Bloomberg News

ANA Trumps Japan Air in Securing Extra Haneda Airport Slots (1)

October 02, 2013

ANA Aircraft at Haneda Airport

A Boeing Co. 787 Dreamliner aircraft operated by All Nippon Airways Co. (ANA) approaches to land at Haneda Airport in Tokyo. Photographer: Kiyoshi Ota/Bloomberg

ANA Holdings Inc. (9202), Japan’s biggest airline, won more take-off and landing rights than Japan Airlines Co. (9201) at Tokyo’s Haneda airport in a distribution of new international slots by the government.

ANA will get 11 new daytime slot pairs at the end of March, compared with five for Japan Air, the nation’s transport ministry said in a statement in Tokyo. The ministry, which was distributing 31 rights in total today, said overseas carriers will get 15 slot pairs at Haneda, just outside Tokyo’s main business district.

The decision to give more slots to ANA, the partner of United Continental Holdings Inc. (UAL:US), is a break from the past, when new international slots at Haneda were shared equally between the two largest airlines in the country. ANA said last month it should get more slots than Japan Air, which has teamed up with American Airlines Inc., because the government assisted Japan Air in its restructuring.

“ANA got more than I thought they would,” said Ryota Himeno, an analyst at Barclays Securities Japan Ltd. “It doesn’t mean they will get an immediate boost to their profits, but it’s definitely a plus.”

The transport ministry is continuing negotiations with the U.S. and other countries on how to divide the remaining nine slot pairs, it said in the statement. The ministry made the slot decision to ensure a fair competitive base and convenience for passengers, it said in the statement.

International Slots

ANA will get two slot pairs for flights to Germany and one each for the U.K., France, Canada, Singapore, Thailand, Vietnam, Indonesia, the Philippines and China, the ministry said. Japan Air will get pairs for the U.K., France, Singapore, Thailand and China, it said.

The international slots will bring in about 6 billion yen ($61 million) of extra revenue a year on average, according to forecasts from Himeno.

Japan Air fell 1.7 percent to 5,880 yen in Tokyo trading today before the announcement, trimming its gains for the year to 59 percent. ANA fell 0.5 percent to 216 yen and is up 19 percent this year.

Japan Air was relisted on the Tokyo Stock Exchange last year after it wiped out shareholders and debts during bankruptcy as it was supported by 350 billion yen of government-backed financing.

‘Healthy Competition’

“We want to have healthy competition,” said Shigenori Hiraoka, a director in Japan’s Civil Aviation Bureau, told reporters in Tokyo today. “We considered the help given to JAL as part of the decision.”

The carriers currently have eight daytime slot pairs each for Haneda to overseas destinations and five nighttime pairs. ANA flies to Seoul, Hong Kong, Beijing, Shanghai and Taipei during the day and Singapore, Bangkok, Frankfurt, Los Angeles and Honolulu during the night from Haneda.

The transport ministry hasn’t given a “rational” explanation for granting it fewer slots than ANA, Japan Air said in a statement today.

“We welcome the slot allocation decision,” ANA President Shinichiro Ito said by e-mail.

U.S. airlines have also jockeyed to get international slots at the airport.

Delta

Delta Air Lines Inc. (DAL:US), the only major U.S. carrier without a Japanese partner, wants to snatch more landing slots at the airport while United is aiming for its first.

Haneda restarted intercontinental flights three years ago after opening a new international terminal. It moved overseas flights to Narita, 70 kilometers (40 miles) east of Tokyo, more than three decades earlier to cut down on overcrowding.

Atlanta-based Delta, the second-largest U.S. carrier, won two nighttime slots to Haneda in 2010, while American Airlines Inc., partnered with Japan Airlines, got one, Hawaiian Holdings Inc. (HA:US) also received one, and United, tied up with ANA, got none.

United and American’s respective ventures with ANA and Japan Air allow them to share revenue from passengers traveling from the U.S. via Japan to other destinations in Asia, such as Hong Kong, China, the Philippines, Singapore and Indonesia.

Delta, which doesn’t have any such venture with a Japanese airline, said July 31 it wants 25 slot pairs so the company can return most of its flights to Haneda after being forced to move them to Narita in 1978.

Japan has been gradually increasing landing and takeoff slots at Haneda since the opening of a new runway in 2010. It will add 30,000 international slots in the year ending March bringing the total to 447,000 annually, according to the transport ministry.

ANA also won more domestic slots than Japan Air at Haneda when the nation’s transport ministry handed out new take-off and landing spaces last year. ANA got handed eight new domestic slots, compared with five for Star Flyer Inc. (9206), four for Skymark Airlines Inc. (9204) and three for Japan Air.

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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