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Topic: DL And KE End Codeshare On Some Flights?
Username: jayunited
Posted 2013-08-25 15:18:16 and read 12454 times.

We all know that next year DL is launching SEA-ICN but according to airlineroute.net Delta will be ending their codeshare with KE on KE flights from SEA, SFO, LAX and LAS only. These two airlines are partners so why does Delta feel the need to end its codeshare with KE on these routes? I know these two airlines are not in a JV which in a way means there is still some type of competition between them so I can understand Delta ending their codeshare with KE on flights out of SEA because Delta would now need the passengers to fill their own local flight. But why does Delta feel the need to end their codeshare on KE flights from LAX and SFO? Does Delta really believe that passengers in LA and San Francisco would now choose a one stop on Delta over Korean Air when Korean Air has nonstop flights, and their on board service and product is clearly superior to Delta's? How does ending the codeshare on flights out of LAX and SFO benefit Delta if most of those passengers continue to fly Korean Air? Now days many airlines are trying to work closer with their partners build on their relationships but these 2 airlines do not appear to be trying to work closer together especially on their west coast to ICN flights. Or is there more to the story between Delta and Korean Air?

http://airlineroute.net/2013/08/25/dl-hkgicn-jun14/

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: usflyer msp
Posted 2013-08-25 15:23:58 and read 12463 times.

Quoting jayunited (Thread starter):

DL and KE are not getting along right now. DL even changed their mileage chart so that you don't even earn miles on most KE fares or elite qualifying miles on any KE fare. If this keeps up I wouldn't be suprised if KE and AA ended up hooking up with each other, even if KE stays in SkyTeam

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: RyanairGuru
Posted 2013-08-25 15:31:47 and read 12408 times.

Quoting jayunited (Thread starter):
Does Delta really believe that passengers in LA and San Francisco would now choose a one stop on Delta over Korean Air when Korean Air has nonstop flights

For reasons that are beyond fathoming (it would be prohibited in both Star and OW) DL have made KE a "Group 4" partner which means that you don't any MQMs when flying KE (even full J or F!) and many fairs don't earn award miles. Because of that, it is quite possible that a SkyMiles member would make the connection via SEA with DL in order to earn points/MQMs. What is also possible, however, is that they reconsider their loyalty to SkyMiles, especially if they regularly travel to Korea  

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: srbmod
Posted 2013-08-25 15:33:13 and read 12393 times.

It is mentioned in the following thread that DL has cancelled a lot of their domestic codesharing with KE and KE seems to be getting pushed out of SkyTeam, at least by Delta, in favor of the other Asian airlines in the alliance. After September 1st, you can no longer earn DL MQMs on KE flights either after reducing the rates earlier this year (Meanwhile you can still earn partial MQMs on Vietnam, China Airlines, China Southern, China Eastern and Xiamen.).

KE A380 Still Starting ATL Sept 1st? (by AV8AJET Aug 22 2013 in Civil Aviation)

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: avek00
Posted 2013-08-25 18:05:00 and read 12070 times.

And yet DL plans to make SEA-ICN work!? LOL...

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: commavia
Posted 2013-08-25 18:41:54 and read 11922 times.

Quoting RyanairGuru (Reply 2):
For reasons that are beyond fathoming (it would be prohibited in both Star and OW) DL have made KE a "Group 4" partner which means that you don't any MQMs when flying KE (even full J or F!) and many fairs don't earn award miles.

It is rather incomprehensible - I agree. Even if Delta isn't entirely thrilled with the present arrangement, "going nuclear" with SkyMiles seems needlessly provocative for such an important partner. It is remarkable to see that Korean is in the same SkyMiles partner "group" with carriers as meaningless (relatively, to Delta) as Olympic and Malaysia.

Quoting srbmod (Reply 3):
KE seems to be getting pushed out of SkyTeam, at least by Delta, in favor of the other Asian airlines in the alliance

I don't think so. I doubt Delta is actively seeking to push Korean out of SkyTeam. Delta is just playing hardball. But as I said in the other thread - I think Delta needs to be very careful here as it may be playing with fire.

Quoting avek00 (Reply 4):
And yet DL plans to make SEA-ICN work!? LOL...

If Delta loses Korean Air (which, by the way, I'm not predicting) then SEA-ICN will be the least of their worries. Delta has some structural issues that have to be addressed in Asia. SEA is most definitely part of that solution. But so is Korean. Losing them would be a huge strategic blow - particularly at the time (in the next few years) when I personally think Korean (and ICN) are going to be becoming more and more critical for Delta.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jayunited
Posted 2013-08-25 19:43:52 and read 11728 times.

Quoting commavia (Reply 5):
I don't think so. I doubt Delta is actively seeking to push Korean out of SkyTeam. Delta is just playing hardball. But as I said in the other thread - I think Delta needs to be very careful here as it may be playing with fire.

Your comment seems to suggest that Delta wants something from Korean Air if that is the case what exactly does Delta want from Korean Air? With all the nonstop flights Korean Air offers between the US and ICN is if fair to say that the looser in this high stakes game Delta is now playing with Korean Air would be Delta Airlines not Korean?

I won't go as far as to say that KE would leave SKY but I'm sure if they ever did (not saying its going to happen) both AA and UA would go out of their way to convince Korean Air to join either OW or Star. Even with Asiana already in Star I think UA would at least try to get KE as well. So what is Delta's end game here and what will it take to get these 2 airlines who are supposed to be partners back on the same page?

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: commavia
Posted 2013-08-25 19:52:07 and read 11694 times.

Quoting jayunited (Reply 6):
Your comment seems to suggest that Delta wants something from Korean Air if that is the case what exactly does Delta want from Korean Air?

Others would know the answer to this. I suspect that Delta wants (a) more favorable terms for its interlining and codesharing with Korean, and/or (b) a joint venture. Perhaps Korean is less interested in one or both.

Quoting jayunited (Reply 6):
With all the nonstop flights Korean Air offers between the US and ICN is if fair to say that the looser in this high stakes game Delta is now playing with Korean Air would be Delta Airlines not Korean?

From my perspective, Delta needs Korean more than the other way around.

Delta is behaving as if it thinks the opposite. Delta management certainly knows more than I do. But when I look out at the competitive landscape across the Pacific, and the pressure Delta has been, is, and will continue to be feeling at Narita, it seems to me that Incheon is the perfect alternative, and Korean the perfect partner.

On the flip side, Korean has proven itself quite adept and effective at cultivating a very strong U.S.-Incheon network in its own right - with little help from Delta - based upon its targeting of local ethnic communities and its extremely powerful connecting hub at Incheon.

When I look at the major carriers of East Asia, I see few alternative partners for Delta that could replicate what Korean offers, whereas in the U.S. Korean could - theoretically - switch their allegiance to AA and likely see little material network difference in terms of online connectivity to internal U.S. points.

Quoting jayunited (Reply 6):
I won't go as far as to say that KE would leave SKY but I'm sure if they ever did (not saying its going to happen) both AA and UA would go out of their way to convince Korean Air to join either OW or Star. Even with Asiana already in Star I think UA would at least try to get KE as well.

I suppose United could theoretically try to keep up appearances, but realistically I don't think anyone would find such a move credible. The only other U.S. partner that Korean could ever theoretically partner with would be AA - particularly given that AA actually happens to be sizable or even larger than Delta in some of Korean's U.S. gateways. Nonetheless, I still don't realistically see that happening.

Quoting jayunited (Reply 6):
So what is Delta's end game here and what will it take to get these 2 airlines who are supposed to be partners back on the same page?

That is the multi-million-dollar question.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: crownvic
Posted 2013-08-25 20:19:57 and read 11581 times.

There was a thread several months back when the SkyMiles MQM issue came up and IIRC, this maybe an issue of Delta reacting to issues with KAL's behavior. While maybe unrelated, I can tell you I have business dealings with KAL (not as a passenger) and they have gone from being an easy customer, to extremely arrogant. Seems that KAL has forgotten it's humble attitude from just a few years ago when Delta was hired to make their airline more safe.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: slcdeltarumd11
Posted 2013-08-25 21:47:59 and read 11396 times.

Couldn't this just be them trying to fill their new SEA flight? LAX, SFO, and LAS all have a link to SEA. Delta would be smart to try to fill that plane rather then letting people buy tickets on the non-stop.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: factsonly
Posted 2013-08-26 00:38:05 and read 10876 times.

Quoting commavia (Reply 5):
I doubt Delta is actively seeking to push Korean out of SkyTeam. Delta is just playing hardball.

We may need to look at the relationship of Korean Air with other SKYTEAM members as well to put DL into perspective, as it is not just KE-DL that seems to be in difficulty.

Korean has had a difficult relationship with other SKYTEAM partners as well, just take a look at European partner AF/KL. Though AF-KE have had a long codeshare relationship on SEL-CDG, they still do not codeshare on all flights operated by the SKYTEAM partners between SEL-CDG. AF and KE codeshare on eachothers main daily flights, but KE operates two additional weekly services that AF is not part of.

- AF 267 dep. 09.25 ICN - arr. 14.20 CDG 11h55m daily
- KE 5901 dep. 09.25 ICN - arr. 14.20 CDG 11h55m Operated by: Air France

- dep. ICN 11:30 - arr. CDG 16:10 KE903 non-stop Korean Air 11h 40m Monday & Saturday (NO AF codeshare)

- KE 901 dep. 13.20 ICN - arr. 18.20 CDG 12h0m daily
- AF 261 dep. 13.20 ICN - arr. 18.20 CDG 12h0m Operated by: Korean Air

Similar for KE - KL. These SKYTEAM partners never codeshared until quite recently on SEL-AMS. But take a closer look at how it is constructed. KE only codeshares on KL flights on days that KE does not operate SEL-AMS itself, while KL codeshares on all KE flights. KE only operates SEL-AMS 3x/week, and codeshares on KL 4x/week, while AMS is a big SKYTEAM hub which could offer KE huge network benefit (look at DL at AMS).

- dep. ICN 12:45 - arrr. AMS 17:30 KE925 non-stop Korean Air 11h 45m = Sun, Tue, Thu
- dep. ICN 12:45 - arr. AMS 17:30 KL200 non-stop 11h 45m - codeshare KLM Sun, Tue, Thu

- dep. ICN 14:30 - arr. AMS 18:45 KE5925 non-stop 11h 15m codeshare Korean Air = Mon, Wed, Fri, Sat
- dep. ICN 14:30 - arr. AMS 18:45 KL866 non-stop KLM 11h 15m flight operates Daily

AND ....... all this time KE continues to operate the A380 daily on SEL-FRA feeding the FRA hub in competition to daily flights by OZ and LH. A little surprising as CDG and AMS are among the largest SKYTEAM hubs and yet KE does not codeshare much beyond AMS or CDG to maximise network potential.

If you consider China Southern - another SKYTEAM partner - it has really maximised its codeshare opportunities to/beyond both AMS & CDG.

So KE seems to be a more difficult partner for other SKYTEAM members as well.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-08-26 05:10:04 and read 10238 times.

Quoting factsonly (Reply 10):



I love your username!

Speculation is okay but it always bothers me when we have those that are quick to lay down the hammer without an ounce of information. I'll put it to you like this... You walk by and see me beating the snot out of some guy. More so than not; i'm automatically the bad guy and you intervene. What you missed just a minute earlier was that this guy is actually a muger and he jumped me but I eventually got the upper hand. It's sort of the same thing with KE and DL. This has been going on for much longer but only now DL has stepped up and said enough is enough. They've wanted it their way or no way since about 2007 and upper DL mgmt finally said; if they really don't need us then so be it.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: commavia
Posted 2013-08-26 05:18:12 and read 10188 times.

Quoting FlyASAGuy2005 (Reply 11):
It's sort of the same thing with KE and DL. This has been going on for much longer but only now DL has stepped up and said enough is enough. They've wanted it their way or no way since about 2007 and upper DL mgmt finally said; if they really don't need us then so be it.

Interesting context - thanks for adding that. I would be interested to know what it was that both sides wanted, and what Delta finally found unacceptable. Two sides to every story, of course - as in many cases like this, I'm sure both Delta and Korean think the other is acting unreasonably. Nonetheless, the strategic implications of this type of spat could be pretty big - as I said, I think particularly for Delta.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-08-26 05:23:15 and read 10159 times.

Quoting commavia (Reply 12):
Nonetheless, the strategic implications of this type of spat could be pretty big - as I said, I think particularly for Delta.



I'm generally not a DL appologist (usually not). I most certainly believe that DL has more to loose than KE but if they weren't adding as much as DL felt was beneficial then i'm not 100% sure that going the other route is any better or worse.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: commavia
Posted 2013-08-26 05:28:37 and read 10124 times.

Quoting FlyASAGuy2005 (Reply 13):
I'm generally not a DL appologist (usually not). I most certainly believe that DL has more to loose than KE but if they weren't adding as much as DL felt was beneficial then i'm not 100% sure that going the other route is any better or worse.

I don't necessarily agree. As you said - it's business. Delta management knows exactly how much money they're making off of the Korean relationship, and they also have a pretty good guess at the cost of whatever it is Korean wants from them.

However, I think stepping back from the minutiae of the dollars and sense, Delta has some broader strategic challenges in East Asia that they need to address, and Korean seems (or at least seemed) like an integral part of that solution - along with building the hub in SEA, which I think is now largely complete (at least from a schedule standpoint).

Without the network scope that Korean provides, I struggle to see what more Delta will be able to do in Asia, because I think they are pushing up against the limits of what SEA can offer them, and I have long contended that they do not realistically have much prospect for substantial organic growth at NRT (quite the opposite, actually, in my view). Korean offers such an extensive U.S.-ICN and ICN-Asia network that Delta could tap into through a JV that it just seems obvious. But then again - that may well be the root (or part) of the wedge between the two carriers.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: peanuts
Posted 2013-08-26 05:44:19 and read 10047 times.

Quoting commavia (Reply 7):
I see few alternative partners for Delta that could replicate what Korean offers

That's just it; KE doesn't offer DL anything right now. It is the anti-SkyTeam partner.

Quoting commavia (Reply 5):
I think Delta needs to be very careful here as it may be playing with fire.

How is there fire with a partner that is in it entirely for themselves? That's like saying keep tolerating an abusive relationship for the fear of the abuser leaving you.

I'm wording it over dramatically just to drive the point a bit. Seriously, DL doesn't have as much to loose as some imply simply due to the fact that it doesn't have much with KE to begin with.

It's obvious by now DL wants some actual cooperation and benefits from KE. If not, time to move on and find another suitor.

KE with AA? Ok. Let's see what JAL thinks about that.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-08-26 05:56:07 and read 9986 times.

Quoting commavia (Reply 14):
Without the network scope that Korean provides, I struggle to see what more Delta will be able to do in Asia, because I think they are pushing up against the limits of what SEA can offer them, and I have long contended that they do not realistically have much prospect for substantial organic growth at NRT (quite the opposite, actually, in my view). Korean offers such an extensive U.S.-ICN and ICN-Asia network that Delta could tap into through a JV that it just seems obvious. But then again - that may well be the root (or part) of the wedge between the two carriers.



Although I understand what you're saying 100%; if said partner is unwilling to allow you to put your code on them for x,y, and z reason then the ICN-whatever benefits is moot. That's the root of this whole disagreement.

It's great if you have parner hub in Asia but let's just say for arguments sake they will only allow 10% of that to be tapped then what are we gaining? (or loosing). Conversly, look at AF/KL out of AMS and CDG! There are tons of onward DL flights out of both hubs (codes).

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: OzarkD9S
Posted 2013-08-26 06:06:35 and read 9928 times.

Quoting peanuts (Reply 15):


KE with AA? Ok. Let's see what JAL thinks about that.

NH and OZ seem to get along just fine in Star. JL "may" come to the conclusion that a KE/AA/JL partnership would form an Asian-American powerhouse that would be the envy of the industry. And if they could somehow persuade Cathay to play nice.....

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: peanuts
Posted 2013-08-26 06:21:45 and read 9859 times.

Quoting OzarkD9S (Reply 17):
JL "may" come to the conclusion that a KE/AA/JL partnership would form an Asian-American powerhouse that would be the envy of the industry.

That may be the case but fact remains KE is not acting as the partner DL desires at this time. Indications are that KE won't change their way either. So DL has no choice but to move forward.

If KE is looking for a cosy three-way a la NH/OZ/UA then they should go for it. DL is just not happy with a status quo and is wanting some action.

(On a side note though: why would KE act any differently with AA?)

If KE and DL go their own way what is really DL's loss of anything if there wasn't much to begin with? It was a one way love of potential, so to speak, nothing one can do anything with.

Sure, it would be a disappointment for DL but the mourning would quickly be replaced with ideas of other partnerships in Asia that are currently being worked on. Pretty much China.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: OzarkD9S
Posted 2013-08-26 06:34:17 and read 9777 times.

Quoting peanuts (Reply 18):


(On a side note though: why would KE act any differently with AA?)

AA's vastly smaller Asian footprint perhaps? DL's NRT and SEA hubs bypass and compete with ICN in a way AA doesn't.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: commavia
Posted 2013-08-26 06:48:36 and read 9686 times.

Quoting peanuts (Reply 18):
If KE is looking for a cosy three-way a la NH/OZ/UA then they should go for it.

Again - not that I'm predicting any such thing, but that would be fascinating to watch. A 3-way AA-JAL-Korean tie-up would be quite a competitive dynamic to witness, particularly given that JAL and Korean are already established partners that have cooperated, on one level or another, for years, and considering that ICN is a perfect compliment to NRT given the depth of connections it offers - particularly to China.

Quoting peanuts (Reply 18):
(On a side note though: why would KE act any differently with AA?)

They likely wouldn't. Although perhaps AA would be more willing to accept a more arms-length "partnership" than Delta considering (a) AA's demonstrated willingness to accept such arrangements with important partners (Cathay Pacific), and (b) AA's generally inferior lack of alternative options in Asia compared with Delta, which has both SEA and NRT.

Quoting peanuts (Reply 18):
If KE and DL go their own way what is really DL's loss of anything if there wasn't much to begin with?

Well I wouldn't say Delta has nothing to lose. There are already plenty of Delta FFs in the U.S. extremely unhappy about the dwindling options for receiving Delta miles when accessing beyond-NRT/ICN Asia. If that persists, it may begin to make Delta less and less attractive in general to some segment of their FFs. This would, theoretically, also make competitors relatively more attractive if they have partners that can provide superior FF access to that region.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: peanuts
Posted 2013-08-26 06:56:27 and read 9616 times.

Quoting OzarkD9S (Reply 19):
DL's NRT and SEA hubs bypass and compete with ICN in a way AA doesn't.

Fine. But what about JAL? There's your NRT/HND hub that would bypass ICN.

KE may see potential in AA's poor footprint in Asia so why haven't they acted on it? Why wait for DL to force them to make that decision?

So with OneWorld, KE has a Japanese competitor (of whom AA has made commitments to) to content with. And once AA exits Ch11 they would most likely launch some decent non stop routes over flying ICN anyway.

In SkyTeam, KE deals with no Japanese competitor within the alliance and DL overflies a few key routes.

So? Take your pick. In the end, it's just business. For both KE and DL. There may just not be a match. Simple as that.

DL is performing a few tests right now. Calculated ones. I don't believe these are foolish ones.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jayunited
Posted 2013-08-26 07:25:54 and read 9491 times.

Quoting peanuts (Reply 18):
If KE and DL go their own way what is really DL's loss of anything if there wasn't much to begin with? It was a one way love of potential, so to speak, nothing one can do anything with.

Of course Delta will not loose much if things continue to sour between these 2 airlines. I think our focus is in the wrong place. Delta may not be effect by the changes in their relationship with KE but Delta's passengers will most certainly feel effects of this decision. The problem is there is no real evidence to suggest that DL passengers who now fly on KE from the US to ICN will now choose DL instead. The facts seem to suggest quite the opposite especially when it comes to Asian travelers those travelers seem to be extremely loyal and if they are use to flying on KE when they need to travel to ICN the facts seem to suggest they will continue to do so. So I agree this breakdown will not effect Delta but it will effect their passengers especially their frequent fliers who no longer will be able to accrue miles. Which brings up the question: what is more important to passengers accruing the miles (by choosing DL) or great onboard service and flying in comfort (by choosing KE)?

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-08-26 07:38:44 and read 9401 times.

Commavia, here's how I see it.

DL's trans-atlantic push provided many insights. They were able to build upon a dormant JFK hub and increse share in the market. The 75Es was a great idea on paper but look at where we're at today. Many routes were either axed or actually upgraded to 767s! Good for those markets but it caused a ripple effect in many other areas. Now, we're left with what we have. DL has said in plain english that the JV is making them a truck load of money. They have also stated that more than half of the TATL revenue comes from flights going to partner hubs. They've also stated that they (eventually) want 50% of all TATL flights to terminate in one of the JV hubs. THE most profitable route in the DL system for the month of July was AMS-DTW...THE most.. The balancing and right-sizing is not complete but the're almost there (tweaking of AMS/CDG/FCO and a few more additions to LHR plus the partnership with Virgin).

On the pacific rim, DL is in a very precarious and voulnerable situation due to NRT and limited US-Asia (NRT overflight segments). I THINK (guessing here) that DL wants to build something similar in Asia. I'm am in the belief that if they could, they will get rid of the smaller onward NRT flights save the beach markets. It's been stated in numerous conference calls that they are making money. Interport continues to struggle. A-la AMS/CDG, I think they want a robust schedule to their hubs and key US gateways but also a very strong Asian partner that they can form a JV with for onward flights. It may have been that KE wasn't willing to do this for whatever reason but from a logical stand-point (based on where they're going with their trans-atlantic flights) I think this is where they're trying to go in Asia over the next few years. I'm not 100% sure that this has to be done in Korea although i'm sure that's what they wanted initially. Now they're left with China.

Let's see how things play out but i'd expect more SEA/DTW-Asia flights in teh future when another key elemnet in DL's strategy materializes very shortly.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LAXintl
Posted 2013-08-26 07:49:12 and read 9340 times.

One thing to note, KE has done extremely well for itself in the US. It has 13 US/Canada gateways, and manages to connect with worlds biggest economic region. KE has diligently built the largest footprint in the US of any Asian carrier, virtually all nothing to do with DL.

KE also has long lost its image of being a 2nd rate, deep discount carrier. Its product and services are good, it runs an excellent hub, with strong network and schedules.

I was quite surprised to read in an interview about Randy Petersen (Flyeryalk/IndsideFlyer fame) that KE had the largest membership base if its FF program amongst foreign airlines in the US after BA and LH. Maybe I should not be surprised.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: OzarkD9S
Posted 2013-08-26 07:58:00 and read 9592 times.

Quoting peanuts (Reply 21):


Fine. But what about JAL? There's your NRT/HND hub that would bypass ICN.

A split TYO hub system is inferior to the single hub at ICN, which to make one point has greater China connections than TYO. If (BIG IF, I'm just hypothesizing here...) a KE/JL/AA JV with a focus on ICN for connections would allow JL to maximize the NRT/HND split hub with an O&D focus on TYO with connections to major markets with higher frequencies and turning some of the mid-sized destinations over to KE. The current airport situation in Tokyo, and for the foreseeable future, does not allow JL to duplicate ICN's single airport capacity. So why try? That's what partnerships are for.

LH for example has partnered with airlines adjacent to Germany in Europe and while the jury's still out on some of those relationships, there are some success stories...Swiss, and Brussels' African network have meshed nicely with LH. Would partnering up with a strong neighbor hinder JAL? Who knows....

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: factsonly
Posted 2013-08-26 07:59:01 and read 9619 times.

Quoting FlyASAGuy2005 (Reply 23):
THE most profitable route in the DL system for the month of July was AMS-DTW...THE most..

No wonder DL upped USA-AMS seats by 10% this summer.

Hopefully KE reads this thread!

Come on guys .......it takes two to tango .......... surely this applies in Asia as well!

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: BigGSFO
Posted 2013-08-26 08:17:00 and read 9632 times.

Quoting peanuts (Reply 21):
DL is performing a few tests right now. Calculated ones. I don't believe these are foolish ones.

Agreed 1000%. Post merger Delta is more likely to make bolder moves than before and clearly much more than their competitors. They have built/are building some critical mass with network and elite flyers that can potentially make them less reliant on partners. Now I'm not saying they don't need partners, because they do, but they have demonstrated that they will need to take care of their needs first and not rely solely on partnership flying if it benefits the firm.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: mercure1
Posted 2013-08-26 10:28:30 and read 9115 times.

Yes its strange the poor manner the relationship has devolved and how DL is now treating KE relegating them to bottom of FF benefits. Many DL customers will certainly lose with this.

But I think KE can go on with life as usual flying to the USA without DL as partners as it seems to have built its American route map without much Delta help in mind anyhow (except maybe 380 @ ATL)
However it seem DL could use KE much more if it wants to broaden and reshape its Asian network away from Tokyo nexus in coming years,

KE with its excellent network in region including to many secondary markets along with its most excellent ICN hub would deliver a big prize to align with.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: B2443
Posted 2013-08-26 10:44:48 and read 9045 times.

Quoting LAXintl (Reply 24):
KE has diligently built the largest footprint in the US of any Asian carrier, virtually all nothing to do with DL.
Quoting commavia (Reply 14):
Korean offers such an extensive U.S.-ICN and ICN-Asia network that Delta could tap into through a JV that it just seems obvious.

Why would KE do that if they are not going to benefit much out of the JV? A JV would be asking KE to share profit while KE does most of the work.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: peanuts
Posted 2013-08-26 10:51:09 and read 9023 times.

Quoting mercure1 (Reply 28):
However it seem DL could use KE much more if it wants to broaden and reshape its Asian network away from Tokyo nexus in coming years

Takes two to tango

Quoting mercure1 (Reply 28):
KE with its excellent network in region including to many secondary markets along with its most excellent ICN hub would deliver a big prize to align with

Again, takes two to tango.
The prize KE/ICN seems elusive to DL
What should DL do? Sit idly by and watch while KE does what it wants? Or take the bull by the horns and keep working on its own interests?

FWIW there are options.

Quoting B2443 (Reply 29):
A JV would be asking KE to share profit while KE does most of the work.

Costs would also be shared. If KE thinks what you think than I can see the problem here.
There are some fundamental issues, that much is clear.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: mercure1
Posted 2013-08-26 11:38:25 and read 8758 times.

Quoting peanuts (Reply 30):
The prize KE/ICN seems elusive to DL
What should DL do? Sit idly by and watch while KE does what it wants? Or take the bull by the horns and keep working on its own interests?

Work to entice KE more, instead of aggravating the situation more and hurting DL own FF'ers in the mean time?

Someone mentioned KE having the largest number of FF'ers amongst foreign companies in US, they can probably pick up many Delta flyers this way. If you cant get proper Skymiles, then join KE Skypass directly. (they also have some pretty easy Skyteam elite level qualifications spread over 2-years)

And yes its interesting, KE US network has been built mostly without regard to DL alliances. It develop its own markets, and build its own client base whether Korean diaspora or now growing volume of American clients that utilize KE to reach greater Asia market via ICN.

While I have no insight in to back end details between DL-KE, it seems DL is the one playing with fire, and could use friendship with KE more than KE needs DL. So it would seem the ball is in DL's court to make it worthwile for KE to partner.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: B2443
Posted 2013-08-26 11:43:26 and read 8725 times.

Quoting peanuts (Reply 30):
Costs would also be shared. If KE thinks what you think than I can see the problem here.
There are some fundamental issues, that much is clear.

it depends on what "cost" means...on-going operating cost, and/or cost to include paybacks on prior investments...I am speculating that KE spent tons of money on developing the ICN-US network (pretty much without DL's help as pointed out by others) and now it's their 'reaping' time for them. They are probably trying to protect that as hell from being 'shared'. That might explain why they are being the bad boy in SKY.
KL/AF/DL have the TATL JV and they've got things worked out for them. Other Asian Skyteam members such as CZ, and MU do not have much to offer to DL and things are the other way around. Have we heard about DL JV-ing with MU/CZ? No, precisely because there's too much development to do, which means $$$$$ and huge risks.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LAXintl
Posted 2013-08-26 11:50:22 and read 8687 times.

A typical alliance benefit is to use your partners network to funnel passengers via gateways.

But KE is a bit different with its dozen North America gateways, that it delivers the client directly to many of the biggest destinations, and does not need a partners feed to the same degree compared to other Asian airlines that might only offer a couple North America service points.

Since JAL was previously mentioned, even it only serves 6 US destinations not counting Hawaii, which makes the need to funnel connections via the AA network more important to reach deeper into the US marketplace.

[Edited 2013-08-26 11:53:22]

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: B2443
Posted 2013-08-26 12:02:08 and read 8625 times.

Quoting LAXintl (Reply 33):

I see KE doing the same in China as well. Maybe they want to be EK for the pacific.They don't seem to partner with MU/CZ at all. They fly their own metals to many many Chinese secondary cities, well beyond PEK/PVG/CTU/CAN. JL/NH on the other hand, seem to just focus on the few top tier cities.

[Edited 2013-08-26 12:07:30]

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: klkla
Posted 2013-08-26 14:23:21 and read 8094 times.

Quoting srbmod (Reply 3):
After September 1st, you can no longer earn DL MQMs on KE flights either after reducing the rates earlier this year (Meanwhile you can still earn partial MQMs on Vietnam, China Airlines, China Southern, China Eastern and Xiamen.).

This is not quite true. You can still earn MQM's but you need to buy the ticket from Delta (or get a ticket with Delta's ticket code). I think some people are exaggerating the dispute here. Clearly DL wants to ensure they are making money when they give frequent flier benefits to people flying on KE metal. That's a reasonable expectation but clearly KE does not want to share that revenue unless Delta actually sells the ticket.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: Viscount724
Posted 2013-08-26 14:28:51 and read 8071 times.

Quoting LAXintl (Reply 33):
Since JAL was previously mentioned, even it only serves 6 US destinations not counting Hawaii, which makes the need to funnel connections via the AA network more important to reach deeper into the US marketplace.

That benefit is over-rated. Virtually all major carriers interline with almost all other major carriers. I expect JAL sells quite a few connections every day with UA and DL, not just AA.

Many people seem to have a misconception that you can only interline with your alliance partners. That's far from correct.

I flew DUS-CDG-GVA on AF last week. I was surprised to note that the DUS-CDG flight was codeshared with JL. JL/AF also codeshare on all 3 daily nonstops (2 AF, 1 JL) CDG-NRT.

[Edited 2013-08-26 14:33:49]

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LDVAviation
Posted 2013-08-26 14:42:02 and read 8022 times.

Quoting Viscount724 (Reply 36):
That benefit is over-rated. Virtually all major carriers interline with almost all other major carriers. I expect JAL sells quite a few connections every day with UA and DL, not just AA.

But in a JV the incentives are weighted in favor of selling the connection on the partner rather than the interline because the total revenue from the ticket is shared with the partner and the fare structure with the partner is by definition more favorable than it is with the interline.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: mercure1
Posted 2013-08-26 15:13:39 and read 7865 times.

Sure you can interline, however you revert to old ticket pricing rules, not always very beneficial.

Things like codeshares, partnerships, JVs often mean airlines have offer through published pricing, along with benefits like often under single roof transfers, and frequent flyer benefits.

Interline worked great when fares were pretty fixed and everyone played nicely, but such agreements mean less and less today in the deregulated market place especially since airlines are cancelling them with growing frequency. We recently had a discussion where Delta cancelled its interline agreements with various airlines including Qatar and Turkish.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: panamair
Posted 2013-08-26 16:23:12 and read 7680 times.

Quoting B2443 (Reply 32):
Other Asian Skyteam members such as CZ, and MU do not have much to offer to DL and things are the other way around. Have we heard about DL JV-ing with MU/CZ? No, precisely because there's too much development to do, which means $$$$$ and huge risks

MU in particular has plenty to offer DL, and DL is nurturing the relationship with the Chinese right now. A key reason why you have not heard of a JV with MU/CZ is because JVs are only allowed with countries that have signed Open Skies agreements with the U.S. China is currently not one of them, and hence no JV possibility between DL and MU/CZ yet. Make no mistake though, PVG will play a pivotal role in the future DL Asia-Pacific operation. Shanghai is a far more significant opportunity than Seoul could ever be.

Quoting mercure1 (Reply 31):
Work to entice KE more, instead of aggravating the situation

How do you know they haven't been? What if KE wouldn't be satisfied unless the deal would ultimately be a LOSE proposition for DL? Why should DL continue expending energy on such a deal?

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: RyanairGuru
Posted 2013-08-26 16:26:20 and read 7662 times.

Quoting B2443 (Reply 29):
Why would KE do that if they are not going to benefit much out of the JV? A JV would be asking KE to share profit while KE does most of the work.

Profit sharing isn't a straight 50:50 cut down the middle, rather it is pro rated. If one airline does 97% of the leg work then they get 97% of the revenue. See QF-EK as an example of where the operations in a JV are tilted heavily in one carriers favour.

Quoting B2443 (Reply 34):
I see KE doing the same in China as well. Maybe they want to be EK for the pacific.They don't seem to partner with MU/CZ at all. They fly their own metals to many many Chinese secondary cities, well beyond PEK/PVG/CTU/CAN.

Reading this comment finally made me realise what we are looking at here: CX. I'm much more familiar with oneworld than SkyTeam, and if you look at Cathay's attitude, and how they interact with their so-called partners, then it is very similar. Both carriers have very strong and very valuable networks on their own, so don't really need a partner to help them. They already fly to the largest markets, and aren't so interested in the smaller ones. Because of this they ignore their partners, if not have outright disdain for some of them.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LAXintl
Posted 2013-08-26 16:47:08 and read 7628 times.

Quoting panamair (Reply 39):
Make no mistake though, PVG will play a pivotal role in the future DL Asia-Pacific operation. Shanghai is a far more significant opportunity than Seoul could ever be.

PVG has one huge problem. The city is split into 2 airports. Domestic @ SHA and Intl @ PVG. Not the best for connections.

Imo, PEK especially and then CAN will have much better alliance opportunities when the day comes versus the PVG/SHA combo.

But for now Seoul is the big jewel out there in North Asia.

Quoting panamair (Reply 39):
How do you know they haven't been?

No clue. But obviously if anything it did not appeal enough to KE.

Quoting panamair (Reply 39):
What if KE wouldn't be satisfied unless the deal would ultimately be a LOSE proposition for DL? Why should DL continue expending energy on such a deal?

Yes certainly. Airlines get in agreements particularly when its ones that broaden network footprint as potential loss leaders

Funny I do work for 2 airlines that are members of the same alliance. Neither are too hot about doing biz together but at the end they realize they provided each other something of value. Airline A provides some unique destinations and routes Airline B finds have important value in its global network portfolio, while airline B provides airline A decent feed even if the revenue involved is less then the airline could generate selling the capacity itself. Basically the airline is turning away customers to in deference to their partner.
At the end both work together as their intrinsic combined networks look stronger to the potential client than if the airlines were left with open gaps in their portfolios even if the end revenue results are not that great.

So who knows, maybe neither DL or KE see enough value in working with each other. DL is not hungry enough to use KE and ICN to help reshape its Transpac network, while KE does not see much value DL brings to its already well developed US market presence.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: luckyone
Posted 2013-08-26 18:10:42 and read 7452 times.

Quoting LAXintl (Reply 41):
PVG has one huge problem. The city is split into 2 airports. Domestic @ SHA and Intl @ PVG. Not the best for connections.

While it is true that operations are split, it is also true that China Eastern flies to over 50 Chinese cities from PVG, and China Southern over 20. So it's not quite the NRT vs. HND situation.

Quoting LAXintl (Reply 41):
Imo, PEK especially and then CAN will have much better alliance opportunities when the day comes versus the PVG/SHA combo.

PEK will also find itself in a split airport operation when its new airport is opened. PVG is also a bigger SkyTeam hub for the time being than PEK.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: pu
Posted 2013-08-26 18:54:41 and read 7347 times.

Quoting BigGSFO (Reply 27):

Now I'm not saying they don't need partners

An airline sinks or flourishes on its own network: partners, alliances, etc... are more window dressing the reality. Delta is in what conventional wisdom says is the weakest alliance, yet they are by far the most profitable airline in the world. Make a list of other airlines well known for reliable profitability and they are either not in an alliance or less-dedicated members of one.

Quoting Viscount724 (Reply 36):
That benefit is over-rated. Virtually all major carriers interline with almost all other major carriers

Better to own 100% of the work you do and rely on your own work to bring in a premium to the industry -like Delta- than complicate your business and rely on your partners for profitability.

Quoting panamair (Reply 39):

MU in particular has plenty to offer DL, and DL is nurturing the relationship with the Chinese right now. A

+wow+ Someone who studies and offers their own analysis instead of repeating trite tidbits from UA's and AA's annual report. Insofar as partners are necessary give me an unbeatable lineup in areas prime for future growth -like China- versus partners with a glorious past.

Quoting usflyer msp (Reply 1):

DL even changed their mileage chart so that you don't even earn miles on most KE fares or elite qualifying miles on any KE fare.

The days of large network airlines trying to appeal to customers who primarily stay loyal for miles are coming to an end, thank God. The most valuable customers fly so often that a free flight is of almost no meaning to them....what matters is perks, not saving enough miles for grandma to fly to Omaha.




Pu

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LDVAviation
Posted 2013-08-26 20:03:13 and read 7234 times.

Quoting pu (Reply 43):
The days of large network airlines trying to appeal to customers who primarily stay loyal for miles are coming to an end, thank God. The most valuable customers fly so often that a free flight is of almost no meaning to them....what matters is perks, not saving enough miles for grandma to fly to Omaha.

Really? Perks? Grandma? Omaha?

There are still a lot of HVC's who play the mileage game.

In the alliance era, the HVC's play the game this way. They pay for J/F on a top tier partner (e.g., Cathay or BA) and they credit the miles to their home carrier (e.g., AA). That way they get the best products the alliance can offer and they compound their miles.

As to those miles, you are right to conclude that a free flight is meaningless to this elite group, but not because they are more concerned with perks. Perks come with choosing the best products (e.g., Cathay J or F) or being top tier in the FF program. Free flights to "Omaha" are meaningless because the members of this group simply make too many miles in a year and end up with too many miles in their accounts (e.g., rolling amounts of 2 million miles) to worry about how many miles they give away to relatives or friends in a year.

Now, not all free flights are meaningless to this elite group. Here is the exception. When HVC's redeem miles for themselves, it is usually for international F on the best airlines in the alliance. For some HVC's, therefore, some alliances are better than others because of the quality and range of the premium products offered by the partners.

In short, miles still matter and they continue to be a source of loyalty for HVC's, perhaps not all of them, but definitely the most astute ones.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-08-26 20:20:26 and read 7196 times.

Quoting mercure1 (Reply 31):
Work to entice KE more, instead of aggravating the situation more and hurting DL own FF'ers in the mean time?

Someone mentioned KE having the largest number of FF'ers amongst foreign companies in US, they can probably pick up many Delta flyers this way. If you cant get proper Skymiles, then join KE Skypass directly. (they also have some pretty easy Skyteam elite level qualifications spread over 2-years)

And yes its interesting, KE US network has been built mostly without regard to DL alliances. It develop its own markets, and build its own client base whether Korean diaspora or now growing volume of American clients that utilize KE to reach greater Asia market via ICN.

While I have no insight in to back end details between DL-KE, it seems DL is the one playing with fire, and could use friendship with KE more than KE needs DL. So it would seem the ball is in DL's court to make it worthwile for KE to partner.

1. This has been done for years. It didn't/doesn't work.
2. They will pull some but i'm not sure how KE will get the US business traveler from ATL-LGA, MSP-LAX, DTW-BOS, etc. etc. etc. You may very well set the precedent but I can't think of many examples where someone home based in the US (majority of the flying, etc.) is completely loyal (and pried) from a US carrier. "LD" outlined it fairly well below.
3. Yes, it is very interesting. So much so that I'm not even sure what you're argument is as such when it comes to what Delta's doing. I can feel the "up in the air" tone as you speak about KE so I can't even imagine this sort of stuff coming from the company itself.
4. You're right, you don't know the details but then you still come with something that clearly shows this. This is not 2005. DL (all carriers for that matter) is playing chess no checkers. You need not look further than how far KE has come.

It's funny, just 10 years ago they were the laughing stock of this very board. No one would/could have ever imagined that they'd be where they are today.

Quoting panamair (Reply 39):
How do you know they haven't been? What if KE wouldn't be satisfied unless the deal would ultimately be a LOSE proposition for DL? Why should DL continue expending energy on such a deal?

Bingo

Quoting LAXintl (Reply 41):
So who knows, maybe neither DL or KE see enough value in working with each other. DL is not hungry enough to use KE and ICN to help reshape its Transpac network, while KE does not see much value DL brings to its already well developed US market presence.

And it is quite that simple. DL cannot and will not contiune to prostitute themselves.

Quoting pu (Reply 43):
The days of large network airlines trying to appeal to customers who primarily stay loyal for miles are coming to an end, thank God. The most valuable customers fly so often that a free flight is of almost no meaning to them....what matters is perks, not saving enough miles for grandma to fly to Omaha.
Quoting LDVAviation (Reply 44):
In short, miles still matter and they continue to be a source of loyalty for HVC's, perhaps not all of them, but definitely the most astute ones.

I think he has a valid point but so do you.

[Edited 2013-08-26 20:21:25]

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: pu
Posted 2013-08-26 20:24:10 and read 7163 times.

Quoting LDVAviation (Reply 44):

I heartily give you praise for moving somewhat away from what [in my perception] is your traditional role as a rebroadcaster of struggling-legacy-carrier apologies, especially the decade-long unfulfilled prommises from AMR. But at least we agree that free flights are not so interesting to everyone, least of all to those who spend the most with airlines.

Where we do disagree is to the value of miles.

In a very few but important markets life for the elite flier is as you say: they choose airlines (and alliances) based on the product appeal and may value miles in the manner you suggest. In American terms, this is true in NYC and Los Angeles, somewhat true in Chicago, and not true at all anywhere else. EVERYWHERE else, including everywhere in Europe and most of Asia (except maybe Tokyo), elites fly the locally dominant airline....whether or not they are in an alliance, whether or not they get bonus miles, and whether or not they get miles or not: all they really care about is perks.



Pu

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: a380787
Posted 2013-08-26 20:33:55 and read 7164 times.

Quoting klkla (Reply 35):
You can still earn MQM's but you need to buy the ticket from Delta (or get a ticket with Delta's ticket code).

True, except that frequently DL code-shared flights are more expensive than KE's own code, making the value proposition rather weak (same problem with AA not earning miles with CX codes + CX metal in MOST economy fare buckets). I'm paying a big premium for the sake of MQM when a rival alliance offers me both RDM and EQM at the best price.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: alfa164
Posted 2013-08-26 20:51:46 and read 7107 times.

Quoting pu (Reply 43):
The days of large network airlines trying to appeal to customers who primarily stay loyal for miles are coming to an end, thank God. The most valuable customers fly so often that a free flight is of almost no meaning to them....what matters is perks, not saving enough miles for grandma to fly to Omaha.

Maybe... but you missed the point. It's not the "mileage accrual" that is most important; it is the Medallion Qualifying Miles.

DL SM members no longer earn MQM's on KE - and those are important, because those "qualifying miles" are what earn (and keep) elite status. Not getting them on long, trans-Pacific flight puts a big dent in a high-end customer's potential for perks.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: AS739BSI
Posted 2013-08-26 21:31:50 and read 7046 times.

Quoting alfa164 (Reply 48):

What will be more important will be MQD's come next year. Given the code-share gutting DL is doing and KE not on good terms with DL, I would be considering talking to AA where they could potentially be given a bit of better treatment and AA would significantly benefit with having KE in OW.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: HeeseokKoo
Posted 2013-08-27 06:52:50 and read 6759 times.

I guess we all were drama queens. Now those removed code-shares last week (west coast to ICN) are restored. Maybe it was a system glitch or something. Or was it a threat?  

The others (DL's domestic routes) are still gone, by the way.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: klkla
Posted 2013-08-27 09:36:16 and read 6562 times.

Quoting a380787 (Reply 47):
True, except that frequently DL code-shared flights are more expensive than KE's own code, making the value proposition rather weak (same problem with AA not earning miles with CX codes + CX metal in MOST economy fare buckets). I'm paying a big premium for the sake of MQM when a rival alliance offers me both RDM and EQM at the best price.

I pulled some random dates on delta.com right now and found the fares exactly the same as on KE's own site for the exact same flights. I'm not doubting that sometimes DL may see an opportunity to charge more but I think it's the exception rather than the rule.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jfk777
Posted 2013-08-27 10:45:04 and read 6525 times.

IF Delta and Korean go there separate ways then what does DL have to replace them. China Southern and China Eastern do not have the hub like Korean has at ICN. Their own NRT operation is small with no room to grow. ANA & JAL are not going to help, they already have JV's to the USA. Seoul is the only large hub in north asia with room for growth. To not code share from LAX to ICN is ridiculous.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-08-27 13:21:42 and read 6353 times.

Quoting jfk777 (Reply 52):
IF Delta and Korean go there separate ways then what does DL have to replace them. China Southern and China Eastern do not have the hub like Korean has at ICN. Their own NRT operation is small with no room to grow. ANA & JAL are not going to help, they already have JV's to the USA. Seoul is the only large hub in north asia with room for growth. To not code share from LAX to ICN is ridiculous.



I think you're missing the fact that there isn't much to replace to begin with. DL's cooperation with KE was always limited. Now, it's apparent that they simply cannot agree on terms.

Post NW merger, DL really did not rely on KE heavily for onward Asia flights. The NRT hub may have started all of this, actually.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: OA412
Posted 2013-08-27 13:46:09 and read 6300 times.

Quoting mercure1 (Reply 31):
And yes its interesting, KE US network has been built mostly without regard to DL alliances. It develop its own markets, and build its own client base whether Korean diaspora or now growing volume of American clients that utilize KE to reach greater Asia market via ICN.

This is true of most large international carriers, and not a situation unique to KE. LH, BA, AF, JL, NH all built their US networks largely on their own. Sure some flights are flown precisely because of their partnerships with US carriers, but those are a minority of markets. LH didn't need UA to build its large US netowrk, BA didn't need AA, etc.

Quoting mercure1 (Reply 31):
While I have no insight

And neither do 99.99% of people contributing to this thread, so we really don't know why any of this is happening. On paper, it's obvious that DL should pursue a JV with KE, but their willingness to play hardball tells me there's something else going on here that we are not privy to. The outcome is anyone's guess, but DL management has shown themselves to be rather adept, so I doubt they are acting with wilful recklessness here.

Quoting mercure1 (Reply 31):
it seems DL is the one playing with fire, and could use friendship with KE more than KE needs DL. So it would seem the ball is in DL's court to make it worthwile for KE to partner.

It seems that way, but as you mentioned, you don't have any insight, neither do I nor do most of the people contributing to this thread. DL wouldn't be doing this if they didn't feel it to be a calculated risk. They obviously know something that we don't.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jetlanta
Posted 2013-08-27 14:17:20 and read 6254 times.

If I told you that KE chooses to route a significant amount of its LAX connecting traffic via UA, rather than DL, simply because UA will undercut Delta pricing by a few dollars, would all this make more sense?

In the scheme of trans-pac fares, the dollar amount is a pittance. But KE would rather hardball its own partner of well over a decade and send business to its biggest competitor than support its own ATI partner. Delta has spent years trying to negotiate a mutually beneficial pro-rate, but Korean seems to be concerned only with the bottom-line. That is their right, but if KE won't use Delta in LAX, why should DL feed KE anywhere else? And why should DL use KE in ICN? A JV would eliminate most of this sort of pettiness, but KE seems to have little interest in pursuing one.

This is a small example of the sort of stuff that has gotten us here. This isn't the only alliance relationship in the world that works like this. That is why joint ventures are so critical and really form the foundation of alliance relationships. Delta's relationship with Virgin Australia, for example, is far more robust than its partnership with Korean.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LDVAviation
Posted 2013-08-27 14:40:04 and read 6204 times.

Quoting jetlanta (Reply 55):
If I told you that KE chooses to route a significant amount of its LAX connecting traffic via UA, rather than DL, simply because UA will undercut Delta pricing by a few dollars, would all this make more sense?

Didn't you tell us about a year ago that a JV between Delta and KE was imminent?

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jetlanta
Posted 2013-08-27 14:45:33 and read 6193 times.

Quoting LDVAviation (Reply 56):
Didn't you tell us about a year ago that a JV between Delta and KE was imminent?

I don't recall saying that. But I do recall that there was a strong push at DL to make it happen last year. The failure of that effort likely led to the realization that the partnership is currently not a mutually-benefiicial one. We are seeing the impact of that realization now.

So even if I did say that, the comment was not necessarily contradictory to what is happening today.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: OA412
Posted 2013-08-27 18:37:10 and read 5990 times.



Quoting LDVAviation (Reply 56):
Didn't you tell us about a year ago that a JV between Delta and KE was imminent?

And many years ago when AA merged with TW, didn't you tell us that they'd wipe out competition on the East Coast and be the dominant carrier at JFK, LGA, DCA, among others? Whatever happened to that...?
Quoting jetlanta (Reply 57):

You should know better than that. KE doesn't want to settle for a partner like DL. If their partner was AA, they would have locked in a JV years ago, but DL is second rate. This is going to lead to the destruction of DL's Asian operations and the eventual demise of DL itself. You should know that by now.  

[Edited 2013-08-27 18:45:57]

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: a380787
Posted 2013-08-27 19:52:06 and read 5879 times.

Quoting jetlanta (Reply 55):
That is why joint ventures are so critical and really form the foundation of alliance relationships.

Only in alliances that are fracturing severely and having a civil war

LH and TG have good partnership despite no JV ... UA and NZ has a strong mutual understanding despite no JV

JVs are a double-edged sword ... in this case, it's pushing KE soon into the arms of oneworld. KE is a rare gem within skyteam and clearly DL doesn't know how to treasure it. (There's a reason why the entire Star Alliance puts up with SQ's attitude)

[Edited 2013-08-27 19:52:41]

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jetlanta
Posted 2013-08-27 21:15:26 and read 5770 times.

Quoting a380787 (Reply 59):
JVs are a double-edged sword ... in this case, it's pushing KE soon into the arms of oneworld. KE is a rare gem within skyteam and clearly DL doesn't know how to treasure it. (There's a reason why the entire Star Alliance puts up with SQ's attitude)

If KE had any intention of working within an alliance structure, they'd work within the one they are currently in. That is the problem.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: avek00
Posted 2013-08-27 21:16:07 and read 5762 times.

Quoting a380787 (Reply 59):
There's a reason why the entire Star Alliance puts up with SQ's attitude

Star Alliance (and SkyTeam, and oneworld) isn't a friendship or blood oath; it's a business arrangement leveraged by its participating carriers. SQ certainly codeshares with other Star carriers where it makes sense to do so, and is also a robust participant in Star's IT development/business simplification efforts (which are nearly as important from an economic perspective as any interline cooperation marketed to customers).

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jetlanta
Posted 2013-08-27 21:25:48 and read 5763 times.

I'd also add that the reason that Delta is currently distancing itself from KE is that KE won't enter into a JV with Delta under terms that it considers inferior to the status quo. The idea that AA & JL, who already have their own JV, would partner with Korean on MORE favorable terms than Delta is offering is absurd. If anything JL won't want KE involved at all. AA is certainly not going to jeopardize its relationship with JAL over KE. And even if they wanted too, they are unlikely to be granted ATI and/or approval of a JV in anything approaching a timely fashion.

If KE wants a comprehensive JV, they'll do it with Delta. Until then, this stand-off will continue.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: MaverickM11
Posted 2013-08-27 21:37:34 and read 5744 times.

Quoting jetlanta (Reply 62):
AA is certainly not going to jeopardize its relationship with JAL

Was the AA-JL JV negotiated under the presure of the JL tussle between DL and AA? Because it seems like a perfect example of a suboptimal JV that does not work for AA at all.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: avek00
Posted 2013-08-27 22:10:36 and read 5709 times.

KE doesn't need a TPAC JV with anyone, as it's the most unfettered carrier in the entire Asia-North America market. Literally. It can fly pretty much anywhere it wants at-will from its hub at Incheon, has room to expand at its home base, and has an aircraft mix that allows for access to anywhere worth serving on its own metal.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: jetlanta
Posted 2013-08-27 22:14:09 and read 5709 times.

Well, i think this is a timely piece in FlightGlobal...

ANALYSIS: Airlines must ensure partnerships are profitable

Quote:
At the core of all partnerships are interline agreements and special prorate agreements (SPA) created to allow airlines to expand network reach and to be more competitive. When created, these types of agreements provided a defacto guarantee for adding incremental profitable revenue.. Yet it seems the industry has become carried away. An analysis of global data shows tens of thousands of overlapping and competing itineraries between airlines and their partner combinations across non-stop, one and multistop option

Traditional airline thinking considers having more options for travel as being the best option. Yet, the volume of competing itineraries creates tremendous potential for cannibalisation within an airline, across partners and between competing offers. Overlapping competing itineraries creates an exponential increase in the virtual supply of product in the market, skewing economic logic and adding significant downward pressure on yields worldwide.

Airlines launch flights to offer faster routings and connections, and gain market share. This always creates winners and losers. If well executed, an airline can play this game selectively to ensure it wins more often than others, without falling into the yield dilution trap.

Unfortunately, few airlines, if any, can measure with confidence whether their agreements produce positive incremental revenue. Many airlines misinterpret growth in interline passenger volume and revenue. The multiplication of competing itineraries, caused by extensive and often uncontrolled code-sharing and prorating, results in significant cannibalisation. Most airlines are unable to identify or measure this, therefore the problem goes unchecked.

Airlines new to partnerships focus on alliances, but not all have exploited the full potential of their own networks, nor do they realise the benefits provided to them through bilateral and multilateral partnership; be it a simple interline agreement, SPA, codeshare, membership in an alliance or a JV.

Successful airlines get the basics right, ensuring they identify only the most profitable partnerships.

Airlines need to continue to develop innovative means of expanding their network reach without employing excessive capital to launch unsustainable operations. Partnerships between airlines will certainly remain vital in ensuring industry sustainability. However, there is a desperate need for more discipline to identify which partnerships to enter and to measure and execute these partnerships with evidence-based precision. Airlines will and should continue to partner bilaterally and multilaterally through alliances and JVs.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: a380787
Posted 2013-08-28 14:29:03 and read 5364 times.

Quoting jetlanta (Reply 62):
If anything JL won't want KE involved at all. AA is certainly not going to jeopardize its relationship with JAL over KE.

Star has CA OZ and NH, all with hubs literally stone throw away from each other. Do you see OZ throwing a fit when NH-UA paired up ?

There's also SQ and TG that's roughly the same traffic flows too.

DL needs KE more than the other way around. Routing through MU is so much worse from a premium pax perspective.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: questions
Posted 2013-08-28 19:03:28 and read 5104 times.

Quoting FlyASAGuy2005 (Reply 23):
i'd expect more SEA/DTW-Asia flights in teh future when another key elemnet in DL's strategy materializes very shortly.

What key element??

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: questions
Posted 2013-08-28 19:04:34 and read 5108 times.

Why was DL so late to the game or ineffective at establishing partners in Asia?

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: phxa340
Posted 2013-08-28 19:13:27 and read 5110 times.

Quoting a380787 (Reply 66):
DL needs KE more than the other way around.

Everyone keeps repeating this but if DL needed KE that bad, they wouldn't be doing what they are doing right now. Delta isn't making decisions based on emotions. They are one of the most rational airline businesses out there. Clearly DL doesn't need KE as much as we want to think.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: alfa164
Posted 2013-09-02 06:54:22 and read 4396 times.

Quoting jetlanta (Reply 62):
Quoting jetlanta (Reply 55):
If I told you that KE chooses to route a significant amount of its LAX connecting traffic via UA, rather than DL, simply because UA will undercut Delta pricing by a few dollars, would all this make more sense?In the scheme of trans-pac fares, the dollar amount is a pittance. But KE would rather hardball its own partner of well over a decade and send business to its biggest competitor than support its own ATI partner

...or, looking at if from another point of view, if someone told you Delta refused to match UA's connecting flight fares, would that make more sense? If "the dollar amount is a pittance", then the argument works both ways. Maybe DL would rather play hardball than cooperate with its strongest Asian partner.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: delimit
Posted 2013-09-02 13:01:41 and read 4174 times.

Quoting a380787 (Reply 66):
Star has CA OZ and NH, all with hubs literally stone throw away from each other. Do you see OZ throwing a fit when NH-UA paired up ?

Sigh. KE dwarfs OZ. The situations are not analogous.

The reason you see this happening now isn't because of DL's weakness in Asia; it's because of its strength. It is now in a position to push back against KE, and KE really has nowhere else to go.

KE is one of the strongest carriers in Asia. It is one of, if not the, largest foreign carrier between the US and Asia. It has always been the one dictating terms. Neither current OW or Star Asian carriers would welcome their addition to their respective alliances.

DL is now in a position to force them to actually negotiate.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: evomutant
Posted 2013-09-02 13:05:11 and read 4172 times.

Quoting delimit (Reply 71):
DL is now in a position to force them to actually negotiate.

But KE are still in a position to tell DL to go fish. Which is why we have what we have. Deadlock.

KE have a nice little thing going with or without DL. Likewise the other way around.

In the vast majority of industries this would be considered normal and healthy- two very strong competitors actually, you know, competing. It's is only aviation that sees this as odd.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: delimit
Posted 2013-09-02 13:18:37 and read 4132 times.

The problem KE faces is down the road. Much of its traffic is funneled from secondary Japanese and Chinese cities. Cooperation between DL and CZ/MU threatens the Chinese portion of that.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: questions
Posted 2013-09-02 13:26:26 and read 4106 times.

Is the poor relationship with KE the reason DL wanted an equity stake in JL?

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: mercure1
Posted 2013-09-02 13:41:50 and read 4100 times.

Quoting delimit (Reply 73):

The problem KE faces is down the road. Much of its traffic is funneled from secondary Japanese and Chinese cities. Cooperation between DL and CZ/MU threatens the Chinese portion of that.

Actually I think DL faces a bigger problem down the road.

Not only is DL way too dependent on Japan (NRT particularly), a CZ/MU combo is not very valuable when it would require double connections to reach much of America from those secondary cities you mention. KE can connect much of the entire Far East basin 1-stop to US via ICN.
Also connecting in China is hardly the optimal thing to do for many nationalities due to visa issues and less than ideal airport connection experiences.
KE is very lucky is has excellent geographic location to service the North Pacific, a every vibrant and growing home market, and an excellent hub airport.

At end, i still believe KE offers DL more than DL can offer KE in return which is part of the problem likely.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: panamair
Posted 2013-09-02 13:45:08 and read 4087 times.

Here is a recent article that nicely summarizes the pressure that both KE and OZ are currently facing due to deteriorating yields in their key markets - namely China and Japan. Both KE and OZ are currently losing money (for the first half of 2013) though OZ is in greater trouble due to large capacity increases in order to catch up with KE. Both depend heavily on Chinese traffic to drive their transpacific buildup. Once the Chinese carriers get their act together, they could have a not-insignificant negative impact on KE and OZ. Delta could easily choose to align better with MU/CZ, which would only add more pressure to KE.

http://centreforaviation.com/analysi...lack-of-capacity-discipline-125073

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: panamair
Posted 2013-09-02 14:02:14 and read 4077 times.

Quoting mercure1 (Reply 75):
a every vibrant and growing home market,

No disrespect to South Korea, but it is a speck compared to China and even Japan in terms of O&D market size. Why do you think KE and OZ depend so much on transfer traffic through ICN ?

Quoting mercure1 (Reply 75):
a CZ/MU combo is not very valuable when it would require double connections to reach much of America from those secondary cities you mention

But the Chinese carriers have been aggressively underpricing almost everyone in the transpac market (as well as other markets such as CZ on the Kangaroo route) for the last 18 months if not longer. MU is often the cheapest option now on many itineraries from many parts of Asia to the usual suspect markets of SFO, LAX, and JFK. That will eat into KE's transfer traffic since a good portion of KE's volume across the Pacific is driven by VFR and price-sensitive customers as well.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: alfa164
Posted 2013-09-02 15:47:34 and read 3975 times.

Quoting questions (Reply 74):
Is the poor relationship with KE the reason DL wanted an equity stake in JL?

Mostly, I think they were looking to add JL as a partner because that would provide an almost infinite number of connections out of Haneda, as well as from NRT.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: RyanairGuru
Posted 2013-09-02 16:59:51 and read 3919 times.

Quoting questions (Reply 74):
Is the poor relationship with KE the reason DL wanted an equity stake in JL?

I was under the impression that it was because the saw the right on the wall for inter-port flying, and wanted JL to fill the role that the NRT hub currently does.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: Viscount724
Posted 2013-09-02 17:22:01 and read 3900 times.

Quoting panamair (Reply 77):
Quoting mercure1 (Reply 75):
a every vibrant and growing home market,

No disrespect to South Korea, but it is a speck compared to China and even Japan in terms of O&D market size. Why do you think KE and OZ depend so much on transfer traffic through ICN ?

It's slightly ironic that the world's busiest air route in number of passengers (and possibly also in frequency) is a Korean domestic sector, Seoul (GMP) - Jeju (CJU), with roughly 100 flights daily in each direction.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LAXintl
Posted 2013-09-03 08:08:45 and read 3634 times.

Quoting panamair (Reply 77):
No disrespect to South Korea, but it is a speck compared to China and even Japan in terms of O&D market size.

 

Japan is a quickly shrinking market - down almost 26% in last decade. Korea on the other hand has grown massively and more than doubled traffic in the same time and represents about 42% the size of the Japan international travel enplanements today.

More importantly, in 2012, Korea was larger market than China for international travel. Sure, China growth at some point will exceed South Korea, but the fact is that Korea is the 2nd largest national market in the Far East region today.

So the Korean home market is hardly "a speck".

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: mercure1
Posted 2013-09-03 08:34:56 and read 3596 times.

Quoting panamair (Reply 77):
But the Chinese carriers have been aggressively underpricing almost everyone in the transpac market (as well as other markets such as CZ on the Kangaroo route) for the last 18 months if not longer. MU is often the cheapest option now on many itineraries from many parts of Asia

Is this the type of partner DL wants? Such low quality revenue.

Quoting panamair (Reply 77):
That will eat into KE's transfer traffic since a good portion of KE's volume across the Pacific is driven by VFR and price-sensitive customers as well.

I think the pie in Asia is growing rapidly from all traffic statistics we see such as growth of LCCs. But regardless what Chinese airlines do which are still in infancy of long-haul operations, KE should still have ample ongoing prospects at ICN based on its very broad footprint, and strong home market.

As LAXINTL said, KE home market is significant in itself, plus it has a good vantage point of geography and unrestrictred hub airport.

Quoting LAXintl (Reply 81):
Sure, China growth at some point will exceed South Korea,

Thanks for data.

For China while it continues to grow, but unlike Korea its traffic will be spread over many gateways and entire nation. For Korea demand is unified really on Seoul, so its a stronger single market then any particular Chinese airport.

If one partners with Chinese airlines it does not mean they can access entire China pie, only a sliver, unlike ICN which is most of entire S. Korea market.
Sure DL can make deal with China airlines as its plan B, or plan C, but KE still seems to come out as most attractive plan A option for Far East market and network.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: HeeseokKoo
Posted 2013-09-03 08:39:15 and read 3602 times.

Quoting HeeseokKoo (Reply 50):
I guess we all were drama queens. Now those removed code-shares last week (west coast to ICN) are restored. Maybe it was a system glitch or something. Or was it a threat?

The others (DL's domestic routes) are still gone, by the way.

Not sure if this has been reported but from early June, 2014, west coast-ICN codeshare will be over. That's when DL launches SEA-ICN. It must not be an error this time.

In the meantime, KE removed 380 flights to ATL from 9/16-9/26 and reduced capacity slightly (some 77W is downgauged to 772) on Oct. Drama still goes on.

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: a380787
Posted 2013-09-03 11:35:52 and read 3495 times.

Quoting delimit (Reply 71):
Sigh. KE dwarfs OZ. The situations are not analogous.

The reason you see this happening now isn't because of DL's weakness in Asia; it's because of its strength. It is now in a position to push back against KE, and KE really has nowhere else to go.

KE is one of the strongest carriers in Asia. It is one of, if not the, largest foreign carrier between the US and Asia. It has always been the one dictating terms. Neither current OW or Star Asian carriers would welcome their addition to their respective alliances.

DL is now in a position to force them to actually negotiate.

You mean DL's (NW's) reputation of being the TPAC consolidator that's only going to worsen once they route connecting traffic via MU/CZ ? DL *thinks* they're in a position to negotiate, but when both UA and AA already has JVs, it's DL that needs one with KE, not the other way around.

JL might not be too happy, but most of oneworld would welcome a premium carrier like KE. Your claims are self contradicting. You claim KE is one of the strongest, but then no other alliance wants it ??

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LAXintl
Posted 2013-09-03 12:57:26 and read 3416 times.

Quoting mercure1 (Reply 82):
I think the pie in Asia is growing rapidly

Yes the Asia market does continue to grow and no reason to believe Korea is not well positioned to advantage of the growing pie with or without feed from China.

Quoting mercure1 (Reply 82):
For China while it continues to grow, but unlike Korea its traffic will be spread over many gateways and entire nation. For Korea demand is unified really on Seoul, so its a stronger single market then any particular Chinese airport.

If one partners with Chinese airlines it does not mean they can access entire China pie, only a sliver, unlike ICN which is most of entire S. Korea market.

Very valid point. Due to geography, and national airline policies, no Chinese can come close delivering more than a fraction of the market. In reality this will mean that China partners will be in command of international travel markets much smaller than what Korea generates.

Quoting mercure1 (Reply 82):
Sure DL can make deal with China airlines as its plan B, or plan C, but KE still seems to come out as most attractive plan A option for Far East market and network.

Yes, CZ/MU might indeed be plan B or C for DL.

Not the most attractive options imo...

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: FlyASAGuy2005
Posted 2013-09-05 20:51:00 and read 3070 times.

Quoting FlyASAGuy2005 (Reply 23):
Let's see how things play out but i'd expect more SEA/DTW-Asia flights in teh future when another key elemnet in DL's strategy materializes very shortly.
Quoting questions (Reply 67):
What key element??

The most recent announcement should have answered your question. Just following up with you  

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: questions
Posted 2013-09-05 21:31:31 and read 3009 times.

Quoting FlyASAGuy2005 (Reply 86):
The most recent announcement should have answered your question. Just following up with you

I'm sorry, I don't understand. You mean the recently announced changes to the First class snack basket are considered a "key element in Delta's strategy"?

LOL... just kidding. Obviously beefing up TPAC with the A330s.

 

Topic: RE: DL And KE End Codeshare On Some Flights?
Username: LJ
Posted 2013-09-06 13:07:18 and read 2800 times.

It seems that DL restored codeshare on KEs following flights:
ICN - LAS
ICN - LAX
ICN - SFO
ICN - SEA


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