United Airlines is mounting an aggressive challenge to Delta Air Lines’ efforts to obtain more flexibility in the use of Tokyo Haneda slots assigned in 2019.
Delta Air Lines Wants More Flexibility To Use Tokyo Haneda Slots – American Airlines Agrees
In 2019, the US Department of Transportation (DOT) dispersed a number of new slots between the USA and Tokyo Haneda, assigning these slots based upon specific usage:
- American Airlines
- Dallas-Fort Worth (DFW)
- Los Angeles (LAX)
- Delta Air Lines
- Atlanta (ATL)
- Honolulu (HNL)
- Los Angeles (LAX)
- Minneapolis (MSP)
- Portland (PDX)
- Seattle (SEA)
- Hawaiian Airlines
- Honolulu (HNL)
- United Airlines
- Chicago (ORD)
- Los Angeles (LAX)
- Newark (EWR)
- San Francisco (SFO)
- Washington (IAD)
But since the pandemic, carriers have been granted a slot waiver, relieving them of their obligation to operate these flights on a “use or it lose it” basis. That waiver is set to sunset in October 2023.
Ahead of that sunset, Delta has asked DOT for more flexibility in the use of its assigned slots, specifically requesting that all US carriers to Haneda be able to use two slots on an ad hoc basis. Delta claims that demand remains depressed and this move will allow it and other carriers to more effectively match demand to Japan’s capital city.
Just as air carriers need flexibility to make market-based decisions on when and where to deploy their network and operational assets for purposes of preserving their limited-entry DOT-issued international route authorities, so too do they need flexibility to determine the optimal U.S. gateways for serving Haneda – a market that remains extraordinarily depressed relative to 2019 volumes…
Granting U.S.-Haneda slot holders the gateway flexibility described in this motion as part of a three-year pilot program will be pro-consumer, pro-competitive, and serve the public interest because it will enable U.S. carriers to respond more nimbly to the evolving demand environment in Asia following the COVID-19 pandemic.
American Airlines, which offers a very limited number of routes to Asia, is onboard with Delta’s proposal:
As a current U.S.-Haneda slot holder, American supports the requested relief. Enabling flexible, market-based decision-making for U.S.-Haneda service is warranted in the current demand environment. Gateway flexibility for up to two current slot pairs would create public benefits by allowing all participating carriers to adapt their networks to the evolving conditions.
But now United has come out swinging against the request by Delta.
United Airlines Strongly Opposes Slot Flexibility Request
In a hastily assembled phone call with reporters yesterday, United Chief Communications Officer Josh Earnest contended that Delta is deliberately raising prices on routes it wants to suspend in order to argue that demand is not present. United strongly oppose the request by Delta to give it more flexibility to use pre-assigned Haneda slots.
Earnest presented a “mystery” as to why Delta is charging over $10,000 round-trip for nonstop flights between Portland and Tokyo, set to resume in October after the slot waiver expires. Indeed, Delta is only selling full-Y (unrestricted) fares on the nonstop routes and they do price at more than $10,000 round-trip in economy class on every single day:
Adding a connection in Seattle drops the fare to $1629 round-trip.
“If Delta is not going to fly the routes they were awarded, they should say so, so that other airlines (including United) can compete for the opportunity to do so.”
In a regulatory filing opposing the move, United argues:
The Department should reject Delta’s latest self-serving scheme for an unprecedented, and untested “pilot program” for “limited” gateway flexibility at Tokyo Haneda just as the Department has rejected Delta’s and others’ prior requests for gateway flexibility, and should continue to use its own unbiased judgment in allocating rights based upon a full and complete assessment of public benefits.
Contrary to Delta’s contention, United contends that demand to Tokyo has experienced a strong rebound:
Despite the challenges of the COVID pandemic, the U.S.-Japan market is rebounding, and access to limited entry route rights should continue to be about consumers, communities, and shippers as it always has been, not about carriers’ financial performance. It is the Department that should be the ultimate arbiter of the best U.S. gateways to ensure maximum benefits of the Haneda slots – not Delta or American, who are appearing to prioritize their own profits over benefitting consumers.
Delta, however, insists its petition is well-reasoned, though did not address the abnormally high nonstop fares between PDX and HND.
“Delta stands by our well-reasoned petition to the Department and we look forward to a constructive dialogue to ensure Haneda access is consistent with Open Skies policy and benefits the U.S. traveling public.”
United wants to start nonstop service from Houston and Guam with Delta’s Tokyo Haneda slots.
My Take: Carriers Do Not Own Haneda Slots And Should Not Be Able To Self-Regulate Their Use
It’s clear that Delta’s lack of an airline partner in Japan makes service to Tokyo difficult. I do not doubt that the nonstop routes have not performed as well as hoped for.
But United makes the stronger argument here:
- Carriers do not own these 2019 Haneda slots: they were allocated based upon specific city pair uses as judged by DOT to most benefit consumers
- Delta obscures true demand to Japan by failing to distinguish between demand recovery originating in Japan versus in the United States
- It was has only been two weeks since Japan ended the last of its COVID-related travel restrictions for Japanese citizens: of course demand is still going to be weak, particularly originating in Japan
- The high fares on the Portland – Tokyo flight do appear to be a smoking gun: it is not convincing for Delta to claim there is no demand from Portland while offering fares so high that any reasonable person would not buy them.
Ultimately, carriers do not own these slots in a fungible way: the specific city pairs assigned were carefully considered by DOT to best benefit consumers. It may be that 2019 demand does not reflect 2023 demand and the slot awards should be revisited: but that should be done by DOT, not by the individual carrier. There should be no de facto chattel ownership of these slots.
United Airlines has come out swinging against a request by Delta to grant it more flexibility in the use of its Tokyo Haneda slots. Calling Delta’s move “self-serving” and “gaming the system,” United has asked DOT to deny Delta’s request, supported by American, to be able to freely use two Haneda slot pairs as it sees fit.
The issue now goes before DOT for consideration.