After vying for over a year, premier passenger carrier American Airlines Group Inc. AAL is geared up to launch its services between Tokyo Haneda Airport and Los Angeles International Airport route starting Oct 2015.
At present, Delta Air Lines Inc. DAL operates seasonal flights between these airports. However, lack of demand and stringent government regulations have compelled the carrier to hand over the slots to the U.S. Department of Transport (DOT). Delta will terminate operations on this route by the end of Sep 30, 2015.
Easy connectivity to downtown Tokyo has made the Haneda airport more convenient for most business travelers as compared to the Narita International airport. Meanwhile, after the signing of U.S.-Japan bilateral agreements in 2010, three U.S. carriers were given access to Haneda airport and were allowed to operate only four flights daily.
U.S. carriers, namely, Delta, United Airlines – the wholly owned subsidiary of United Continental Holdings Inc. UAL and Hawaiian Airlines, Inc. – a subsidiary of Hawaiian Holdings, Inc. HA won the four allotted slots. Out of the four, Delta operates two while United Airlines and Hawaiian Airlines got permits for the other two routes connecting San Francisco and Honolulu.
However, the underutilization of the Seattle-to-Haneda network by Delta has prompted American Airlines to file a complaint with the DOT in October, last year. American Airlines also requested the regulatory body for a reallocation of the routes.
On failing to keep up with DOT’s flight operation standards, Delta has been ordered to hand over the slots which will now be given to American Airlines.
We believe that the new network will not only boost American Airlines’ presence in Asia but will also drive traffic to a considerable extent.
American Airlines currently carries a Zacks Rank #3 (Hold).
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