Delta to DOT: We Don’t Want US Carriers to Be Allowed to Compete, Either

Cranky Flier had a great piece on the Department of Transportation’s ruling on Delta’s Seattle – Tokyo Haneda flight.

There are a limited number of permissible flights between the US and Tokyo’s close-in airports. One of the slots is currently held by Delta for Seattle service, but it was hugely unprofitable so Delta has just been sitting on the route. They’ve flown the bare minimum number of times to not automatically lose the privilege — 7 flights every 90 days.

American used to have one of the Haneda slots, flying from New York JFK, but they gave that up to stop the bleeding. US carriers get the worst flight times, and lose money. But American has a joint venture partner in Japan Airlines and wanted to make a go of service out of Los Angeles (where there’s already plenty of Haneda service). They asked the DOT to take the more or less unused slot away from Delta. The DOT said no, Delta gets to keep the slot, but only if they actually used it.

When the Department permitted Delta to introduce Seattle-Haneda service, it did so because it found that Delta’s proposed service would address a variety of public interest goals and would best maximize public benefits.

…Nevertheless, the Department recognizes that the positive attributes of Seattle-Haneda service remain meaningful only if Seattle-Haneda service is actually being provided.

…any failure, without a Department-granted waiver, to perform Haneda-Seattle flights, on two days of any seven-day period (365 days a year) will constitute a default of Delta’s Seattle-Haneda authority and that authority will automatically expire.

Delta gets to keep the slots if they use the slots, and they immediately said that they would. Now they’re looking to overturn the ruling.

The Transportation Department wants to set a “draconian” standard in insisting that a flight between Seattle and Haneda airport operate every day, Delta said in a filing. Failing to do so could mean ceding Haneda access to American, Delta said.

“At the most basic level, the proposed condition deviates from past practice because, as far as Delta is aware, the department has never previously imposed such a strict 365-day-a-year service requirement,” Delta Associate General Counsel Alexander Van der Bellen wrote in the April 6-dated filing.

Delta should know know when to leave well enough alone. They get what they want but only if they make service available, which is the whole point of awarding them the slot.

If they said “look, the requirement that 2 days of missed flights automatically pulls our rights to fly is too onerous because two flights could go mechanical, so how about a presumption that we lose them unless we can show good cause in a filing within 30 days?” that could be a reasonable position to take.

But they just don’t want any conditions at all. They want to keep the right to fly Seattle – Tokyo Haneda without actually flying to Haneda. They want:

  1. To keep the right for later, in case it ever becomes valuable
  2. To prevent anyone else from providing service

Just like they don’t want Middle Eastern carriers providing good service and low prices to Americans, they don’t want American carriers providing that on flights to Haneda, either.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. @Gary: It’s true that it’s not the US government that’s rationing the slots, but since it is the government that’s allocating them, they could have a more market-oriented process to do so. I don’t see why they don’t auction them off.

  2. @ed
    hey ed, any chance you can explain the stupid remark and how dod you reach teh conclusion and why do you put it here and so on so on?

  3. @dbeach agreed that an auction scheme would appear to allocate them to their highest use, although not clear why the government ought to be the initial property holder. I think it would be really quite funny and ingenious to assign the property rights to Planned Parenthood or a similar conservative organization and let them auction it. Let the fireworks ensue!

  4. The DOT set a minimum standard, which Delta fulfilled. American cried foul and suddenly the DOT’s standard increased tenfold. Delta that is at fault here, power to them for challenging the BS ruling.

  5. I really do not see the need for mockery aimed at Delta in this case. Have you ever considered this? Delta cannot make the SEA-HND route profitable, thus leading them to cut the service while playing by the rules previously set by DOT. American filed a complain and DOT feels the need to tighten that rule.

    There is nothing wrong with protecting their asset, especially when the asset may fall into the hands of their competitor. This is called competition.

  6. @Gary, I’m not saying it’s the government’s fault. Just saying that since the whole program is anti-competitive, you can’t fault DL for playing the game. I was responding to @Steve above me.

  7. Id be interested in changing some conditions in Deltas policies
    Might they be open to that?
    Cry me a river

  8. I agree wholeheartedly with Nicander…. If the route isn’t profitable or utilized enough to run a full schedule, why should Delta be forced to incur a loss? Also, I dint see anything wrong with them protecting their position in regards to the slots.

    And Ed, what in the world does Delta Air Lines = Obama airlines even mean?!?!?!? It’s obviously meant as a slight, but I am not clear to whom it is directed. Can you please explain?

    Thanks!

Leave a Reply

Your email address will not be published. Required fields are marked *