For more than a year, American Airlines and Delta Air Lines have been caught up in a dogfight concerning access to Tokyo's Haneda Airport.
Haneda is preferred by many business travelers because it is much closer to Tokyo than Narita Airport, which handles most international flights. However, U.S. airlines are currently limited by the Japanese government to just four daily roundtrips to Haneda Airport. Delta and American have been squabbling over one of those four slots since last October.
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American Airlines has set a start date for its Los Angeles-Tokyo Haneda route. Image source: American Airlines.
After more than a year of effort, American Airlines finally appears to have won this battle, as it announced an official start date of February 11 for its new Los Angeles-Tokyo Haneda route. Unfortunately, this may prove to be a pyrrhic victory.
Troubled history at HanedaIt has only been five years since U.S. carriers were allowed back into Haneda Airport, but there have already been numerous setbacks. For a while, American Airlines flew between New York and Haneda, but it finally dropped the loss-making route in late 2013. Delta started with two Haneda routes, but its flights from Detroit also didn't work out, leading the carrier to apply for a Seattle-Haneda route instead.
That was the origin of the most recent dispute between American Airlines and Delta Air Lines. Delta discovered that flight demand between Seattle and Haneda was highly seasonal, so it cut back to just a handful of flights during the fall and winter last year: the bare minimum needed to satisfy the government's conditions for awarding the route to Delta.
American Airlines complained to the Department of Transportation that Delta was violating the spirit -- if not the letter -- of its agreement. Rather than have one of the country's four Haneda slots sit nearly idle for half the year, American argued that Delta should be required to fly every day, or else give the route authority to another airline (such as American) that would do so.
The DOT ultimately informed Delta that it would have to operate its Seattle-Haneda route 365 days a year, or drop the route entirely. The DOT also selected American's proposed Los Angeles-Haneda route as a "back-up" in case Delta didn't meet its conditions.
A familiar situationDelta decided it couldn't make money flying the Seattle-Haneda route on a daily basis year-round and informed the DOT in June that it would end the route on September 30. That enabled American Airlines to start its Los Angeles-Haneda flights at the beginning of October.
Delta has been fighting American Airlines tooth and nail on Haneda access.
However, October 1 came and went without American Airlines starting those flights or putting any tickets on sale. Not surprisingly, Delta immediately lodged a formal complaint, arguing that American had violated its agreement to start service within 60 days and should lose the Haneda route authority.
American Airlines countered that it had been unable to obtain "commercially viable" slots at Haneda despite significant effort. It finally seems to have completed that task as of last week, allowing it to belatedly start selling tickets for Los Angeles-Haneda flights.
Best of luckWhile American Airlines seems to feel it can't be the only major airline left out of Haneda, I don't have great hopes for this route to be profitable. Delta and Japanese airline ANA both already operate daily Los Angeles-Haneda flights, and there may not be enough demand to support a third flight.
Due to Japanese restrictions limiting flights between Haneda and the U.S. to overnight hours (10 p.m. to 7 a.m.), American's schedule is very similar to Delta's -- and rather inconvenient for most travelers. Some people may be willing to put up with that inconvenience to fly into Haneda Airport, but most would probably prefer to just fly into the more distant Narita Airport.
Looking back on this episode in a few years, it's quite possible American's management will be reminded of the famous proverb: Be careful what you wish for -- you just might get it.
The article American Airlines Group, Inc. Is Finally Flying Back to Tokyo's Haneda Airport originally appeared on Fool.com.
Adam Levine-Weinberg is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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