Things in the Sky

Haneda airport has been closed off for long-haul flying for a long time, but that will change later this year when a new runway opens. As part of the new open skies agreement between the US and Japan, American carriers will access to the airport for the first time since 1978. This is big, as Haneda is closer to downtown Tokyo, and as such is viewed as more convenient. The best comparison I can think of (at least in part of the world) is if LaGuardia in New York or Reagan National in Washington were opened for transoceanic flying, if that were possible.

Four slots at the airport were allocated to American carriers, and the DOT was charged with the task of choosing who would get service. Naturally, this is a big deal for the airlines – the prospect of getting access to an attractive  new market where they are shielded from competition is very exciting. But this is also a big decision for the DOT, and I have to think it was a tough choice dealing with such a small number of slots. Plus, the DOT says it had to put its blinders on – the agency said it did not consider the outcomes of the anti-trust immunity applications from American/JAL and United/Continental/ANA.

We had five carriers propose routes – Hawaiian, Delta, American, Continental, and United. I tried to write this carrier-by-carrier, but it just didn’t work out. So here’s a breakdown by city. Karl Swartz over at the Great Circle Mapper made an interesting featured map that shows what was approved (in blue) and what was denied (red):

Honolulu

Two carriers proposed service here. Delta applied for one 747 flight, Hawaiian proposed flying two daily flights from Honolulu, and they received rights for one flight with a 767-300. The airline says they’re going to appeal for the second, but I doubt they’ll get it.

You might be surprised that the DOT selected Honolulu, but it’s actually the largest United States – Japan market. Some airlines argued that Honolulu shouldn’t get any service because it’s a leisure-dominated market, but the DOT argued that the service would provide a boost to Hawaii’s tourism economy.

So why go with Hawaiian, who will inject less capacity? Well, the DOT likes competition. A lot. Hawaiian would be a new entrant into the Hawaii-Japan market, so that seems to be the major motivation for selecting Honolulu and Hawaiian. On a side note, JAL will be starting flights to Honolulu from Haneda later this year as well.

Guam

This one might seem a bit odd, too, but it’s the second-largest Japan-US market. Continental Micronesia applied for one with with a 767-400, and was denied. The DOT acknowledged that there would be economic benefits if the service was approved, but didn’t find it worthwhile. Unlike Hawaiian’s proposal, this would not add any new competition. DOT also believes that using the other slots for mainland service is a better use of them.

Los Angeles/San Francisco/Seattle

From the way I read the filing, it looks like DOT looked at the West Coast as a whole here, so I’ll do the same. Delta applied for a flight from Seattle (A330-300) and Los Angeles (747-400). American applied for Los Angeles (777-200), and not surprisingly, United applied for service from San Francisco. Seattle was denied, and I’m not really shocked. It’s one of the smaller markets that were up for consideration, and with only three slots left to work with DOT was looking for other options, and it ended up going with Delta out of Los Angeles, and that one makes sense – it’s the largest mainland-Japan market. DOT also went with Delta because the flights would be using 747s, introducing most capacity. From a connecting standpoint I think San Francisco opens up more opportunities but I can see DOT’s reasoning here.

Also worth noting is that JAL is cutting SFO-Narita service and moving it over to Haneda later this year.

Detroit

Yep, this was yet another Delta application. The carrier applied for all four slots and wanted to see what would stick. Despite this being the smallest market that DOT was looking at, they gave it to Delta because of connecting opportunities, which makes sense. Even if San Francisco were approved, that wouldn’t be very convenient for passengers in the Eastern half of the country who were flying United, while Delta has an expansive domestic network out of Detroit. (Now that I think of it, why didn’t United try for Chicago service here? I feel if they had they would’ve beat Delta if they had.) Plus Delta using a 747 probably helps, too.

New York

DOT saved New York, the second-largest mainland-Tokyo market, for last. Continental applied for flights out of Newark, and American applied for JFK. Both flights would be flown with 777-200s. The DOT ended up going with American, saying that “should enhance alliance competition by improving the competitive posture of American and oneworld in the U.S.-Asia market as compared to the Skyteam and Star alliances”. (Which is very true – take a look at this graph.) I can see that argument, but I still would have gone with Continental instead. The DOT was looking at connecting opportunities for other cities, and in that department, Continental wins by a long shot.

So when does this all start? Uhm, later this year. The DOT says service will start within 90 days of October 31, but the service is also contingent on the US and Japan signing the final agreement, and the completion of the runway at Haneda. Plus, there’s now a few days left to object to the tentative ruling, though I don’t see much changing at this point.