WorldTraveler From , joined Dec 1969, posts, RR: Reply 1, posted (3 years 7 months 6 hours ago) and read 3714 times:
There are a couple interesting thoughts that were raised just before last thread was closed.
As SRB points out, DL is shifting many advertising resources away from ATL. First, it may surprise many to know that before the merger, DL spent more por ASM than any other airline in the US except for WN based on DOT stats. Many think that DL doesn't advertise much but they actually have a very heavy ad budget. Second, DL is shifting resources away from ATL in order to boost its ad presence in key competitive markets which right now is primarly NYC. DL isn't walking away from ATL but there are limits on any company and DL is going where they need to have the greatest impact.
DL dropped the Falcons sponsorship in part because the Falcons allowed their players to be spokesmen for that "other airline" while DL was the official carrier for the team. Not sure what the economics of the decision were for the Falcons but it doesn't do much for your brand commitment if consumers are confused by seeing players in ads for 2 airlines - one for the team and one on their own.
There is no doubt that NRT doesn't play the role it once played as a connecting hub... UA has done a masterful job of developing the Pacific with its strong presence in HKG and China - but it has been 25 years since UA acquired the Pacific from Pan Am. UA hasn't done anything terribly innovative w/ the Pacific in a good long time.
At the same time, NW operated the largest airline base on foreign soil in the world - and despite being weak and shrinking, the Japanese economy is still one of the top economies in the world and Tokyo is one of the richest cities. DL isn't going to walk away from the local market even if the hub is not profitable; there are ways to retain the revenue while reducing costs. The JAL arrangement appears to be DL's first priority. It not only has huge competitive value in snatching JAL but also does reduce DL's Pacific costs w/o sacrificing a Japan-intra-Asia presence.
UA simply walked away from most of the intra-Asia markets. The only reason they have kept the intra-Asia flights they have is because they don't have the a/c to fly to SE Asia nonstop from the US. DL will have that ability with the 77LR but will also retain their presence inthe Japan local market for the very same reason that they will not walk away from the CVG and MEM local markets despite reworking those hubs.
DL will DEVELOP its nonstop Pacific network as well as RETAIN its presence in Japan - it is both/and and not either/or. If the Japan presence comes through an equity presence in JAL, then DL will have accomplished something that doesn't exist by a US carrier in any other major market of the world - an equity investment in the principal airline in that market.
Jfk777 From United States of America, joined Aug 2006, 7348 posts, RR: 7 Reply 2, posted (3 years 7 months 6 hours ago) and read 3687 times:
Quoting WorldTraveler (Reply 1): There is no doubt that NRT doesn't play the role it once played as a connecting hub... UA has done a masterful job of developing the Pacific with its strong presence in HKG and China - but it has been 25 years since UA acquired the Pacific from Pan Am. UA hasn't done anything terribly innovative w/ the Pacific in a good long time.
In the last 25 years no other area of the world have changed more then non-Japan Asia with new airports and economic prosperity. 25 years ago all US airline service to Asia was via NRT, now most is nonstop. Continental, AA and Delta(preNW) had not arrived in China yet. The world hadn't heard of China Southern or China Eastern airlines. Even United now has nontop to Peking from ORD, SFO and Dulles. This isn't Pan AM's ASian network anymore.
WorldTraveler From , joined Dec 1969, posts, RR: Reply 4, posted (3 years 7 months 4 hours ago) and read 3491 times:
Quoting Jfk777 (Reply 2): In the last 25 years no other area of the world have changed more then non-Japan Asia with new airports and economic prosperity. 25 years ago all US airline service to Asia was via NRT, now most is nonstop. Continental, AA and Delta(preNW) had not arrived in China yet. The world hadn't heard of China Southern or China Eastern airlines. Even United now has nontop to Peking from ORD, SFO and Dulles. This isn't Pan AM's ASian network anymore.
correct.. but UA still flies to just 2 cities in China and HKG (which is administered separately). UA could have done far more to become a larger leader in transpac travel but I believe it will be DL that will become the dominant force across the Pacific; holding onto a presence in Japan as well as developing new flights over the Pacific to new markets only strengthens DL's ability to do what no other carrier can do....
Acey559 From United States of America, joined Jan 2007, 1341 posts, RR: 2 Reply 5, posted (3 years 7 months 3 hours ago) and read 3392 times:
I didn't read the other threads about the DL/JL 'tie-up' very closely, but is that subject to the same approval process that the DL/NW merger was? If so, what are the chances it will get approved?
Ryu2 From Taiwan, joined Aug 2002, 460 posts, RR: 0 Reply 6, posted (3 years 6 months 4 weeks 1 day 22 hours ago) and read 3097 times:
Quoting WorldTraveler (Reply 1): There is no doubt that NRT doesn't play the role it once played as a connecting hub... UA has done a masterful job of developing the Pacific with its strong presence in HKG and China - but it has been 25 years since UA acquired the Pacific from Pan Am. UA hasn't done anything terribly innovative w/ the Pacific in a good long time.
At the same time, NW operated the largest airline base on foreign soil in the world - and despite being weak and shrinking, the Japanese economy is still one of the top economies in the world and Tokyo is one of the richest cities. DL isn't going to walk away from the local market even if the hub is not profitable; there are ways to retain the revenue while reducing costs. The JAL arrangement appears to be DL's first priority. It not only has huge competitive value in snatching JAL but also does reduce DL's Pacific costs w/o sacrificing a Japan-intra-Asia presence.
UA simply walked away from most of the intra-Asia markets. The only reason they have kept the intra-Asia flights they have is because they don't have the a/c to fly to SE Asia nonstop from the US. DL will have that ability with the 77LR but will also retain their presence inthe Japan local market for the very same reason that they will not walk away from the CVG and MEM local markets despite reworking those hubs.
DL will DEVELOP its nonstop Pacific network as well as RETAIN its presence in Japan - it is both/and and not either/or. If the Japan presence comes through an equity presence in JAL, then DL will have accomplished something that doesn't exist by a US carrier in any other major market of the world - an equity investment in the principal airline in that market.
NW (and UA) is well-known here in Asia but they almost have a reputation of a LCC. They usually offer the lowest fares, or close to them. In my experience, NW/UA intra-Asia flights ex-NRT do have a lot of O/D traffic, but mostly American expats living in Asia, or low-yield leisure package flights.
Most local business travellers prefer the carriers from their home countries, for service and perceived "cultural understanding".
Jfk777 From United States of America, joined Aug 2006, 7348 posts, RR: 7 Reply 7, posted (3 years 6 months 4 weeks 1 day 21 hours ago) and read 2991 times:
Quoting Ryu2 (Reply 6): NW (and UA) is well-known here in Asia but they almost have a reputation of a LCC. They usually offer the lowest fares, or close to them. In my experience, NW/UA intra-Asia flights ex-NRT do have a lot of O/D traffic, but mostly American expats living in Asia, or low-yield leisure package flights.
All bad reasons to have NRT-Asia flights. DO United and Delta realy need to fly to Bangkok and Singapore. UA could code-share with Thai's LAX to BKK daily nonstops and encouage Thai to fly to SFO or ORD in addition to LAX.
Delta could rely on Korean's flights to BKK from ICN.
WorldTraveler From , joined Dec 1969, posts, RR: Reply 8, posted (3 years 6 months 4 weeks 1 day 21 hours ago) and read 2971 times:
Quoting Acey559 (Reply 5): I didn't read the other threads about the DL/JL 'tie-up' very closely, but is that subject to the same approval process that the DL/NW merger was? If so, what are the chances it will get approved?
It is more complicated that a traditional JV because it also requires the backing of the Japanese gov't and JAL investors because it will involve an equity stake. There are two parts of the arrangement - the JV which exists w/ other airlines and the equity stake which is unique to this arrangement because at present no US airline has a significant ownership stake in any major foreign airline.
Quoting Ryu2 (Reply 6): Most local business travellers prefer the carriers from their home countries, for service and perceived "cultural understanding".
That has been mentioned by other posters and it may be true but cannot be known w/ certainty because US airlines are not required to report revenue data on segments that fly entirely outside the US or its territories.
Neither UA or NW have ideal flight times or market satuation at NRT in order to win over the local market. Their intra-Asian flights are time to connect w/ their transpac flights more than to serve the local market.
If your assertion is true, it makes more sense for DL to obtain an equity stake in a Japanese airline, reduce DL costs, and still have access to the local market through a joint venture and ownership arrangement.
PSU.DTW.SCE From United States of America, joined Jan 2002, 6875 posts, RR: 29 Reply 9, posted (3 years 6 months 4 weeks 1 day 16 hours ago) and read 2763 times:
Quoting WorldTraveler (Reply 1): As SRB points out, DL is shifting many advertising resources away from ATL. First, it may surprise many to know that before the merger, DL spent more por ASM than any other airline in the US except for WN based on DOT stats. Many think that DL doesn't advertise much but they actually have a very heavy ad budget. Second, DL is shifting resources away from ATL in order to boost its ad presence in key competitive markets which right now is primarly NYC. DL isn't walking away from ATL but there are limits on any company and DL is going where they need to have the greatest impact.
Interesting point. Spending a lot of time in NYC, I notice the significant amount of DL advertising plastered all over the city. Same can be said for CO and AA. It is a very competitive market and the increase in DL advertising spend over the past year has been very noticable.
NW had significantly less advertising spend, and post-bankruptcy there was essentially no advertising in DTW expect for fare sale in the newspaper. They pulled all billboard, TV, radio, and sports stadium ads post-Ch.11 Since the merger, I've noticed much more DL advertising in DTW than existed under NW at DTW in recent years. Billboard have sprouted up in the area once again.
Quoting WorldTraveler (Reply 8): Neither UA or NW have ideal flight times or market satuation at NRT in order to win over the local market. Their intra-Asian flights are time to connect w/ their transpac flights more than to serve the local market.
Very true. The only local market that NW/DL has really been competitive out of NRT have been the beach markets - NRT-GUM, SPN, HNL. Those flights have been timed for the local market, not for connections from the US mainland.
As the freighter operation comes to an end, those slots are best timed for beach markets, not business markets so that is likely where you will see more growth. The 330 and 767 are ideal a/c for serving beach markets with the 330 having an edge due to its lower business class seat config.
MaverickM11 From United States of America, joined Apr 2000, 15734 posts, RR: 48 Reply 11, posted (3 years 6 months 3 weeks 3 days 16 hours ago) and read 2160 times:
Quoting WorldTraveler (Reply 10): As the freighter operation comes to an end, those slots are best timed for beach markets, not business markets so that is likely where you will see more growth.
The latest South Pacific expansion came at the expense of TPE/PUS/NGO slots, not freighter slots.
Timf From United States of America, joined Mar 2003, 954 posts, RR: 1 Reply 12, posted (3 years 6 months 3 weeks 3 days 16 hours ago) and read 2087 times:
Quoting DTW.SCE" class=quote target=_blank>PSU.DTW.SCE (Reply 9): NW had significantly less advertising spend, and post-bankruptcy there was essentially no advertising in DTW expect for fare sale in the newspaper. They pulled all billboard, TV, radio, and sports stadium ads post-Ch.11 Since the merger, I've noticed much more DL advertising in DTW than existed under NW at DTW in recent years. Billboard have sprouted up in the area once again.
I was at yesterday's Ford Field debacle and Delta had a pretty healthy presence. They had shared ad space on the scoreboard (a sign that rotated with a few other companies) and had messages on the electronic banner several times proclaiming them the "Official airline of the Detroit Lions". I've seen similar messages at Comerica Park as well. Oddly enough there was still a dedicated NWA logo on the scoreboard in the corner opposite the rotating Delta ad.
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