-OST-2016-0048
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Old Apr 26, 16, 2:11 pm
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Originally Posted by mnbp View Post
DOT cares about the travelling public, not individual carriers. It seems clear that the travelling public would be better served by three viable carriers / joint venture partnerships serving HND vs two. For this reason the DL case for three slot pairs seems the only way DOT could balance the US48-HND market. If DOT doesn't award DL three slots, wouldn't that leave only two carriers / partnerships serving the vast majority of the US48-HND market? What would that do to prices? That would be DOTs main concern I believe.
Awarding a carrier three slots that has previously given up HND slots not once but twice? While HAL/UA should be commended for operating HND flights consistently since their respective start dates, HAL's HND flight fills the niche of Hawai'i-Japan traffic. The sole HNL-HND flight is sufficient for the market. UA will likely keep SFO-HND daytime but with NH receiving four slots, including three daytime, Star Alliance will have four daytime. JAL will want to keep SFO-HND and then either ORD-HND or JFK-HND.

And that leaves AA/DL to fight over the remainder. I don't see a valid reason why DL should be awarded all three daytime slots they applied for while they previously have abused their HND slots in the past and were responsible for holding up this entire deal in the first place. In fact, they were the only airline to call for all of the slots to be put up for allocation again, over the objections of UA/AA/HAL. Is DL at a competitive disadvantage? Yes, absolutely. Should they be properly compensated with THREE day time slots after this tomfoolery of the impossible goal of shifting their entire NRT operation to HND and threatening to further gut their NRT operation because they did not get what they want? No, not at all. MSP is unfortunate in that DL is using the Twin Cities as a pawn to prove to DOT that daytime slot restricted HND flying is bad for business as I mentioned earlier, MSP-NRT is toast if DL doesn't get want they want.

UA/AA/HAL have been the most serious and professional players since HND opened international operations to the US five years ago. DL has done nothing but whine and complain to DOT, demanding to both DOT and Japan's MLIT to allow the total transfer of DL's NRT operation to HND. DL could have made this slot allocation round far less political if instead of using MSP as a pawn, apply for JFK-HND. Had they applied for JFK-HND, in addition to LAX-HND and ATL-HND, I'd say there would be a decent chance DOT would give them the authority to operate all three routes.

In the end, I think UA receives SFO-HND daytime, HAL's HNL-HND remains as is, DL receives daytime LAX-HND and ATL-HND, and AA will receive LAX-HND and DFW-HND. While AA tried to make JFK-HND work several years ago, the night slots for the East coast, combined with using a high CASM 777 with an outmoded configuration and product, it never had a real chance of becoming profitable. AA's application for daytime LAX-HND and DFW-HND is very strong. AA's recent addition of LAX-HND has posted excellent load factors, especially considering they are competing with DL with very similar timings. Last month alone, AA recorded a near 95% load factor on the flight. While yes, the flight is utilising their smallest aircraft, the 787-8, they lobbied hard twice for this flight and just in the first two months of operation, its load factors beat EVERY SINGLE HND flights' load factors.
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Old Apr 26, 16, 2:14 pm
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Originally Posted by mnbp View Post
Here's the sequence.

DOT issues "Order instituting proceedings"
All have the opportunity to "Petition for reconsideration" of the above.
All have the opportunity to respond to others petitions in "Answers to petitions"
All have the opportunity to file "Objections" to the order instituting proceedings.
All have the opportunity to file "Answers to Objections"
and so on.

On 4/14/2016 DOT granted petitions for reconsideration and issued an Order with an updated schedule:



So I was mistaken. April 26 is no longer the next milestone date, it is May 5. The last opportunity to comment will be the "Replies" which are due May 12. Then it will be up to DOT to decide.

Follow all the fireworks here:
Docket DOT-OST-2016-0048
And to think that with slots having been allocated on the Japanese side, our government would be almost equally efficient. How naive.

I had been thinking that the announcements scheduled for April 28-29 would be partly in response to the HND slots, one way or another, even if it's just a planned opportunity for a rant.

ADDED: In addition to my concern about the future of the nonstop flight to Tokyo from MSP (and potential consequences for down gauging of some domestic MSP routes), I'm wondering about the future of DL service on the intraAsia routes like SIN and BKK, to the extent that there are many flights remaining from NRT (R.I.P. HKG, ICN, PUS, CAN and others.) The idea of changing airports at Tokyo sounds horrible, as does being to connect through PVG on MU or other mainland China airports using Chinese partner flights. In addition, I don't want to connect through SEA or LAX for Asian destinations.

Last edited by MSPeconomist; Apr 26, 16 at 2:30 pm
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Old Apr 26, 16, 2:19 pm
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Originally Posted by Longboater View Post
Awarding a carrier three slots that has previously given up HND slots not once but twice? While HAL/UA should be commended for operating HND flights consistently since their respective start dates, HAL's HND flight fills the niche of Hawai'i-Japan traffic. The sole HNL-HND flight is sufficient for the market. UA will likely keep SFO-HND daytime but with NH receiving four slots, including three daytime, Star Alliance will have four daytime. JAL will want to keep SFO-HND and then either ORD-HND or JFK-HND.

And that leaves AA/DL to fight over the remainder. I don't see a valid reason why DL should be awarded all three daytime slots they applied for while they previously have abused their HND slots in the past and were responsible for holding up this entire deal in the first place. In fact, they were the only airline to call for all of the slots to be put up for allocation again, over the objections of UA/AA/HAL. Is DL at a competitive disadvantage? Yes, absolutely. Should they be properly compensated with THREE day time slots after this tomfoolery of the impossible goal of shifting their entire NRT operation to HND and threatening to further gut their NRT operation because they did not get what they want? No, not at all. MSP is unfortunate in that DL is using the Twin Cities as a pawn to prove to DOT that daytime slot restricted HND flying is bad for business as I mentioned earlier, MSP-NRT is toast if DL doesn't get want they want.

UA/AA/HAL have been the most serious and professional players since HND opened international operations to the US five years ago. DL has done nothing but whine and complain to DOT, demanding to both DOT and Japan's MLIT to allow the total transfer of DL's NRT operation to HND. DL could have made this slot allocation round far less political if instead of using MSP as a pawn, apply for JFK-HND. Had they applied for JFK-HND, in addition to LAX-HND and ATL-HND, I'd say there would be a decent chance DOT would give them the authority to operate all three routes.

In the end, I think UA receives SFO-HND daytime, HAL's HNL-HND remains as is, DL receives daytime LAX-HND and ATL-HND, and AA will receive LAX-HND and DFW-HND. While AA tried to make JFK-HND work several years ago, the night slots for the East coast, combined with using a high CASM 777 with an outmoded configuration and product, it never had a real chance of becoming profitable. AA's application for daytime LAX-HND and DFW-HND is very strong. AA's recent addition of LAX-HND has posted excellent load factors, especially considering they are competing with DL with very similar timings. Last month alone, AA recorded a near 95% load factor on the flight. While yes, the flight is utilising their smallest aircraft, the 787-8, they lobbied hard twice for this flight and just in the first two months of operation, its load factors beat EVERY SINGLE HND flights' load factors.
The problem with Longboat's argument is that it considers half of the equation. The US gets to allocate 5 routes, and Japan gets to allocate 5 routes. DOT will consider the effect of the Japanese route allocations when making their decision, since both UA and AA have anti-trust-immunized joint venture (ATI JV) partnerships with Japanese carriers holding 5 route authorities.
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Old Apr 26, 16, 2:36 pm
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Originally Posted by mnbp View Post
The problem with Longboat's argument is that it considers half of the equation. The US gets to allocate 5 routes, and Japan gets to allocate 5 routes. DOT will consider the effect of the Japanese route allocations when making their decision, since both UA and AA have anti-trust-immunized joint venture (ATI JV) partnerships with Japanese carriers holding 5 route authorities.
That's the advantage, maybe by design, of the USA making its decisions later and having a longer process.
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Old Apr 26, 16, 2:56 pm
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Originally Posted by MSPeconomist View Post
And to think that with slots having been allocated on the Japanese side, our government would be almost equally efficient. How naive.
Um, the DOT has a much more difficult task. There are four carriers fighting over the six slots, and the allocation between those four carriers is not pre-determined. On the Japanese side, it was pre-determined, with little or no public record as far as I know, that NH would get four and JL would get two, irrespective of the merits of their applications, as part of the continued consequences of JL's bankruptcy.

I strongly disagree with your implicit assertion that the DOT should have pre-determined the allocation of slots without a public process and a public record of how the decision is made.

The goal of a democratic government is not efficiency above all else. The Chinese government is much more efficient than the American government; that doesn't make it better.
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Old Apr 26, 16, 2:57 pm
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Originally Posted by Longboater View Post
Is DL at a competitive disadvantage? Yes, absolutely. Should they be properly compensated with THREE day time slots after this tomfoolery of the impossible goal of shifting their entire NRT operation to HND and threatening to further gut their NRT operation because they did not get what they want? No, not at all.
Why not? Are you saying that the DOT should ignore their role in ensuring competition because DL was mean to them?

Originally Posted by Longboater View Post
MSP is unfortunate in that DL is using the Twin Cities as a pawn to prove to DOT that daytime slot restricted HND flying is bad for business as I mentioned earlier, MSP-NRT is toast if DL doesn't get want they want.
MSP isn't a pawn. There will almost certainly be some negative impact to demand for DL's service to Tokyo if their competitors have better access to a more convenient airport. That may reduce demand sufficiently to make MSP-NRT unsustainable. That is a statement of fact, not a game.

Originally Posted by Longboater View Post
DL has done nothing but whine and complain to DOT, demanding to both DOT and Japan's MLIT to allow the total transfer of DL's NRT operation to HND.
They have a legitimate grievance. What would you have them do if not lobby for a resolution that works for them? More importantly, from the DOT's perspective, the resolution that works for DL also happens to maximize competition in the market.
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Old Apr 26, 16, 2:59 pm
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Originally Posted by mnbp View Post
The problem with Longboat's argument is that it considers half of the equation. The US gets to allocate 5 routes, and Japan gets to allocate 5 routes. DOT will consider the effect of the Japanese route allocations when making their decision, since both UA and AA have anti-trust-immunized joint venture (ATI JV) partnerships with Japanese carriers holding 5 route authorities.
I am considering AA/JAL and UA/NH's JVs. This is why I highly doubt UA receives EWR-HND among other reasons. DL is deliberately making this a political ploy by applying for a route that they plan to axe if it is not approved in MSP-HND. DL COULD have avoided making this process political by applying for JFK-HND. Better than a 50/50 chance DOT would have approved all three routes. But they didn't. DL is basically daring DOT to reject MSP-HND so they can use that as an excuse to further cut NRT in ending MSP-NRT. If DOT were to approve of UA SFO-HND, AA DFW-HND and LAX-HND, and DL LAX-HND and ATL-HND, with HAL staying as is with HNL-HND the breakdown would be Star receives five total slots, including four day time slots to the US assuming NH keeps HNL-HND night time. OW would receive four day time slots to the US and DL, as the sole representative of SkyTeam would receive two. I find it very hard to believe MSP-HND somehow gives greater benefit to the traveling business public than DFW-HND as DFW traffic to Japan is leaps and bounds greater than MSP. MSP alone would be unable to support any Trans Pacific flight if it weren't for DL having their second/third largest hub there (depending on how you characterise the size of a hub either by seats or flights per day).
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