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From: Carol
Date: 6/25/2015 1:47:19 PM
Subject: Fw: American Airlines Wins a Futile Victory Over
Delta & MORE !!
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Amenity kits get refresh
June 23, 2015
By Paul
Skrbec, Corporate CommunicationsComplimentary TUMI travel kits have provided Delta’s premium customers with enjoyable amenities in flight since 2013.
Beginning July 1, Delta One customers will enjoy updated amenity kits featuring a fresh design and new features from TUMI.
Custom designed hard- and soft-sided TUMI amenity kits will include a TUMI soft-touch pen and eyeshades; MALIN+GOETZ lip moisturizer, body lotion and new mouthwash; striped socks, facial tissues, earplugs and a dental kit with Crest toothpaste.
The hard- and soft-side kits will be alternated in direction of travel so customers are able to collect one each way and keep it for re-use after they get to their destination.
Delta One customers also enjoy full flat-bed seats on all of Delta’s widebody aircraft and flights between New York-JFK and Los Angeles or San Francisco as well as Westin Heavenly In-Flight bedding, chef-curated meals paired with wines selected by Master Sommelier Andrea Robinson, complimentary Delta Sky Club access and complimentary access to Delta Studio entertainment in-flight.
Also starting July 1, customers traveling in Delta Comfort+ will receive a new sleep kit with the addition of a toothbrush, toothpaste, eye mask and earplugs on all long-haul international flights. Main Cabin customers will continue to receive a sleep kit with an eye mask and earplugs on international flights.
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American Airlines Wins a Futile Victory Over Delta
AAA |
Based on the outcome of a contentious DOT proceeding that stretched from last October well into 2015, American Airlines (NASDAQ: AAL) will be able to take over Delta's unused slots for a new round-trip flight to Los Angeles. However, this victory could prove futile. The evidence suggests that American's new Los Angeles-Haneda flight may be unprofitable.
The promise and pitfalls of Haneda service
For the past few decades, virtually all long-haul international service to Tokyo had to arrive at Narita Airport, which is about 40 miles outside of downtown Tokyo. Haneda Airport is much closer.
Thus, when Haneda was opened up for a limited number of flights to the U.S. -- four daily roundtrips for Japanese carriers and four for U.S. carriers -- there was fierce competition for the available slots. U.S. airlines in particular believed that business travelers would pay a premium to fly to Haneda rather than Narita.
The reality has been more complex. Haneda's location may be convenient, but the flight times have been the very opposite. That's because these special slots for flights to the U.S. are limited to the overnight hours (10 p.m.-7 a.m.).
As a result, flight times have been subpar, and airlines have had trouble making most of the Haneda flights work. American Airlines previously canceled its lone Haneda route (from JFK Airport in New York). Meanwhile, the Seattle service that Delta is now canceling was only implemented after its Detroit-Haneda route also failed.
L.A. is getting overcrowded
Los Angeles and San Francisco seem to be the only mainland U.S. markets that work well for service to Haneda. Delta flies from Los Angeles to Haneda, as does Japanese carrier ANA. United Continental and Japan Airlines both serve San Francisco-Haneda.
However, the market may not be big enough for a third carrier on the Los Angeles-Haneda route, given that there is also ample service from Los Angeles to Narita. In fact, a study done by Hawaiian Airlines -- which wanted to take over Delta's slot for flights to Kona, Hawaii -- found that American's Los Angeles-Haneda route is likely to be a commercial failure.
Hawaiian argues that while the two existing Los Angeles-Haneda flights have respectable load factors of more than 80%, they have exhausted the available demand. (This is why Delta now flies the Boeing 767-300 -- its smallest widebody aircraft -- on that route, after initially planning to fly a Boeing 747 jumbo-jet.)
Furthermore, due to the restrictions on flight times for U.S.-Haneda flights, American's flights will operate on virtually the same schedule as Delta's Los Angeles-Haneda service. On the return flight from Tokyo to Los Angeles, all three carriers will be operating similar schedules: leaving around midnight and arriving in the early evening (thus losing a full business day).
It's fairly common for international departures to be bunched up around a similar time. But these Haneda-Los Angeles flights are not at a convenient time. For Narita-Los Angeles flights -- which are not limited to overnight hours -- five of the six nonstops leave between 4:30 p.m. and 5:30 p.m. this summer, arriving in Los Angeles in the late morning. That's when most people want to travel.
As a result, Hawaiian projects that American Airlines' load factor for Los Angeles-Haneda flights could be less than 60%. That's just as bad as Delta's Seattle-Haneda results, and it's not feasible to make money with so few seats filled.
Best of luck
If American Airlines can make its Los Angeles-Haneda service work -- without pushing one of the other two carriers out of the market -- the consumer benefits will be substantial. Having flights from all three airline alliances on that route should keep pricing competitive.
However, that's not a good situation for the airlines themselves. Unless American Airlines can stimulate incremental demand for flights to Haneda, its entry into the Los Angeles-Haneda route will make that market just as unprofitable as most of the other U.S.-Haneda routes that have been attempted.
Given the awkward flight times available at Haneda, it's highly doubtful that these new flights will be the smashing success that American Airlines' management is looking for. Instead, it might just be the beginning of a new costly war of attrition
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