Quoting LAX772LR (Reply 98): sDL's original JV partner (SR) did not either.

Please provide evidence that Delta had a "joint venture" - in today's context/meaning - with Swissair. Correct me if I'm wrong - but I do not believe that the two, for example, coordinated schedules or fares, nor did they share revenue.

Quoting LAX772LR (Reply 98): It seems you're attempting to emphasize the equity purchases as if they were somehow a preferred method of j/v integration for DL to the point of scuttling a deal if they can't get it

Nope, not at all. What I'm emphasizing is that it appears equity purchases have clearly greased the skids for several of the JVs/"strategic partnerships" Delta has created.

The bottom line in all the semantic back and forth is that it takes two. I'm not suggesting that the reason Delta and Korean have not been able to do a deal is because of big, bad Delta, nor do I subscribe to the view - expressed here on A.net as recently as a few years ago - that it was just a matter of time until intransigent Korean bent to Delta's will. But I do think there's some truth to both sides. Is Korean less than enthusiastic about given up as much control to Delta as what Delta is used to getting from its other partners? Quite likely, yes. But on the flip side, is Delta also likely a very demanding and assertive "partner?" Quite likely, yes. I have absolutely no doubt that both are acting in their own interests - or at least that's how they see it.

The point I'm making is that in this case, whether Delta likes it or not, it apparently doesn't have the same amount of bargaining leverage to get a JV on the terms it wants in the same way it's managed to do with some of its other partners (in some cases facilitated, again, at least partly by cash). Similar story with Alaska. Try as they might, Delta cannot get its way. And so at some point Delta is going to have to decide what is in its long-term interests, and whether it's better to continue holding out to get the deal it wants from Korean, and in the meantime accepting that the potential network opportunities that could be enabled by a Korean JV are simply not worth the "cost" that Korean wants in return.

Quoting panamair (Reply 99): Technically, Delta is currently only in three separate JVs and only one of them involves a stake in the partner (the Virgin Atlantic JV). The AF/KL/AZ JV - no equity involved. The VA JV - no equity involved.

Precisely as I said.

Notice how I've repeatedly referred to "JVs" as well as "strategic partnerships?" Delta itself refers to its relationships with Aeromexico, GOL and China Eastern as "strategic" - but nobody ever said they were JVs.

Quoting panamair (Reply 99): Technically, Delta is currently only in three separate JVs and only one of them involves a stake in the partner (the Virgin Atlantic JV). The AF/KL/AZ JV - no equity involved. The VA JV - no equity involved.

Quoting panamair (Reply 99): Actually, I think what he is trying to imply is that DL can't get partners into a JV unless they agree to be a 'sugar daddy'. Which is why I pointed out above that the majority of DL's current JVs (i.e., two thirds) actually involve no equity stake whatsoever.

One of those was established waaaay back in the NW days (I believe 97 was the JV launch with KL).

So of the 2 deals done post merger, 50% of them involve equity. And for the ones that DL is actively seeking JV (AM+G3), 100% involve equity.

So commavia's point is relevant.

Quoting commavia (Reply 100): Correct me if I'm wrong - but I do not believe that the two, for example, coordinated schedules or fares, nor did they share revenue.

I did work for Swissair in the 90s, and the "Atlantic Excellence' partnership (that also included Sabena and Austrian Airlines) was the pinnacle after many years of growing cooperation with Delta and included joint revenue sharing as result of being granted ATI in 1996.

Remember the SR-DL cooperated long back when formed with Singapore Airlines the "Global Excellence" partnership in 1989.
The carriers would coordinate schedules (for example SR would send its 743 to ATL), frequent flyer benefits, joint fares, ground handling etc, and eventually grew into deeper ATI relationship.

Quoting commavia (Reply 100): Please provide evidence that Delta had a "joint venture" - in today's context/meaning - with Swissair. Correct me if I'm wrong - but I do not believe that the two, for example, coordinated schedules or fares, nor did they share revenue.

DL and SR received ATI in 1996, with the primary carveout being that they could not merge their FFPs. In 1997 they began to jointly coordinate scheduling, ops, and marketing for all of their services between N.Am and Europe, and continued to do so until early 2000. I don't know the nature/extent of their revenue share.

http://www.deseretnews.com/article/4...AIN-ANTITRUST-IMMUNITY.html?pg=all

Quoting commavia (Reply 100): The point I'm making is that in this case, whether Delta likes it or not, it apparently doesn't have the same amount of bargaining leverage to get a JV on the terms it wants

If anything, it appears to be the other way around. DL states, most notably in their conference calls, that KE's desire for revenue exceeding their percentage of contribution, is the holding point; and that KE's apparent impression (along with this site) that DL "needs" them is the bargaining leverage it's relied upon over the years. To apparently ill effect.

Quoting commavia (Reply 100): Precisely as I said. Notice how I've repeatedly referred to "JVs" as well as "strategic partnerships?" Delta itself refers to its relationships with Aeromexico, GOL and China Eastern as "strategic" - but nobody ever said they were JVs.

Yes, but I was responding to this quote of yours:

Quoting commavia (Reply 78): Well actually I already made clear why they're being "compared" (or really grouped together) - because Virgin Australia, along with Air France and Alitalia, are the only JVs that Delta has successfully formed that didn't involve Delta writing a check

"....are the only JVs that Delta has successfully formed" - no mention of strategic partnerships...

Quoting a380787 (Reply 101): One of those was established waaaay back in the NW days (I believe 97 was the JV launch with KL).

Not really... NW and KL established their JV back in 1997 for 10 years initially. Delta and Air France agreed in 2007 to establish theirs (to start April 1 2008). At that time, DL and NW were separate carriers so NW had no access to AF, and DL had no access to KL. DL and NW announced their merger agreement on April 15 2008 and officially merged October 2008. The AFKL-DL JV only came about in 2009, with the addition of AZ in 2010. So technically, Delta did establish a JV with Air France (alone) while the NW-KL JV was still ongoing as a separate deal.

Quoting LAXintl (Reply 102): Remember the SR-DL cooperated long back when formed with Singapore Airlines the "Global Excellence" partnership in 1989. The carriers would coordinate schedules (for example SR would send its 743 to ATL), frequent flyer benefits, joint fares, ground handling etc, and eventually grew into deeper ATI relationship.

SR. DL, and SQ each also had a 5% stake in each other at that time. They sold their stakes in each other around the fall of 1999.

Quoting panamair (Reply 104): Not really... NW and KL established their JV back in 1997 for 10 years initially. Delta and Air France agreed in 2007 to establish theirs (to start April 1 2008). At that time, DL and NW were separate carriers so NW had no access to AF, and DL had no access to KL. DL and NW announced their merger agreement on April 15 2008 and officially merged October 2008. The AFKL-DL JV only came about in 2009, with the addition of AZ in 2010. So technically, Delta did establish a JV with Air France (alone) while the NW-KL JV was still ongoing as a separate deal.

That's being revisionist. First, AF and KL was already one entity by then. And second, DL and NW didn't truly act independently. They've filed for BK on exactly the same day - 9/14/2005 - at exactly the same location - U.S. Bankruptcy Court for the Southern District of New York, in Manhattan. It was structured in such a fashion with the intention to perform a merger very quickly after exiting BK. Another point is that DL was far weaker in 2007 than it is today, so just because they easily established something back then has no relationship to how easy or difficult it is for them today.

KE has the broadest network to the US from a single hub in Asia, while DL is the most profitable US airline, so both their huge egos are in play today, which makes it problematic for both sides to bury the hatches.

If HND happens (to the detriment of DL NRT), SEA TPAC stagnates (which is surfacing), and/or MU/PVG doesn't pan out as fantasized, guess who will have the upper hand in negotiations ? And no, no matter how we slice and dice it, CAN and TPE are *not* realistic alternatives in play here.

Quoting LAX772LR (Reply 103): DL states, most notably in their conference calls, that KE's desire for revenue exceeding their percentage of contribution, is the holding point

And I have no doubt Delta would say that. But then, there are two sides to every story.

Just as I said - and meant - that I firmly believe both sides think they're acting in their own self-interest, I also have no doubt that both sides think the other side is the one that's being unreasonable. But as in most such situations in life, again, I suspect the truth is somewhere in the middle. So like I said - is Korean being "difficult?" Yeah, probably. But is Delta being "difficult," too? Yeah, probably. After enough quotes or intimations like, "[Anderson] is a great CEO, but a poor partner ... Delta dominates its partners," you start to think that there is at least some semblance of truth to it.

But again, all of these semantics aside, it ultimately doesn't matter. The perception of who is being the holdout - Delta, Korean, Alaska, whatever - is ultimately meaningless. What matters is the end result. And if the end result in this specific case is that - as the company itself is apparently acknowledging, now in both internal and public fora - Delta is becoming less competitive in East Asia, Delta has to decide what's in its long-term best interest. Again, Delta has clearly concluded - at least up until now - that it wasn't worth compromising (or, as Delta management would likely view it, compromising further) with Korean in order to get a deal. In a few years time, if (when) the NRT "hub" continues to deteriorate? The calculus might change. We'll see.

Quoting panamair (Reply 104): "....are the only JVs that Delta has successfully formed" - no mention of strategic partnerships...

I missed the "or strategic partnership" caveat in that particular sentence. Point is the same. Of the JVs and strategic partnerships that Delta - not Northwest, but Delta - has successfully formed, a substantial number have included cash.

I have found this particularly notable given how dramatically different this is from AA and United - neither of which, interestingly, have felt the need or desire to do these types of cash injections (or at least not to nearly the same extent) in order to lock up strategic partners. To my knowledge, the only other examples of this among the current US3 is AA with Canadian and Iberia/Aerolineas Argentinas (both of which occurred nearly two decades ago), and United recently with Azul. Am I missing any? (I do recognize that AA offered it to JAL, but it didn't actually end up happening.)

Quoting LAXintl (Reply 102): included joint revenue sharing as result of being granted ATI in 1996.

Quoting LAX772LR (Reply 103): DL and SR received ATI in 1996, with the primary carveout being that they could not merge their FFPs. In 1997 they began to jointly coordinate scheduling, ops, and marketing for all of their services between N.Am and Europe, and continued to do so until early 2000.

My mistake, I stand corrected - knew it was ATI, didn't remember that it involved revenue sharing. Nonetheless, further to the main point being made (and now debated), I definitely do remember this:

Quoting panamair (Reply 105): SR. DL, and SQ each also had a 5% stake in each other at that time. They sold their stakes in each other around the fall of 1999.

[Edited 2016-01-21 13:47:00]

What was Northwest's "best" asset? Japan and beyond?

Wow. Now we've almost come complete circle and it appears DL got snookered. They really needed JAL didn't they?

I'm just gonna throw this out there: in spite of the huge numbers DL produces, the impeccable product and branding it has, I see huge cracks when it comes to drawing media attention, lobbying, negotiating and cutting crucial deals.

It's really nothing short of amazing, the contradictions in this journey of Delta.

Quoting commavia (Reply 107): But then, there are two sides to every story.

Indeed, but this site seems to have only accepted one side as fact; which is odd, since no one here really knows all the details in the first place.

In my opinion, the best routes for DL to serve to HND are SEA and DTW. These two DL markets have ample other flights to Asia and travelers can fly DL to the most important Asian directions directly. For the other DL hubs, due to limited presence in Asia, they would need to continue to service NRT so they the onward connections could be made and the flights are profitable. I believe that both SEA and DTW can support local traffic only to TYO. For the few markets from SEA and DTW which aren't reached directly anymore since they cannot connect to the feed in NRT, they could forge a code-share with Korean at ICN (Both cities already have DL flights there) to be connected to the likes of SIN, BKK, JKT etc.

When Delta purchased NW what happened to the people at Northwest Orient which knew about the Orient ? It seems that all the knowledgeable people left and a bunch of Georgia Good' Ole Boys started managing the Asian part of Delta ?

Quoting LAXintl (Reply 102): The carriers would coordinate schedules (for example SR would send its 743 to ATL)

yep. flew on that in 96 and 97. the one and only times on a 743  

Quoting peanuts (Reply 108): Wow. Now we've almost come complete circle and it appears DL got snookered. They really needed JAL didn't they?

I firmly believe this was one of the major faux pas that started the unraveling relationship between DL and KE. The manner in which DL was aggressively courting JAL was not perceived well in Seoul.

Quoting peanuts (Reply 108): I'm just gonna throw this out there: in spite of the huge numbers DL produces, the impeccable product and branding it has, I see huge cracks when it comes to drawing media attention, lobbying, negotiating and cutting crucial deals.

Correct. And the cantankerous behavior in international forums are only going to create, rather than allay, further problems.

Quoting LAX772LR (Reply 109): Indeed, but this site seems to have only accepted one side as fact; which is odd, since no one here really knows all the details in the first place.

I wouldn't say that is the case. Few know details beyond what we can hypothetically piece together, but I would venture to say that everyone sides with one vs. the other. Each party has dirt on their hands. But I'd venture to say that KE is more willing to think outside the box (read: AA codeshare and AS partnership) rather than throw its weight around like DL does.

Quoting jfk777 (Reply 111): When Delta purchased NW what happened to the people at Northwest Orient which knew about the Orient ? It seems that all the knowledgeable people left and a bunch of Georgia Good' Ole Boys started managing the Asian part of Delta

I think that's highly unfair. The challenges presently facing Delta's Asian business - at least at NRT - have little if anything to do with Delta, and would have been just as acute, if not frankly worse, absent the merger. At least Delta has a vastly larger and more diversified U.S. (and global) network to draw upon to support these flights than Northwest ever did.

The competitive issues that Delta is facing at NRT were evident - and predicted - literally years ago, before the merger. The advent of 777s and 787s, and the general trend of civil aviation liberalization around the world, meant that Northwest would be at a progressively larger disadvantage trying to route passengers on 747s over NRT to access East Asia. That's the reason why Northwest starting downgauging the hub (A330s) in the pre-merger environment, and it's a credit to Delta management that they clearly recognized this trend coming and set about to build a gateway at SEA to effectively replace NRT, which is what has already partly happened.

Quoting jfk777 (Reply 111): When Delta purchased NW what happened to the people at Northwest Orient which knew about the Orient ? It seems that all the knowledgeable people left and a bunch of Georgia Good' Ole Boys started managing the Asian part of Delta ?

Maybe all got silenced. Whenever they voice a concern or challenge the convention, the standard rebuke is "we make billions each quarter so you aren't allowed to question our wisdom".

DL has at their disposal :

1. DTW hub with no competition and guaranteed auto-industry traffic
2. SEA hub that's closest to Asia, allowing for maximum gauge flexibility
3. LAX hub with largest O&D and largest TPAC O&D in the country
4. NRT hub with decades of experience stretching back to NW Orient
5. ICN partner hub waiting in the wings for them to jump in
6. PVG partner hub at the richest mainland Chinese metro from an equity-infused partner who's willing to do their bidding

You'd *think* they have a coherent strategy by now instead of scrambling for a response.

Quoting BigGSFO (Reply 2): Of course Delta is going to pitch a hissy fit, even though they have been diminishing their reliance on their Narita hub since boosting Seattle. Perhaps if their relationship with Korean was better, they'd simply route connecting traffic over ICN.

NW briefly tried to use Kimpo as a hub in the early 90's with flights to BKK, TPE, NRT, etc. but it was not successful. NRT was the hub of preference.

Quoting jfk777 (Reply 111): When Delta purchased NW what happened to the people at Northwest Orient which knew about the Orient ? It seems that all the knowledgeable people left and a bunch of Georgia Good' Ole Boys started managing the Asian part of Delta ?

Many of the senior NW executives found jobs at the new DL post-merger. After all, RA knew most of them and their capabilities. Even before the merger, NW was trying to reduce its reliance on NRT as a hub and wanted to overfly it directly to other Asian cities. If you think snow storms can create havoc in the US you have not lived until you have seen snow at NRT. At one point they had the little ladies that clean the cabins out on the wings with brooms brushing off snow. We raised a level five hissy fit as it was so unsafe for them to be on a wet, icy sloping wing. To this day they have minimal deicing equipment but NRT does not often see snow.

HND is good for O & D traffic but needs the daytime slots to make it work profitably. Also, Japan has been very slow to recover from their recession which has affected loads.

[Edited 2016-01-22 10:42:27]

Quoting commavia (Reply 113):

   We would likely be seeing a lot of NRT overflying from NW on their 788s if they had remained independent like UA does, but UA also benefits from much stronger domestic hubs than NW did (even pre-CO merger). After the merger some priorities shifted, but DL's current predicament isn't entirely their (PMDL's management) fault.

Quoting a380787 (Reply 114): 1. DTW hub with no competition and guaranteed auto-industry traffic 2. SEA hub that's closest to Asia, allowing for maximum gauge flexibility 3. LAX hub with largest O&D and largest TPAC O&D in the country 4. NRT hub with decades of experience stretching back to NW Orient 5. ICN partner hub waiting in the wings for them to jump in 6. PVG partner hub at the richest mainland Chinese metro from an equity-infused partner who's willing to do their bidding

NW and Delta have known since the 777 was launched that the current structure at NRT was doomed but until purchase of A350-900 it was not addressed. But even with plans capable of flying to Hong Kong from JFK and Detroit what is Delta's Asian hub ? NRT's days are numbered in its current form. Shanghai is a great destination but I don't see Delta having a dozen flights there. Seoul for so many reasons and Korean Air is the city where Delta needs a dozen flights or more.

Quoting a380787 (Reply 106): First, AF and KL was already one entity by then

They weren't then, and they aren't now.

They're two distinct airlines financially held by a single entity.
They themselves are not a singularity, and they don't operate as such.

Quoting jfk777 (Reply 111): When Delta purchased NW what happened to the people at Northwest Orient which knew about the Orient ? It seems that all the knowledgeable people left and a bunch of Georgia Good' Ole Boys started managing the Asian part of Delta

Ridiculous statement.

Quoting commavia (Reply 113): I think that's highly unfair. The challenges presently facing Delta's Asian business - at least at NRT - have little if anything to do with Delta,

      

Quoting a380787 (Reply 114): Whenever they voice a concern or challenge the convention, the standard rebuke is "we make billions each quarter so you aren't allowed to question our wisdom".

As it should be. If you knew better as to what worked in their interest within their capabilities, then I'm sure they'd be seeking your "wisdom."  

I agree with all your points LAX772LR but what are Delta's options going forward? I'm actually asking this to you and all BUT the Delta haters.

What are their viable options for long term success in Asia if they can't make a deal with KE and assuming the NRT will no longer be viable a couple years down the road?

Quoting commavia (Reply 113): I think that's highly unfair. The challenges presently facing Delta's Asian business - at least at NRT - have little if anything to do with Delta, and would have been just as acute, if not frankly worse, absent the merger.

How can you say their challenges had little to nothing to do about themselves....

Quoting commavia (Reply 113): The competitive issues that Delta is facing at NRT were evident - and predicted - literally years ago, before the merger. The advent of 777s and 787s, and the general trend of civil aviation liberalization around the world, meant that Northwest would be at a progressively larger disadvantage trying to route passengers on 747s over NRT to access East Asia. That's the reason why Northwest starting downgauging the hub (A330s) in the pre-merger environment, and it's a credit to Delta management that they clearly recognized this trend coming and set about to build a gateway at SEA to effectively replace NRT, which is what has already partly happened.

...and then say this about 777s and 787s, when NW had them on order and DL deferred them for CapEx reasons. If newer technology helped create DL's problem, then it's very much their own fault.

Who knows, the merger may have been the worst thing for the NW/DL Pacific network. NW could be flying efficient 787s across the Pacific, along with A330s and 747s. And they might have a friendly partnership with AS, expanding their international presence at SEA in a more profitable manner.

Quoting MSPNWA (Reply 122): If newer technology helped create DL's problem, then it's very much their own fault.

  

Deferring the 787s was IMHO incredibly short sighted. The retort from Delta and their plants on this website is that as they are the most profitable airline in the world are therefore above question, but on this issue they undoubtedly misread the market. They deferred the very equipment that was going to systematically weaken their hub in NRT, leaving them in a position where they can't retaliate. They tied their own hands behind their back, and then went crying to the umpire when they couldn't land a punch.

Quoting a380787 (Reply 114): You'd *think* they have a coherent strategy by now instead of scrambling for a response.

Quoting jfk777 (Reply 117): NW and Delta have known since the 777 was launched that the current structure at NRT was doomed but until purchase of A350-900 it was not addressed.

I don't subscribe to the views that Delta lacks a "coherent strategy" in Asia, or did not "address" the declining NRT hub until the A350 order.

Delta has clearly articulated a vision and strategy for Asia and executed on them in multiple meaningful, visible ways - Delta's vision for Asian is to use a combination of DTW, SEA and ICN to link the U.S. to East Asia nonstop. To that end, Delta has organically built out a sizable gateway at SEA that is now linked nonstop to the five most important business cities in Northeast Asia, and re/established nonstop links from DTW (ICN/PEK/PVG) to augment the longstanding NRT/NGO flights.

Apropos to this conversation, it just so happens that one component (a critical one, in my view) of that vision has yet to be accomplished - that being getting a deal with Korean to fully leveraging ICN as a hub. But just because that one piece hasn't fallen into place doesn't mean Delta has no strategy and/or didn't address its challenges.

Quoting Aaron747 (Reply 121): ranted, Japanese carriers have no equivalent opportunity for continuing 5th freedom business within the States

Well "business within the States" wouldn't be 5th freedom, but rather 8th or 9th freedom cabotage, and of course U.S. carries do not now nor have they ever at any time in recent memory had such rights in Japan. Instead, what U.S. carriers have long had in Japan is 5th freedom rights beyond, but not within, Japan, and yes, Japanese carriers have exactly the same rights in the U.S. and long have - thus how JAL was able for years to operate from both LAX and JFK to Brazil, for example.

Quoting MSPNWA (Reply 122): ...and then say this about 777s and 787s, when NW had them on order and DL deferred them for CapEx reasons. If newer technology helped create DL's problem, then it's very much their own fault.

Two separate issues. The advent of 777s and 787s what facilitated competitors overflying NRT nonstop from their U.S. gateways into East Asia, but that was going to happen no matter what Delta did with its own fleet. That tide was already turning long before 2008. Delta management, recognizing that trend, responded by building SEA. I won't argue that some of the Asia routes out of SEA/DTW would probably benefit today if they were being flown with 787s (we've seen how effectively AA and United have deployed them across the Pacific), but that being said, given the understandable goal of limiting capex and debt, it seems the SEA development worked without 787s.

Again, the whole reason we're even having this conversation is because one of the three pillars of Delta's Asia strategy is not working - that being Korean/ICN. SEA/DTW seem to be working fine. I've said repeatedly for years and still agree that Delta definitely needs Korean and ICN to bolster its competitive position in Asia vs AA/JAL and United/ANA. But that being said, let's keep some perspective - Delta certainly still has quite a strong Pacific franchise. I honestly think a big part of the negative perception may be a matter of what Delta is being compared to. Relatively speaking, Delta has lost ground in the last few years just owing to the dramatic (and apparently continuing) growth of AA across the Pacific, but in absolute terms (i.e., not compared to AA or United) Delta seems to be moving in the right direction.

Quoting MSPNWA (Reply 122): Who knows, the merger may have been the worst thing for the NW/DL Pacific network. NW could be flying efficient 787s across the Pacific, along with A330s and 747s. And they might have a friendly partnership with AS, expanding their international presence at SEA in a more profitable manner.

Maybe. I doubt it, though. As said, I personally suspect that absent the merger, Northwest's Asia network would be in even worse shape right now than Delta's (and, to be clear, I don't think Delta's Asia franchise is in all that bad of shape). Again, I do not believe that Northwest would have had either the network scale nor competitive prowess to confront the evolving dynamics across the Pacific these days as successfully as Delta has.

Quoting commavia (Reply 124): Maybe. I doubt it, though. As said, I personally suspect that absent the merger, Northwest's Asia network would be in even worse shape right now than Delta's (and, to be clear, I don't think Delta's Asia franchise is in all that bad of shape). Again, I do not believe that Northwest would have had either the network scale nor competitive prowess to confront the evolving dynamics across the Pacific these days as successfully as Delta has.

Agreed.

What's been overlooked in this thread is that NW was very strong in the middle of the country pre-merger, but much weaker on the coasts. Northwest had suspended JFK-NRT before the merger, and NW's weak presence in SFO and LAX meant those routes' discontinuance was inevitable. This would have left the merged carrier with DTW / MSP / SEA - NRT, plus flights from Japan to Hawaii and Micronesia - not enough to sustain a hub at NRT.

The DL merger brought DL's ATL-NRT route, and DL's stronger position on the coasts enabled LAX-NRT to be sustained, and JFK-NRT to be resumed, and the additional feed provided by ATL / LAX / JFK-NRT is the only reason the hub is still alive today.

Well, DL is just not threatening to pull MSPNRT, but now PDXNRT too.

http://www.oregonlive.com/commuting/...ght_to_asia.html#incart_river_home

Quoting BigGSFO (Reply 127): Well, DL is just not threatening to pull MSPNRT, but now PDXNRT too.

Delta sure likes to throw public tantrums  

DL should put its big boy pants on and instead go out and compete as it does so well in other markets.

Instead of crying about progress in bilateral air services, they should seek way to better compete themselves.

In the meant time community in PDX should go lobby ANA+JAL to commence service. Offer them nice incentive package.

Quoting mercure1 (Reply 128): In the meant time community in PDX should go lobby ANA+JAL to commence service. Offer them nice incentive package.

I was about to say the same. Surely, if there is enough high yield traffic on this routes, NH or JL would jump in. They both have a American JV partner to market the flight further on the US side. If there is government related traffic a UA/AA code could be placed on these flights to comply with the Fly America Act.

Quoting commavia (Reply 124): Two separate issues. The advent of 777s and 787s what facilitated competitors overflying NRT nonstop from their U.S. gateways into East Asia, but that was going to happen no matter what Delta did with its own fleet. That tide was already turning long before 2008. Delta management, recognizing that trend, responded by building SEA. I won't argue that some of the Asia routes out of SEA/DTW would probably benefit today if they were being flown with 787s (we've seen how effectively AA and United have deployed them across the Pacific), but that being said, given the understandable goal of limiting capex and debt, it seems the SEA development worked without 787s.

You're just repeating the same argument that doesn't make sense. If newer technology is one reason DL is struggling with their Pacific strategy, then that part of the struggle is entirely their own fault. They could be on their fourth year of flying the 787 already. How is the SEA development working without 787s when DL can't even fly to HKG from SEA more than a couple days a week? Or anywhere else in the U.S. for that matter?

It's a cop-out to say that DL's struggles are largely or entirely out of their control. Even the lack of a partner is largely their own fault. Other airlines got it done. DL hasn't. The two biggest strikes against them are mainly self-inflicted.

Quoting commavia (Reply 124): Maybe. I doubt it, though. As said, I personally suspect that absent the merger, Northwest's Asia network would be in even worse shape right now than Delta's (and, to be clear, I don't think Delta's Asia franchise is in all that bad of shape). Again, I do not believe that Northwest would have had either the network scale nor competitive prowess to confront the evolving dynamics across the Pacific these days as successfully as Delta has.

Absent mergers, one can't forget that UA and NW were the kings of the Pacific. AA, DL, CO, and US were in no position to challenge. The vestiges of UA and NW are still what propel the new UA and DL to the lead in the Pacific. The new DL has handcuffed themselves in their long-haul fleet, made war with a partner in SEA, failed to win over JL to SkyTeam, and has not made a good friendship with KE. Another airline couldn't have done much worse....

Quoting MSPNWA (Reply 122): Who knows, the merger may have been the worst thing for the NW/DL Pacific network. NW could be flying efficient 787s across the Pacific, along with A330s and 747s. And they might have a friendly partnership with AS, expanding their international presence at SEA in a more profitable manner.

You are forgetting that the original frames allocated to NW as a launch customer were those in the first thirty or so--all overweight and would not be profitable. It makes perfect sense to continue to operate the 744's until they time out and then switch to the A350-900XWB and eventually to the 787-8 and/or 9. They are now mature aircraft but I see in various publications that people are still watching those produced in South Carolina closely.

Quoting RyanairGuru (Reply 123): Deferring the 787s was IMHO incredibly short sighted. The retort from Delta and their plants on this website is that as they are the most profitable airline in the world are therefore above question, but on this issue they undoubtedly misread the market. They deferred the very equipment that was going to systematically weaken their hub in NRT, leaving them in a position where they can't retaliate. They tied their own hands behind their back, and then went crying to the umpire when they couldn't land a punch.

DL did not misread the market. Traffic to NRT had dropped significantly due to the Japanese and US recessions. Most of Japan's auto industry is located in NGO and that is where we carried a lot of Toyota folks in and out for business purposes. DL had the flexibility to gauge the right equipment--mainly the A330-200--for routes from SEA and PDX that could not support the 744. There are only a few destinations in Asia that could support enough traffic to warrant a nonstop--BKK, PEK, PVG, ICN and possibly MNL, but that is mostly VFR traffic and is highly price sensitive. However the Philippine community, both here and in MNL are incredibly loyal customers.

I would like to see DL use the 757 to restart service to Okinawa and begin service to Vietnam. This, however, would be difficult considering our alliance with Vietnam Airlines. We feed them a lot of traffic.

Quoting MSPNWA (Reply 130): The new DL has handcuffed themselves in their long-haul fleet

I do think DL would find a few 787s to be helpful on a few specific routes, but very few of those routes would be viable in the PMNW network.

Quoting MSPNWA (Reply 130): made war with a partner in SEA

The reason for that, we've been told, was that DL felt AS was unable to provide adequate feed. Assuming that's true, it's entirely possible that NW would've felt the same way.

Quoting MSPNWA (Reply 130): failed to win over JL to SkyTeam

Which, on its own, is far from a deal-breaker for DL's Asian network.

Quoting MSPNWA (Reply 130): and has not made a good friendship with KE.

That is frustrating, but it does take two to tango. A-net wisdom says DL wants a JV with KE, but I have seen next to nothing indicating KE feels the same way.

Quoting Aaron747 (Reply 126): The point still stands that with HND/NRT already a political football here, DL is not going to win any favors the way they are currently seeking solutions

The "point still stands" in that Delta likely isn't doing themselves any P.R. favors, but the point decidedly does not stand in that Japanese carriers absolutely do enjoy fifth freedom rights beyond the U.S. under the terms of the bilateral between the two countries.

Quoting MSPNWA (Reply 130): If newer technology is one reason DL is struggling with their Pacific strategy

But that's not what I'm saying.

Again, I don't think Delta's Pacific strategy is particularly "struggling" at all, but whatever "struggling" there may be isn't because Delta doesn't have new technology. It's struggling because other carriers do. And that would have been the case whether it was Delta or Northwest we were talking about. The advent of 777s and 787s has rendered Delta's NRT hub less and less relevant, but the way in which Delta - Delta, not Northwest, but Delta - has responded is fairly smart in that it allowed them to respond to this shift without having to actually capitalize a fleet of new aircraft themselves. Namely, picking SEA as their primary U.S. gateway to replace NRT also had the benefit of allowing them to serve all the major cities they were ever going to serve - TYO, SEL, BJS, SHA and HKG - with lower-capital-cost 767s and A330s. SEA's geography served Delta's purposes both in terms of facilitating connectivity and proximity to Asia.

Quoting MSPNWA (Reply 130): How is the SEA development working without 787s when DL can't even fly to HKG from SEA more than a couple days a week?

The SEA development seems to be working quite well from my perspective - certainly better than any plausible alternative I can think of, including the "do nothing" approach of continuing to rely near-entirely on NRT, as Northwest did for decades.

Quoting MSPNWA (Reply 130): Absent mergers, one can't forget that UA and NW were the kings of the Pacific.

Meh. They were the "kings of the Pacific" at a very different time, under a very different regulatory, economic and competitive regime than exists today. At least United actually had, long before the Continental merger, a U.S. hub structure highly conducive to substantial nonstop flying from the U.S. to East Asia overflying Japan. But particularly in Northwest's case, their "monarchy" across said ocean was largely an artificial construct of their disproportionate access to a particular set of traffic flows at a time when, owing to aircraft technology of the day, said traffic flows were far more important. Once both of those conditions - limited access, and limited aircraft capability - changed, we've clearly seen the result. And this would have been the result whether Northwest had merged into Delta or not.

Quoting BigGSFO (Reply 127): Well, DL is just not threatening to pull MSPNRT, but now PDXNRT too. http://www.oregonlive.com/commuting/...ght_to_asia.html#incart_river_home

Quoting mercure1 (Reply 128): In the meant time community in PDX should go lobby ANA+JAL to commence service. Offer them nice incentive package.

The Port of Portland should have been preparing for this ever since Delta decided to hub at SEA. If the problem with NRT did not come first, the activity at the hub up the I-5 would eventually force Delta to pull out.

Japan is offering 5 slots for -all- US carriers. And DL needs how many to transfer their entire NRT hub?

Seems like a bit of wishful thinking to think that Japan could ever come up with that many slots. Especially when every new slot is fought for by tooth and nail.

5 flights a day from US carriers are unlikely to create a LHR/LGW situation so I don't know why DL is throwing such a hissy fit.

Quoting DTWPurserBoy (Reply 115): Quoting BigGSFO (Reply 2): Of course Delta is going to pitch a hissy fit, even though they have been diminishing their reliance on their Narita hub since boosting Seattle. Perhaps if their relationship with Korean was better, they'd simply route connecting traffic over ICN. NW briefly tried to use Kimpo as a hub in the early 90's with flights to BKK, TPE, NRT, etc. but it was not successful. NRT was the hub of preference.

Like the 5th freedom rights beyond Japan, they couldn't operate more tag-on flights beyond either Japan or Korea than the number of flights between the US and those points, since they have to be continuations of US flights bearing the same flight number.

Quoting peanuts (Reply 108): What was Northwest's "best" asset? Japan and beyond?

The 5th freedom rights for US carriers beyond Japan were only a valuable asset when demand to/from those points was much smaller and when aircraft lacked the range to serve those points nonstop. And since they had to be continuations of US flights, the schedules often weren't ideal for the local 5th freedom traffic, which is often the reason why fares on 5th freedom flights are lower than on the local carriers.

Quoting Aaron747 (Reply 137): Nobody said they don't - what was said is the current Japanese government does not recognize parity in the opportunities Japanese carriers have with those rights beyond the US versus how US carriers benefit from the rights here.

The Japanese are doing to do as little as they have to to help US airlines. They have always felt resentful about the beyond rights imposed on them after WW2. Even though that is becoming a far less important issue then it was even 20 years ago many other countries have daytime Haneda landing rights at "regular" hours.

Today most if not all ANA and JAL flights to Europe fly from HND not NRT. Most EU3 Tokyo flights are to HND, The EU3 still have some flights to NRT but as many as they can send to HND are sent the closer airport. Haneda has stopped the EU3 from flying A380 to Tokyo since many have a split operation, before NRT saw many AF & LH A380.

When ANA gets A380's will HND suddenly and miraculously have A380 operations.

Quoting Aaron747 (Reply 137): Nobody said they don't - what was said is the current Japanese government does not recognize parity in the opportunities Japanese carriers have with those rights beyond the US versus how US carriers benefit from the rights here.

Japan should have offered 10 slots with the condition that no airline holds more than 50% of them for the next 5 years. That would implode both UA's and DL's hubs at NRT in one single swoop.

Quoting jfk777 (Reply 137): Today most if not all ANA and JAL flights to Europe fly from HND not NRT. Most EU3 Tokyo flights are to HND, The EU3 still have some flights to NRT but as many as they can send to HND are sent the closer airport.

That is only true in the cas of NH: Most NH flights to Europe are from HND. However, the majority of JL's Europe flights are from NRT, as are most AF/KL flights. Half of BA's flights are at NRT (one of two), while a little more than haf of LH Group's flights are at NRT too. Every other European airline can and does only go to NRT.

Quoting LAX772LR (Reply 118): Quoting a380787 (Reply 106):First, AF and KL was already one entity by then They weren't then, and they aren't now. They're two distinct airlines financially held by a single entity. They themselves are not a singularity, and they don't operate as such.

  

Quoting MSPNWA (Reply 130): Even the lack of a partner is largely their own fault. Other airlines got it done. DL hasn't. The two biggest strikes against them are mainly self-inflicted.

Not true. DL has many partners; that fact it cannot meet the terms KE demands - or KE cannot meet the terms DL demands - hardly indicates that DL is incapable of reaching pertnership agreements.

Quoting commavia (Reply 113): The challenges presently facing Delta's Asian business - at least at NRT - have little if anything to do with Delta, and would have been just as acute, if not frankly worse, absent the merger. At least Delta has a vastly larger and more diversified U.S. (and global) network to draw upon to support these flights than Northwest ever did. The competitive issues that Delta is facing at NRT were evident - and predicted - literally years ago, before the merger. The advent of 777s and 787s, and the general trend of civil aviation liberalization around the world, meant that Northwest would be at a progressively larger disadvantage trying to route passengers on 747s over NRT to access East Asia. That's the reason why Northwest starting downgauging the hub (A330s) in the pre-merger environment, and it's a credit to Delta management that they clearly recognized this trend coming and set about to build a gateway at SEA to effectively replace NRT, which is what has already partly happened.

     

Quoting DTWPurserBoy (Reply 130): DL did not misread the market. Traffic to NRT had dropped significantly due to the Japanese and US recessions. Most of Japan's auto industry is located in NGO and that is where we carried a lot of Toyota folks in and out for business purposes. DL had the flexibility to gauge the right equipment--mainly the A330-200--for routes from SEA and PDX that could not support the 744. There are only a few destinations in Asia that could support enough traffic to warrant a nonstop--BKK, PEK, PVG, ICN and possibly MNL, but that is mostly VFR traffic and is highly price sensitive. However the Philippine community, both here and in MNL are incredibly loyal customers.

Thank you for your insight and information. You are always knowledgable on matters related to NW and DL.

Quoting DTWPurserBoy (Reply 130): I would like to see DL use the 757 to restart service to Okinawa and begin service to Vietnam. This, however, would be difficult considering our alliance with Vietnam Airlines.

DL did operate NRT-SGN briefly; I believe it lasted about one year. The problem, I was told, was that the Vietmanese government refused to allow 5th Freedom rights between NRT and SGN, thus diluting the traffic potential.

I have no doubt they were working to protect their own airline's sales, even though DL and VN were partners.

Quoting commavia (Reply 132): They were the "kings of the Pacific" at a very different time, under a very different regulatory, economic and competitive regime than exists today. At least United actually had, long before the Continental merger, a U.S. hub structure highly conducive to substantial nonstop flying from the U.S. to East Asia overflying Japan. But particularly in Northwest's case, their "monarchy" across said ocean was largely an artificial construct of their disproportionate access to a particular set of traffic flows at a time when, owing to aircraft technology of the day, said traffic flows were far more important. Once both of those conditions - limited access, and limited aircraft capability - changed, we've clearly seen the result. And this would have been the result whether Northwest had merged into Delta or not.

        

Quoting alfa164 (Reply 140): DL did operate NRT-SGN briefly; I believe it lasted about one year. The problem, I was told, was that the Vietmanese government refused to allow 5th Freedom rights between NRT and SGN, thus diluting the traffic potential.

It had nothing to do with anyone refusing anything. It written black and white in the bilateral what the valid 3rd party gateway points were.

United chose to operated to Vietnam from authorized HKG, while DL decided to fly from an unauthorized gateway with NRT and hence no local traffic authority.

[Edited 2016-01-24 18:08:33]

I read somewhere that there would be 12 slot pairs (2 late-night-early-morning and 10 day-time slots)
that will replace the current 8 late-night-early-morning slot pairs.

That's a net gain of just 4 new slot pairs at HND.

As far as I understand, the incumbent airlines are not allowed to keep the current overnight slots.

My apologies if I am misinformed.

[Edited 2016-01-24 19:13:42]

Quoting klkla (Reply 119): I agree with all your points LAX772LR but what are Delta's options going forward? I'm actually asking this to you and all BUT the Delta haters.

Pretty much what they're doing:

Focus on their relationship with MU, and start building a cohesive plan for when US/PRC links inevitably liberalize, whenever/whatever that entails.

Continue to fortify SEA, knowing that they'll likely incur years of losses and addition/deletions before their investment there pays off.

Utilize the economics of the new generation aircraft (A350s, A330NEOs, and 787s are all currently scheduled in within the next 4yrs+) to consider expansion from other gateways; quite possibly add JFK to their current triparties Asia strategy.

And above all else-- keep making money throughout the rest of the network, so they could afford to tool around with various efforts until they figure out what works best for them within the given economic/political environment.

Quoting Aaron747 (Reply 120): It seems the more logical way for DL and others to go is to continue relationship-building with Tokyo officials, get in their good graces

That's the carrot.

There's also the stick: start tossing around enough political capital (meant in more ways than one) to get Japan to stop screwing around on what's supposed to be an "open skies" relationship.

Quoting RyanairGuru (Reply 122): Deferring the 787s was IMHO incredibly short sighted.

Meh, buying line aircraft with definitively limited performance and excessive weight, just to get a few years head start, when you're then likely to then be stuck with it for two decades or more..... would be the ACTUAL short-sighted move.

Quoting mercure1 (Reply 127): DL should put its big boy pants on and instead go out and compete as it does so well in other markets. Instead of crying about progress in bilateral air services, they should seek way to better compete themselves.

Why does it have to be an "or"... they're doing both.

They'd be doing their shareholders a disservice if they didn't.

Quoting MSPNWA (Reply 129): How is the SEA development working without 787s when DL can't even fly to HKG from SEA more than a couple days a week?

Yes, answer that for us:
How *is* it doing?

I'm sure you'll readily provide us with a detailed layout of SEA's financial performance for DL, both in real terms and in projection over a multi-year layout, including opportunity cost both on a hub and network basis--- in order to answer that.

Or, could it be that you're just jumping to completely anecdotal conclusions based on the spot performance of a single route, then using that to support whatever preconceived notions you may have had? Hmm.   

Quoting C010T3 (Reply 133): The Port of Portland should have been preparing for this ever since Delta decided to hub at SEA.

    

Quoting DTWPurserBoy (Reply 130): You are forgetting that the original frames allocated to NW as a launch customer were those in the first thirty or so--all overweight and would not be profitable. It makes perfect sense to continue to operate the 744's until they time out and then switch to the A350-900XWB and eventually to the 787-8 and/or 9. They are now mature aircraft but I see in various publications that people are still watching those produced in South Carolina closely.

Even the early 787s are a big improvement in long-and-thin over anything else flying in that size range. How you can make the unprofitable claim is beyond me.

Quoting commavia (Reply 132): Again, I don't think Delta's Pacific strategy is particularly "struggling" at all, but whatever "struggling" there may be isn't because Delta doesn't have new technology. It's struggling because other carriers do.

The only way your argument works now is if DL would essentially gain no benefit from newer, better aircraft on the market today. 747s, A330s, 787s, 777s, it doesn't matter. They have to be a complete victim of circumstance, with no amount of 787s or 777s helping their situation enough to make a difference. That argument just doesn't hold water, and it's inconsistent with what you first stated.

Quoting commavia (Reply 132): The SEA development seems to be working quite well from my perspective - certainly better than any plausible alternative I can think of, including the "do nothing" approach of continuing to rely near-entirely on NRT, as Northwest did for decades.

DL has struck out an KIX and is down in the count at HKG. The Asian network has stalled and taken a step backward. It can't surpass the number of Asian destinations from DTW. I'll let that speak for itself on whether or not it's working.

Quoting alfa164 (Reply 140): Not true. DL has many partners; that fact it cannot meet the terms KE demands - or KE cannot meet the terms DL demands - hardly indicates that DL is incapable of reaching pertnership agreements.

They have zero Asian JV partners--the context of the statement. So it's very true.

Quoting LAX772LR (Reply 143):

I asked first. Care to take a stab at my question? Just remember that KIX failed. ICN is just 6x weekly. There's only five Asian destinations yet (same as faraway DTW and with fewer seats). And in the current offseason 4 of the 5 are on the smallest gauge DL can operate on the route.

Yeah, I'd be complaining about HND slots too if I knew I was screwed.

Quoting LAX772LR (Reply 143): That's the carrot. There's also the stick: start tossing around enough political capital (meant in more ways than one) to get Japan to stop screwing around on what's supposed to be an "open skies" relationship.

While you give us a lot of valubale information about DL, you clearly don't know how Japanese politics works. "Tossing around political capital" and making a fuss is what DL is doing at the moment and look where it got them. You put more outside "pressure" on Japanese politicians/officials? They stick to their opinion even harder. That seems to be an underestimated advantage of AA/UA with their JVs. They let their JV partners handle the matters in Japan, who know how to deal in Japan.

Quoting MSPNWA (Reply 144): I'll let that speak for itself on whether or not it's working.

Mistake #1.

Quoting MSPNWA (Reply 144): Care to take a stab at my question?

No point in that, as I don't have access to sufficient information to accurately make the call... and, of course, neither do you. At all.

Except that only one of us here seems to recognize that basic fact, despite being informed just one post above.  

[Edited 2016-01-25 00:25:47]

Quoting LAX772LR (Reply 143): to get Japan to stop screwing around on what's supposed to be an "open skies" relationship.

Japan is very much open-skies.

No different that US domestic market which allows any US airline to fly any route. That does not mean an airline can serve airports like DCA, LGA, SNA, LGB without a slot.

Airport slots have nothing to do with bilateral open-skies and are separate issue.

Quoting LAXintl (Reply 148): Japan is very much open-skies. No different that US domestic market which allows any US airline to fly any route. That does not mean an airline can serve airports like DCA, LGA, SNA, LGB without a slot. Airport slots have nothing to do with bilateral open-skies and are separate issue.

I disagree - this is not the same thing.

If slots were the only limitation, I would concur with the characterization as "Open Skies" - like LHR, another highly-in-demand airport where any U.S. carrier can fly as much as they want if they're willing and able to purchase slots. But that's not the case in Japan, where U.S. carriers cannot openly add or subtract flying subject to their willingness and ability to trade slots. U.S. carriers are limited by the bilateral itself to the amount of access they are permitted. Put another way: if it wanted to, could, say, Hawaiian tomorrow go and spend $500M on the open market buying up slots at HND and open a hub flying there from 5 U.S. cities and beyond there to 5 Asian cities? The answer is obviously no - even if they had the money, they would not be allowed to do that.

And that's not "open," at least not by my definition.