B2443
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NW's China Strategy?

Fri Sep 24, 2004 6:18 am

Now we have got CO, AA, DL applying for US-China routes which all seemed nonstop from their US hub to the Chinese gateways such as PEK and PVG. UA has already been feeding PEK/PVG nonstop from ORD and SFO.

So what's NW's next step? Continue building NRT as THE transit point to other Asian destinations including China? Would they feel a bit threathened somewhere since business travelers just might want to spend less time traveling (with stops in NRT)? Will we see maybe next spring NW bring back DTW-PEK/PVG nonstop to counter competition from UA and AA/CO's nonstops?
 
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jetjack74
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RE: NW's China Strategy?

Fri Sep 24, 2004 6:25 am

It supposed to be announced sometime after the new year that we will be re-starting DTW-PVG non-stop in the spring-time. Again nothing official until Building A releases it to the press.
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B2443
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RE: NW's China Strategy?

Fri Sep 24, 2004 6:31 am

cool...just in time. I'd be surprised to see NW just sit there do nothing about it. Apparently the people in "Building A" are aware that their love affair with NRT might just become a little inconvenient...
 
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jetjack74
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RE: NW's China Strategy?

Fri Sep 24, 2004 7:04 am

Japan is our root of the Asia tree. But some birds must fly to a new tree when the original becomes to crowded. My attempt to make a airline-related confuscious style statement.:D Just kidding, but yes. China is the fastest growing market in the pacific theatre of commecial aviation, with PEK, PVG and CAN being the big leaders. CAN opening it's new airport is a definate attraction with the large amount of commerce. We are going to be serving it with a 757 for starters, but I see us upgrading that to a widebody of some sort in the future. Who knows, we may serve southern China with a nonstop. I was told that Guangzhou has large concentration of Japanese-owned firms there. I don't know if this is true, but if so, that would be a good basis for prolonged service to that city.
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azjubilee
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RE: NW's China Strategy?

Fri Sep 24, 2004 7:11 am

The bottom line is that NRT works and makes money. The problem right now is that there just aren't enough airplanes. I'm sure that if NWA could, and if it were profitable they'd over fly their NRt hub to SHA, PEK, SEL, HKG, TPE, MNL if the could turn a profit. But they can't fly their current schedule and over fly at the same time. IN the future I can see smaller shell sizes for inter port and over flying. NWA needs to get ahold of more 744s, look into a 350 seat long hauler or sit on their hands for the 7E7. But their going to have to do something soon. I'm confident that NWA will react in their traditional competitive way in this matter... especially since we're talking about Asia, their bread and butter.

AZJ
 
A330323X
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RE: NW's China Strategy?

Fri Sep 24, 2004 8:46 am

NW didn't apply for any additional combination frequencies for 2005/2006. NWA Cargo did apply for some additional cargo frequencies for 2006, in addition to the frequencies it will be receiving for 2004/2005.

I'm not sure of the exact extent, but some of the combination frequencies can be turned into cargo frequencies, and vice versa.
I'm the expert on here on two things, neither of which I care about much anymore.
 
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jetjack74
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RE: NW's China Strategy?

Fri Sep 24, 2004 8:54 am

The problem right now is that there just aren't enough airplanes.

Actually, what it really comes down to is slots. NRT has limited a number of slots for heavy, long-range aircraft. We hedged off part of that problem with lower weight, smaller aircraft for the use of the additional, shorter runway that opened in May of 2002. Acquiring aircraft is reletively easy at the present time, since there are so many out in the desert. It's the favorable lease rates which are illusive. NW is going to have to bypass NRT eventually. It goes without saying, that we have NRT wrapped around our economic fingers, but other markets are going to be needed in our system if we are going to compete effectively. UA is already going after SGN, CAN thru NRT. CAN Will eventually go n/s from SFO. Today they've added Nagoya to the list today. It'll be served from SFO. SGN is a market we'll have to get into before the limited slots available go as well.
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Lu
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RE: NW's China Strategy?

Fri Sep 24, 2004 9:10 am

I am wondering if the US government is considering to loose the VISA application to Chinese. As everyone knows what is happening now in China, US tour market potential is enormous for Chinese, directly it is good to the airlines. And with different culture, we, chinese, does not like westerns, if we have money, we must spend more to show that I am rich, so I am sure the rich will prefer choosing foreign airlines for enjoy rather than the Chinese.

Lu
 
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jetjack74
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RE: NW's China Strategy?

Fri Sep 24, 2004 9:16 am

Well, we FA's are required to have a Chinese Visa in our passport. Who will budge first?
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JoFMO
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RE: NW's China Strategy?

Fri Sep 24, 2004 10:07 am

The problem for NW is that they can't open new Chinese routes without aboandoning another. If they want to open DTW-PEK they need to discontinue NRT-PEK. And because of their hub in NRT they so far have a lot of feed for their flight to PEK which they would loose if they dicide to go direct to PEK from DTW.
NW has direct flights to NRT from SEA,PDX,SFO and LAX. And I guess that no one from any of these cities would go to PEK via DTW. So they have to weight what's more important to them. Loosing all of their west coast pax or reducing the number of stops for all their west coast / middle west pax.
 
B2443
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RE: NW's China Strategy?

Fri Sep 24, 2004 11:43 am

If they want to open DTW-PEK they need to discontinue NRT-PEK.

Well technically they could do 4 DTW-PEK nonstop, 3 DTW-NRT-PEK per week. They did that before anyway. They probably could switch to nonstop tomorrow if they wanted to..
 
JoFMO
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RE: NW's China Strategy?

Fri Sep 24, 2004 11:53 am

@B2443:

OK, they could switch their frequencies, but no additional routes.

And reducing NRT-PEK to 3times weekly would make their flight much less attractive for 5th freedom business passengers who a least want to have one daily flight.
 
burnsie28
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RE: NW's China Strategy?

Fri Sep 24, 2004 12:00 pm

OK, they could switch their frequencies, but no additional routes.

And reducing NRT-PEK to 3times weekly would make their flight much less attractive for 5th freedom business passengers who a least want to have one daily flight.


Im sure that NW will get even more routes to china next year.
 
DTWINTLFLYER
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RE: NW's China Strategy?

Fri Sep 24, 2004 8:46 pm

The number of visitors to Beijing will increase exponentially as it did in Seoul after the Olympics came. No matter how much (or not at all) the Chinese govt would like to keep things the way they are now, things will change. They have to, and with such a huge workforce and the economic potential for China, traffic will increase from here on out (both visitors and also business). NW of course operated these flights as either non stop or connection and then after 9-11 dropped them to connection which only made sense (especially with the downturn in travel during the SARS outbreak). Look for NW to restart non stops to PVG and eventually PEK also. To remain competitive they will have to. With the addition of China Southern into the SkyTeam, there are certainly possibilities for NW to connect pax to other Chinese cities from CAN (as we did with Air China in the previous code share). CAN is a good city for NW and eventually that will see a larger a/c. The real problem NW had with Air China in the past was they sold tickets for less than they should which hurt the yield. No doubt UA is realizing that now.
I think those folks in Bldg A have a handle on the situation and as always at NW (the bean counter is hard at work to make sure we make some money).


Other Asia cities....
SGN remains a question mark for anyone. Yes there is a potential for tourism to spike up (it is beautiful there and the people are very nice, but as far as business traffic - that will remain elusive I think because the infrastructure is just not developed enough. You have companies like LG and Hyundai there, but it would be a tough place for US businesses to go into.

NGO - new airport in 05, look for NW to potentially add a flight
ICN - always a potential to serve like we did back before the Asian Economic Crisis in 97.
Jakarta - NEVER
KL - be nice to once again go there, but not sure if it will happen

I would think over the next two - three years, we will see more frequency increase as opposed to city increase.
 
cdgdtw
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RE: NW's China Strategy?

Fri Sep 24, 2004 10:43 pm

In fact, it would seem aircraft are an issue. Consider:
DTW-NRT 2x daily = 4 747s
MSP-NRT 1x daily = 2 747
JFK-NRT 1x daily = 2 747
HNL-NRT 1x daily = 2 747
DTW-KIX 1x daily = 2 747 (November the plane will continue to TPE, now a 757)
DTW-NGO 1x daily = 2 747, MNL continuation

the above aircraft continue past NRT and there is a spare overnight for mntce. in DTW.

I'm surprised NW hasn't added any frequency to NGO with its opening of a new airport next year. But as stated, no routes without aircraft and no aircraft without routes.
 
B2443
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RE: NW's China Strategy?

Fri Sep 24, 2004 11:45 pm

The real problem NW had with Air China in the past was they sold tickets for less than they should which hurt the yield. No doubt UA is realizing that now.

Back when NW and CA were buddy-buddies, CA's price (on NW's PEK-DTW) wasn't lower than NW's consolidator's at all, at least not in the US. What would ensure CZ won't do the same? But can someone explain how this kind of code-sharing works? Was CA given a fixed/unfixed number of seats on NW flights to sell or what?

When the NW's new terminal opened at DTW, there were (probably still are) Air China signs everywhere as if Air China were flying to DTW...
 
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jetjack74
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RE: NW's China Strategy?

Sat Sep 25, 2004 12:19 am

In fact, it would seem aircraft are an issue

Well yes, It would be somewhat difficult to expand any with the current fleet, but like I said, there is an abundance of aircraft. That is a short-term obstacle. But NW is not going to add very much to the fleet as of right now. It's the type of slots that the JAA will offer to foreign carriers. Even with the US-Japan Bi-lateral agreement blatently favoring US-carriers, space for large aircraft is at a premium. If NRT extends the new runway, then more flying into NRT is possible for the future. But until the farmers, who own the feilds around the perimeter give in to the JAA, then I see NRT being a difficult airport gain any more marketshare

When the NW's new terminal opened at DTW, there were (probably still are) Air China signs everywhere as if Air China were flying to DTW...

Yep, they're still there. The Berry Terminal had a Royal Jordanian sign on it's board on the access road.
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PSU.DTW.SCE
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RE: NW's China Strategy?

Sat Sep 25, 2004 7:46 am

Right now there's 1 744 out of service at a given time for WBC upgrades and repainting.

NW could pull the 744 off of HNL-NRT and put on a 742 or DC-10 instead.

This would potentially allow for an additional route to be flown in the future, but either way as metioned the 744 fleet is max-ed out.

NW would like to get the 742's out of passenger service, but they're aren't enough aircraft to go around to cover LAX-NRT with anything else. Not enough 744's, and NW isn't likely to drop this route down to an A332 even if they had more A332's available to cover this route.
 
Vctony
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RE: NW's China Strategy?

Sat Sep 25, 2004 8:48 am

Would NW consider getting some second hand A340s to plug this gap (I don't know if there are any available, but it seems like the aircraft that fits the NW fleet the best)?
 
burnsie28
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RE: NW's China Strategy?

Sat Sep 25, 2004 9:27 am

I dont believe that NW is interested in getting the A340 due to its poor performance (minus A345). I would expect NW to get the 7e7 but that wont come out in time. NW is still looking at buying UA birds that are sitting idol down in the desert, which would fit the gap.