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WSJ: Delta - Korean Air Discuss Deeper Links  
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Posted (1 year 10 months 2 weeks 6 days 13 hours ago) and read 8499 times:

In probably what is an overdue move, looks like Delta and Korean Air are in talks to deepen their current Pacific relationship that primarily is only a code-share with very limited anti-trust activity.

Following Delta's attempt to lure JAL into Skyteam two years back, apparently Delta now views its presence on Trans-Pacific routes being relatively weak compared to Oneworld and Star.


Personally I believe a deeper true TPAC JV with KAL would be very good for Delta, and help it move further away from its reliance on Japan where it lacks a partner.
KE and the ICN hub, while a smaller market than Tokyo is truly a gem that fits very well and could take the place of NRT for DL while tapping into the broader KE network and market presence.

Story:
http://www.i4u.com/2012/10/korean-ai...sider-delta-air-korean-wider-links
http://www.wrko.com/content/delta-korean-air-consider-wider-links

Also avail as subscriber WSJ story.

=


From the desert to the sea, to all of Southern California
49 replies: All unread, showing first 25:
 
User currently offlinePHX787 From Japan, joined Mar 2012, 7394 posts, RR: 17
Reply 1, posted (1 year 10 months 2 weeks 6 days 13 hours ago) and read 8503 times:

Quoting LAXintl (Thread starter):
In probably what is an overdue move, looks like Delta and Korean Air are in talks to deepen their current Pacific relationship that primarily is only a code-share with very limited anti-trust activity.

It's about time, but to me, it seems like it will complicate things.
DL's ops at NRT and KE's ops at ICN may be a little bit complicated. I don't think DL will have any sort of connection/5th freedom flights in Korea any time soon, and I don't know how this would work out.

[Edited 2012-10-04 20:30:31]


次は、渋谷、渋谷。出口は、右側です。電車とホームの間は広く開いておりますので、足元に注意下さい。
User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17416 posts, RR: 46
Reply 2, posted (1 year 10 months 2 weeks 6 days 13 hours ago) and read 8470 times:

Quoting LAXintl (Thread starter):
Personally I believe a deeper true TPAC JV with KAL would be very good for Delta

   Excellent hub at ICN, great inflight product, strong network, and arguably the most competent and comprehensive Chinese carrier to North America. It raises some awkward questions for DL at TYO, but I've always thought DL/KE could easily replicate DL/KL for the Pacific.



E pur si muove -Galileo
User currently offlineFI642 From Monaco, joined Mar 2005, 1079 posts, RR: 2
Reply 3, posted (1 year 10 months 2 weeks 6 days 13 hours ago) and read 8453 times:

Code share only. Antitrust is still a big issue. Skyteam needs Korean more than Korean needs Skyteam.


737MAX, Cool Planes for the Worlds Coolest Airline.
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 4, posted (1 year 10 months 2 weeks 6 days 12 hours ago) and read 8284 times:

Quoting PHX787 (Reply 1):
I don't think DL will have any sort of connection/5th freedom flights in Korea any time soon, and I don't know how this would work out.

US-Korea has open-skies, so 5th freedom would be easy, but then why do they even need 5th freedom. Thats so 1970s.

Instead a comprehensive metal-neutral JV, Delta could dump people at Incheon and they could continue on a defacto DL flight operated by KAL.

As Delta has done across the Atlantic, a deep JV could reshape its presence across the Pacific.
Tokyo could revert to more a local O&D market, while Seoul would be the hub similar to how AMS, CDG, and FCO act today across the Atlantic.



From the desert to the sea, to all of Southern California
User currently offlinemax999 From United States of America, joined Dec 2005, 1036 posts, RR: 0
Reply 5, posted (1 year 10 months 2 weeks 6 days 4 hours ago) and read 7951 times:

And looking at the macro economic picture of Japan vs S Korea. Japan has been stagnant for a long time while S Korea is still growing by leaps and bounds.

DL has a lot more opportunity for future revenue growth hubbing in Seoul than Tokyo. Although NRT will continue to maintain its importance, there probably won't be much in the way of growth.



All the things I really like to do are either immoral, illegal, or fattening.
User currently offlinePIEAvantiP180 From United States of America, joined Sep 2009, 532 posts, RR: 0
Reply 6, posted (1 year 10 months 2 weeks 6 days 4 hours ago) and read 7949 times:
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Quoting FI642 (Reply 3):
Code share only. Antitrust is still a big issue.

DL and KE already have an extensive code sharing program with a limited ATI. So the only step further from this point would be a JV. US and Korea already have open skies and with Asiana growing coverage of NA i don't think there will be much in the way for anti trust regulators not to approve this.

Quoting MaverickM11 (Reply 2):
It raises some awkward questions for DL at TYO, but I've always thought DL/KE could easily replicate DL/KL for the Pacific

I think the DL hub at NRT and the KE hub at ICN could work the same way AMS and CDG work for DL-AF/KL over the Atlantic. I believe the two hubs will be more complimentary then competitive.


User currently offlineEddieDude From Mexico, joined Nov 2003, 7569 posts, RR: 43
Reply 7, posted (1 year 10 months 2 weeks 6 days 1 hour ago) and read 7625 times:

Quoting PHX787 (Reply 1):
I don't think DL will have any sort of connection/5th freedom flights in Korea any time soon

Connections yes, plenty of them. That is the reason why this plan is being studied. DL and KE fly from the U.S. to ICN and codeshare on each other, and KE will give DL passengers arriving from the U.S. (whether arriving on board DL or KE planes) a ton of connecting opportunities.

As to fifth freedom, as LAXIntl mentioned, why would DL want that? DL is not aiming to move its NRT hub to ICN or build a new hub at ICN. KE will take DL's passengers from ICN to a ton of destinations in Asia, and both carriers would benefit from that.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlinePHX787 From Japan, joined Mar 2012, 7394 posts, RR: 17
Reply 8, posted (1 year 10 months 2 weeks 6 days 1 hour ago) and read 7618 times:

Quoting EddieDude (Reply 7):
As to fifth freedom, as LAXIntl mentioned, why would DL want that? DL is not aiming to move its NRT hub to ICN or build a new hub at ICN. KE will take DL's passengers from ICN to a ton of destinations in Asia, and both carriers would benefit from that.

This is what I was trying to explain. Sure DL will have KE to have connections with. 5th freedom? No, but it does throw a hat into the ring when it comes to competition between NRT and ICN.



次は、渋谷、渋谷。出口は、右側です。電車とホームの間は広く開いておりますので、足元に注意下さい。
User currently offlinefactsonly From Montserrat, joined Aug 2012, 863 posts, RR: 0
Reply 9, posted (1 year 10 months 2 weeks 6 days 1 hour ago) and read 7545 times:

Perhaps interesting to note that DL & KE already codeshare on the Trans-Atlantic to AMS as well:

- dep. SEA 13.30 - arr. AMS 08:20 KE 7214 A333 daily
- dep. SEA 13.30 - arr. AMS 08:20 DL 0232 A333 daily


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17416 posts, RR: 46
Reply 10, posted (1 year 10 months 2 weeks 6 days ago) and read 7447 times:

Quoting PIEAvantiP180 (Reply 6):

I think the DL hub at NRT and the KE hub at ICN could work the same way AMS and CDG work for DL-AF/KL over the Atlantic. I believe the two hubs will be more complimentary then competitive.

Without a local partner in Japan DL will have declining relevance. A better analogy for AMS/CDG would be ICN/PVG.

Quoting factsonly (Reply 9):
Perhaps interesting to note that DL & KE already codeshare on the Trans-Atlantic to AMS as well:

Why on earth would that be necessary?



E pur si muove -Galileo
User currently offlineTWA85 From United States of America, joined Feb 2012, 221 posts, RR: 0
Reply 11, posted (1 year 10 months 2 weeks 6 days ago) and read 7430 times:

This partnership will be very beneficial for both carriers. DL will benefit from being able to focus on funneling traffic from primary destinations like PEK, PVG, and HKG, etc. through NRT, while funneling traffic from secondary destinations like TSN, HGH, and SZX, etc. through ICN on KE. KE will benefit from being able to off load capacity through DL's NRT hub thus allowing room for new capacity through ICN.

User currently offlinelightsaber From United States of America, joined Jan 2005, 12981 posts, RR: 100
Reply 12, posted (1 year 10 months 2 weeks 6 days ago) and read 7381 times:
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This looks like an overdue growth of Skyteam.

I could see limited 5th freedom for DL, but only from an aircraft utilization purpose.

Quoting max999 (Reply 5):
And looking at the macro economic picture of Japan vs S Korea. Japan has been stagnant for a long time while S Korea is still growing by leaps and bounds.

   We could go into the two different economic strategies, but what matters is growth.

Quoting LAXintl (Thread starter):
KE and the ICN hub, while a smaller market than Tokyo is truly a gem that fits very well and could take the place of NRT for DL while tapping into the broader KE network and market presence.

NRT has to compete with HND and by effectively isolating NRT from much of the Tokyo market, its value is declining as ICN, PEK, PVG, HKG, and other Asian hubs grow.

One grows or it rots and NRT has been very stagnant.

Quoting LAXintl (Reply 4):
Tokyo could revert to more a local O&D market, while Seoul would be the hub similar to how AMS, CDG, and FCO act today across the Atlantic.

I could see that. Smaller aircraft to NRT and larger gauge to ICN...

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7867 posts, RR: 52
Reply 13, posted (1 year 10 months 2 weeks 6 days ago) and read 7351 times:

I'm not sure if this is really a debate of NRT vs ICN, as both a very large markets. DL may have an uphill battle at NRT against JAL and ANA, but they have a nice little operation going. Maybe it can be optimized a bit if they get a JV with KE. But look at Europe... DL does just fine with CDG and AMS despite their proximity. I see a lot more ICN in DL's future, but I believe NRT will still be around (and strong)


Ironically I have never flown a Delta MD-90 :)
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 14, posted (1 year 10 months 5 days ago) and read 5777 times:

S&P this month is out with an investor note which suggest Delta should look beyond Japan in the Pacific. Matter of fact they say unless Delta does this quickly they could find themselves squeezed both in Japan and other parts of Asia.

More specifically --


Northwest Airlines Inc., which Delta acquired after the two airlines emerged from bankruptcy, historically was stronger in Japan than United Air Lines, while United had broader service to most other Asian destinations.

This continues to be the case, but Delta's Japan operations face more difficult competition now that United Continental and American Airlines each have implemented antitrust-immune alliances with the two leading Japanese airlines, All Nippon Airways and Japan Airlines, respectively.

The liberalization of aviation treaties and the emergence of larger and more aggressive Asian airlines will place further pressure on Delta's Japan centric Pacific network. Major markets such as China, South Korea, Hong Kong and Australia will require continued capacity growth by Delta in order to maintain current market share in face of expectant GDP and traffic growth.

A long term Pacific strategy beyond Japan in relatively attractive, high-growth markets does create risk for Delta particularly at time the broader global economy remains in recovery mode, however failure to capitalize on such opportunities risk Delta being left with less than robust links in a key international segment.


=



From the desert to the sea, to all of Southern California
User currently offlineDTWLAX From United States of America, joined Aug 2009, 789 posts, RR: 0
Reply 15, posted (1 year 10 months 4 days 23 hours ago) and read 5621 times:

Quoting MaverickM11 (Reply 10):
Without a local partner in Japan DL will have declining relevance.

But DL (and NW before merger) has been without a local partner in Japan for years. They are still surviving. What may affect DL is NRT's declining growth with the opening of HND to international traffic.


User currently offlinePHX787 From Japan, joined Mar 2012, 7394 posts, RR: 17
Reply 16, posted (1 year 10 months 4 days 22 hours ago) and read 5482 times:

Quoting LAXintl (Reply 14):
S&P this month is out with an investor note which suggest Delta should look beyond Japan in the Pacific. Matter of fact they say unless Delta does this quickly they could find themselves squeezed both in Japan and other parts of Asia.

The alliance factor may come into play when Skymark acquires their 330s and 380s. Buddy of mine who works for them said that after they begin working with those aircraft to overseas markets, they may join Skyteam. I'm sure this rumor has been floating for a while but in reality I think it only makes sense. DL and Skymark already have some sort of connection to each other with sky miles being able to be used on some Skymark flights.



次は、渋谷、渋谷。出口は、右側です。電車とホームの間は広く開いておりますので、足元に注意下さい。
User currently offlinecommavia From United States of America, joined Apr 2005, 11522 posts, RR: 61
Reply 17, posted (1 year 10 months 4 days 21 hours ago) and read 5408 times:

Quoting DTWLAX (Reply 15):
But DL (and NW before merger) has been without a local partner in Japan for years. They are still surviving.

The problem, though, is that the market is evolving at DL's NRT operation is not ideally suited to address that evolution.

Sure, NW made NRT work for 50 years, but that was largely a function of the fact that NW at that time - plus Pan Am, and then UA - essentially had a government-sanctioned oligopoly among U.S. carriers to the Pacific. At that time they did not need local partners in Japan because their networks were so dominant - there was virtually no U.S. competition because of the regulatory regime, and minimal Asian competition because of the relative economic weakness of those airlines (and countries) during that period.

The world has dramatically changed since then. Today, the Asian airlines in the U.S.-Asia market are arguably stronger and more dominant in many markets than any U.S. carrier. The near-complete lack of U.S. competition that NW and UA once enjoyed is now gone. Not only are other competitors actively expanding their nonstop links from major U.S. hub gateways directly to the principal cities of Asia (overflying NRT), but DL's two primary competitors now have metal-neutral JVs in place with Japanese partners that effectively give them the same flexibility to optimize networks and coordinate schedules that DL (NW) enjoyed for decades.

I have been saying for years - and continue to believe - that the DL (legacy NW) NRT hub is not sustainable long-term. The fundamental, underlying economic and competitive dynamics that previously justified its existence simply do not apply anymore, in my view. As such, I predict that DL's NRT and non-NRT Asia operation will, in time, evolve into pretty much what UA's Asia network looks like today: any markets that can be profitably served nonstop from a U.S. hub will be, and any that can't will either be discontinued or still served over NRT. UA has long had a unique advantage in that its hubs have long been generally better-positioned for Asia - so they have typically flown all their Asian routes from either SFO or ORD or both, plus other cities where demand warrants. DL can, and I suspect will, do something similar - most of the major non-Japan Asia markets will be served from SEA and/or DTW, plus other markets (ATL, JFK) where appropriate. As for NRT specifically, I expect the DL operation to eventually move to flights from the major U.S. gateways (ATL, JFK, DTW, MSP, LAX, SEA, and of course HNL and probably GUM and SPN) and over NRT to Asian markets that for either operational and/or economic reasons cannot profitably be flown nonstop from the U.S. (MNL, TPE, SIN, BKK). I - personally - do not see DL's flights from NRT to PEK, PVG, ICN, ROR or probably HKG sticking around much longer.


User currently offlineSR117 From Mexico, joined Jun 2000, 795 posts, RR: 1
Reply 18, posted (1 year 10 months 4 days 21 hours ago) and read 5335 times:

Quoting LAXintl (Reply 14):
The liberalization of aviation treaties and the emergence of larger and more aggressive Asian airlines will place further pressure on Delta's Japan centric Pacific network. Major markets such as China, South Korea, Hong Kong and Australia will require continued capacity growth by Delta in order to maintain current market share in face of expectant GDP and traffic growth.

A long term Pacific strategy beyond Japan in relatively attractive, high-growth markets does create risk for Delta particularly at time the broader global economy remains in recovery mode, however failure to capitalize on such opportunities risk Delta being left with less than robust links in a key international segment.

I wouldn't call DL's Pacific operation completely Japan-centric, while it is true that DL has a very large footprint in Japan, a large part of this is based on Japanese O/D, like Hawaii/Guam-Japan flights which is completely based on local traffic, and flights to NGO, KIX and HND which aren't meant to be connecting traffic flights like NRT flights are. Having NRT makes flights to places like SIN, BKK and MNL possible, and even UA, despite having NH, still operate their SIN and BKK flights in similar fashion to DL.

Delta may be a bit behind with regards to a transpacific JV, however this can be remedied and things are already more or less aligned for this to happen sometime in the future. DL already seems to be building a decent network out of PVG and PEK with nonstops to DTW, SEA and NRT. ICN already has a DTW link, and HKG will hopefully get a direct US link again soon.

While UA and AA have NH and JL, DL will have an equally formidable partner in KE. And let's not forget that Skyteam has both China Eastern and China Southern (And also Taiwan with China Airlines), while the closest thing Oneworld has to a strong Chinese partner is KA/CX, certainly not an ideal position to be in and not one that can be changed easily with eligible partners already spoken for.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1359 posts, RR: 2
Reply 19, posted (1 year 10 months 4 days 21 hours ago) and read 5263 times:

I wonder why NW/DL did not see or opt to pursue a strategic shift away from Japan the same manner United started doing years back ?

On the surface Japan has been in economic holding patterns for more than a decade, while rest of Asia has boomed. Growth opportunity has clearly been outside Japan.

United seems to now be sitting good position now with both a strong Japan network thanks to its ANA JV, and a broader network across the rest of Far East region.
Meanwhile DL is still heavily focused on Japan where its left with no home partner, while also having weaker network to the rest of the regions map being reliant on NRT stopover.


User currently offlineSR117 From Mexico, joined Jun 2000, 795 posts, RR: 1
Reply 20, posted (1 year 10 months 4 days 20 hours ago) and read 5161 times:

Quoting mercure1 (Reply 19):
I wonder why NW/DL did not see or opt to pursue a strategic shift away from Japan the same manner United started doing years back ?

On the surface Japan has been in economic holding patterns for more than a decade, while rest of Asia has boomed. Growth opportunity has clearly been outside Japan.

While it is true that Japan has been stagnant economically speaking, that does not mean Japan does not present opportunities, just witness the growth that HA and DL have had on their Hawaii-Japan routes. The strong yen has made these routes very profitable.

While I definitely agree that DL has to provide more direct links to Asia beyond Japan, I think that it is a mistake to view the current Pacific network as a handicap. A quick review of Delta's 10K report from 2011 shows us the following information with regards to the Pacific network:

FY11 vs FY10 Passenger Revenue Growth: 20% Capacity Increase: 10% Load Factor: (4.7)
FY10 vs FY09 Passenger Revenue Growth: 38% Capacity Increase: 9% Load Factor: 7.3

So that looks like pretty solid performance (even though 2011 performance was affected by the March Earthquake) and indeed the strongest performance in the system, so the NRT hub can't be all that bad.


User currently onlineFlighty From United States of America, joined Apr 2007, 8468 posts, RR: 2
Reply 21, posted (1 year 10 months 4 days 20 hours ago) and read 5115 times:

Quoting LAXintl (Reply 4):
Instead a comprehensive metal-neutral JV, Delta could dump people at Incheon and they could continue on a defacto DL flight operated by KAL.

I suppose actual passengers and US citizens should just roll over and get violated again and again by Delta's increasing prices and profits. Anti-trust laws do serve a purpose. There are reasons why DL-KE-AF-KL-NW "one price" global domination isn't necessarily a good thing.

But yeah, glad DL is doing well and everything.


User currently offlinejustinlee From China, joined Aug 2012, 331 posts, RR: 0
Reply 22, posted (1 year 10 months 4 days 19 hours ago) and read 5025 times:

Quoting TWA85 (Reply 11):

This partnership will be very beneficial for both carriers. DL will benefit from being able to focus on funneling traffic from primary destinations like PEK, PVG, and HKG, etc. through NRT, while funneling traffic from secondary destinations like TSN, HGH, and SZX, etc. through ICN on KE. KE will benefit from being able to off load capacity through DL's NRT hub thus allowing room for new capacity through ICN.

ICN is a far more transfer friendly airport for Chinese passengers. Due to some political reasons, it's fairly hard for Chinese to get a shore pass for Japan after 2011. Since NRT is closed at mid-night, passengers from China can't connect the over-night flights in NRT, unless they want to wait in a police station, weird!!!

Quoting MaverickM11 (Reply 2):
Excellent hub at ICN, great inflight product, strong network, and arguably the most competent and comprehensive Chinese carrier to North America. It raises some awkward questions for DL at TYO, but I've always thought DL/KE could easily replicate DL/KL for the Pacific.

Unarguably the most competent and comprehensive one...


User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3013 posts, RR: 2
Reply 23, posted (1 year 10 months 4 days 18 hours ago) and read 4874 times:

I'm all for it! Hope it happens.


Finally made it to an airline mecca!
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 24, posted (1 year 10 months 4 days 17 hours ago) and read 4771 times:

Yes indeed its interesting to see the different strategy the two airlines pursued. At one time essentially both Pan Am and Northwest networks were the same.

United has over the last 20-years continued to build growing direct services, while NW remained Japan focused. In more recent years UA's shift away from NRT picked up steam as more smaller 777 versus historic 747s were assigned. Add in the recent ANA JV, UA has been able to exit some Japan markets completely and have NH operate the route all the while its Japan footprint actually grew thanks to JV all the while freeing up planes for other markets.

While both carriers have looked to mainland China in recent years, UA has been far more invested in non-Japan markets across Asia and its market share and frequency show this.

I think a DL-KE venture could definately boost DL's regional footprint and reduce its dependence on Japan.
Not only would KE's vast network connections be beneficial, simply spreading Delta's eggs beyond Japan market is a good move an lessens overall network risk such as experienced last year when the key market took a dive.

Quoting SR117 (Reply 20):
FY11 vs FY10 Passenger Revenue Growth: 20% Capacity Increase: 10% Load Factor: (4.7)
FY10 vs FY09 Passenger Revenue Growth: 38% Capacity Increase: 9% Load Factor: 7.3

Yes but how much of that is non-Japan traffic ?

For example last year Delta in earnings call after earnings call last year said Japan market had been hit quite hard, so whatever growth they saw was things like China, and non-Japan O&D passengers being channeled through the existing Japan flights.

On the macro scale, Japan-USA market has actually shrunk in the last two decade (2010 there were 10.7mil travelers between the countries, in 2000 was almost 18mil) and hence long gone are those JAL and ANA 747s in favor of smaller models. Japanese tourism to the US is on the decline, and is far off its 1995-1997 peak.



From the desert to the sea, to all of Southern California
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1359 posts, RR: 2
Reply 25, posted (1 year 10 months 4 days 16 hours ago) and read 4800 times:

Japan becoming land of the setting sun these days.

The numbers are not kind to Japan.
a) stagnant economy
b) stagnant population and is one of the few places on early forecast to see population declines (shrink by a staggering 30% in 50-years)
c) country no longer needed as traffic gateway to Asia from crossing the Pacific.

As mentioned gone are the days of 747 heaven in Japan. Markets is both fragmented and smaller today.
Amazing site to see Japan carriers growing fleets of small narrow bodies these days. Reverse trend from much of the world.

But Instead the much rest of Far East experiencing rising sun with strong growth in all areas.

Not hard to see where future of air travel demand is going also. Japan was yesterday, other places like China, South Korea, Singapore, Vietnam, etc are the future.

It seems United notice this trend prior to NW/DL.


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17416 posts, RR: 46
Reply 26, posted (1 year 10 months 3 days ago) and read 4130 times:

Quoting DTWLAX (Reply 15):
But DL (and NW before merger) has been without a local partner in Japan for years

So were AA and UA; their partnerships are relatively recent, but they have strengthened their respective Japan point-of-sale, relegating DL to an also-ran.



E pur si muove -Galileo
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 27, posted (1 year 10 months 3 days ago) and read 4277 times:

Yes while Japan is a huge economy in its own right still as time goes on it will not only shrink in actual terms due to demographics, but is will shrink relative to its regional peers also.

The Asia-Pacific region is home to many vibrant economies which are estimated to lead the world in their economic growth further outpacing Japan.

Since growth in air travel has historically been linked to GDP, I think its definitely time Delta deepen its regional footprint beyond Japan otherwise find itself being outpaced and stuck with in a network primarily built around a stagnant market.



From the desert to the sea, to all of Southern California
User currently offlinejetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Reply 28, posted (1 year 10 months 2 days 21 hours ago) and read 4034 times:

Quoting mercure1 (Reply 25):
t seems United notice this trend prior to NW/DL.

Let's be honest. UA's gateways of SFO, LAX and ORD were far better suited to the expansion of nonstop service beyond NRT than NW's DTW & MSP hubs. NW didn't have the same deck of cards to play with. Delta's hubs didn't change the equation much. Its not that the trends weren't noticed, its that there were limits to what could be done in the near term.

So what is Delta to do?

Well, you start by managing the NRT operation to be as profitable as possible for as long as possible while you begin to restructure the network. You do this by:

1. Adding more U.S. gateways to the NRT hub, but downsizing gauge. (ATL, JFK, PDX, etc...)
2. Removing non-essential, money-losing beyond NRT flow markets.
3. Expand highly-profitable Japan-beach market flying.
4. Begin developing mainland U.S. gateways to destinations beyond NRT. Primarily DTW and SEA to China and Korea.
5. Enter into extensive code-sharing with China Eastern to take advantage of the PVG hub. (BIG DEAL over the long-run)
6. Finally enter into a JV with KE that effectively negates the need for the NRT hub.
7. Focus NRT flying on point-to-point opportunities, re-guage equipment.
8. Over the longer run, begin adding more joint alliance capacity in markets from JFK & LAX.
a) JFK-PVG, ICN, TPE and whatever the new Beijing airport ail be coded.
b) LAX-PVG, ICN, CAN, TPE, SGN and Beijing

Ultimately, Delta (and NW) have been disadvantaged by their historical lack of strength in key gateway market in the U.S. But Delta's network restructuring is improving its prospects in JFK, LAX and SEA while continuing to grow DTW. The real key however, is that Delta's partners are exceptionally strong in the largest and fastest-growing North Asia markets (South Korea, China and Taiwan). This ultimately leaves Delta well-postiioned as its partner's networks are vastly superior to both Star and oneworld in those countries.

A word on China, While Air China does dominate PEK, the new Beijing airport will be a major hub for CZ and MU, leading to quality opportunities in that market. What SkyTeam does have, that Star doesn't, is a great position in both PVG and CAN. Both these markets have significant long-term potential.

Its going to be interesting. But Delta's prospects in Asia are dramatically better than they were a couple of years ago. It will be interesting to see when/if Delta begins a more aggressive embrace of these opportunities.


User currently offlinelightsaber From United States of America, joined Jan 2005, 12981 posts, RR: 100
Reply 29, posted (1 year 10 months 2 days 21 hours ago) and read 3948 times:
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Quoting mercure1 (Reply 25):
c) country no longer needed as traffic gateway to Asia from crossing the Pacific.

That is the big hit. I would be more precise and say that Japan did not step up and build a mega-airport as Asia was developing its 'gateway needs.' Instead, HKG, ICN, PEK, and PVG grew with a few 'also rans' for hubing to NorthEast Asia (for TPAC traffic). If NRT had been built as intended as a 24/7 airport, its global role would be different. It wasn't built out enough and now there are other options.

As ICN, PVG, HKG, and CAN grow, NRT will fade to obscurity from an economic standpoint.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinebobnwa From United States of America, joined Dec 2000, 6464 posts, RR: 9
Reply 30, posted (1 year 10 months 2 days 20 hours ago) and read 3914 times:

Quoting Flighty (Reply 21):
I suppose actual passengers and US citizens should just roll over and get violated again and again by Delta's increasing prices and profits.

Kind of a strong statement about DL isn't it? Would not the same be true of AA,UA, and any carrier flying to Japan?


User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2781 posts, RR: 4
Reply 31, posted (1 year 10 months 2 days 20 hours ago) and read 3879 times:
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HEAD MODERATOR

Quoting Flighty (Reply 21):
I suppose actual passengers and US citizens should just roll over and get violated again and again by Delta's increasing prices and profits. Anti-trust laws do serve a purpose. There are reasons why DL-KE-AF-KL-NW "one price" global domination isn't necessarily a good thing.

Nobody has to roll over to DL at all. Costs are going up and why shouldn't airfares join them? Don't get me wrong I love a cheap fair. But if it is too high I look at someone else. Not to mention there aren't many monopoly routes around anymore. Especially to Asian business centers.
Blue



You push down on that yoke, the houses get bigger, you pull back on the yoke, the houses get bigger- Ken Foltz
User currently offlinejustinlee From China, joined Aug 2012, 331 posts, RR: 0
Reply 32, posted (1 year 10 months 2 days 19 hours ago) and read 3811 times:

Quoting jetlanta (Reply 28):
8. Over the longer run, begin adding more joint alliance capacity in markets from JFK & LAX.

I totally agree with this point. The US-Asia market is dominated by P2P passengers. If DL really want to do something, they should use LAX and JFK instead of DTW or SEA.


User currently offlinejetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Reply 33, posted (1 year 10 months 2 days 19 hours ago) and read 3775 times:

Quoting justinlee (Reply 32):
I totally agree with this point. The US-Asia market is dominated by P2P passengers. If DL really want to do something, they should use LAX and JFK instead of DTW or SEA.

In many cases, they will leave it to their alliance partners to handle much of this. A senior MU executive a few weeks ago indicated that he'd like the U.S. and China to work towards allowing anti-trust immune JV's between carriers of those nations. That would be a big deal. As it is, you can begin to see the PVG operation developing today...

MU Operated
LAX
JFK
SFO

DL Operated
DTW
SEA

I think you will see long-term growth by both carriers as PVG becomes a bigger player. It is entirely possible that after 2020, we could see Delta operating 787's to PVG from secondary markets like BOS, MSP, ATL, SLC, PDX, IAD. Look at CDG and AMS today and I think that should be a fair representation of how DL/MU flying will develop over time.

All that said, eventual ATI will be a key component of seeing this develop to its potential.


User currently offlinejustinlee From China, joined Aug 2012, 331 posts, RR: 0
Reply 34, posted (1 year 10 months 2 days 19 hours ago) and read 3722 times:

Quoting jetlanta (Reply 33):
As it is, you can begin to see the PVG operation developing today...

MU Operated
LAX
JFK
SFO

DL Operated
DTW
SEA

I agree. PVG is really under served considering its market volume. It's mainly due to the lack of wide-body for MU and their strategy. If they can simply put their wide-bodies into high volume domestic routes such as SHA-PEK, SHA-CAN, SHA-SZX and make a profit, why should they try some risky long-haul?

Quoting jetlanta (Reply 33):
It is entirely possible that after 2020, we could see Delta operating 787's to PVG from secondary markets like BOS, MSP, ATL, SLC, PDX, IAD. Look at CDG and AMS today and I think that should be a fair representation of how DL/MU flying will develop over time.

Yeah, I know this is 787 designed for. But I think the case of CDG or AMS is a little bit different from PVG. Firstly, the trans-atlantic routes are shorter, from BOS to AMS is something 8 hrs but MSP-PVG is 14 hrs, which means much higher cost. In order to make some money, we need a good load factor. Secondly, most of the business activities between US and East Asia happen in the big cities. Also, Asian American population concentrates in few places such as LA, NYC and Bay area. The high cost and low demand will make P2P trans-pacific routes unprofitable.


User currently offlineEddieDude From Mexico, joined Nov 2003, 7569 posts, RR: 43
Reply 35, posted (1 year 10 months 2 days 17 hours ago) and read 3568 times:

Quoting jetlanta (Reply 28):
5. Enter into extensive code-sharing with China Eastern to take advantage of the PVG hub. (BIG DEAL over the long-run)

This is a very good point. I think that codesharing with MU on multiple Asian services ex-PVG will be nearly as important to DL in the future as codesharing with KE ex-ICN. Plus, PVG on its own should be a source of a lot of traffic and, potentially, profits.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 36, posted (1 year 10 months 2 days 17 hours ago) and read 3552 times:

While having good potential eventually, don't hold your breaths for ATI JVs with Chinese airlines. There is a long way to go for China to even comply with its current bilateral commitments and easing business practices before ATIs can be agreed to.

Also once it happens, PVG is not half as useful as a place like PEK. Remember Shanghai is a two airport city, with bulk of domestic service at Hongqiao. Cross town connections is not a viable selling point. Also China needs to improve how it deals with transfer passengers, often an arduous ordeal often requiring immigration entry and exit procedures today. Even modern new PEK airport publishes a crazy minimum connection time of 160 minutes! About 100 minutes too long compared to peer airports in Asia...

For now DL is much better off exploring partnerships with KE and others like CI and GA eventually.



From the desert to the sea, to all of Southern California
User currently offlinecommavia From United States of America, joined Apr 2005, 11522 posts, RR: 61
Reply 37, posted (1 year 10 months 2 days 17 hours ago) and read 3507 times:

Quoting jetlanta (Reply 28):
Let's be honest. UA's gateways of SFO, LAX and ORD were far better suited to the expansion of nonstop service beyond NRT than NW's DTW & MSP hubs. NW didn't have the same deck of cards to play with. Delta's hubs didn't change the equation much. Its not that the trends weren't noticed, its that there were limits to what could be done in the near term.

So what is Delta to do?

Well, you start by managing the NRT operation to be as profitable as possible for as long as possible while you begin to restructure the network.

Agree with all of the above.

Delta (like Northwest before it) is more wedded to NRT simply because it has less of a viable alternative at the moment. United, with hubs near-perfectly positioned across the U.S. to capture both O&D and connection traffic to/from Asia, obviously was able to shift its strategic focus in Asia sooner, to their huge benefit.

Quoting jetlanta (Reply 28):
1. Adding more U.S. gateways to the NRT hub, but downsizing gauge. (ATL, JFK, PDX, etc...)
2. Removing non-essential, money-losing beyond NRT flow markets.

Okay, although I question whether (2) is eventually going to impact Delta's ability to sustain (1). I think the big Delta hubs and O&D markets are always going to stick around - ATL, JFK, DTW, MSP, LAX, SEA and HNL are obviously not going anywhere. But I do question whether SFO and PDX are going to be viable long-term - SFO just because the competition is so intense, and PDX because, absent the connections, I'm not sure if it is too 'thin' a market to work.

Quoting jetlanta (Reply 28):
4. Begin developing mainland U.S. gateways to destinations beyond NRT. Primarily DTW and SEA to China and Korea.

Yep.

Quoting jetlanta (Reply 28):
5. Enter into extensive code-sharing with China Eastern to take advantage of the PVG hub.

Yep.

Quoting jetlanta (Reply 28):
6. Finally enter into a JV with KE that effectively negates the need for the NRT hub.

Yep.

Quoting jetlanta (Reply 28):
7. Focus NRT flying on point-to-point opportunities, re-guage equipment.

Hmmm. Not sure how much point-to-point optimization can really realistically be done by Delta at NRT. The entire operation, with the exception of the beach markets, is oriented entirely towards connections over NRT between the U.S. and Far East. Given the slot situation and competitive dynamics, I'm not sure how much Delta can really change that. Delta's primary response - following Northwest's for years - has been to gradually pull down more and more capacity to keep a presence in these NRT-Asia markets even as JAL and ANA continue to be the dominant local players. But I question how long that is sustainable before the average aircraft size becomes so small, and the corresponding ability to route people directly over U.S. hubs grows so great, that it undermines the economics of the hub overall.

Quoting jetlanta (Reply 28):
8. Over the longer run, begin adding more joint alliance capacity in markets from JFK & LAX.
a) JFK-PVG, ICN, TPE and whatever the new Beijing airport ail be coded.
b) LAX-PVG, ICN, CAN, TPE, SGN and Beijing

I am not sure how much growth Delta itself can do from either of those markets. Both are extremely competitive with a very healthy presence from foreign flag carriers with often lower costs and better service. I agree with your premise that some growth at those U.S. gateways could be done by Delta's Asian partners, though.

Quoting jetlanta (Reply 33):
I think you will see long-term growth by both carriers as PVG becomes a bigger player. It is entirely possible that after 2020, we could see Delta operating 787's to PVG from secondary markets like BOS, MSP, ATL, SLC, PDX, IAD. Look at CDG and AMS today and I think that should be a fair representation of how DL/MU flying will develop over time.

I have a hard time imagining that. All of this growth that everybody continues to ascribe to China is, in large part, based on assumptions of straight line growth in GDP continuing at high-single or low-double-digits into the future. I find that highly unrealistic. I'm certainly not denying that China's economy is going to continue growing, and that China is going to continue to be a massive economic and geopolitical force on the world. But Delta flying SLC-PVG? I don't see those kinds of markets being able to profitably sustain a regular, nonstop flight from a U.S. carrier within the next decade. Maybe, but that's just my $0.02.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1359 posts, RR: 2
Reply 38, posted (1 year 10 months 2 days ago) and read 3073 times:

Its interesting people bring up China. While China airlines are starting to act more commercial and try to sell international to international connections neither the infrastructure nor government policy (such as immigration controls) supports these.
Transferring at a place like even relative new PVG airport is like being almost in a low star hotel with guards compared to first class facilities at ICN, HKG, SIN, etc.

So, the idea to rely on China as a transfer hub is far from realistic when the region has multiple excellent competing options.
Yes China is a huge market, but I see it more a point to point market then succesfuly becoming a successful transfer hub in the region.


And yes to the point, thank you, I can see now and agree why United as done better non Japan markets as it indeed has the better hubs such as the US West to link versus then NW/DL.


Lastly, comment that Star would be weak compared to Skyteam in Asia. I think Star has some excellent partners such as ANA, SQ, Thai, Asiana, soon EVA. Yes Skyteam might have 2 China partners but not very useful for many passengers in different countries.
I think Korean Airlines business venture has best promise for DL partnership in region.


User currently offlinejetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Reply 39, posted (1 year 10 months 1 day 21 hours ago) and read 2929 times:

Quoting mercure1 (Reply 38):

Its interesting people bring up China. While China airlines are starting to act more commercial and try to sell international to international connections neither the infrastructure nor government policy (such as immigration controls) supports these.
Transferring at a place like even relative new PVG airport is like being almost in a low star hotel with guards compared to first class facilities at ICN, HKG, SIN, etc.

So, the idea to rely on China as a transfer hub is far from realistic when the region has multiple excellent competing options.
Yes China is a huge market, but I see it more a point to point market then succesfuly becoming a successful transfer hub in the region.


And yes to the point, thank you, I can see now and agree why United as done better non Japan markets as it indeed has the better hubs such as the US West to link versus then NW/DL.


Lastly, comment that Star would be weak compared to Skyteam in Asia. I think Star has some excellent partners such as ANA, SQ, Thai, Asiana, soon EVA. Yes Skyteam might have 2 China partners but not very useful for many passengers in different countries.
I think Korean Airlines business venture has best promise for DL partnership in region.

I completely agree that ICN is the marquee transfer hub for Delta across the Asian continent. But Shanghai will soon be the New York City of Asia (if it isn't already). Having MU as a partner is a huge blessing over the long-term. And having CZ as well, gives Delta major opportunities across the three most prominent Chinese markets. No other alliance can provide that.

For all of Star's strengths, the Asian carriers aren't as good a long-term play for UA as SkyTeam's are for Delta. And oneworld's are vastly inferior. For UA, I'd argue that ANA, Air China and Asiana are the most valuable. But in China and Korea, they are 2nd place to the SkyTeam partners. ANA is great, but NRT is primarily an O&D operation for them and the market is of diminishing value, as it is for Delta's own hub.

South Asia hubs like HKG, SIN and BKK are of far less value to U.S. airlines as a simple matter of geography.

I'll acknowledge that as international transit hubs, Chinese airports have a long way to go, but I'd also argue that ATL isn't all that great as an international transit hub either. Does it matter? When the domestic market is so big and so valuable, the international connections aren't quite as important. (That is what ICN is for.) The key for Delta is the access to the Chinese domestic market.

its really important to understand that 2012 isn't 2022. Forget about what these airports and airlines are today. Imagine another decade of growth and development. 10 years ago KE was a disaster and ICN had just opened. Think about what has changed since then. If you could pick the ideal places to hub for a U.S.-Asia network in 2022 based on market characteristics alone, would you not pick ICN and PVG? My argument is that Delta's future is brighter in Asia because of its partners and the fundamentals of the markets they dominate.


User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 40, posted (1 year 10 months 1 day 19 hours ago) and read 2806 times:

I agree on the surface China has lots of potential (just I'm not too keen on PVG as a hub however due to the bulk of domestic ops being at SHA), however in practice I am not sure how well things will still be in 2022.

Doing business in China has rewards, but its definitely a challenge as many things are hardly transparent. Things have been like this since the 1980s, so I'm not sure when if ever they will match first world governance standards.
I have done work with Cathay Pacific, and even as supposed China experts, they themselves are sometimes dumb founded by the way things are in the PRC business and regulatory wise.
Closer to home look at Fedex whom last year from day to day almost lost is rights to do business inside China due to overnight changes in regulations with how it had to contract with local firms for the last mile delivery.


Anyhow, l'll happily wait to 2022 to see how things shake out. In the mean time, I am a firm believer DL should hook up with Korean and form an overdue JV.



From the desert to the sea, to all of Southern California
User currently offlinejetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Reply 41, posted (1 year 10 months 1 day 19 hours ago) and read 2819 times:

Quoting LAXintl (Reply 40):

I agree on the surface China has lots of potential (just I'm not too keen on PVG as a hub however due to the bulk of domestic ops being at SHA), however in practice I am not sure how well things will still be in 2022.

Doing business in China has rewards, but its definitely a challenge as many things are hardly transparent. Things have been like this since the 1980s, so I'm not sure when if ever they will match first world governance standards.
I have done work with Cathay Pacific, and even as supposed China experts, they themselves are sometimes dumb founded by the way things are in the PRC business and regulatory wise.
Closer to home look at Fedex whom last year from day to day almost lost is rights to do business inside China due to overnight changes in regulations with how it had to contract with local firms for the last mile delivery.


Anyhow, l'll happily wait to 2022 to see how things shake out. In the mean time, I am a firm believer DL should hook up with Korean and form an overdue JV.

See, I think KE is the cornerstone. But Delta's SkyTeam links give it unparalleled access to the business travelers to/from China. AS inferior as the Chinese carriers may be, people are more likely to chose the American alternative...Delta.

Governance and all those other issues accepted, it will still be the world's largest economy in 10 years and international business ties will only keep increasing.


User currently offlinejustinlee From China, joined Aug 2012, 331 posts, RR: 0
Reply 42, posted (1 year 10 months 1 day 17 hours ago) and read 2712 times:

Quoting mercure1 (Reply 38):
So, the idea to rely on China as a transfer hub is far from realistic when the region has multiple excellent competing options.
Yes China is a huge market, but I see it more a point to point market then succesfuly becoming a successful transfer hub in the region.

At this point, Chinese market is just like the US market. Would some US airports, say SEA, want to change itself in order to serve transfer passengers from British Colombia to Ontario? No. The domestic market and P2P international market are big enough and high yield.

For example, on the most profitable domestic routes in China, SHA-PEK, there are 28x330, 4x777, 4x767 and 1x747 every day. Don't forget there are still a lot of narrow bodies flying this route. And all these planes are nearly fully booked. If airlines can make easy money by that, they will not go for complex transfer-oriented operations.



Quoting jetlanta (Reply 39):
I completely agree that ICN is the marquee transfer hub for Delta across the Asian continent. But Shanghai will soon be the New York City of Asia (if it isn't already). Having MU as a partner is a huge blessing over the long-term. And having CZ as well, gives Delta major opportunities across the three most prominent Chinese markets. No other alliance can provide that.

True, Shanghai is the commercial center of China, but PVG is famous for its low-yield. There is a huge demand from the rising middle class in the Yangtze River Delta but don't forget FFs are the biggest contributors for airlines!

For some reasons, CA dominants the high-yield market in China. Because government officials basically have no budget constrains in traveling, most of them will not care about the fares and choose Business Class. And, the central government is in Beijing, the HQ of CA, so the officials have a huge demand from/to PEK. For CA flights start from PEK, it's very common that 100+ passengers are in Gold Medallion. There is one time, 191 Phoenix Gold on a 777...The FF program of MU or CZ can't be even compared to that.

Quoting jetlanta (Reply 39):
South Asia hubs like HKG, SIN and BKK are of far less value to U.S. airlines as a simple matter of geography.

How can you forget about HKG! They have 4xdaily to NYC and most of the passengers onboard are high-yield passengers. Definitely a good market to consider. But, if DL wants to use their 767, then forget about this.



[Edited 2012-10-23 16:52:10]

User currently offlinejetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Reply 43, posted (1 year 10 months 1 day 15 hours ago) and read 2607 times:

Quoting justinlee (Reply 42):
How can you forget about HKG! They have 4xdaily to NYC and most of the passengers onboard are high-yield passengers. Definitely a good market to consider. But, if DL wants to use their 767, then forget about this.

I didn't forget about HKG. Its a terrific hub but it isn't an ideal connecting option from the U.S. to Japan, Korea or most of China. I'd also add the the distance to HKG does require a larger, more capable airplane. Secondary markets such as SEA are going to be very difficult to connect to HKG, while ICN and PVG are much better options. This should be evident by the fact that SEA will have nonstop service to both markets, while still lacking HKG.


User currently offlinejustinlee From China, joined Aug 2012, 331 posts, RR: 0
Reply 44, posted (1 year 10 months 1 day 14 hours ago) and read 2563 times:

Quoting jetlanta (Reply 43):
I didn't forget about HKG. Its a terrific hub but it isn't an ideal connecting option from the U.S. to Japan, Korea or most of China. I'd also add the the distance to HKG does require a larger, more capable airplane. Secondary markets such as SEA are going to be very difficult to connect to HKG, while ICN and PVG are much better options. This should be evident by the fact that SEA will have nonstop service to both markets, while still lacking HKG.

It's basically a trade-off. HKG is a little bit far away from the center of Northeast Asia but it's a gateway to Southeast Asia, which is also a fast-growing market. And transferring in HKG is really popular among Chinese people because the sales tax in Hong Kong is fairly low (considering the 30% luxury goods sales tax in Chinese Mainland!). Many of the transfer passengers choose HKG because they wanna go shopping there!

The range issue is some kind of problem but 787 can definitely do it.


User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 45, posted (1 year 9 months 2 weeks 2 days 19 hours ago) and read 2112 times:

Quoting justinlee (Reply 42):
True, Shanghai is the commercial center of China, but PVG is famous for its low-yield. There is a huge demand from the rising middle class in the Yangtze River Delta but don't forget FFs are the biggest contributors for airlines!

Shanghai's issue is also a split airport operation. Atleast at PEK everything can be under one roof, but the SHA/PVG split makes turning Shanghai into a major Asian hub problematic.

Quoting jetlanta (Reply 39):
Having MU as a partner is a huge blessing over the long-term. And having CZ as well, gives Delta major opportunities across the three most prominent Chinese markets. No other alliance can provide that.

You know I was just reading about how CAAC was refusing to allow CZ to commence Paris service from Beijing unless it gets a blessing from Air China.
Part of the story also talked about China’s unwritten "one airline, one route" policy which creates barriers and more rigid spheres of influence by each of the top 3 carrier. In there is was suggesting the perceived unusual set up of having both CZ and MU in Skyteam was becoming a source of friction at CAAC and could force a shakeup if CZ/MU wanted to grow further afield.

So who knows what the future holds, and if the alliance landscape will hold up in China.

Quoting jetlanta (Reply 41):
See, I think KE is the cornerstone.

Agreed - DL/KE just need to get on with it now.

Quoting justinlee (Reply 44):
It's basically a trade-off. HKG is a little bit far away from the center of Northeast Asia but it's a gateway to Southeast Asia, which is also a fast-growing market. And transferring in HKG is really popular among Chinese people

Sure HKG might a bit further to reach from the US, however I agree with you that its still extremely well positioned to service the mainland, plus the entire SE Asia market.
For China I know many that indeed route via HKG as the frequency and variety of flights offered is so great and beats mainland gateway options.



From the desert to the sea, to all of Southern California
User currently offlinewinglets747 From Australia, joined Mar 2007, 85 posts, RR: 0
Reply 46, posted (1 year 9 months 2 weeks 2 days 15 hours ago) and read 2056 times:
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Quoting LAXintl (Reply 45):
In there is was suggesting the perceived unusual set up of having both CZ and MU in Skyteam was becoming a source of friction at CAAC and could force a shakeup if CZ/MU wanted to grow further afield.

Interesting. What article was this?



Stay hungry. Stay foolish.
User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17416 posts, RR: 46
Reply 47, posted (1 year 9 months 2 weeks 2 days 14 hours ago) and read 2045 times:

Quoting LAXintl (Reply 45):
Shanghai's issue is also a split airport operation. Atleast at PEK everything can be under one roof, but the SHA/PVG split makes turning Shanghai into a major Asian hub problematic.

I don't know that SHA/PVG is that much of an issue, and if it is it's far down the list. Chinese carriers aren't particularly good at anything, so just getting the ability to ticket and transfer between DL and MU somewhat seamlessly is no small feat. And even if you get that up and running the sales/marketing force behind MU is nowhere near strong enough to drive as much traffic as a more traditional partner like AZ or AM, never mind AF/KL/KE.

Quoting justinlee (Reply 42):
Shanghai is the commercial center of China, but PVG is famous for its low-yield.

Are we talking about the same PVG? Did you maybe mean PVD If anything in China is low yield it's CAN, and possibly some of the tricky secondary cities that have been tried on and off like CTU.



E pur si muove -Galileo
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 48, posted (1 year 9 months 2 weeks 19 hours ago) and read 2001 times:

Quoting winglets747 (Reply 46):
Interesting. What article was this?

Online - either Financial Times, Economist, or something similar. Cant recall exactly which one. Believe it was published end of last week.



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 25056 posts, RR: 46
Reply 49, posted (1 year 9 months 2 weeks 18 hours ago) and read 2003 times:

Here Business Week seems to have picked up part of the story.

About CZ inability to operate its A380 on routes such as PEK-CDG due to CAAC policy to prefer single operator per route, and how the China market landscape has been built with around the 3 big carriers designated to carve out 3 separate hubs.

http://www.businessweek.com/news/201...target-date-for-a380-paris-flights

=



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