Delta to add Seattle-Osaka, Drops SEA-HKG
Jul 23, 2018, 2:52 pm
#256
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I think that says volumes about DL's attempt to "force" SEA into a hub for Asia-bound/Asia-originating travelers. DL simply couldn't (or wouldn't) compete with the other giants at SFO and LAX, so they decided to leverage (aka force) their relative domestic strength at SEA into a Transpacific hub of their own.
DL still doesn't have enough domestic feed into SEA, and -- while SEA has a large corporate base and significant Asian population for VFR travel -- it still is only a marginally larger market than, for example, MSP, which has much greater domestic feed. It can't compete with SFO/LAX in the O/D traffic that really helps a hub thrive, or even ORD/NYC which are longer hauls but are much stronger markets than SEA (or MSP, DTW, or ATL).
Even well after the merger, the USA->NRT->Asia points onward model is still best for DL's US hubs and route network. It'll be a number of years before they are able to replicate that setup via ICN and KE, and until then, DL will continue to have sub-par connectivity to/from Asia when compared to the other US carriers.
On a somewhat related note what, exactly, has changed in the market that is going to suddenly make SEA-KIX successful this time around? My half-baked theory is that it's simply a consolation prize to SEA and its status as an Asia hub and can be operated on the relatively cheaper 767-300ER compared to the A332/777 that was running on SEA-HKG.
DL still doesn't have enough domestic feed into SEA, and -- while SEA has a large corporate base and significant Asian population for VFR travel -- it still is only a marginally larger market than, for example, MSP, which has much greater domestic feed. It can't compete with SFO/LAX in the O/D traffic that really helps a hub thrive, or even ORD/NYC which are longer hauls but are much stronger markets than SEA (or MSP, DTW, or ATL).
Even well after the merger, the USA->NRT->Asia points onward model is still best for DL's US hubs and route network. It'll be a number of years before they are able to replicate that setup via ICN and KE, and until then, DL will continue to have sub-par connectivity to/from Asia when compared to the other US carriers.
On a somewhat related note what, exactly, has changed in the market that is going to suddenly make SEA-KIX successful this time around? My half-baked theory is that it's simply a consolation prize to SEA and its status as an Asia hub and can be operated on the relatively cheaper 767-300ER compared to the A332/777 that was running on SEA-HKG.
Last edited by ATOBTTR; Jul 23, 2018 at 3:12 pm
Jul 23, 2018, 3:02 pm
#257
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Couple of questions
1) How is UA able to run a once-daily EWR to HKG? Do some of the smaller StarAlliance airlines (Thai) provide enough connectivity from HKG? I would think Delta would be able to run a JFK to HKG just on O&D.
2) Why no ATL to HKG?
1) How is UA able to run a once-daily EWR to HKG? Do some of the smaller StarAlliance airlines (Thai) provide enough connectivity from HKG? I would think Delta would be able to run a JFK to HKG just on O&D.
2) Why no ATL to HKG?
Jul 23, 2018, 3:07 pm
#258
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2) Not enough O/D or connecting traffic from ATL to make an ULH route like that work financially, especially when there are more viable options for most connecting travelers out of NYC, ORD, BOS, and DFW.
Jul 23, 2018, 3:09 pm
#259
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Jul 23, 2018, 3:15 pm
#260
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To me, that speaks volumes about SEA being a viable Transpacific hub.
Last edited by TheMoose; Jul 23, 2018 at 3:21 pm
Jul 23, 2018, 3:18 pm
#261
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I think that says volumes about DL's attempt to "force" SEA into a hub for Asia-bound/Asia-originating travelers. DL simply couldn't (or wouldn't) compete with the other giants at SFO and LAX, so they decided to leverage (aka force) their relative domestic strength at SEA into a Transpacific hub of their own.
DL still doesn't have enough domestic feed into SEA, and -- while SEA has a large corporate base and significant Asian population for VFR travel -- it still is only a marginally larger market than, for example, MSP, which has much greater domestic feed. It can't compete with SFO/LAX in the O/D traffic that really helps a hub thrive, or even ORD/NYC which are longer hauls but are much stronger markets than SEA (or MSP, DTW, or ATL).
Even well after the merger, the USA->NRT->Asia points onward model is still best for DL's US hubs and route network. It'll be a number of years before they are able to replicate that setup via ICN and KE, and until then, DL will continue to have sub-par connectivity to/from Asia when compared to the other US carriers.
On a somewhat related note what, exactly, has changed in the market that is going to suddenly make SEA-KIX successful this time around? My half-baked theory is that it's simply a consolation prize to SEA and its status as an Asia hub and can be operated on the relatively cheaper 767-300ER compared to the A332/777 that was running on SEA-HKG.
DL still doesn't have enough domestic feed into SEA, and -- while SEA has a large corporate base and significant Asian population for VFR travel -- it still is only a marginally larger market than, for example, MSP, which has much greater domestic feed. It can't compete with SFO/LAX in the O/D traffic that really helps a hub thrive, or even ORD/NYC which are longer hauls but are much stronger markets than SEA (or MSP, DTW, or ATL).
Even well after the merger, the USA->NRT->Asia points onward model is still best for DL's US hubs and route network. It'll be a number of years before they are able to replicate that setup via ICN and KE, and until then, DL will continue to have sub-par connectivity to/from Asia when compared to the other US carriers.
On a somewhat related note what, exactly, has changed in the market that is going to suddenly make SEA-KIX successful this time around? My half-baked theory is that it's simply a consolation prize to SEA and its status as an Asia hub and can be operated on the relatively cheaper 767-300ER compared to the A332/777 that was running on SEA-HKG.
For all we know, if CX hadn’t responded by starting the route, SEA-HKG could have come back when the new IAF is ready...
Jul 23, 2018, 3:29 pm
#262
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IMHO, operating on no data other than my own prognostication: what’s changed is the success of Nintendo. The Switch was a major turnaround for them and they now have the most exciting console of the current generation (and I say this as a formerly competing engineer from the industry). I suspect it’s driving increased business travel between KIX/SEA. Combine that with the opportunity to open a route with less competition and it really could be just as simple as KIX being the higher and better use of a limited SEA international arrival slot.
For all we know, if CX hadn’t responded by starting the route, SEA-HKG could have come back when the new IAF is ready...
My gut still says it's a sort of consolation prize to maintain departures to Asia, and perhaps the international arrival slot as you mentioned.
Jul 23, 2018, 3:32 pm
#263
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No, that's kind of my point. CX, which of course is a behemoth at the other end in HKG, isn't even starting daily. It's not a strong enough market to support daily service on CX on their own, let alone at the same time as DL's service.
To me, that speaks volumes about SEA being a viable Transpacific hub.
To me, that speaks volumes about SEA being a viable Transpacific hub.
Of course if the launch is unsuccessful if could get dropped altogether, but It's unlikely to remain at 4x daily for many years.
Your point about space for both DL and CX is of course a valid one.
Jul 23, 2018, 3:42 pm
#264
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Well my point is that I would expect CX to make it daily fairly soon (just like it has elsewhere), i.e. the fact it's not launching daily immediately does not mean CX thinks there's not enough market to support daily.
Of course if the launch is unsuccessful if could get dropped altogether, but It's unlikely to remain at 4x daily for many years.
Your point about space for both DL and CX is of course a valid one.
Of course if the launch is unsuccessful if could get dropped altogether, but It's unlikely to remain at 4x daily for many years.
Your point about space for both DL and CX is of course a valid one.
I guess what I'm getting at is that SEA doesn't appear to be a strong enough hub for Delta to support this flight, maybe ever. And CX (apparently) thought that HKG-SEA wasn't strong enough to operate at the same time Delta operated on the route, even with significant feed advantages on its end compared to DL on its end. That doesn't speak well to the strength of the market, overall. Which means DL needs significant feed to make it work. Getting that feed is strategically challenging, both from a facilities standpoint, and from a geographical standpoint; they'd basically have to gut parts of the SLC/MSP hubs to justify some of the feed, and then there would be "backtracking" out of the SEA hub to those domestic destinations.
Jul 23, 2018, 3:56 pm
#265
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SEA is a failure because of the population. When DL wants to duplicate its ATL model, DL does not realize that many Asian do not like making transfers, especially when the airfares are not significantly lower than competitors.
As I said previously, LAX is the perfect choice for DL. DL simply does not want to face competitions. So SEA.
At least for now, most HKG traffic are terminated at HKG. UA works with NH, so whoever fly to Asia where UA does not serve, they will transit at NRT and connect with NH.
FYI - UA's EWR-HKG is a pmCO route. Yes - a former ST route.
No spare aircrafts for starter. DL simply does not have enough widebodies for long-haul. As a fact, DL has the least 777s among all U.S. airlines.
Also, while I have never traveled on SEA-NRT, I bet U.S. Navy is more important than Nintendo.
But FWIW - SEA-HKG will not come back. If DL seriously wants that market, the routes have to be LAX/JFK-HKG.
Jul 23, 2018, 4:10 pm
#266
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Fair enough. Note, also, that DL dropped the SEA-HKG service from daily down to, I believe, as low as 4x weekly during certain periods.
I guess what I'm getting at is that SEA doesn't appear to be a strong enough hub for Delta to support this flight, maybe ever. And CX (apparently) thought that HKG-SEA wasn't strong enough to operate at the same time Delta operated on the route, even with significant feed advantages on its end compared to DL on its end. That doesn't speak well to the strength of the market, overall. Which means DL needs significant feed to make it work. Getting that feed is strategically challenging, both from a facilities standpoint, and from a geographical standpoint; they'd basically have to gut parts of the SLC/MSP hubs to justify some of the feed, and then there would be "backtracking" out of the SEA hub to those domestic destinations.
I guess what I'm getting at is that SEA doesn't appear to be a strong enough hub for Delta to support this flight, maybe ever. And CX (apparently) thought that HKG-SEA wasn't strong enough to operate at the same time Delta operated on the route, even with significant feed advantages on its end compared to DL on its end. That doesn't speak well to the strength of the market, overall. Which means DL needs significant feed to make it work. Getting that feed is strategically challenging, both from a facilities standpoint, and from a geographical standpoint; they'd basically have to gut parts of the SLC/MSP hubs to justify some of the feed, and then there would be "backtracking" out of the SEA hub to those domestic destinations.
Jul 23, 2018, 4:30 pm
#267
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These two parts of your post contradict each other. In one part, you claim DL now has 2 spare aircraft due to the SEA-HKG cancelation yet then mention they can't do ATL-HKG due to lack of spare aircraft. Yet the aircraft operating SEA-HKG - which is now a 777 - is the same type of aircraft you say they don't have spares of, while saying that SEA-KIX, which will be a 767 I believe, not a 777, is now an option because they'll have spares, even though the 777 fleet is not directly impacted by SEA-KIX unless a 777 is now put on a route currently seeing a 767 so that DL has a 767 to provide and use for SEA-KIX.
Jul 23, 2018, 4:36 pm
#268
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I don't think one route speaks to the viability of a hub. Even mega-hubs like ATL, DFW, etc. have seen routes cut. It may well just be that specific market. SEA and HKG have different markets (industries). HKG is a financial hub. SEA is a technology hub. I believe SEA was (is) the smallest US market served by any airline - CX, DL, UA, or AA - from HKG in terms of metro area population (not the sole factor in determining a market but certainly a factor). But SEA not having a viable market for O&D (required to help sustain hub flights) to HKG doesn't automatically mean SEA can't be a viable TPAC hub to other markets that share similar industries, and thus generate O&D traffic, for SEA. SEA maintains three flights to ICN (two as part the DL/KE JV and then Asiana), and two daily flights to PEK, PVG, and NRT as well as once daily to other destinations (SZX, TPE, and soon KIX).
Jul 23, 2018, 4:53 pm
#269
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SEA has always had some TPAC service because of its geography in the PNW and, in the 20th century, aircraft range limitations (NW used it extensively in serving Asia for many years). I actually think DL knew exactly what it was getting into. After all, DL had the failed PDX Asia hub in the early 90's (talk about a metro area being to small!!). They also have the legacy NW history of serving Asia extensively through SEA. SEA is still a relatively new hub for DL and they are still experimenting with the right mix of international flights.
Jul 23, 2018, 5:00 pm
#270
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1. How about SFO?
2. HKG is more than a financial hub. It actually serves as a gateway to Asia as well. For example, Apple is one of the major UA's customer for SFO-HKG (Apple's products are manufactured by Foxconn, which has a massive production facility in Shenzhen, just north of Hong Kong.)
SPN and GUM are 2 forgotten U.S. markets that even DL has abandoned.
SEA is a poor choice for TPAC hubs, given its proximity to YVR.