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Delta Holds on to Haneda Slots

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Delta Holds on to Haneda Slots

Delta Holds on to Haneda Slots
March 30
10:19 2015

MIAMI — Delta Air Lines fended off challenges from American Airlines and Hawaiian Airlines to maintain its Seattle – Tokyo-Haneda route authority, but the win comes with tremendously strict rules governing the operation.

Last year, American challenged Delta’s holding of the limited route authority, claiming that the Atlanta-based carrier was not operating in a manner which was best suited to passenger needs while Delta claimed full compliance with US Department of Transportation rules. At issue was the number of flights which must operate during a 90 day period so as to not have the route considered dormant. Delta’s operating schedule for the Winter 2014-2015 season had the route scaled back significantly but still meeting the letter of the law with regard to flight frequencies.

Last week’s ruling allows Delta to continue operating the flight but also requires daily service without exception. And the DoT is watching closely.

Any failure, without a Department-granted waiver, to perform a Seattle-Haneda flight, and any failure, without a Department-granted waiver, to perform a Haneda-Seattle flight, on each and every day of every week (7 days a week, 365 days a year), will constitute a violation of Delta’s Seattle-Haneda authority subject to enforcement.

Any failure, without a Department-granted waiver, to perform Seattle-Haneda flights, and any failure, without a Department-granted waiver, to perform Haneda-Seattle flights, on two days of any seven-day period (365 days a year) will constitute a default of Delta’s Seattle-Haneda authority and that authority will automatically expire.

American gave up its Haneda slot in 2013; the carrier had previously operated from New York’s JFK airport. That operating authority is now used by United Airlines for service from San Francisco. American hoped to take over the Delta slot to begin service between Los Angeles and Haneda. Hawaiian Airlines applied to provide service from Kona. American’s application was deemed the runner up in the DoT ruling; should Delta’s operations falter American will receive the Haneda slot. By requiring daily service without a break the DoT has shifted the rules traditionally used to determine dormancy to a very high standard.

While it is unlikely that Delta will be deemed in violation should weather or mechanical issues arise which prevent flight operations on specific dates, the ruling leaves the carrier closely scrutinized but the DoT for this route, much more than any route in the past. This is not the first time Delta has seen challenges with Haneda operations. Previously, the carrier had a route authority assigned to the Detroit-Haneda route but shifted it to the Seattle market in 2014. Even there, with better flight times, demand was soft and Delta cut the winter schedule to save cash.

Responding to the tentative ruling in its favor Delta affirmed its position that future operations will be year-round:

Earlier this month, Delta resumed its nonstop service between Seattle and Haneda after a temporary seasonal suspension. Delta will operate year-round, nonstop flights between Seattle and Haneda as we continue to grow Delta’s international gateway at Seattle-Tacoma International Airport.

Hawaiian Airlines CEO Mark Dunkerley’s response to the ruling was rather aggressive, notable more for the disappointment that American was selected as the second place finisher than for Delta winning the slot:

Hawaiian is the only airline to have operated Haneda service continuously and successfully since the slot rights were granted. Our proposal provided more seats and would have resulted in more travelers flying between Japan and the United States than either Delta’s or American’s proposal. Kona is the largest unserved market in this proceeding, and Hawaiian’s proposed route would have generated more economic benefit than that offered by either Delta or American. None of these facts are in dispute by the DOT.

Sadly, by dismissing Hawaiian’s proposed Kona route as just simply being additive to the routes already serving Hawaii, the DOT has once more failed to appreciate the geography of the 50th state. Kona and Honolulu are separate markets, separate communities and indeed are located on separate islands. The tentative ruling also reveals a long-held institutional bias among decision makers favoring the interests of U.S. business travelers over those of U.S. travel-related businesses and travelers in general.

This ruling is subject to objections from affected carriers received by 6 April.

 

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Seth Miller

Seth Miller

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