Delta suffers a setback in Seattle expansion

Delta is growing like gangbusters in Seattle and it would seem as if no one could stop the international expansion. Enter the US Government. One part of the expansion plan is a transfer of a restricted slot pair – service to Tokyo‘s Haneda Airport – from Detroit to Seattle. Demand for service is lower in the winter months so Delta planned very limited flights until the end of March 2015 but, technically, Delta planned to operate just enough to meet the DoT guidelines which define whether the Haneda slots are dormant or not. Both American Airlines and Hawaiian Airlines filed briefs with the DoT objecting to the move, essentially claiming that Delta was violating the spirit of the rule if not the letter. And both also expressed interest in using the Haneda slot themselves.

Hawaiian argues that Delta’s Haneda strategy is not about providing service or competition, but “playing keep away” with valuable air service rights – all to protect Delta’s Narita hub.

Delta noted in its objections that,

1. The slot is not dormant per the DoT definitions; and,
2. American could have applied to move its JFK slot to Los Angeles rather than ceding it (now used by United from SFO) and trying to take Delta’s.

The DoT has decided to side with the objections and has opened that Haneda slot up once again to competition.

In light of Delta’s extensive winter-season Seattle-Haneda service cutbacks, the submissions of American and Hawaiian and the responses thereto, the Department believes that the public interest requires a fresh examination of whether the best use of the Seattle-Haneda opportunity is to allow Delta to retain the slot pair for Seattle-Haneda service, or whether the public interest would be better served by reallocating the slot pair for service from another U.S. city by another U.S. carrier or by Delta.

…

The Department does not need to decide whether Delta’s current level of Seattle-Haneda service triggers the dormancy condition.  Where frequency allocations are not being operated effectively, the Department has the authority to reallocate them to ensure that they are used effectively and in a manner that promotes competition and otherwise best serves the public interest.  The Department finds that the public interest warrants a proceeding to determine whether it remains in the public interest to allow this limited Haneda opportunity to remain with Delta for service at Seattle, or whether the public interest favors an alternative use of the authority.

This decision has been fast-tracked, with applications due next week and a final decision rendered only four weeks later:

• Petitions for Reconsideration:   December 22, 2014
• Answers to Petitions:    January 2, 2015
• Applications/Supplements/Amendments: January 5, 2015
• Answers:     January 12, 2015
• Replies:     January 20, 2015

Looks like a few airline employees are going to be busy during this holiday season. Everyone wants the Haneda slots, though it is not clear that any US carrier has truly made them profitable.