|Tokyo's Haneda Airport|
NEW YORK TheStreet) -- As U.S. regulators decide who will get access to Tokyo's Haneda Airport, perhaps the toughest question is who gets the New York route.
Should it be Continental ( CAL), which has the best hub in the New York area? Or should it be American ( AMR), which has a smaller hub, but could nevertheless be awarded a route if regulators choose to consider all the complexities of the alliance relationships that increasingly shape international airline travel? Both carriers already serve Tokyo Narita from New York/Newark. The U.S. Transportation Department is deciding which U.S. carriers will fly to Haneda, which has opened to U.S. service for the first time since 1978. That change is part of the package as the two countries move toward an Open Skies agreement. The department has not said whether it will consider the impact of alliances in making its decision. It is reasonable to assume routes will be awarded to United ( UAUA), which operates the largest West Coast hub in San Francisco, and to Delta ( DAL), which operates a principal U.S. gateway to Asia, and the only Midwest applicant for Haneda service, in Detroit. United is in the Star Alliance, and Delta is in SkyTeam. It is also reasonable to assume that American, a member of Oneworld, will get a route, after applying for both Los Angeles and New York, the first and second leading gateways to Japan, in terms of originating passengers, as opposed to connecting passengers. In 2009, Los Angeles was the origination or destination point for 434,085 Tokyo passengers, while the New York market was 338,868 passengers. But which route will American get? And as for the fourth route, who gets that? Delta says Seattle is its first choice. Hawaiian ( HA) wants Honolulu. And then there is Continental. Like United, Continental is a Star member, which would mean two routes to Star if both got routes. Moreover, Japan's two international carriers, All Nippon Airways and Japan Air Lines, have each been awarded two routes of their choosing. ANA is in Star and JAL is in Oneworld, and both are seeking trans-Pacific antitrust immunity with their U.S. partners, which would enable the partners to share revenue on the flights, no matter which airline holds the route authority. Approval is expected. Thus, a potential outcome is that Star gets four of eight routes between the U.S. and Haneda.
In an interview, Hershel Kamen, Continental vice president for regulatory affairs, declined to discuss the role of alliances in the DOT's selection, but he was more than willing to discuss the Continental hub at Newark. "New York is one of the largest markets to Tokyo, it is the financial center of the U.S. and it needs service to Haneda," Kamen said. And in New York, he added, "Our hub is better." In fact, Continental and Continental Micronesia have applied for two routes: the second is Guam. Kamen said both are worthy, given that Guam is the largest U.S. market to Tokyo. While most of the passengers are Japanese tourists going to the beach, Kamen pointed out that these tourists help the U.S. economy by spending money in Guam. Moreover, he noted, Guam also has a growing number of U.S. military bases. Kamen scoffed at Delta's contention that, because it is the only SkyTeam member seeking routes, it should be given all four. He noted that Delta is currently the largest U.S. carrier to Japan because of the extensive Narita service it acquired from Northwest. "They are trying to protect that hub, which I think is reasonable, but it is not true that they are a small player," he said. "Delta has the largest position of any U.S. carrier in Tokyo." Currently, among the four U.S. carriers serving Tokyo, Continental has the smallest market share. As for American, Kamen said it not only operates a smaller New York hub than Continental does, but also it has limited capacity to expand its JFK service to take advantage of the Haneda route, since Kennedy is slot controlled. In its application for Haneda service, American does not say its Kennedy hub is New York's biggest. But it does say that, "The two largest mainland-Tokyo O&D markets, New York and Los Angeles, should clearly be first in line for the important new service opportunities at Haneda," and that it ought to be awarded at least one of them. -- Written by Ted Reed in Charlotte, N.C. .