American Airlines secured the necessary authorities to launch service between New York City and Tokyo, beating out United Airlines. Ultimately, the US Department of Transportation favored American’s offering as an incremental add of service rather than a shift of existing capacity.
[S]election of United would not promote inter-carrier and inter-alliance competition in the nonstop U.S.-Haneda market or promote parity among U.S. carrier nonstop access to Haneda to the same degree as would selection of American. We tentatively find those factors most dispositive in this proceeding, thereby giving American’s proposal an advantage in maximizing public benefits.
-DOT Ruling
The two carriers each applied to replace Delta Air Lines in the limited Haneda market after the latter decided to not launch its flights from Portland in March. Delta had previously requested permission to shift that service to a different airport but was denied by the DoT.
In a statement the carrier says it “plans to begin nonstop service to HND in the coming months.” It previously promised a 31 March 2024 start date to the DoT. It gets a 90-day buffer on that before the slots are considered unused and subject to reallocation.
In its decision the DoT notes “both carriers present attractive proposals that would introduce significant public benefits for the traveling and shipping public. The nature of the benefits that each proposal would offer differ, however, and we tentatively find, on balance, that selection of American’s proposal at New York (JFK) would enhance competition and better achieve our principal objective of maximizing public benefits.”
Three main factors drove the Department’s decision: demand, competition, and capacity.
Serving a clear demand
American’s application argued that demand from New York City to Tokyo remains underserved relative to demand. While the New York area already has more flight to Tokyo than Houston, it also has 5x the demand today, and potentially 9x as the market recovers. This argument swayed the DoT, as it offers “an additional competitive option for travelers between the largest cities and commercial/financial hubs of the United States and Japan.”
Boosting competition
The DoT also leaned in to the idea of balancing competition among the US carriers in the Haneda market. American remains in third place with this allocation, holding slots to operate four daily flights at Haneda, compared to United’s five and Delta’s six, though ahead of Hawaiian’s two. It also adds geographic diversity as an east coast gateway for the carrier.
Growing capacity
Finally, and perhaps most significantly, American’s service includes addition of a new flight, not just shifting service from Narita to Haneda. The DoT specifically calls out the addition of 200,000 seats annually between the countries as a big deal for the recovering market.
Considering connections
United’s application focused on increasing connection options on both sides of the Pacific, while glossing over the fact that it would simply move its Narita flight to Haneda. American, focused solely on the NYC market. And, in the end, the DoT seems to think that the connections don’t matter so much:
American’s proposal also provides for roundtrip connections to only three U.S. cities, meaning it would need to primarily rely on the local New York traffic base to support the service. We tentatively find persuasive American’s arguments that traffic demand in the New York-Tokyo market justifies additional Haneda service, and that New York would still be underserved relative to Houston if the Department awards the slot pair to JFK. Viewed together with the potential competitive benefits to be achieved through selection of American, we tentatively find that additional service at New York (JFK) would offer the greater combination of public benefits.
Moreover, the DoT agreed with American’s analysis that many of United’s proposed Houston connections are not as good as they seem, “many of these proposed connecting cities are already served by United over its other U.S.-Haneda gateways; many, as American argues, with shorter travel times than would be achieved through Houston.”
The ruling is tentative for now. United could appeal the decision. But given the number of reasons the Department ruled the way it did, this one seems unlikely to be overturned.
A consolation prize for United
On the plus side, United may gain access to Haneda for its desired service from Guam. The carrier had been pressing the DoT with respect to usage of night slots at Haneda, currently allocated to Hawaiian Airlines. That carrier informed the Department on Friday that it would be terminating the associated service on 2 April 2024. The slots are poorly suited for mainland US operations and only slightly useful for islands service. But United is keen to try the Guam route. It is unlikely to face competition for the now-abandoned Hawaiian slots.
More recent Haneda slot drama:
- Delta, United win big in Haneda slot allocation
- Delta looks to flex at Haneda
- Delta denied Haneda slot flex request
- United goes after Haneda slots as Delta scales back
- American Airlines looks to add JFK-Haneda service
- American, United vie for Haneda slot
- United, Hawaiian spar over Haneda night slots
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