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User avatar
SANFan
Posts: 5110
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 7:25 pm

Hmmmm. I wonder if this news might present opportunities for service between Korea and SAN? Seoul has been mentioned occasionally as a good potential 2nd gateway to Asia from San Diego.

It would also strengthen SkyTeam's already healthy presence in SAN (through DL.) There are also some strong hints in San Diego that in 2018 we might well see another large European carrier with a world-class hub there, start service; KLM actually seems to fit some of the subtle hints better than say, LH, at this point. Intl expansion at Lindbergh Field is currently expected to continue at least into 2019. (New, much larger FIS facilities are now being planned and built to be finished by summer of 2018, in time for expected intl growth...)

It's sure fun to ponder the possibilities!

bb
 
michman
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 7:28 pm

enilria wrote:


A number of those jobs were moved to Michigan where Toyota has existing facilities --

http://www.toyota.com/usa/operations/ma ... and_saline

Also, they are opening a new autonomous research center here --

http://www.xconomy.com/detroit-ann-arbo ... nn-arbor/#

And, of course, the flight is not just for Toyota. There are other auto manufacturers and suppliers in Michigan that have ties to the region. Sorry, but DTW-NGO was not getting filled by an CRJ-200 from CVG-DTW.
 
jbs2886
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 7:29 pm

Sightseer wrote:
MSPNWA wrote:
commavia wrote:
I strongly disagree. SEA continues to serve precisely the purpose for which it was intended - conveniently linking markets throughout the western U.S. with the principal cities of East Asia. That isn't going to change with or without a Korean JV. Personally, I continue to believe that the combination of DTW, SEA and ICN, plus to an extent LAX, is an extremely compelling proposition for Delta between the U.S. and Asia.


You can strongly disagree all you want, but there's no logical reason to back up your opinion. SEA's importance just took a giant nosedive across the Pacific. No doubt.


What is your understanding of the SEA hub's purpose? I would say that, from the beginning, it's raison d'etre has been to funnel traffic from the Western US to the principal Asian gateways, which is exactly what Commavia said. I agree that this likely dampens TPAC expansion from SEA in terms of new destinations, but outside of maybe TPE I also think there were basically no viable destinations that DL doesn't already serve.


I don't think this is a blow to SEA whatsoever. In fact, DL's weakness has been Pacific routes in part due to the severe lack of decent partnerships; so, to the extent DL strengthens its Pacific position, SEA could gain from a stronger network overall. I agree that there are limited additional destinations, but I don't see a decrease in service, instead see the potential for a stronger network and maybe moderate growth (flights and destinations) from SEA. It doesn't have to flow through ICN for KE and DL to want to launch a SEA-Asia flight; look at all of the Trans-Atlantic adds that are in JV with AF-KLM (sure, ICN will become the dominant point, but it won't be the only).
 
PlanesNTrains
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 7:36 pm

jumbojet wrote:
MSPNWA wrote:
You can strongly disagree all you want, but there's no logical reason to back up your opinion. SEA's importance just took a giant nosedive across the Pacific. No doubt. Every route was already at bare minimum service levels, with bleak prospects to expand further.
The Seattle buildup might not even happen if DL had a joint venture all along. It was an effort to live without one, but I think we're seeing Delta come to the realization that SEA wasn't nearly enough to stem the reduction of their Pacific network. If significant expansion at SEA was looking unlikely before this, we know it's not going to happen now.

.


SEA wasn't going to happen overnight. The SEA build up is what, 3 or 4 years in the making? Everybody seems to want to think that DL should be flying 777's and other large ULH aircraft from SEA in abundance like UA does from SFO. SEA however, is holding its own with the 767 flying TPAC. You don't need large, ULH aircraft to make money and to fit the intended mission. Who really knows what SEA TPAC will look like in a few more years but I'd be willing to bet my paycheck that SEA is not going anywhere, even with the new KE JVA in place. In fact, DL SEA will continue its growth, maybe not as fast but it will grow. And if DL SEA retreats, POS is going to be F****n pissed!!


The POS doesn't really matter in all of this anyhow. If they didn't plan for an eventual hub pulldown of DL before moving forward on their capital investments, they are fools. Not that I'm predicting that for DL in SEA - I think they're pretty well vested right now in the success of the hub.

And is it true that DL is doing a lot of TPAC on 767's? How'd I miss that gem along the way?
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
GripenFan
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 7:57 pm

WPvsMW wrote:
The timing of the DL/KE JV and the AA/CZ deal makes me anticipate something big in the *A world.


I can't help but wonder if AA's interest in CZ was driven by knowledge of a pending DL/KE JV or vice-versa. American and Korean appeared to have been "tiptoeing" toward a closer relationship for some time now, but I suspect that's been permanently put on ice.

I'll be curious to see how this affects both carrier's access to mainland China. As another poster mentioned, Delta's plan to create a JV hub in PVG probably wasn't going to happen anytime soon, and my understanding is that KE has the largest mainland China network of non-Chinese carriers. AA, on the other hand, doesn't even fly to Guangzhou (at least not yet, anyways), and I would imagine any plan to create a hub there would run into the same obstacles as DL in PVG...
 
airbazar
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:13 pm

MSPNWA wrote:
airbazar wrote:
I disagree. Lack of competition is bad for consumers but JV's increase competition. It allows for more city pairs to be linked which give consumers more options, and more options = more competition. For example, do you think we'd have BA flying LHR-AUS or JL flying NRT-SAN without a JV? No, They would stick to the main routes into the large markets. I'm hoping this JV finally bring KE back to BOS.


Increase competition? Not only does that contradict every economic principle out there, it's against what we've seen with every airline JV out there. The primary point of a JV is to reduce competition.

No the primary point of a JV is to share risk. Without risk sharing there would be much fewer routes to/from secondary airports. More routes means more options for consumers and more competition among the remaining airlines.
Compare TPAC, TATL, and S.America fares and you'll see that S.America has by far the most expensive fares. Why? There are no JV's, so there are fewer routes being flown, mostly only into major cities.

Would LHR-AUS and NRT-SAN exist without them? Likely. Those are routes largely unaffected by JVs. Those are example of routes that exist without JVs.

No they wouldn't and the fact that they were started only after a JV was formed proves it, IMO.
Without the risk sharing of a JV, BA or JL would not be starting these routes. DL wouldn't be flying BOS-AMS or BOS-LHR either.
 
WPvsMW
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:18 pm

I predict no change in DL's equipment, routes, and frequencies (other than historic seasonal adjustments) from HNL to Asia .... errr, I mean Japan, because the only Westbound HNL service is to Japan. Why... because the traffic is 90% Japanese nationals. DL is not going to change anything about that, and there would be resistance to that traffic boarding KE metal.

Expanding on that point, there will be some TPAC shift in traffic to ICN that downsizes NRT (and the Skyclub and Morning Calm lounges at NRT may consolidate), but DL's NRT routes that are predominately JP traffic will not go away.

[humor] Maybe HNL will get some A380 gates. [/humor]
 
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Polot
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:26 pm

airbazar wrote:
...

The primarily point isn't to share risk, it is to combine the marketing and network strengths of the airlines involved to make routes more attractive/profitable. The revenue sharing is to ensure that everyone puts their full weight behind the partnership and help avoid internal and external conflict.

S. America fares are generally higher because there is far less competition between the US and South America (especially deep S. America and LCC competition) than TATL and TPAC.
 
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11725Flyer
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:28 pm

Great to finally see this happen. It seems as though once RA was gone, this began to gain some traction.
 
jumbojet
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:33 pm

I have always appreciated and enjoyed reading the arm chair experts on this site, especially how it applies to big and important events like this. However, to me, I think the importance of SEA remains the same. With a KE/DL JV, most people will still need a double connection to get to South East Asia. To compete with UA's mega powerhouse SFO gateway to Asia, SEA will still need to eventually become the focal point of DL's TPAC ops. The SEA expansion is happening and DL will fully take advantage of the added gates to increase domestic feed into SEA and eventually offer passengers the same, if not similar, one stop connections to SE Asia.
 
kavok
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:36 pm

WPvsMW wrote:
I predict no change in DL's equipment, routes, and frequencies (other than historic seasonal adjustments) from HNL to Asia .... errr, I mean Japan, because the only Westbound HNL service is to Japan. Why... because the traffic is 90% Japanese nationals. DL is not going to change anything about that, and there would be resistance to that traffic boarding KE metal.



Is that HNL-Japan traffic included as part of the JV? As I understood it (and please correct me if wrong), this JV includes all TransPacific flights by either airline (except US-China). This raises the following questions:
1- Are flights from HNL/SPN/GUM considered Transpacific, and included in this JV?
2-Since it is TransPac, I am guessing the KE flights to YVR & YYZ are included in the JV, correct?
3-Is DL's SEA-HKG part of the JV, or do flights to HKG fall into the China exclusion?

If the answer to #1 is yes, then capacity wise DL is currently slightly larger than KE TransPac volumes and flights. If the answer to #1 is no, than KE would be larger currently.
 
grbauc
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:59 pm

I think Sea is fine. Delta has been expanding all over with focus cities to a few stand alone routes making a complete presence out here in the west coast and all over the country. I think they can let things grow a little more organically now and I think they can let things grow a little more organically now Tpac growth will probaly shift towards more domestic.
 
PlanesNTrains
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 8:59 pm

jumbojet wrote:
I have always appreciated and enjoyed reading the arm chair experts on this site, especially how it applies to big and important events like this. However, to me, I think the importance of SEA remains the same. With a KE/DL JV, most people will still need a double connection to get to South East Asia. To compete with UA's mega powerhouse SFO gateway to Asia, SEA will still need to eventually become the focal point of DL's TPAC ops. The SEA expansion is happening and DL will fully take advantage of the added gates to increase domestic feed into SEA and eventually offer passengers the same, if not similar, one stop connections to SE Asia.


Yes, because FF's like yourself are the only one's who really get it. smh
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
global1
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 9:05 pm

My question is with the PVG-NRT slot. Will it be reallocated to another market?
 
airtechy
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 9:06 pm

Finally! ICN is a fantastic airport to fly through. My selfish hope is that this will make the DL US...BKK flights in business more affordable. ;)

Jim
 
jumbojet
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 9:08 pm

PlanesNTrains wrote:
jumbojet wrote:
I have always appreciated and enjoyed reading the arm chair experts on this site, especially how it applies to big and important events like this. However, to me, I think the importance of SEA remains the same. With a KE/DL JV, most people will still need a double connection to get to South East Asia. To compete with UA's mega powerhouse SFO gateway to Asia, SEA will still need to eventually become the focal point of DL's TPAC ops. The SEA expansion is happening and DL will fully take advantage of the added gates to increase domestic feed into SEA and eventually offer passengers the same, if not similar, one stop connections to SE Asia.


Yes, because FF's like yourself are the only one's who really get it. smh


Somebody woke up on the wrong side of the bed. You have your opinion, which I respect and appreciate, and I have mine. I fully realize that being a FF with Delta doesn't even qualify me as an arm chair expert, but to me, it still makes sense for DL to build up SEA. Time will tell.
 
grbauc
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 9:30 pm

airtechy wrote:
Finally! ICN is a fantastic airport to fly through. My selfish hope is that this will make the DL US...BKK flights in business more affordable. ;)

Jim


I've been paying low 3's for J class on Korean to SE Asia.
 
jumbojet
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 9:33 pm

grbauc wrote:
airtechy wrote:
Finally! ICN is a fantastic airport to fly through. My selfish hope is that this will make the DL US...BKK flights in business more affordable. ;)

Jim


I've been paying low 3's for J class on Korean to SE Asia.


from where?
 
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TWA772LR
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 9:34 pm

jumbojet wrote:
PlanesNTrains wrote:
jumbojet wrote:
I have always appreciated and enjoyed reading the arm chair experts on this site, especially how it applies to big and important events like this. However, to me, I think the importance of SEA remains the same. With a KE/DL JV, most people will still need a double connection to get to South East Asia. To compete with UA's mega powerhouse SFO gateway to Asia, SEA will still need to eventually become the focal point of DL's TPAC ops. The SEA expansion is happening and DL will fully take advantage of the added gates to increase domestic feed into SEA and eventually offer passengers the same, if not similar, one stop connections to SE Asia.


Yes, because FF's like yourself are the only one's who really get it. smh


Somebody woke up on the wrong side of the bed. You have your opinion, which I respect and appreciate, and I have mine. I fully realize that being a FF with Delta doesn't even qualify me as an arm chair expert, but to me, it still makes sense for DL to build up SEA. Time will tell.

IMO, DL only chose SEA because the only cities with near-limitless demand (SFO and LAX) to Asia were taken. LAX is a cut throat market and AA saw that as it's only option to make a true gateway after their stimulation experiment from DFW worked, and only then they went into it with JVs first with massive players on the other side of the Pacific. And we all know UA is the 1 million bound gorilla in SFO. That left PDX and SEA as viable gateways. PDX failed once before and SEA was the only city between the 2 with meaningful O&D to Asia. DL jumped in with a huge AS agreement. Now that they have left AS, expect SEA to be pulled down especially regionally and either smaller aircraft of cut services to anything that isn't ICN or PVG on DL that is TPAC. I never did see how people thought how DL was going to make SEA rival SFO.

HND needs to happen from JFK and not MSP so as to regain Skyteam service on the NYC-Tokyo market. Yes I know, stiff competition from HN and JL and whatnot, but seeing as they serve only one city on the Asian continent (TLV) from JFK, they lose a ton of pax to the region that is/was their bread and butter. Does anyone know how many pax DL flows from JFK to HND through SEA or MSP?
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
Sightseer
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 10:01 pm

TWA772LR wrote:
Now that they have left AS, expect SEA to be pulled down especially regionally and either smaller aircraft of cut services to anything that isn't ICN or PVG on DL that is TPAC. I never did see how people thought how DL was going to make SEA rival SFO.


AS has been of little benefit to DL in SEA, and vice versa, for a few years now, as DL has stopped codesharing with AS on overlapping routes as they were launched. Now that DL will be up to 163 daily flights in SEA this summer, it has likely reached a critical mass where it doesn't need the additional clout of the AS network to attract customers. Indeed, that was likely a major reason why DL agreed to terminate the agreement early in the first place.

Regarding SFO, no one (well, no one who knows what they're talking about) ever said SEA would "rival" SFO. UA at SFO has a short-term advantage in terms of facilities and a long-term advantage in terms of demand from the Bay Area versus SEA. SEA will not allow DL to overtake UA in the Pacific, but it is a piece of the puzzle that will allow DL to continue to be competitive (the other pieces being DTW, LAX to a lesser extent, and of course the pending KE JV).
 
MIflyer12
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 11:22 pm

PlanesNTrains wrote:
And is it true that DL is doing a lot of TPAC on 767's? How'd I miss that gem along the way?


Yes. Check the SEA departures to PEK, ICN, PVG and NRT.

Refurbed they're not bad in coach or business, with the 777-style drop-down bins and AVOD at all seats.
 
Overthecascades
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Re: Delta and Korean sign JVA

Wed Mar 29, 2017 11:46 pm

Does DL get to code share on KE flights to China? KE has phenomenal coverage to China. i don't think it's affecting Sea Very much. Maybe more feeds domestically from western US to the Sea hub if anything
 
commavia
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:06 am

dmorbust wrote:
Given the competitive dynamics of AA and UA having Japanese based JV partners offering a lot more HND-USA service, I bet the DOT allows the move. DL can always say in their request that they are prepared to continue flying MSP-HND so as not to lose the valuable HND slot if their request is denied to eliminate any risk of losing the slot to someone else.


Maybe, maybe not. But it's still quite a risk. Regardless of what Delta argues, I don't really think there's much question that AA, Hawaiian and United will pounce.

MSPNWA wrote:
You can strongly disagree all you want, but there's no logical reason to back up your opinion. SEA's importance just took a giant nosedive across the Pacific. No doubt. Every route was already at bare minimum service levels, with bleak prospects to expand further. Now with KE's established presence in LAX, SFO, SEA, LAS, DFW, IAH, and ORD, along with DL's LAX, PDX, MSP, and SLC presence, the force-feeding of connecting traffic over SEA can minimize. The only geographical advantage that would remain for SEA over ICN is to Japan, where it only has the lame duck NRT with very weak prospects of anything else beyond a shift to HND.


Cool story. I still strongly disagree, and think the above is near-entirely wrong. SEA's importance is almost entirely unaffected by this. Indeed, as has been said numerous times, Delta's three primary Asia gateways going forward - DTW, SEA and ICN - are actually all exceptionally complimentary:

* DTW is well-situated to link the eastern U.S., including smaller markets, to the principle cities of Asia
* SEA is well-situated to link the western U.S., including smaller markets, to the principle cities of Asia
* ICN is well-situated to link the principle cities of the U.S. with Asia, including smaller markets

The "logical reason" for SEA remains just as it always have - provide convenient 1-stop connectivity between the western U.S. and the biggest markets in East Asia.

enilria wrote:
This is why


I don't follow. Why would Toyota consolidating some of its U.S. operations in North Texas necessitate Delta existing DTW-NGO? As already said, that route caters to more than just Toyota, and indeed even among the Toyota traffic it targets, some will still be traveling to/from cities for which DTW is a well-placed connecting gateway.

GripenFan wrote:
I can't help but wonder if AA's interest in CZ was driven by knowledge of a pending DL/KE JV or vice-versa. American and Korean appeared to have been "tiptoeing" toward a closer relationship for some time now, but I suspect that's been permanently put on ice.


I highly doubt that AA or China Southern had any "inside" knowledge of this. Far more likely is just that they could read the same writing on the wall as all the rest of us. There is really no fundamental economic or strategic logic behind either of these deals that wasn't quite obvious. AA's relationship with Korean was minimal and never likely to considerably alter the movement towards a JV with Delta.

WPvsMW wrote:
I predict no change in DL's equipment, routes, and frequencies (other than historic seasonal adjustments) from HNL to Asia .... errr, I mean Japan, because the only Westbound HNL service is to Japan. Why... because the traffic is 90% Japanese nationals. DL is not going to change anything about that, and there would be resistance to that traffic boarding KE metal.


I'm not so sure. I think far more likely would simply be Delta exiting HNL-Japan, and Japan beach markets, in general. That traffic is, indeed, near-entirely Japan-originating. But of course that means, by extension, that as Delta gets progressively weaker in Japan, it becomes progressively harder for Delta to capture that traffic without discounting and diluting yields. JAL, ANA and low-cost carriers are far more logical operators in Japan beach markets. It isn't hard at all to imagine Delta concluding at some point in the future that these leisure routes are simply not worth it.

global1 wrote:
My question is with the PVG-NRT slot. Will it be reallocated to another market?


I continue to view Delta ending NRT-PVG as a matter of when, not if. The only question to me is where those China frequencies go - LAX-PEK or ATL-PVG.

TWA772LR wrote:
IMO, DL only chose SEA because the only cities with near-limitless demand (SFO and LAX) to Asia were taken. LAX is a cut throat market and AA saw that as it's only option to make a true gateway after their stimulation experiment from DFW worked, and only then they went into it with JVs first with massive players on the other side of the Pacific.


I agree to an extent, although I must admit that I would have agreed to a far greater extent five years ago. Looking back at the lay of the land five years ago, there's really nothing AA has accomplished at LAX that Delta couldn't. While there's no question that LAX is a cutthroat market with tremendous competition and challenged yields, it's not like Delta couldn't have started its post-NRT Transpacific transition at LAX. Delta could have skipped LAX altogether. On the contrary, I think Delta affirmatively, aggressively and enthusiastically chose SEA. Would hindsight on the coming evolution in the Alaska relationship have changed Delta's calculus? Maybe, but I doubt it. Ultimately, SEA still offers just what Delta needed and presumably wanted - it's perfectly-placed geographically, healthy and growing economic fundamentals, and far less competition than LAX or SFO. And, I'll say it again - SEA seems to me to be working, and (at least so far) a clear win for Delta.
 
WPvsMW
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:10 am

Overthecascades wrote:
Does DL get to code share on KE flights to China? KE has phenomenal coverage to China. i don't think it's affecting Sea Very much. Maybe more feeds domestically from western US to the Sea hub if anything


Unknown at present. KE has codeshares with CN carriers, e.g., KE5803 is operated PEK/ICN by CZ. TMK, DL has no codeshares on domestic CN flights (e.g., PVG/XIY). There are codeshares within EU on AF and KL, but getting CAAC to agree to DL codeshares on KE metal into CN a very different matter.
 
WPvsMW
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:22 am

WPvsMW wrote:
I predict no change in DL's equipment, routes, and frequencies (other than historic seasonal adjustments) from HNL to Asia .... errr, I mean Japan, because the only Westbound HNL service is to Japan. Why... because the traffic is 90% Japanese nationals. DL is not going to change anything about that, and there would be resistance to that traffic boarding KE metal.


commavia wrote:
I'm not so sure. I think far more likely would simply be Delta exiting HNL-Japan, and Japan beach markets, in general. ....



HNL/NRT, NRT/GUM, and NRT/SPN are huge cash cows that DL will not walk away from. Plus, KE's only US fifth freedom rights ex-NRT are to HNL ( LAX/GRU is ex-ICN)
 
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TWA772LR
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:25 am

commavia wrote:

TWA772LR wrote:
IMO, DL only chose SEA because the only cities with near-limitless demand (SFO and LAX) to Asia were taken. LAX is a cut throat market and AA saw that as it's only option to make a true gateway after their stimulation experiment from DFW worked, and only then they went into it with JVs first with massive players on the other side of the Pacific.


I agree to an extent, although I must admit that I would have agreed to a far greater extent five years ago. Looking back at the lay of the land five years ago, there's really nothing AA has accomplished at LAX that Delta couldn't. While there's no question that LAX is a cutthroat market with tremendous competition and challenged yields, it's not like Delta couldn't have started its post-NRT Transpacific transition at LAX. Delta could have skipped LAX altogether. On the contrary, I think Delta affirmatively, aggressively and enthusiastically chose SEA. Would hindsight on the coming evolution in the Alaska relationship have changed Delta's calculus? Maybe, but I doubt it. Ultimately, SEA still offers just what Delta needed and presumably wanted - it's perfectly-placed geographically, healthy and growing economic fundamentals, and far less competition than LAX or SFO. And, I'll say it again - SEA seems to me to be working, and (at least so far) a clear win for Delta.

DL could have went into a JV with KE if they wanted to get into LAX. Granted AA had the bigger footprint in LAX, they had almost no recognition in Asia. The big thing with AAs expansion was the JVs were established immediately before going forward. DL was growing organically on its own very fast in LAX, having a larger international system from LAX, and could have totally made American play 2nd fiddle (among the US3, no WN, AS, et al) as Delta would've moved up to the top spot. DL depended a lot on AS for the rapid growth in SEA especially for the domestic feed to the TPAC network and really could not have done that without them. To grow that fast to ring a decent-sized outstation to a full-on TPAC gateway in as little time as Delta did would have been impossible to do on their own without drastically scaling back other hubs. I don't have evidence to back this up, but I actually do think the partnership with AS was only meant to be a temporary solution to boost DLs SEA strategy, only to be dumped at a later time.

As for geography, it's great and all, but DL only serves NRT from the mainland US (today) from ATL, DTW, PDX, and SEA, I'm not counting HND because that is designed for a specific type of traveler and is based on very scarce slot allotting. Compared to AAs service from ORD, DFW, and LAX (which captures more of the country to make a connection at a better time than by going across the country S to N or E to W), and all of UAs hubs being connected to NRT; SEA only has geography to rely on and is only filling up a 763 in the process. If geography did play a role in flying from the US, SEA-NRT would at least be an A330 or 777, or double daily 763.

*edited to fix a spelling error
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
klakzky123
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:29 am

WPvsMW wrote:
Overthecascades wrote:
Does DL get to code share on KE flights to China? KE has phenomenal coverage to China. i don't think it's affecting Sea Very much. Maybe more feeds domestically from western US to the Sea hub if anything


Unknown at present. KE has codeshares with CN carriers, e.g., KE5803 is operated PEK/ICN by CZ. TMK, DL has no codeshares on domestic CN flights (e.g., PVG/XIY). There are codeshares within EU on AF and KL, but getting CAAC to agree to DL codeshares on KE metal into CN a very different matter.


I actually don't think DL is allowed to codeshare on routes to China based on the bilateral agreement with China. I believe the only way to codeshare to secondary Chinese cities is via a Chinese carrier which is why China Eastern will always have a role in DL's Asia-Pac strategy.
 
commavia
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:34 am

WPvsMW wrote:
HNL/NRT, NRT/GUM, and NRT/SPN are huge cash cows that DL will not walk away from.


We'll see. Personally, I remain skeptical. As Delta's brand presence in Japan inevitably continues to diminish, it's hard for me to imagine a plausible economic rationale for dedicating tens of millions of dollars of capital assets for flying lower-yielding Japanese leisure passengers to beach resorts in Hawaii and Micronesia. And especially if (when) more low-cost competition comes into these markets - then I really think Delta will walk away from most if not all of that business.

Flying Japan beach markets made sense years ago - Delta, and Northwest before it, (1) needed a presence in beach markets to maintain loyalty among Japan O&D passengers, because (2) Delta needed those Japan O&D passengers to support local yields on all of the Japan-Asia flying, because (3) those higher local yields were used to reinforce the connecting traffic moving over NRT to support the core U.S. O&D market. Virtually none of that applies any longer, and thus Japan beach markets are no longer core to Delta's strategy.

TWA772LR wrote:
DL could have went into a JV with KE if they wanted to get into LAX. Granted AA had the bigger footprint in LAX, they had almost no recognition in Asia. The big thing with AAs expansion was the JVs were established immediately before going forward. DL was growing organically on its own very fast in LAX, having a larger international system from LAX, and could have totally made American play 2nd fiddle (among the US3, no WN, AS, et al) as Delta would've moved up to the top spot. DL depended a lot on AS for the rapid growth in SEA especially for the domestic feed to the TPAC network and really could not have done that without them. To grow that fast to ring a decent-sized outstation to a full-on TPAC gateway in as little time as Delta did would have been impossible to do on their own without drastically scaling back other hubs. I don't have evidence to back this up, but I actually do think the partnership with AS was only meant to be a temporary solution to boost DLs SEA strategy, only to be dumped at a later time.


I'm not sure I follow. Korean would have done little to help Delta if it had gone into LAX markets like HKG, PVG and PEK. In any event, all I'm saying is that - five years ago - Delta could have done pretty much just what AA has done at LAX. AA was by that point already ahead of Delta at LAX, but it was much more evenly matched. But Delta consciously - and, I still contend, smartly - chose SEA for a variety of reasons.
 
PlanesNTrains
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:49 am

jumbojet wrote:
PlanesNTrains wrote:
jumbojet wrote:
I have always appreciated and enjoyed reading the arm chair experts on this site, especially how it applies to big and important events like this. However, to me, I think the importance of SEA remains the same. With a KE/DL JV, most people will still need a double connection to get to South East Asia. To compete with UA's mega powerhouse SFO gateway to Asia, SEA will still need to eventually become the focal point of DL's TPAC ops. The SEA expansion is happening and DL will fully take advantage of the added gates to increase domestic feed into SEA and eventually offer passengers the same, if not similar, one stop connections to SE Asia.


Yes, because FF's like yourself are the only one's who really get it. smh


Somebody woke up on the wrong side of the bed. You have your opinion, which I respect and appreciate, and I have mine. I fully realize that being a FF with Delta doesn't even qualify me as an arm chair expert, but to me, it still makes sense for DL to build up SEA. Time will tell.


Nope, slept eight hours. As long as you acknowledge that you're an armchair expert as well, we're all good. You just seem to always have the know-it-all point of view. Maybe I jaded by your relentless and repetitive UA bashing in the leggings thread. I need to turn my jumbojet-detector down a few notches.
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
PlanesNTrains
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:51 am

MIflyer12 wrote:
PlanesNTrains wrote:
And is it true that DL is doing a lot of TPAC on 767's? How'd I miss that gem along the way?


Yes. Check the SEA departures to PEK, ICN, PVG and NRT.

Refurbed they're not bad in coach or business, with the 777-style drop-down bins and AVOD at all seats.


I'm sure they're great. I love the 767. I just thought DL was .... better than that?
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
grbauc
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:55 am

jumbojet wrote:
grbauc wrote:
airtechy wrote:
Finally! ICN is a fantastic airport to fly through. My selfish hope is that this will make the DL US...BKK flights in business more affordable. ;)

Jim


I've been paying low 3's for J class on Korean to SE Asia.


from where?


Lax. Heck CX is 4k to CJK,DPS,MNL For me J fares to SE Asia have been easier to find then to Europe.
 
jetlanta
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:06 am

commavia wrote:
global1 wrote:
My question is with the PVG-NRT slot. Will it be reallocated to another market?


I continue to view Delta ending NRT-PVG as a matter of when, not if. The only question to me is where those China frequencies go - LAX-PEK or ATL-PVG.


That is indeed the correct question. Tough choice, actually. I'll go with LAX-PEK...as I think the competitive implications are so important. Delta isn't investing $1.9B in LAX to sit pat. And 2x daily JV-operated ATL-ICN helps a lot in terms of making that decision, I'd think.

Another, longer-term question to ponder....Does this even further accelerate the expansion of T3 at JFK? Delta has too many JV partners sitting over at T1. That has got to change, just like it is changing at LAX.
 
jetlanta
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:24 am

commavia wrote:
WPvsMW wrote:
HNL/NRT, NRT/GUM, and NRT/SPN are huge cash cows that DL will not walk away from.


We'll see. Personally, I remain skeptical. As Delta's brand presence in Japan inevitably continues to diminish, it's hard for me to imagine a plausible economic rationale for dedicating tens of millions of dollars of capital assets for flying lower-yielding Japanese leisure passengers to beach resorts in Hawaii and Micronesia. And especially if (when) more low-cost competition comes into these markets - then I really think Delta will walk away from most if not all of that business.

Flying Japan beach markets made sense years ago - Delta, and Northwest before it, (1) needed a presence in beach markets to maintain loyalty among Japan O&D passengers, because (2) Delta needed those Japan O&D passengers to support local yields on all of the Japan-Asia flying, because (3) those higher local yields were used to reinforce the connecting traffic moving over NRT to support the core U.S. O&D market. Virtually none of that applies any longer, and thus Japan beach markets are no longer core to Delta's strategy.


Much of this is true. However, the Delta brand is now well-established in these markets and Delta does extremely well in them. If you question that....look at how much capacity Delta is flying in these markets right now and how much more they have on tap the remainder of the year (3x Daily NRT-HNL this Summer, for example). They aren't doing it for network strategy reasons. They are doing it because these markets are so well-established, and traditionally so strong, that they fight for them. Now what happens in the next major downturn is certainly a valid question. As is the influence of Air Asia X and ANA 380s. But the former can only be minimal capacity anyway due to the bilateral and they cannot fly from TYO.

Also, Japanese travelers that fly on Delta to these markets are not "Delta loyal" today. They don't fly Delta to the US mainland or Asia. They pretty much only fly Delta to Hawaii. But they've done that for years and years. Delta (and NW) has owned a huge share of this market for years because of the way it sells the product in Japan. Nothing about closing the NRT hub necessarily impacts that, so long as Delta wants to remain.

I do completely agree that these markets are not core to Delta's "Network Strategy", but they are important to their "Profit Strategy". Which is why they continue until there is some sort of shock to the system. Keep in mind that KE also flies NRT-HNL, btw.
 
Cubsrule
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:27 am

commavia wrote:
enilria wrote:
This is why


I don't follow. Why would Toyota consolidating some of its U.S. operations in North Texas necessitate Delta existing DTW-NGO? As already said, that route caters to more than just Toyota, and indeed even among the Toyota traffic it targets, some will still be traveling to/from cities for which DTW is a well-placed connecting gateway.


If anything, the Toyota relocation might help DTW-NGO a bit. DTW was not a viable connecting point for LAX-NGO traffic, but it could conceivably capture some DFW-NGO traffic.
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ty97
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:27 am

PlanesNTrains wrote:
MIflyer12 wrote:
PlanesNTrains wrote:
And is it true that DL is doing a lot of TPAC on 767's? How'd I miss that gem along the way?


Yes. Check the SEA departures to PEK, ICN, PVG and NRT.

Refurbed they're not bad in coach or business, with the 777-style drop-down bins and AVOD at all seats.


I'm sure they're great. I love the 767. I just thought DL was .... better than that?


I came over from AA to DL last year and had a bias against the 767 because of AA's planes. But DL's 767s are quite nicely done and I don't mind them at all.

DL seems to have focused on finding ways to keep older planes in good running condition (and good, modern interior condition) in order to lower capital cost. Based on their 767s, as a flier, I have no issue with this.
 
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intotheair
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:27 am

commavia wrote:
I agree to an extent, although I must admit that I would have agreed to a far greater extent five years ago. Looking back at the lay of the land five years ago, there's really nothing AA has accomplished at LAX that Delta couldn't. While there's no question that LAX is a cutthroat market with tremendous competition and challenged yields, it's not like Delta couldn't have started its post-NRT Transpacific transition at LAX. Delta could have skipped LAX altogether. On the contrary, I think Delta affirmatively, aggressively and enthusiastically chose SEA. Would hindsight on the coming evolution in the Alaska relationship have changed Delta's calculus? Maybe, but I doubt it. Ultimately, SEA still offers just what Delta needed and presumably wanted - it's perfectly-placed geographically, healthy and growing economic fundamentals, and far less competition than LAX or SFO. And, I'll say it again - SEA seems to me to be working, and (at least so far) a clear win for Delta.


I agree with pretty much everything you said, though I would add that we shouldn't underestimate LAX's role in DL's Asia strategy. I don't think LAX is necessarily a "backup" to SEA, but perhaps a "secondary TPAC west coast gateway." They clearly have plans to expand there, otherwise they would not have applied for LAX-PEK or spent $1.9bn in order to get a ridiculous number of gates in T2+3 and better access to TBIT. I wouldn't be surprised to see more Asia adds from LAX in order to at least mirror what they have at SEA, if not come close.

But with that said, I don't think DL is going anywhere at SEA. I was very skeptical of the SEA expansion, but I think for what it is, it works. I don't think we're ever going to see DL fly into secondary China markets from SEA the same way UA can make it work from SFO, but the same could be said that UA/AA probably couldn't pull off secondary Europe or Africa the same way DL does from JFK, or DL/UA and secondary cities in Latin America like AA at MIA.

DL saw a void to build a nice, medium-sized international gateway from SEA. UA had no reason to ever try to keep up any presence they had left there beyond to hubs, and AA was in no position to want to build up another hub themselves in the middle of a bankruptcy and merger with US, so LAX it is for them. If SEA were as massively unprofitable as some people suspect, DL would probably have scaled back by now and would have not terminated the AS relationship.
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commavia
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:28 am

jetlanta wrote:
However, the Delta brand is now well-established in these markets and Delta does extremely well in them.

jetlanta wrote:
Now what happens in the next major downturn is certainly a valid question. As is the influence of Air Asia X and ANA 380s. But the former can only be minimal capacity anyway due to the bilateral and they cannot fly from TYO.

jetlanta wrote:
I do completely agree that these markets are not core to Delta's "Network Strategy", but they are important to their "Profit Strategy". Which is why they continue until there is some sort of shock to the system.


I remain skeptical. They are not core to Delta's strategy, and serve a diminishing role in a diminishing part of Delta's network. Perhaps the economics of these routes makes sense as long as they're being flown with older, largely-depreciated aircraft. As time goes by, though, and competitive inevitably increases, and yields inevitably decrease, and bigger/stronger competitors inevitably leverage their scale to undermine Delta's position, and as the aircraft flying these routes start to retire, I find it hard to believe that Delta will conclude that it will make financial sense to keep much if any capacity in Japan beach markets. Maybe. But I don't think so. We'll see.
 
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:56 am

I can't quite comprehend all the doom and gloom with respect to SEA. AA has DFW, LAX, and to a lesser extent ORD in addition to NRT. UA has SFO, ORD, EWR, and NRT. Why is it so difficult for people to believe that DL will hold onto SEA in addition to DTW, ICN, and, to a lesser extent, LAX?
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commavia
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 2:06 am

OA412 wrote:
I can't quite comprehend all the doom and gloom with respect to SEA. AA has DFW, LAX, and to a lesser extent ORD in addition to NRT. UA has SFO, ORD, EWR, and NRT. Why is it so difficult for people to believe that DL will hold onto SEA in addition to DTW, ICN, and, to a lesser extent, LAX?


Agree completely. I don't quite get it, either.
 
jbs2886
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 2:09 am

commavia wrote:
OA412 wrote:
I can't quite comprehend all the doom and gloom with respect to SEA. AA has DFW, LAX, and to a lesser extent ORD in addition to NRT. UA has SFO, ORD, EWR, and NRT. Why is it so difficult for people to believe that DL will hold onto SEA in addition to DTW, ICN, and, to a lesser extent, LAX?


Agree completely. I don't quite get it, either.


It stems from some deep hatred of DL or Alaska fanboyism. The same people who say SEA is doomed said it would never work in the first place.
 
EddieDude
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 2:23 am

Congrats to both carriers! This was long expected and is certainly great news for their respective FFs.

I don't really see DL launching SEA-MNL/TPE; seems like it would likely be a money-losing endeavor; MNL is in the collective a.net belief a destination with poor yields, so if that is true, perhaps it is best not to go there nonstop from SEA. Dunno about the yields of flights from the U.S. to TPE, but I would imagine that DL and CI can work together and leverage CI's existing presence in the U.S.

I do agree however with the posters who have argued for the keeping of a nonstop U.S.-HKG flight on DL metal. Whether SEA, DTW or ATL is the best place to have that flight originate/end, I don't know, but I think DL can make money to HKG from the U.S. if it stays out of LAX and NYC.

The subject of whether MSP-HND should remain or be moved is tricky. Since DL does not have the liberty to move around its flights to HND, I think DL should stay put and continue to operate this service. Seems like for DL fliers who do not live near an airport with nonstop service to Tokyo, XXX-MSP-HND is a good way to getting to Tokyo more efficiently than if flying to NRT. Perhaps a route originating at a DL hub with more O&D demand to Tokyo would be better because of the possibility of charging higher fares, but I think DL will continue MSP-HND.

With respect to SEA, I doubt DL would downsize SEA as a result of the J.V. with KE. There has to be some O&D traffic between SEA and its catchment area to Asia, and many DL pax will be able to connect at SEA more efficiently *i.e., with no or less backtracking) than at DTW. I absolutely acknowledge that SEA is no SFO, but DL's A330 aircraft (and as I understand some 763ERs while they last) seem like a good aircraft to perform most missions from SEA to Asia. To me it does not make that much sense to unwind what has taken so much effort and dedication to build, even it if was never the most desirable option.
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WPvsMW
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 4:10 am

D7's KUL/KIX/HNL 9-abreast A330 service, 4x weekly, starts in June 2017. We'll see how that impacts DL, HA, and JL, the entrenched KIX/HNL carriers.
http://www.airasia.com/ot/en/press-rele ... awaii.page

Relevant to DL's future persistence in the JP to HNL/SPN/GUM markets, D7 flies BKK/NRT and KUL/HND. D7 would probably have preferred 5th freedom ex-TYO to HNL given the Kanto slot constraints and catchment. ex-KIX is a distant second to TYO.
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PWMRamper
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 6:44 am

As a Delta employee, I'm very excited by this news.

ICN is a fantastic airport, and KE's a great airline.

I admit though, that I'm sad because I think the writing is on the wall for both MNL and SIN. Not sure if Delta would be able to operate these flights ex-ICN. If not, I would be stunned if they operate them from the States. Could NGO-MNL feasibly return?

On a personal level, having Delta service to the Philippines is really nice, considering I have many close friends there. Hopefully this JV will also allow us Delta employees to ZED on KE...that'll make getting to Cebu much, much easier!
 
Atlwarrior
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 8:18 am

Wait a minute let's not assume that cuts want happen at Seattle. Just study Delta's European Atlanta operation once KLM and Air France became JV partners. Many routes were cut from its darling Atlanta superhub and routed through Amsterdam and Paris hubs. I wonder if Delta will deploy the 350's aircraft from its US cities to Seoul.
 
WPvsMW
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 8:44 am

I think all Westbound DL flights out of NRT will change to Westbound KE flights out of ICN. Cutting ICN, then TPE, on DL metal began the trend, the only cities left ex-NRT Westbound are PVG, MNL, and SIN. However, I would not be surprised to see LAX/HKG, or added frequency on LAX/SYD, on DL metal. If things go south with CZ, look for LAX/CAN instead of LAX/HKG.
 
deltal1011man
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 9:00 am

about frickin time.

now we still back and watch DALPA play checkers and DL management play chess....or just ignore the contract all together and not care......again. :banghead: :banghead:

MSPNWA wrote:
I hate JVs, bad for consumers, but good for both businesses. This was DL's only simple option to remain competitive in the Pacific. This will send ripples across both their networks. I expect some significant changes. I really wonder how SEA will fare. Its importance just went way down for Asia.

3 posts and here it comes :lol:

also, no. No it didn't.
commavia wrote:
jetlanta wrote:
However, the Delta brand is now well-established in these markets and Delta does extremely well in them.

jetlanta wrote:
Now what happens in the next major downturn is certainly a valid question. As is the influence of Air Asia X and ANA 380s. But the former can only be minimal capacity anyway due to the bilateral and they cannot fly from TYO.

jetlanta wrote:
I do completely agree that these markets are not core to Delta's "Network Strategy", but they are important to their "Profit Strategy". Which is why they continue until there is some sort of shock to the system.


I remain skeptical. They are not core to Delta's strategy, and serve a diminishing role in a diminishing part of Delta's network. Perhaps the economics of these routes makes sense as long as they're being flown with older, largely-depreciated aircraft. As time goes by, though, and competitive inevitably increases, and yields inevitably decrease, and bigger/stronger competitors inevitably leverage their scale to undermine Delta's position, and as the aircraft flying these routes start to retire, I find it hard to believe that Delta will conclude that it will make financial sense to keep much if any capacity in Japan beach markets. Maybe. But I don't think so. We'll see.

uh. some of the beach flying, HNL-NRT/KIX, sees A330s all the time.

Brand new A333s aren't depreciated.

but DL isn't going to replace its 767 fleet in a day. By the time the last 767 is done the 77E and 330(PW) fleet will be the new 767s.

And then they will start to be replaced and the 339/350 becomes the new 767....around and around we go.
enilria wrote:

I'm confused. You said SEA is going to replace SLC.

So now ICN is replacing SEA? does that mean SEA replaces SLC then get replaced by ICN so you expect people to fly BWI-XXX-ICN-...RDM?

Or DL just going to say screw it and leave the west all together? Just interested to see which road you wanna go down here...... :lol: :lol:
 
commavia
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:38 pm

EddieDude wrote:
I don't really see DL launching SEA-MNL/TPE; seems like it would likely be a money-losing endeavor; MNL is in the collective a.net belief a destination with poor yields, so if that is true, perhaps it is best not to go there nonstop from SEA. Dunno about the yields of flights from the U.S. to TPE, but I would imagine that DL and CI can work together and leverage CI's existing presence in the U.S.


Agree. MNL is almost certainly too low-yielding to work nonstop from the U.S. with any U.S. carrier with the possible exception, as always, of United from SFO. TPE is a bit more of a question mark - tons of competition depressing yields, but it does have a major premium element to it. I think even TPE is a long shot for a Delta nonstop from SEA, though - especially since Delta has so many attractive means of getting passengers to TPE, both with China Airlines plus soon with the Korean JV over ICN.

EddieDude wrote:
I do agree however with the posters who have argued for the keeping of a nonstop U.S.-HKG flight on DL metal. Whether SEA, DTW or ATL is the best place to have that flight originate/end, I don't know, but I think DL can make money to HKG from the U.S. if it stays out of LAX and NYC.


Agree. HKG is too big, and too premium, a market to hand off to a partner when AA has two daily nonstop flights from the U.S. and United has four. As said, a daily A330 HKG-SEA actually seems like a perfect fit - at least as long as Cathay Pacific doesn't add its own HKG-SEA flight.

EddieDude wrote:
The subject of whether MSP-HND should remain or be moved is tricky. Since DL does not have the liberty to move around its flights to HND, I think DL should stay put and continue to operate this service. Seems like for DL fliers who do not live near an airport with nonstop service to Tokyo, XXX-MSP-HND is a good way to getting to Tokyo more efficiently than if flying to NRT. Perhaps a route originating at a DL hub with more O&D demand to Tokyo would be better because of the possibility of charging higher fares, but I think DL will continue MSP-HND.


I agree that MSP is a great connecting hub for U.S.-HND. The problem, though, is that as O&D markets between the U.S. and Japan go, it's quite small. My skepticism about the long-term economic viability of MSP remain the same as when Delta was awarded the route. Personally, I think MSP's sole Asia link is at HND not because it was actually the best place for it, but because the DOT wanted to give Delta a second HND slot pair and MSP is what Delta proposed, and Delta proposed it precisely because they thought it would have the best shot of being chosen.

WPvsMW wrote:
Relevant to DL's future persistence in the JP to HNL/SPN/GUM markets, D7 flies BKK/NRT and KUL/HND. D7 would probably have preferred 5th freedom ex-TYO to HNL given the Kanto slot constraints and catchment. ex-KIX is a distant second to TYO.


I think far more relevant is the evolution that will occur in the market when ANA introduces A380s, and if - when, I'd say - Jetstar and/or other low-fare brands enter TYO-Hawaii.

WPvsMW wrote:
However, I would not be surprised to see LAX/HKG, or added frequency on LAX/SYD, on DL metal. If things go south with CZ, look for LAX/CAN instead of LAX/HKG.


I would be surprised to see Delta flying LAX-HKG - I don't think that Delta's management would view that as a worthwhile investment of company resources. Extra frequency to SYD is perhaps plausible depending on the machinations of the Virgin Australia JV. I think LAX-CAN is almost impossible for Delta - I see no way that Delta would be able to make a market like that profitable.
 
kavok
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 12:52 pm

Has it been decided if the DL Japan beach routes are included in the joint venture, as technically those routes are USA-Asia flights over the Pacific?

I just was curious how inclusive the proposed KE/DL JV is, and what is truly considered TransPacific.
 
jetlanta
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 1:48 pm

commavia wrote:
jetlanta wrote:
However, the Delta brand is now well-established in these markets and Delta does extremely well in them.

jetlanta wrote:
Now what happens in the next major downturn is certainly a valid question. As is the influence of Air Asia X and ANA 380s. But the former can only be minimal capacity anyway due to the bilateral and they cannot fly from TYO.

jetlanta wrote:
I do completely agree that these markets are not core to Delta's "Network Strategy", but they are important to their "Profit Strategy". Which is why they continue until there is some sort of shock to the system.


I remain skeptical. They are not core to Delta's strategy, and serve a diminishing role in a diminishing part of Delta's network. Perhaps the economics of these routes makes sense as long as they're being flown with older, largely-depreciated aircraft. As time goes by, though, and competitive inevitably increases, and yields inevitably decrease, and bigger/stronger competitors inevitably leverage their scale to undermine Delta's position, and as the aircraft flying these routes start to retire, I find it hard to believe that Delta will conclude that it will make financial sense to keep much if any capacity in Japan beach markets. Maybe. But I don't think so. We'll see.


I agree that day may come. I just think it is further into the future than you may realize. Delta doesn't need a hub in TYO to make Hawaii work, though the others are a different story. As you say, none of these markets are core to Delta's strategy. But they aren't really part of the NRT hub strategy either. They are self-contained. For example, there is no Delta "hub" in KIX, NGO or FUK, yet Delta flies from all of them to HNL. You mention "bigger/stronger" competitors, but today Delta is a very close #2 to JAL and this Summer they may even be larger. No one else currently comes close....and seven airlines fly between Japan and Hawaii.

One of the key advantages for Delta in these markets is that they are year-round and firmly established. They have blessedly free from LCC interference versus pretty much every other region. Air Asia X isn't going to offer enough capacity to ever seriously impact that. ANA's 380s will certainly start a bit if a war in late 2019, but the likelihood of a major incursion by LCCs is remote in the near term. These markets are bread and butter for JAL and ANA, they certainly aren't going to be creating a Japan-based LCC to serve them. ANA's 380 purchase is very telling about how Japanese carriers view the market...as will the configuration of the aircraft (premium heavy).

Think about it for a minute...in the peak of Summer 2017, Delta will be devoting six long-haul aircraft to this non-strategic market. They are actually increasing capacity year over year. NRT gets a 3rd frequency and the secondary airports go back to daily for the first time in a couple of years. That capacity could be in Europe, but Europe sucks now, as does the Trans-Pacific. And Latin America is small and just now recovering. (Delta offers more capacity from Japan to Hawaii than it does in the entire Brazil market.) I'd offer that Japan-Hawaii stick around longer because of Yields, not in spite of them.

All of that said, when the Japan-Hawaii market has some serious shock (a capacity war initiated by ANA?), Delta is the most likely of the major players to exit because it isn't "core", as you say. But I think we are a long way from there.
 
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Polot
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Re: Delta and Korean sign JVA

Thu Mar 30, 2017 2:00 pm

Where are the beach aircraft originating from (in other words, how are the routed)? That could play a big factor in whether they stay around or not. If you have a lot of spare aircraft capacity in Japan due to the NRT hub then yes the flights may make sense and be profitable. But if not (i.e. drawing down NRT hub) then it may be harder to have frames available for use, which can change the cost equation (have to purposely schedule other flights with the necessary aircraft at the necessary times to still continue supporting beach market operations, or start purposely basing aircraft in Japan or Hawaii just for those flights).
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