US, Japan to Shift Haneda Slots

The US airlines will be changing their schedules at Tokyo‘s Haneda airport this fall. US & Japanese authorities have agreed to shift the limited Haneda slots allocated to US carriers from overnight to daytime, allowing such flights for the first time in nearly 40 years. The US Embassy in Japan issued the following statement:

Under the current agreement, U.S. airlines have a total of four slot pairs (four arrivals and four departures) for service to and from Haneda, which are now restricted to use during nighttime hours. Under the proposed amendment, these four slot pairs would be transferred to daytime hours. In addition, a fifth daytime slot pair for scheduled service to and from Haneda would be added and U.S. airlines would be able to continue operating one nighttime slot pair. Several U.S. carriers have expressed strong interest in offering daytime service to Haneda, and their passengers will benefit from convenient access to downtown Tokyo.

Hawaiian Airlines is expected to keep the night slot for it service to/from Honolulu. The longer flights to the mainland will shift to the daytime operations. This improves the viability of service from eastern US cities based on flight duration and hub flow considerations. The current mainland HND service from US carriers is concentrated at Los Angeles (American Airlines just launched service joining Delta serving the route) and San Francisco (United Airlines has been serving the route since October 2014). American previously attempted service from JFK but the flight times were inconvenient. Similarly, Delta offered Haneda service from its Detroit hub before shifting the flights to Seattle and then ultimately returning the authority to the DoT.

United Airlines has already indicated that it will adjust its SFO-Haneda schedule based on the new agreement. American similarly expects to re-time its flight from LAX to allow for better passenger flow. And, as noted above, Hawaiian seems content with its night slot based on previous statements. But Delta is something of a wildcard with the changes.

The Dying Narita Hub

For its existing service at Haneda we can reasonably assume that the slot will move to daytime hours as only one night slot remains. But Delta lobbied strongly against this policy shift in recent months, suggesting that either it receive 14 slot pairs at Haneda – enough to move its full operations from Narita – or that no daytime slots be awarded.

Delta remains strongly opposed to any further changes to the Haneda operating rules unless and until Japan is willing to open the airport under normal open skies terms and allow Delta to relocate its Tokyo hub operation to the preferred airport. Any incremental or phased deal effective before then would be harmful and unfair to Delta as a Narita hub operator. Accordingly, we urge the U.S. government to aggressively pursue a full opening of Haneda to allow fair and equal access by U.S. carriers and their customers.

Delta Special Counsel Ben Hirst has expanded on that idea, claiming passenger flow would shift in, “a large enough number to destroy Delta’s Narita hub, but not large enough to allow us to remain a significant competitor in the U.S.-Japan market. Passengers will prefer to go on flights to Haneda, and without that traffic, the flights we operate into the interior of Asia won’t be viable.”

Essentially Delta’s hub at Narita is threatened because United and American have local partners ANA and JAL, respectively, and Delta has nothing but its own presence in the region. Where it gets interesting is that Delta claims the shift in traffic will kill its passenger flow into Asia. American and United have, for the most part, already chosen to bypass Tokyo with connecting traffic, flying non-stop to those destinations from the US mainland instead. Delta does not have those non-stop flights into China, save for the slowly growing Seattle hub. United and American can feed secondary cities through their partnerships at HND and optimize for passengers headed to Tokyo; for Delta the onward flow to larger cities is more significant, creating a greater challenge. Historically Detroit and Minneapolis served as gateways to Asia and they still do, to some extent, but the flow of passengers through those hubs does not extend nearly as far west as what American and United can pull through their hubs and Delta has not yet built up Seattle sufficiently to match those capabilities. The lack of a true west coast hub hurts the carrier when it comes to competing in the Asia market and this change will not help the situation.

Update: Delta has now issued a statement on the deal. Not surprisingly it is unhappy:

Delta is committed to doing our best to maintain the viability of our current Asian route structure and our Tokyo-Narita hub for as long as possible, recognizing that commercial impacts are imminent. Delta will make a careful assessment and adjust our network accordingly.

More Haneda Slots: Number 5

The new deal also offers up one more slot for US carriers to fight over. And with the daytime operations this becomes viable for east coast operations to benefit. Delta could conceivably try to bring back Detroit service or add from Atlanta, though the flow over the Narita hub makes that harder to fill and operate profitably. American could try to bring back JFK service, though five existing JFK-Narita daily flights (2x JL, 2x NH, 1x DL) present some competitive challenges there. United may have the best opportunity by shifting its flight from Newark to Haneda. Onward flights to China are less significant as it operates Shanghai, Beijing and Hong Kong also from the Newark hub. Secondary connections would be well facilitated via Haneda while Singapore-bound traffic could leverage the upcoming nonstop service from San Francisco instead. Chicago could also work for either United or American but the latter has suggested Asia growth will come at Los Angeles, not further east.

Ultimately this is good news for most travelers, despite Delta’s protests. It means more convenient flying times and a shorter commute to town upon arrival in Japan. For those flying beyond Tokyo the daytime slots offer better connections across the board. But it is also easy to see how it hurts Delta. Losing the Tokyo-bound traffic to the more convenient Haneda operations will cut in to the viability of a Narita Hub. That’s why others have been dismantling such operations in recent years.