LAXintl
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Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 4:33 pm

Delta Airlines has informed the DOT that it will retun 7 US-China frequencies allocated to Atlanta-Shanghai services back to the DOT.

Additionally Delta seeks DOT approval for additional 1-year delays in resuming service to Guangzhou. Delta now seeks permission to resume NRT-CAN service on June 1, 2013.

Delta further request the flexibility to utilize the 7 frequencies allocated to delayed CAN service on other existing China routes the carrier operates should market demand dictate.

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LAXdude1023
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 4:35 pm

Not surprising at all. They gave ATL-PVG two good runs, but it just couldnt work.
It is what it is...
 
aznmadsci
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 4:37 pm

So who will now go for these slots? Would these slots be good only for PVG or could another airline do PEK?
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LAXdude1023
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 4:40 pm

Quoting aznmadsci (Reply 2):
So who will now go for these slots?

There is already a pile of unused China slots, so I suspect nobody.
It is what it is...
 
EricR
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 4:49 pm

I still am of the opinion that the Chinese economy (although exploding in growth) is not yet at the point where it has high enough yields to support such long duration flights. I do not believe this is a DL issue, but one that all U.S. based carriers are experiencing.

I think an overwhelming proportion of US-China capacity will be provided by Chinese carriers due to their lower cost structure in the short to mid term. Longer term we may see yields rise to the point where Chinese routes become profitable for US based carriers.

[Edited 2012-05-04 10:38:49]
 
LAXintl
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 4:56 pm

With the expanded US-China bilateral there are unallocated frequencies available.

Delta could always get a few more if it asks, however this is likely a pragmatic move as it does not expect to make ATL-PVG work anytime soon.
Also Guangzhou has truly been scheduling yo-yo as it has come and gone more times than I can remember.
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FSDan
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 5:49 pm

Quoting LAXdude1023 (Reply 1):
They gave ATL-PVG two good runs

I don't know if I would call the second one good... Two weekly flights isn't appealing to many high-yield travelers.
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Centre
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 6:14 pm

Quoting EricR (Reply 4):
I think an overwhelming proportion of US-China capacity will be provided by Chinese carriers due to their lower cost structure in the short to mid term.

How about better service by Chinese carriers?
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EricR
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 6:37 pm

Quoting Centre (Reply 7):
Quoting EricR (Reply 4):
I think an overwhelming proportion of US-China capacity will be provided by Chinese carriers due to their lower cost structure in the short to mid term.

How about better service by Chinese carriers?



My opinion and my opinion only, but the rapid and successful expansion of ULCC's leads me to conclude that price matters significantly more than service to more and more people.

Also keep in mind that a vastly larger proportion of passengers to/from China are Chinese (paid in Chinese wages). Therefore, a lower priced option is more important than service.
 
BoeingGuy
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 6:42 pm

Quoting LAXintl (Reply 5):
Delta could always get a few more if it asks, however this is likely a pragmatic move as it does not expect to make ATL-PVG work anytime soon.

Why doesn't DL use the slot to start SEA-PVG? That would give them a lot more connecting traffic from DL's own network and AS/QX.
 
FlyPNS1
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 7:26 pm

Quoting EricR (Reply 4):
I do not believe this is a DL issue, but one that all U.S. based carriers are experiencing.

Agreed. On top of that, while China is a big country, the demand between the U.S. and China is still relatively small. It's certainly growing, but the airlines jumped a bit too quickly into China and flooded it with capacity.
 
phxa340
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 7:31 pm

Quoting Centre (Reply 7):
How about better service by Chinese carriers?

Eh, from my experience I would rather fly a US carrier. With the exception of CX of course. Air China was seriously bad. It made the 744 UA flight from LAX - SYD seem luxurious in economy.
 
yellowtail
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 7:32 pm

Just like India, China has not panned out to be worthy of the gold rush it commanded a few years ago.
Even Brazil has struggled to live up to its promise outside of GIG and GRU.

Only the Arabian bubble seems not to have just yet.
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LJ
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 7:44 pm

Quoting FlyPNS1 (Reply 10):
Agreed. On top of that, while China is a big country, the demand between the U.S. and China is still relatively small. It's certainly growing, but the airlines jumped a bit too quickly into China and flooded it with capacity.

Is there any reason why US - China traffic is so difficult compared to Europe - China? I would assume that the US would be able to absorb such capacity as it seems to be a larger market (in absolute numbers) than Europe. Or isn't there much trade between the US and China (at least compared to Europe?).
 
roseflyer
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 7:48 pm

Quoting BoeingGuy (Reply 9):

Why doesn't DL use the slot to start SEA-PVG? That would give them a lot more connecting traffic from DL's own network and AS/QX.

Since they already operate SEA-PEK with the 767, I think SEA-PVG might be worth investigating. A 767 is a lot easier to fill than a 777. However, I'm not sure the 767 has enough range. Also the 767 is not a particularly desirable plane for that long of a flight since it is so much slower than a 777 or 747.

[Edited 2012-05-04 12:49:37]
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FlyPNS1
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 7:52 pm

Quoting LJ (Reply 13):
Is there any reason why US - China traffic is so difficult compared to Europe - China?

There's certainly a lot of trade between the US and China, however there's far less leisure demand. Lots of American's go on vacation to Europe, however vastly fewer go to China on vacation. Even in the reverse direction, the U.S. welcomes more European tourists than Chinese. On top of this, China is a lot further from much of the U.S. population which lies on the East Coast of the U.S., further hurting demand and making it harder to make money...hence why ATL-PVG hasn't worked.
 
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MillwallSean
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 8:46 pm

Its not a big difference in total trade between the EU and US with China. The EU is just slighly larger overwall.
But if you look at details the US is exporting a fair bit less to China compared to the EU and US FDI is a fair bit less than EU FDI.

The EU is Chinas largest tradingpartner.
It handles a total of 17% of all trade with China (13.2% of Chinas imports and 20.1% of Chinas exports)

The US is Chinas second largest tradingpartner.
It handles a total of 13.6% of all trade with China (8.0% of Chinas imports and 18.3% of Chinas exports)

Those figures alnone should warrant plenty of traffic. Were talking about alot of money here. But there is plenty of airlines flying and US inbound and outbound tourism to China isnt at all as large as European tourism ties with China.
Chinese airlines seem to compete better on US routes compared to European routes for traffic too.

What we might ask ourselves is whats the connection between SE US and China?
DL does bring in feed from many parts of the US to its ATL hub but I dont think ATL is that well positioned for the US China connections either. Its natural O/D will lack VFR, tourism and to a large degree natural business connections with China. Its larger market surrounding market SE US also lacks VFR, tourism ties and natural business connections.
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LAXintl
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 8:52 pm

China and the US have huge trade links. Just look at all the freighters, ships going back and forth plus all consumer goods sold in America.

However all this trade has not necessarily meant as strong passenger air travel demand. For example in 2011 there was about 1.2mil US visitors to China., this compares with well over 6mil Europeans that visited China. Seems China is simply not as big of an interest for the average American as for European travelers.

Chinese outbound tourism to the US has been growing incredibly fast (up 36%in 2011), and more would love to visit, however the difficulty in obtaining visa’s complicates this. Chinese visitors however indeed tend to fly their own carriers, and while big spenders when the US and have become the new Japanese, they tend to chase after the lowest possible airfare which does not help the case for US airlines.

As far as comments about the quality of Chinese airlines, things are changing fast. I’ve had business dealing with Chinese carriers since the mid 1990s, and they have come a long way, especially as they take delivery of new aircraft with the latest cabins. Also having joined global alliances pushed improvements both in their networks, and service on the ground.

While admittedly most won’t look to Chinese airlines as models of service especially in a very upscale Asian market place, they are moving fast and will over time create growing headaches for US and other foreign carriers.
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B2443
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 8:55 pm

Quoting LJ (Reply 13):
Is there any reason why US - China traffic is so difficult compared to Europe - China?

Schengen visa is easier to get than U.S visa for Chinese citizens.

[Edited 2012-05-04 13:56:16]
 
PPVRA
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Fri May 04, 2012 9:31 pm

For a lot of people, going through ATL also means a fair bit of backtracking. And you have a lot more choices through other hubs.
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PHX787
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 12:02 am

Quoting PPVRA (Reply 19):
For a lot of people, going through ATL also means a fair bit of backtracking. And you have a lot more choices through other hubs.

   precisely. As much of a hub that ATL is, you can most likely still get to your destination from China via LAX, SEA, etc etc.
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bkkair
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 1:10 am

This market is growing rapidly, fueled by Chinese going to the USA. 1.1 million tourists last year is expected to almost double within 2 years.

Due to hassles getting a USA visa, Chinese are going to Europe to spend their money, but that is changing with Obama speeding up visa procedures for China, India and Brazil:


http://www.nytimes.com/2012/04/15/bu...ists.html?_r=2&partner=rss&emc=rss

A record number of Chinese visited the United States last year — nearly 1.1 million — and the country accounts for one of the top-growing tourist groups here, according to the Commerce Department. The number of visitors is expected to almost double by 2014, according to the U.S. Travel Association. Chinese visitors spend about $6,000 each on every visit here, versus the $4,000 that visitors from other countries spend on average, the association says, and their top activity is shopping.

Just a few months ago, for example, the wait for a Chinese tourist to the United States was about 180 days; now it is less than a week.
 
bobnwa
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 2:12 pm

Quoting PHX787 (Reply 20):
precisely. As much of a hub that ATL is, you can most likely still get to your destination from China via LAX, SEA, etc etc.

For a good connection from the US to China, DTW would still offer a better choice than LAX,SEA or ATL for most of the US>
 
dtw9
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 2:55 pm

Quoting bobnwa (Reply 22):
For a good connection from the US to China, DTW would still offer a better choice than LAX,SEA or ATL for most of the US>

Hard to believe but if you flew DFW-DTW-PEK, it would only be about 100 air miles more then if you flew DFW-LAX-PEK and I'm sure an easier connection
 
delta2ual
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 3:01 pm

Quoting dtw9 (Reply 23):
Hard to believe but if you flew DFW-DTW-PEK, it would only be about 100 air miles more then if you flew DFW-LAX-PEK and I'm sure an easier connection

  
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DTWLAX
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 3:14 pm

Quoting bobnwa (Reply 22):
For a good connection from the US to China, DTW would still offer a better choice than LAX,SEA or ATL for most of the US>

DTW will be a better choice if you are on the East Coast, upper Midwest and to some extent South East. LAX, SEA is better for anything west of IAH. More LAX due to the various airlines that serve LAX
 
hohd
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 3:57 pm

Quoting bkkair (Reply 21):
A record number of Chinese visited the United States last year — nearly 1.1 million — and the country accounts for one of the top-growing tourist groups here, according to the Commerce Department. The number of visitors is expected to almost double by 2014, according to the U.S. Travel Association. Chinese visitors spend about $6,000 each on every visit here, versus the $4,000 that visitors from other countries spend on average, the association says, and their top activity is shopping.

Just a few months ago, for example, the wait for a Chinese tourist to the United States was about 180 days; now it is less than a week.

That is assuming you get the visa. With Schengen visa, if you submit all the required docs, you will get the visa, with US there is no assurance.
 
Flighty
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 4:33 pm

Quoting EricR (Reply 4):
I still am of the opinion that the Chinese economy (although exploding in growth) is not yet at the point where it has high enough yields to support such long duration flights.

It "could." But US Customs is only going to let people in if they have a really good reason to be here. The vast majority of the market, we reject due to immigration concerns. It is not an uncontrolled market in the same way US/UK is relatively uncontrolled.

Plenty of Chinese tourists and businessmen would like to come here but cannot. Many Chinese pay $30,000 to coyotes to come up through the Mexican border. There is an illegal pipeline for human traffic because the airlines are off limits to 90% of the market.

At least that is my view on the market. Ordinarily, the economic indicators would suggest a vast amount of traffic. Airlines were caught a little off guard here.
 
jfk777
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RE: Delta Returns ATL-PVG Slots; Delays Guangzhou Svc

Sat May 05, 2012 9:21 pm

AA could fly a 777 from JFK to PVG to go along with their ORD and LAX 777 flight to Shanghai.