News
Delta reports 13.9% trans-Pacific yield decline
May 13th 2016
Delta Air Lines is having difficulty making money on its Asia routes. In the January-March quarter, the Atlanta-headquartered carrier saw yields across the Pacific decline 13.9% year-on-year. Read More » This is the 12th consecutive quarter Delta has seen its revenues in the region weaken, despite extensive code sharing with China Eastern Airlines. The U.S. airline took a 3.55% stake in the Shanghai carrier last year, which should have bolstered loads if not necessarily yield.
It is understood that the Ed Bastian-led legacy carrier is suffering on routes in and out of Japan. After its merger with Northwest, Delta inherited the latter’s hub at Narita Airport, located more than an hour’s journey from downtown Tokyo. It operates approximately 100 weekly services on ten U.S.-bound routes out of Narita.
In recent years, All Nippon Airways (ANA) and Japan Airlines (JAL) have strengthened their services to the U.S. and added destinations and frequencies in rapid succession. ANA and JAL, which have strong U.S. partners in United Airlines and American Airlines, respectively, have boosted connectivity to East and Southeast Asia, which helps them fill their aircraft but siphons passengers from Delta.
As well, Japanese authorities have allowed its local carriers, especially ANA, to add services to the U.S while allotting American carriers four largely unpopular night-time slots between 10pm and 7am, making onward connectivity almost impossible.
However, a reprieve is underway after Japanese authorities earlier this year announced they would open five new daytime departure slots at Haneda for the U.S. airlines, while retaining one night-time slot. This could be the break for Delta; it has applied for three of the slots, daily B777 services each to Los Angeles, Atlanta and Minneapolis/St. Paul. Its rivals, American, United and Hawaiian Airlines have asked for two slots each. A decision is expected after June 1.
