alex0easy wrote:

TransWorldOne wrote:

FA9295 wrote:

Wouldn't be surprised to see Delta start up SEA-CAN (Seattle-Guangzhou) in the future.

I would. Long and thin route that would require a 777 or 350.

Other than this route is flyable with the A332, I agree with the rest.
If CZ isn't starting this route (plus the fact that they've currently run out of zone 1 traffic rights), DL won't.

There are still 7 or 14 frequencies that are zone one but just useable to CAN. Delta could start SEA-CAN tomorrow if they wanted....

having said that, it will be a long time before SEA is ready for a CAN flight. Capacity will come from larger aircraft not many new routes.

Especially with the possibility of CZ leaving SkyTeam, CAN is probably not a huge priority at the moment.

cvgComair wrote:

Especially with the possibility of CZ leaving SkyTeam, CAN is probably not a huge priority at the moment.

IMO HKG and the big weakness Delta and American have in the market is why we wont see either touch CAN for a while.

If anyone does it, It'll be United from SFO. I imagine Delta/American will continue to focus on growing in PEK/PVG/HKG.

deltal1011man wrote:

alex0easy wrote:

TransWorldOne wrote:

I would. Long and thin route that would require a 777 or 350.

Other than this route is flyable with the A332, I agree with the rest.
If CZ isn't starting this route (plus the fact that they've currently run out of zone 1 traffic rights), DL won't.

There are still 7 or 14 frequencies that are zone one but just useable to CAN. Delta could start SEA-CAN tomorrow if they wanted....

having said that, it will be a long time before SEA is ready for a CAN flight. Capacity will come from larger aircraft not many new routes.

I'd figure DL would start a CAN flight from LAX rather than SEA. Market is just too small in SEA. However, the A350-900 is too big. I have to think that CAN's market is much stronger on the CAN end of the flight than on the US side. UA was supposed to start SFO-CAN but never started. UA tried SFO-Secondary China before CAN. Should say something about CAN. The only airline of the US3 I can think of that could start a CAN flight is AA with a 787-8 on LAX-CAN given the CZ codeshare, appropriate aircraft for the route, and LAX is the strongest US market to CAN.

DeSpringbokke wrote:

UA was supposed to start SFO-CAN but never started. UA tried SFO-Secondary China before CAN. Should say something about CAN.

Indeed. Says that CAN had and has no need to give out the short-term route subsidies that the secondary Chinese airports UA opted to fly to gave out.

DeSpringbokke wrote:

The only airline of the US3 I can think of that could start a CAN flight is AA with a 787-8 on LAX-CAN given the CZ codeshare, appropriate aircraft for the route, and LAX is the strongest US market to CAN.

[url][/url]

cokepopper wrote:

glaring that JFK is missing.

DL codeshares with both MU and CZ from there with 21 weekly flights combined..not sure about MF. As for the topic...I’m surprised DL doesn’t serve CAN.

now, maybe I am crazy but 363 seats being added to the market sure seems like growth to me.

Seems Like growth to me too lol..Nice facts, cant wait to fly on the A-350-900....

Polot wrote:

DL doesn’t have a great hub for tier 2 cities...

??? ICN is a great hub for tier 2 cities in China.
One of the motivators for the DL/KE JV is that PVG connections are getting worse, not better (IME). Stated differently, I think the JV will do more for Medallion members flying from the US to tier 2 cites in China (where KE serves 28 airports) than DL's investment in MU.
https://en.wikipedia.org/wiki/Korean_Air_destinations

deltal1011man wrote:

IMO HKG and the big weakness Delta and American have in the market is why we wont see either touch CAN for a while.

Even from the Kai Tak days, DL has always been so historically weak in HKG.

Sorta surprised that they haven't launched either DTW or LAX to HKG since receiving A359s.

Also, HX doesn't have a US partner........ just sayin'.

LAX772LR wrote:

deltal1011man wrote:

IMO HKG and the big weakness Delta and American have in the market is why we wont see either touch CAN for a while.

Even from the Kai Tak days, DL has always been so historically weak in HKG.

Sorta surprised that they haven't launched either DTW or LAX to HKG since receiving A359s.

Also, HX doesn't have a US partner........ just sayin'.

Yeah even with SkyTeam having a minimal presence there, HK is a pretty gaping hole for the likes of DL. I expect it probably will happen at some point in the near term though.

WPvsMW wrote:

Polot wrote:

DL doesn’t have a great hub for tier 2 cities...

??? ICN is a great hub for tier 2 cities in China.
One of the motivators for the DL/KE JV is that PVG connections are getting worse, not better (IME). Stated differently, I think the JV will do more for Medallion members flying from the US to tier 2 cites in China (where KE serves 28 airports) than DL's investment in MU.
https://en.wikipedia.org/wiki/Korean_Air_destinations

I was under the impression that the DL/KE JV wouldn't cover China.

DarkSnowyNight wrote:

Yeah even with SkyTeam having a minimal presence there, HK is a pretty gaping hole for the likes of DL. I expect it probably will happen at some point in the near term though.

Especially since both LAX and DTW would technically be resumptions for them... LAX even more so, considering that their previous service was to Kai Tak, and not Chek Lap Kok.

DeSpringbokke wrote:

deltal1011man wrote:

alex0easy wrote:

Other than this route is flyable with the A332, I agree with the rest.
If CZ isn't starting this route (plus the fact that they've currently run out of zone 1 traffic rights), DL won't.

There are still 7 or 14 frequencies that are zone one but just useable to CAN. Delta could start SEA-CAN tomorrow if they wanted....

having said that, it will be a long time before SEA is ready for a CAN flight. Capacity will come from larger aircraft not many new routes.

I'd figure DL would start a CAN flight from LAX rather than SEA. Market is just too small in SEA. However, the A350-900 is too big. I have to think that CAN's market is much stronger on the CAN end of the flight than on the US side. UA was supposed to start SFO-CAN but never started. UA tried SFO-Secondary China before CAN. Should say something about CAN. The only airline of the US3 I can think of that could start a CAN flight is AA with a 787-8 on LAX-CAN given the CZ codeshare, appropriate aircraft for the route, and LAX is the strongest US market to CAN.

SEA is still the west coast gateway, much the anger of a.net and the AS fanboy club.

If Delta starts a non-stop to CAN or TPE or SIN.....it will be from Seattle first. Having said that, as I said, I suspect Delta will focus on PEK/PVG/HKG/ICN and Japan for a while. So frequency will come from LAX (or DTW for HKG) but SEA will see the majority of capacity increases till a new China bilateral is signed.

LAX772LR wrote:

deltal1011man wrote:

IMO HKG and the big weakness Delta and American have in the market is why we wont see either touch CAN for a while.

Even from the Kai Tak days, DL has always been so historically weak in HKG.

Sorta surprised that they haven't launched either DTW or LAX to HKG since receiving A359s.

Also, HX doesn't have a US partner........ just sayin'.

I hope we see LAX and DTW over time, but I don't know if either happens till 280t 350s show up. Thats a long flight for the current 359 fleet and the 77L isn't the cheapest airplane to operate compared to the other players in the market.


as I have said before, Delta is more in need of a the 787 than any carrier I can think of, but currently they are focusing on narrow bodies and it would be really hard for the school house to handle another type till after 2021-2022. Also management is super conservative which isn't wrong but I hope Delta isn't pissing away chances at long term money looking at the short term. (ie weak offering to HKG compared to American (who would have thought that right after the merger?) and letting United own the non-stop market to SIN.....the same mistake AA/DL made in HKG oddly enough)

deltal1011man wrote:

enilria wrote:

SteelChair wrote:

45% less block fuel and 37% less fuel per seat (give or take a % or 2) is a huge decrease in operating costs. To say nothing of the enhanced reliability of having an all-new airplane. A massive upgrade all the way around imho.

The quote was "growing", not upgrading. 66 less seats is not growing. The airplane is cool, but still not growth.

as per the norm here you pick a single route and then say Delta isn't going in China.

Lets take a look at DL's seats to China with the 744 vs when they start ATL-PVG.

with 744
SEA-PEK 767-211 seats
SEA-PVG 767-211 seats
SEA-HKG 332-234 seats

LAX-PVG 777-291 seats

DTW-PEK 332-234 seats
DTW-PVG 744-378 seats

Total seats = 1,559 seats.

When ATL-PVG starts

SEA-PEK 767-211 seats
SEA-PVG 767-211 seats
SEA-HKG 777-291 seats

LAX-PVG 359-306 seats

DTW-PEK 359-306 seats
DTW-PVG 359-306 seats

ATL-PVG 777-291 seats
Total seats 1,922

now, maybe I am crazy but 363 seats being added to the market sure seems like growth to me.

FWIW PVG, the single 744 market in China with be up 200+ seats as well, on top of having more flights to more hubs offering more connection opportunities.

If you want to play that game, you twisted the data in two ways to make your point. First, HKG is not normally considered China, it is not even covered by the same restrictive bilateral that this entire thread began by talking about. Second, the 747s did not disappear in a single day, they were being retired over a period of time. Let's compare Summer 2016 to Summer 2018 to allow for that accurately.

ATLPVG July 2016 000> July 2018 3,492
DTWPEK July 2016 7,254> July 2018 9,486
DTWPVG July 2016 11,656> July 2018 9,486
LAXPVG July 2016 9,021> July 2018 9,351
NRTPVG July 2016 9,021> July 2018 4,068
SEAPEK July 2016 6,541> July 2018 6,448
SEAPVG July 2016 6,448> July 2018 6,448
TOTAL July 2016 49,941> July 2018 48,779

Capacity down 2.4%, and much more in existing markets since the ATL route offset those.

TransWorldOne wrote:

I was under the impression that the DL/KE JV wouldn't cover China.

Correct, the JV doesn't, but that doesn't detract from ICN being a superior hub for SkyTeam for service to Tier 2 cities in China. Assume you are a Medallion member, with experience flying both MU and KE within Asia, and your destination is a Tier 2 city. Will connect through PVG (where there are two types of flights: delayed, and cancelled) or through ICN, one of the best airports in the world? The days of KE as the "vacant" (as in no MQMs) member of SkyMiles are over.

enilria wrote:

deltal1011man wrote:

enilria wrote:

The quote was "growing", not upgrading. 66 less seats is not growing. The airplane is cool, but still not growth.

as per the norm here you pick a single route and then say Delta isn't going in China.

Lets take a look at DL's seats to China with the 744 vs when they start ATL-PVG.

with 744
SEA-PEK 767-211 seats
SEA-PVG 767-211 seats
SEA-HKG 332-234 seats

LAX-PVG 777-291 seats

DTW-PEK 332-234 seats
DTW-PVG 744-378 seats

Total seats = 1,559 seats.

When ATL-PVG starts

SEA-PEK 767-211 seats
SEA-PVG 767-211 seats
SEA-HKG 777-291 seats

LAX-PVG 359-306 seats

DTW-PEK 359-306 seats
DTW-PVG 359-306 seats

ATL-PVG 777-291 seats
Total seats 1,922

now, maybe I am crazy but 363 seats being added to the market sure seems like growth to me.

FWIW PVG, the single 744 market in China with be up 200+ seats as well, on top of having more flights to more hubs offering more connection opportunities.

If you want to play that game, you twisted the data in two ways to make your point. First, HKG is not normally considered China, it is not even covered by the same restrictive bilateral that this entire thread began by talking about. Second, the 747s did not disappear in a single day, they were being retired over a period of time. Let's compare Summer 2016 to Summer 2018 to allow for that accurately.

ATLPVG July 2016 000> July 2018 3,492
DTWPEK July 2016 7,254> July 2018 9,486
DTWPVG July 2016 11,656> July 2018 9,486
LAXPVG July 2016 9,021> July 2018 9,351
NRTPVG July 2016 9,021> July 2018 4,068
SEAPEK July 2016 6,541> July 2018 6,448
SEAPVG July 2016 6,448> July 2018 6,448
TOTAL July 2016 49,941> July 2018 48,779

Capacity down 2.4%, and much more in existing markets since the ATL route offset those.

HKG doesn't count but NRT-PVG counts?

lol okay dude.

and FWIW the only markets that saw less capacity are NRT-PVG, which is an increase for the frequency as NRT-PVG has mostly been a 767 route and ATL-PVG is a 777 route and DTW-PVG which went 744 to 359.

You pulled crap data that some how magically doesn't show ATL-PVG as having more capacity than NRT-PVG even with the larger aircraft (I guess that is magic......or as per normal you are twisting it as hard as possible hoping no one is smart enough to catch it.)

WPvsMW wrote:

TransWorldOne wrote:

I was under the impression that the DL/KE JV wouldn't cover China.

Correct, the JV doesn't, but that doesn't detract from ICN being a superior hub for SkyTeam for service to Tier 2 cities in China. Assume you are a Medallion member, with experience flying both MU and KE within Asia, and your destination is a Tier 2 city. Will connect through PVG (where there are two types of flights: delayed, and cancelled) or through ICN, one of the best airports in the world? The days of KE as the "vacant" (as in no MQMs) member of SkyMiles are over.

I was talking about options for DL flights, not options for DL loyalists. DL is not going to be flying ICN-2nd tier China city.

If there was a remote chance that DL would fly nonstop US / tier 2 airports in China, and CAAC added such airports as "international gateways", the JV erased it for the near term. KE will do in CN like AF/KL do in Europe.

BTW, what carrier now has nonstop rights between tier 2 airports in China and EU or US?

If CAAC reclassified SZX, WUH, and CTU as tier 1 airports, Delta would probably eventually add nonstops from the US, just as they do TATL.
https://en.wikipedia.org/wiki/List_of_t ... s_in_China

Ranked by population:
Shanghai (34 million)
Guangzhou (25 million)
Beijing (24.9 million)
Shenzhen (23.3 million) SZX
Wuhan (19 million) WUH
Chengdu (18.1 million) CTU
Chongqing (17 million)
Tianjin (15.4 million)
http://money.cnn.com/2015/04/21/news/ec ... index.html

HKG is the busiest in the world by cargo traffic... but I think CAN (a Fedex hub) and SZX (a UPS hub) will eventually replace HKG for China exports... they have better rail access and room for more runways. Growing cargo may push SZX into tier 1 airport status before CTU ... CTU (currently, 4th busiest in CN) would probably already be tier 1 if it were on the seaboard rather than inland.
https://en.wikipedia.org/wiki/List_of_b ... go_traffic
http://conference.payloadasia.com/wp-co ... en-Lau.pdf

deltal1011man wrote:

LAX772LR wrote:

deltal1011man wrote:

IMO HKG and the big weakness Delta and American have in the market is why we wont see either touch CAN for a while.

Sorta surprised that they haven't launched either DTW or LAX to HKG since receiving A359s.

I hope we see LAX and DTW over time, but I don't know if either happens till 280t 350s show up. Thats a long flight for the current 359 fleet and the 77L isn't the cheapest airplane to operate compared to the other players in the market.

Two things:
1) DL could uprate its current birds to 277T today if it wanted to, possibly the same 278T that PR has (though not sure about that). A 277T A359 would have no trouble whatsoever doing either route. I'm just wondering which would come first (I'm guessing DTW).

2) Is there any indication that DL intends to bring 280T birds onto property? Hadn't heard anything about that.

deltal1011man wrote:

as I have said before, Delta is more in need of a the 787 than any carrier I can think of

I still can't understand how they pissed away the opportunity to have early 787s, regardless of their A330N order.

And contrary to all AvGeek consensus, I'm still of the belief that they may yet find a use for RR-powered 789 and 78X in the fleet, despite the current A339/A359 order, if they get the right (read that: "insanely aggressive") price from the competing OEM.

And before anyone comments out of butt-hurt due to presumed "fanboyism".... that isn't a comment on the well-suited A339 or the (absolutely magnificent aircraft that is the) A359; it's just knowing that DL historically doesn't give a flying f#ck about "commonality" if operational/maintenance/acquisition values offer them similar options for dealing with revenue/costs.

Then again, most airlines op that way.

LAX772LR wrote:

1) DL could uprate its current birds to 277T today if it wanted to, possibly the same 278T that PR has (though not sure about that). A 277T A359 would have no trouble whatsoever doing either route. I'm just wondering which would come first (I'm guessing DTW).

Correct. I didn't really mean they couldn't do it with the current A350s but for the most part they are already spoken for and would probably need a MTOW upgrade to do LAX/DTW-HKG round with as much cargo as possible.

LAX772LR wrote:

2) Is there any indication that DL intends to bring 280T birds onto property? Hadn't heard anything about that.

Rumor mill says they will go 280t unless those last 10 orders are turned into 339s. It would be nice to be able to sub the 359 on any 77L route and v.v.

a lot of this will depend on the economy and how much international growth is done by the time the next 350s show up.

deltal1011man wrote:

as I have said before, Delta is more in need of a the 787 than any carrier I can think of

LAX772LR wrote:

I still can't understand how they pissed away the opportunity to have early 787s, regardless of their A330N order.

conservative Delta isn't going to take too many wide bodies at once.

LAX772LR wrote:

And contrary to all AvGeek consensus, I'm still of the belief that they may yet find a use for RR-powered 789 and 78X in the fleet, despite the current A339/A359 order, if they get the right (read that: "insanely aggressive") price from the competing OEM.

I personally think Delta ends up operating the 788, 789 and some 78X. The next widebody RFP will be wide open to anything from Boeing or airbus. It will just depend who has the best deal.

example, GE and Boeing come in with a good deal and let Delta TechOps have a GEnX MRO deal......

LAX772LR wrote:

And before anyone comments out of butt-hurt due to presumed "fanboyism".... that isn't a comment on the well-suited A339 or the (absolutely magnificent aircraft that is the) A359; it's just knowing that DL historically doesn't give a flying f#ck about "commonality" if operational/maintenance/acquisition values offer them similar options for dealing with revenue/costs.

Then again, most airlines op that way.

Absolutely true.

deltal1011man wrote:

You pulled crap data that some how magically doesn't show ATL-PVG as having more capacity than NRT-PVG even with the larger aircraft (I guess that is magic......or as per normal you are twisting it as hard as possible hoping no one is smart enough to catch it.)

It's DL's filed schedule with OAG. Please cite a source that disproves it. Hint: There's not one.

deltal1011man wrote:

It would be nice to be able to sub the 359 on any 77L route and v.v.

Has Airbus posted anymore on the A359's performance at hot/high?

....still wondering if it can objectively do JNB-ATL sufficiently to swap with the 77Ls.

burnsie28 wrote:

cokepopper wrote:

glaring that JFK is missing.

Much like JFK-NRT was it's likely not going to be that profitable compared to other cities, plus with the already enormous amount of capacity in the market DL is better off using other gateways.

That is a good point
According to a recent Chinese report in the link below, even CA has been struggling to earn profits on popular trunk routes like PEK-LAX, PEK-New York due to intense competition there in the past couple years, as increasingly more passengers are flown on China-US routes via tier 2 cities, bypassing major traditional gateway hubs

http://www.jiemian.com/article/2054580.html

To help the non-Sinophones, in the jieman link, blue is CA, yellow is CZ, and green is MU.
Looks like MU has lost the most traffic.

Zoedyn wrote:

According to a recent Chinese report in the link below, even CA has been struggling to earn profits on popular trunk routes like PEK-LAX, PEK-New York due to intense competition there in the past couple years, as increasingly more passengers are flown on China-US routes via tier 2 cities, bypassing major traditional gateway hubs

No surprise to anyone who lives here, as it's not uncommon to see sub-$500 roundtrip Y fares (and sub-$2000 J fares) on the PRC carriers (and sometimes their neighboring competitors) nowadays.

I'd be shocked if anyone is making money on USA-PRC right now.

My friends in Shandong Prov. all fly TAO/ICN, then to the US or EU.
PVG is a few km closer to TAO ... but travel time is always longer via PVG.

WPvsMW wrote:

To help the non-Sinophones, in the jieman link, blue is CA, yellow is CZ, and green is MU.
Looks like MU has lost the most traffic.

Are you sure? According to the article, CZ would be RMB 0.37/passenger kilometer; CA would be RMB 0.4111, and MU 0.462. That would mean MU is yellow; CA blue, and CZ green.

jordanh wrote:

WPvsMW wrote:

To help the non-Sinophones, in the jieman link, blue is CA, yellow is CZ, and green is MU.
Looks like MU has lost the most traffic.

Are you sure? According to the article, CZ would be RMB 0.37/passenger kilometer; CA would be RMB 0.4111, and MU 0.462. That would mean MU is yellow; CA blue, and CZ green.

And this is more correct.

I believe the 2nd graph is showing YoY growth percentage on international route, not traffic share. The whole point is that with the glut in capacity to both US and (especially) Australia, CN3 slowed down the growth in long-haul and focus back into domestic market. No more ultra aggressive 30% growth, and instead, it is down to more "normal" 8-10% growth YoY. One reason behind thay growth? The amount of widebodies being order (i.e. 789) means they have to put those planes on some routes.

Another thing that slow down the growth at large hubs (PEK, PVG, CAN) is those crazy amount of subsidaries local gov't of smaller (relative to the Big 3) cities are throwing out. It was mentioned that in the article, though, that "Secondary Chinese cities route are bound to lose money without subsidary". Not surprising that DL (or US3) are not jumping into those routes like CN3/4/5/6.

Lastly, although it has been said many times on a.net, to really make money on long-hauls, premium services (business class, etc.) is the place to go. CN3 (or 4/5/6) are just not really filling those seats up front, though.

Reports say tickets go on sale today for ATL-PVG operated by 291-seat B772
DL185 ATL 15:00 PVG 18:50+1
DL186 PVG 11:40 ATL 14:55
The schedule is subject to approval by authorities

So from the article, despite subsidies and competitions, routes like PEK-LAX and PEK-NYC would still be better than routes to secondary cities due to higher premium demands.

SteelChair wrote:

enilria wrote:

Zoedyn wrote:

the carrier is deeply committed to growing its business in China, as shown by its introduction of A350-900

The A350-900 has 66 seats less than the 747-400 it replaced on some of the China routes. Growth in investment perhaps.

45% less block fuel and 37% less fuel per seat (give or take a % or 2) is a huge decrease in operating costs. To say nothing of the enhanced reliability of having an all-new airplane. A massive upgrade all the way around imho.

Excellent point

达美航空大中华区及新加坡总裁黄康表示：“中国是快速增长的市场，达美在中美航线推出A350客机，彰显了我们对这一市场的重大承诺。达美航空为改善各类舱位的乘客体验不断进行投资，A350正是真正集这些投资努力之大成的臻品。中国是达美航空最重要的市场之一，我们很高兴能够在中美航线启用A350这一采用最先进技术的客机，更好地服务往返中美的旅客。”

The Chinese chunk of words by Mr Huang, DL's director for Greater China and Singapore, is essentially about what you were driving there: the adoption of A350, the state of art pax jet, on China routes demonstrates DL's profound commitment to the Chinese market that they would continue to pour big-stroke investments in, as DL regards China as one of their most important markets

It's reported that DL's A350 metals are also going to fly DTW-PVG, LAX-PVG starting from April 21, July 4 respectively, thereby US-China routes would see most A350s on DL's TPAC route network

Zoedyn wrote:

burnsie28 wrote:

cokepopper wrote:

glaring that JFK is missing.

Much like JFK-NRT was it's likely not going to be that profitable compared to other cities, plus with the already enormous amount of capacity in the market DL is better off using other gateways.

That is a good point
According to a recent Chinese report in the link below, even CA has been struggling to earn profits on popular trunk routes like PEK-LAX, PEK-New York due to intense competition there in the past couple years, as increasingly more passengers are flown on China-US routes via tier 2 cities, bypassing major traditional gateway hubs

http://www.jiemian.com/article/2054580.html

So then my question would be why do airlines keep dumping capacity into those markets when there are cities that lack links to China that show growth potential. Seems short sighted to keep adding flights in markets that are already over saturated as you all say.

LAX772LR wrote:

Zoedyn wrote:

According to a recent Chinese report in the link below, even CA has been struggling to earn profits on popular trunk routes like PEK-LAX, PEK-New York due to intense competition there in the past couple years, as increasingly more passengers are flown on China-US routes via tier 2 cities, bypassing major traditional gateway hubs

No surprise to anyone who lives here, as it's not uncommon to see sub-$500 roundtrip Y fares (and sub-$2000 J fares) on the PRC carriers (and sometimes their neighboring competitors) nowadays.

I'd be shocked if anyone is making money on USA-PRC right now.

a.net logic says that if the route makes business sense an airline will fly it but now we are saying the opposite what is the logic behind flying West Coast to China if it bleeds money ?

klm617 wrote:

LAX772LR wrote:

Zoedyn wrote:

According to a recent Chinese report in the link below, even CA has been struggling to earn profits on popular trunk routes like PEK-LAX, PEK-New York due to intense competition there in the past couple years, as increasingly more passengers are flown on China-US routes via tier 2 cities, bypassing major traditional gateway hubs

No surprise to anyone who lives here, as it's not uncommon to see sub-$500 roundtrip Y fares (and sub-$2000 J fares) on the PRC carriers (and sometimes their neighboring competitors) nowadays.

I'd be shocked if anyone is making money on USA-PRC right now.

a.net logic says that if the route makes business sense an airline will fly it but now we are saying the opposite what is the logic behind flying West Coast to China if it bleeds money ?

A route can make business sense overall while still losing money by itself, if it's a strategically important part of an airline's network that keeps HVCs from otherwise jumping ship.

DL lost money in NYC for years before it became profitable. I suppose China is no different.

Sightseer wrote:

klm617 wrote:

LAX772LR wrote:

No surprise to anyone who lives here, as it's not uncommon to see sub-$500 roundtrip Y fares (and sub-$2000 J fares) on the PRC carriers (and sometimes their neighboring competitors) nowadays.

I'd be shocked if anyone is making money on USA-PRC right now.

a.net logic says that if the route makes business sense an airline will fly it but now we are saying the opposite what is the logic behind flying West Coast to China if it bleeds money ?

A route can make business sense overall while still losing money by itself, if it's a strategically important part of an airline's network that keeps HVCs from otherwise jumping ship.

How can it be important if it's losing money airlines are a business that have to answer to investors so why operate a route that loses money when they can deploy those assets else where turning a better profit.

TransWorldOne wrote:

DL lost money in NYC for years before it became profitable. I suppose China is no different.

Delta only lost money until it was able to control the capacity through the last round of consolidation by eliminating half the competition and shedding that debt through bankruptcy.

klm617 wrote:

Sightseer wrote:

klm617 wrote:

a.net logic says that if the route makes business sense an airline will fly it but now we are saying the opposite what is the logic behind flying West Coast to China if it bleeds money ?

A route can make business sense overall while still losing money by itself, if it's a strategically important part of an airline's network that keeps HVCs from otherwise jumping ship.

How can it be important if it's losing money airlines are a business that have to answer to investors so why operate a route that loses money when they can deploy those assets else where turning a better profit.

Surely you know the answer to this?

There is no open skies agreement between China and the United States, and additionally there are only a set number of frequencies allowed to be flown nonstop between the the United States and China's major gateways of PEK, PVG, and CAN. That's important - remember that.

The Chinese aviation market is still in relatively early days compared to say the US or European markets, but it's obvious that in the coming decades China will soon be the largest aviation market in the world simply by way of the country's population and rapidly expanding Middle Class.

US carriers have snapped up these route allocations in the hope (and make no mistake it is still very much a hope) that as time passes and Chinese transpacific traffic blossoms, that these loss-making frequencies that they've been camping on will begin to turn profits and become as network critical and profitable as the key transatlantic business routes like JFKLHR, etc.

In short, it's a long play, and to not jump on securing such a potentially profitable future asset in the form of a nonstop route between the US and China would draw as much ire from investors as camping on a route that's losing money. We saw the exact same thing with the US to Cuba route allocations and the scramble to snap them up, although I would argue that was essentially a collossal failure on the part of the airlines with the exception of the MIAHAV routes that were acquired.

winginit wrote:

We saw the exact same thing with the US to Cuba route allocations and the scramble to snap them up, although I would argue that was essentially a collossal failure on the part of the airlines

...while omitting the rather important detail that most of the airlines anticipated a completely different political landscape than what occurred in the US, which would've driven relations, regulations, business development, and tourism with Cuba in a completely different direction.

That any of them are sticking it out, is likely due to a gamble that the current climate is relatively short-term, and the path to normalization resumes and progresses-- which renders it not undifferent from the current PRC strategy.

SteelChair wrote:

727200 wrote:

Are you implying that DL is blaming Boeing for DL failure to make all of those routes work? If so, then DL needs to pull their 'training panties' up and take FULL responsibility for their mistakes. Boeing sold them the planes, DL picked where to fly them.

Not blaming, but Boeing definitely oversold the fragmentation concept imho. There has been some fragmentation, but mostly carriers are using long range twins to serve hubs and adjusting the capacity (dropping/adding frequecies) to meet demand (you can't split a VLA in half).

In the next 25 years, I expect only limited fragmentation in Asia also, (787 or no) though I admit I don't have data to support my hunch. Just mho.

Except that Delta has exactly zero of the 787 aircraft that Boeing envisioned would open up more secondary/non-hub markets and that has for other carriers. It's pretty apparent when you look at what United and to a lesser extent AA have been able to open up with the 787. I'm not sure how Delta would be "sour" at Boeing over a plane they never chose to take delivery of, or how that would be reflected by DL being one of the most profitable airlines in the world while probably being the most prolific 767 workhorse operator.

klm617 wrote:

Sightseer wrote:

klm617 wrote:

a.net logic says that if the route makes business sense an airline will fly it but now we are saying the opposite what is the logic behind flying West Coast to China if it bleeds money ?

A route can make business sense overall while still losing money by itself, if it's a strategically important part of an airline's network that keeps HVCs from otherwise jumping ship.

How can it be important if it's losing money airlines are a business that have to answer to investors so why operate a route that loses money when they can deploy those assets else where turning a better profit.

Something to keep in mind especially for China is that you got the "One airline one route" going on. Although according to the Jiemian article, the "One airline one route" rule is not a written rule, it definitely plays a big part in how CAAC allocated rights for new routes (To put it more bluntly, unless you're Air China, if another carrier already operate the long-haul route, it's highly doubtful that CAAC will allocated rights to a 2nd carrier for the same route)

Thus, this create an effect in which airlines (especially HNA group airlines) start operating routes just to "occupy" the rights to that route. Then you got the more secondary Chinese market throwing money out left and right to subsidized those route (b/c those routes are, quite frankly, not very profitable, mainly due to the lack of premium demand), which further accelerated the like of HU "occupying" rights to those "secondary cities" routes. In turn, with the glut in the capacity from those secondary cities, primary gateway hub (i.e. PEK, PVG, CAN) start to lose connecting passengers. To fill those seats, now CN3 either has to lower price (thus lower yield = less profit), or those seats would be empty (thus lower profit also).

winginit wrote:

LAX772LR wrote:

winginit wrote:

We saw the exact same thing with the US to Cuba route allocations and the scramble to snap them up, although I would argue that was essentially a collossal failure on the part of the airlines

...while omitting the rather important detail that most of the airlines anticipated a completely different political landscape than what occurred in the US, which would've driven relations, regulations, business development, and tourism with Cuba in a completely different direction.

That's fair, but it's still speculative that a different political outcome in the US would have translated to a regulatory and economic climate that would have been the difference between those non MIA routes being cancelled versus not.

That's the business in a nutshell, when flying to autocratic countries, or dealing with developed nations that experienced a wave change in leadership.

We've seen plenty of times before when political shifts affected air traffic rights and/or modeling.

LAX772LR wrote:

winginit wrote:

We saw the exact same thing with the US to Cuba route allocations and the scramble to snap them up, although I would argue that was essentially a collossal failure on the part of the airlines

...while omitting the rather important detail that most of the airlines anticipated a completely different political landscape than what occurred in the US, which would've driven relations, regulations, business development, and tourism with Cuba in a completely different direction.

That's fair, but it's still speculative that a different political outcome in the US would have translated to a regulatory and economic climate that would have been the difference between those non MIA routes being cancelled versus not.

zakuivcustom wrote:

klm617 wrote:

Sightseer wrote:

A route can make business sense overall while still losing money by itself, if it's a strategically important part of an airline's network that keeps HVCs from otherwise jumping ship.

How can it be important if it's losing money airlines are a business that have to answer to investors so why operate a route that loses money when they can deploy those assets else where turning a better profit.

Something to keep in mind especially for China is that you got the "One airline one route" going on. Although according to the Jiemian article, the "One airline one route" rule is not a written rule, it definitely plays a big part in how CAAC allocated rights for new routes (To put it more bluntly, unless you're Air China, if another carrier already operate the long-haul route, it's highly doubtful that CAAC will allocated rights to a 2nd carrier for the same route)

Thus, this create an effect in which airlines (especially HNA group airlines) start operating routes just to "occupy" the rights to that route. Then you got the more secondary Chinese market throwing money out left and right to subsidized those route (b/c those routes are, quite frankly, not very profitable, mainly due to the lack of premium demand), which further accelerated the like of HU "occupying" rights to those "secondary cities" routes. In turn, with the glut in the capacity from those secondary cities, primary gateway hub (i.e. PEK, PVG, CAN) start to lose connecting passengers. To fill those seats, now CN3 either has to lower price (thus lower yield = less profit), or those seats would be empty (thus lower profit also).

But with those Chinese airlines bleeding money on secondary routes why not add routes that are untapped that would return more profit. This it the equivalent of operating TVC to LHR when you could get rights from PHL to EDI surely the second route would generate more revenue you might not gave a rout to London but at least you would make more money a lot of the capacity dumping is just ego plastering all over the place that you serve LAX and SFO

LAX772LR wrote:

boilerla wrote:

LAX772LR wrote:

You mean other than having the 2nd largest hub at the largest gateway to Asia?

There's nothing that AA is capable of doing from its network that DL couldn't replicate, given regulatory authority to do so. UA yes. AA, hardly.

LAX may be a large gateway to China but it has to be low yielding. I regularly see flights advertised to PEK and PVG for $400 roundtrip all-in during the summer travel season. AA had a sale on business class airfare one or two summers ago that put paid J fares to PVG at $1900 roundtrip all-in (I know because I booked one for a friend)--that's less than a paid J fare to NYC.

Indeed. But good luck getting corporate contracts out of here if you don't serve PVG.... which is why all three of them do.

But those cooperate contracts are worthless if you're bleeding money. This has everything to do with saying we serve LAX and nothing to do about turning a profit.

winginit wrote:

klm617 wrote:

zakuivcustom wrote:

Something to keep in mind especially for China is that you got the "One airline one route" going on. Although according to the Jiemian article, the "One airline one route" rule is not a written rule, it definitely plays a big part in how CAAC allocated rights for new routes (To put it more bluntly, unless you're Air China, if another carrier already operate the long-haul route, it's highly doubtful that CAAC will allocated rights to a 2nd carrier for the same route)

Thus, this create an effect in which airlines (especially HNA group airlines) start operating routes just to "occupy" the rights to that route. Then you got the more secondary Chinese market throwing money out left and right to subsidized those route (b/c those routes are, quite frankly, not very profitable, mainly due to the lack of premium demand), which further accelerated the like of HU "occupying" rights to those "secondary cities" routes. In turn, with the glut in the capacity from those secondary cities, primary gateway hub (i.e. PEK, PVG, CAN) start to lose connecting passengers. To fill those seats, now CN3 either has to lower price (thus lower yield = less profit), or those seats would be empty (thus lower profit also).

But with those Chinese airlines bleeding money on secondary routes why not add routes that are untapped that would return more profit. This it the equivalent of operating TVC to LHR when you could get rights from PHL to EDI surely the second route would generate more revenue you might not gave a rout to London but at least you would make more money a lot of the capacity dumping is just ego plastering all over the place that you serve LAX and SFO

A) Those Chinese airline aren't bleeding money on secondary routes. They're very likely taking advantage of subsidies from the airport in line with what UA has done. Once the subsidies expire (typically after 18-24 months, they cancel the route and a new secondary airport pops up with new subsidies

B) There are no 'untapped' routes in China that would return profit without subsidies given the costs of starting up a new station, the equipment required, and the low yielding climate that won't change for some time (flow traffic over PEK/PVG to secondary cities comes at drastically lower yields than nonstops to PEK/PVG). The marketplace is still simply too immature.

What are you talking about. There is no Chinese airline in DTW, ATL, PHL,BWI,SAN and the like which would generate more revenue than some secondary no name Chinese airport to LAX or SFO

klm617 wrote:

zakuivcustom wrote:

klm617 wrote:

How can it be important if it's losing money airlines are a business that have to answer to investors so why operate a route that loses money when they can deploy those assets else where turning a better profit.

Something to keep in mind especially for China is that you got the "One airline one route" going on. Although according to the Jiemian article, the "One airline one route" rule is not a written rule, it definitely plays a big part in how CAAC allocated rights for new routes (To put it more bluntly, unless you're Air China, if another carrier already operate the long-haul route, it's highly doubtful that CAAC will allocated rights to a 2nd carrier for the same route)

Thus, this create an effect in which airlines (especially HNA group airlines) start operating routes just to "occupy" the rights to that route. Then you got the more secondary Chinese market throwing money out left and right to subsidized those route (b/c those routes are, quite frankly, not very profitable, mainly due to the lack of premium demand), which further accelerated the like of HU "occupying" rights to those "secondary cities" routes. In turn, with the glut in the capacity from those secondary cities, primary gateway hub (i.e. PEK, PVG, CAN) start to lose connecting passengers. To fill those seats, now CN3 either has to lower price (thus lower yield = less profit), or those seats would be empty (thus lower profit also).

But with those Chinese airlines bleeding money on secondary routes why not add routes that are untapped that would return more profit. This it the equivalent of operating TVC to LHR when you could get rights from PHL to EDI surely the second route would generate more revenue you might not gave a rout to London but at least you would make more money a lot of the capacity dumping is just ego plastering all over the place that you serve LAX and SFO

A) Those Chinese airline aren't always bleeding money on secondary routes. They're very likely taking advantage of subsidies from the airport in line with what UA has done (which equates to just moving money around from state-owned airport to state-owned airline). Once the subsidies expire (typically after 18-24 months), they cancel the route and a new secondary airport pops up with new subsidies

B) There are no 'untapped' routes in China that would return profit without subsidies given the costs of starting up a new station, the equipment required, and the low yielding climate that won't change for some time (flow traffic over PEK/PVG to secondary cities comes at drastically lower yields than nonstops to PEK/PVG). The marketplace is still simply too immature.

klm617 wrote:

What are you talking about. There is no Chinese airline in DTW, ATL, PHL,BWI,SAN and the like which would generate more revenue than some secondary no name Chinese airport to LAX or SFO

Again, because those 'no name' Chinese airports are offering hefty route subsidies (many of which essentially guarantee profitability for a period of between 18 and 24 months), you are incorrect that a Chinese carrier (or US carrier) could make more revenue serving, for example, SAN to/from PEK or PVG. A SAN or BWI or what have you might waive some landing fees here and there, but their subsidies pale in comparison to what secondary Chinese airports are offering.

It's for this reason that all secondary Chinese nonstops this month are hitting LAX, JFK, SFO or SEA. All of them. Secondary Chinese airports are willing to subsidize nonstops to major US cities... not SAN or BWI.

CKGLAX
CKGJFK
CSXLAX
CTULAX
CTUSFO
CTUJFK
FOCJFK
HGHLAX
NKGLAX
SZXSEA
SZXLAX
TAOSFO
TAOLAX
TNALAX
WUHSFO
XMNLAX

That's what I am talking about. Keep up.

klm617 wrote:

LAX772LR wrote:

boilerla wrote:

LAX may be a large gateway to China but it has to be low yielding. I regularly see flights advertised to PEK and PVG for $400 roundtrip all-in during the summer travel season. AA had a sale on business class airfare one or two summers ago that put paid J fares to PVG at $1900 roundtrip all-in (I know because I booked one for a friend)--that's less than a paid J fare to NYC.

Indeed. But good luck getting corporate contracts out of here if you don't serve PVG.... which is why all three of them do.

But those cooperate contracts are worthless if you're bleeding money. This has everything to do with saying we serve LAX and nothing to do about turning a profit.

Common sense (if you had it) would tell you that that's clearly not the case.

"Bleeding money" in the amount of X is worth it if it helps you maintain a larger business portfolio providing X+N.

Shareholders would flay the board alive if officers were losing money in the long-term aggregate, just to "say" that they served somewhere.

winginit wrote:

klm617 wrote:

zakuivcustom wrote:

Something to keep in mind especially for China is that you got the "One airline one route" going on. Although according to the Jiemian article, the "One airline one route" rule is not a written rule, it definitely plays a big part in how CAAC allocated rights for new routes (To put it more bluntly, unless you're Air China, if another carrier already operate the long-haul route, it's highly doubtful that CAAC will allocated rights to a 2nd carrier for the same route)

Thus, this create an effect in which airlines (especially HNA group airlines) start operating routes just to "occupy" the rights to that route. Then you got the more secondary Chinese market throwing money out left and right to subsidized those route (b/c those routes are, quite frankly, not very profitable, mainly due to the lack of premium demand), which further accelerated the like of HU "occupying" rights to those "secondary cities" routes. In turn, with the glut in the capacity from those secondary cities, primary gateway hub (i.e. PEK, PVG, CAN) start to lose connecting passengers. To fill those seats, now CN3 either has to lower price (thus lower yield = less profit), or those seats would be empty (thus lower profit also).

But with those Chinese airlines bleeding money on secondary routes why not add routes that are untapped that would return more profit. This it the equivalent of operating TVC to LHR when you could get rights from PHL to EDI surely the second route would generate more revenue you might not gave a rout to London but at least you would make more money a lot of the capacity dumping is just ego plastering all over the place that you serve LAX and SFO

A) Those Chinese airline aren't always bleeding money on secondary routes. They're very likely taking advantage of subsidies from the airport in line with what UA has done (which equates to just moving money around from state-owned airport to state-owned airline). Once the subsidies expire (typically after 18-24 months), they cancel the route and a new secondary airport pops up with new subsidies

B) There are no 'untapped' routes in China that would return profit without subsidies given the costs of starting up a new station, the equipment required, and the low yielding climate that won't change for some time (flow traffic over PEK/PVG to secondary cities comes at drastically lower yields than nonstops to PEK/PVG). The marketplace is still simply too immature.

Indeed, from the article (If you can read Chinese):

一位海航内部人士告诉界面新闻记者，海航经营国际航线的战略很清楚，就是“国内一线城市飞国际二线城市，国内二线城市飞国际一线城市”，比如上海-特拉维夫，成都-纽约。“对于二三线城市的地方政府来说，开通国际航线是地方政府政绩的体现。对航空公司来说，先占到国际航线的航权和时刻，至少有地方政府的财政补贴保障，盈利基本上是可以保证的。”

Basically, it described HU's stretegy of going China Tier 1 to International (Not just US, but also Europe aka the like of VIE or TLV or DUB) and secondary China (Mainly WUH, CSX, CTU, CKG, etc.) to Tier 1 International destinations (London, NYC, LAX, etc.). For the (secondary) cities, it's pure politics showing political achievements (B/c, in China, they need the "mianzi" aka face, and able to literally "show" that they did something is definitely highly regarded ). For the airlines, they not only can gain the rights to those international routes (Which may or may not make money), but also are guarantee to make a revenue (albeit not necessarily a gold mine) as the government subsidized those routes (sometimes heavily).

Hence this:

“哪里航线补贴高，哪里就有海航系的影子。”崔文青称。

In another word, any place you got hefty subsidary, you're going to see HNA Group jumped on it. And are you still surprised why it's almost always HU that seems to operate all those random twice weekly long-haul routes?