I think you misunderstand it.

Think of this, in the PWA we have guaranteed slots to be flown out of NRT. What if the Japanese government wants us to split those with JAL to get access to Haneda. That would lead to furloughs even if the deal is done. (maybe not furloughs but less flights) That is in the PWA, and may need to be changed depending on the wants of the Japanese government. They may want all new growth to be JAL with a 50-50 revenue split with Skyteam. Add that to the slots we have guaranteed, and this becomes really one sided for our group, don't ya think?

Even if this deal is done, it could be really bad for the pilots but good for DAL. They may get the money for flight we operate now, and JAL may do them for us. Not all interests merge on this one!

The problem is that "open skies" are two words. They mean whatever the two governments want them to mean. What we think they "should" include isn't material.

Right now your assertion that it "does" include is flat wrong. It is "open skies" in title only. The Japanese government is looking to decrease the percentage of slots operated by US carriers at NRT AND restrict the total slots available to US carriers at Haneda to a miniscule number. Those slots would not be available to be sold or traded as they are at most other slot constrained airports, so US carriers would effectively be frozen out of Haneda. This is a potential double whammy to Delta's operations in Japan, undercutting NRT while making it less relevant in the region at the same time.

AMR has a similar fear. UAL is well positioned due to their ANA and Star Alliance partnerships, but their NRT operations could suffer as well if our government caves to protect its non-airline interests.

And your point further solidifies my fear of us getting slots cut from the PWA. I understand that Japan gives two hoots about our labor contract. I do. I know what they are "trying" to do. Open skies could nullify the Fifth Freedom Rights to a point, and DAL is fearful of that. They want to give their home grown carriers a home field advantage with Haneda.
The thing is politics are ugly and if they do this to US carriers, I would venture to guess that the US will fire back. (Well maybe, I know we are wussies;) )

There are options around this. GUM is one of them, going after another carrier is another. It can get real ugly. I understand the desire to avoid that. I also think that we are getting in to a price range for this deal that will borderline crazy for what we will really get in return.

Also as I am sure I do not need to tell you, most parties start off at a position a lot worse than what they are willing to settle on. I have no doubt that this is the case with the new Japanese government. They are new to the game and want to show their strength. We need to allow them to do that, just not in the way they think!

Thanks ACL.....That makes more sense:) Slow Learner here.....

No Japan/U.S. Open Skies?

U.S. and Japanese negotiators concluded their latest round of air transport talks without finalizing an open skies agreement. See Mariko Sanchanta, Hurdles Remain for U.S.-Japan Open Skies Deal, Wall St. J., Oct. 30, 2009 (available here). According to lead U.S. negotiator John Byerly, "We made enormous progress on an open skies memorandum of understanding" and he remains "cautiously optimistic that we can succeed." Succeed at what? While the media attention has been on an open skies arrangement, the nature of the negotiations bespeaks something else. According to the story:

At stake are lucrative new routes between Japan and the rest of Asia, which is the fastest growing aviation market in the world, and expanded services between Japan and the U.S. . . .

Haneda, which is the more convenient of the two airports to Tokyo's city center, will offer new international services only between 11 p.m. and 6 a.m., when Narita closes down to commercial air traffic. At the moment, Japan is offering the U.S. only four operations a day, or eight landing slots at Haneda, according to a Japanese government official involved in the negotiations. "[The U.S.] says this is too small and not commercially meaningful, that it is not fair and equal" compared with what the Japanese carriers will receive, said the official.

Mr. Byerly said negotiations over slots are continuing. "There are only a limited number of flights available at night," he said, adding, "we have to discuss how many slots [we receive]."

In one concession by the U.S., its airlines would see their proportion of Narita's slots shrink under the deal currently being discussed. The U.S. carriers' share at Narita Airport is currently roughly 30% of all landing slots, but it won't get new ones when Narita expands its capacity by 10% next year. The move follows concerns from Tokyo that U.S. carriers had too much dominance at Narita.

Slots are not typically part of the open skies template. Cf. U.S. Dept. of State, Current Model Open Skies Agreement Text (Jan. 10, 2008) (available here). If the story is accurate, the slot negotiations appear more akin to the managed trade approach of old-style restrictive bilaterals than the liberalizing open skies ethos. Open gateways and unlimited designation opportunities won't mean much to U.S. carriers if the Japanese Government is still allowed to protect slots for its domestic airlines and thus limit airport access. Yet even with these restrictions looming, airlines on both sides of the Pacific are hoping that a deal can be reached which will satisfy the Department of Transportation's longstanding requirement to only grant antitrust immunity to alliance agreements involving carriers from States which have signed an open skies treaty. Will an agreement with elements of managed trade be enough? Hopefully Japan will forego these last vestiges of air transport protectionism so we won't have to find out.

The US government has other interests at work here. Japan is footing billions of dollars of US debt, and is host to a whole bunch of US military bases. The Japanese are paying around $8 billion to relocate some Okinawa Marine facilities to Guam. It's not that the we're wussies, it's that we're debtors and have "other" needs.

While the $1B number floated around sounds like a lot, it's much like AMR's refinancing a couple of months back. The actual cash outlay is much smaller. $200 million buys certain JAL assets that DAL/Skyteam will own even if JAL goes away. $300 million is a revenue guarantee (Skyteam pass through passengers should create that in the first year), so the exposure is minimal. The only "equity" is in the $500 million piece and the $20 million One World to SkyTeam switchover, and I'm sure that number will go up as AMR bids.

That's not the Japanese government goal. NRT slots can currently be easily obtained. The airport is suffering a loss of traffic. If/when the economy recovers, that shouldn't be true. They're trying to make sure that our absolute number of slots in NRT is frozen, while the total number of available slots is increased, thereby diluting our market share. Couple that with the inability to get commercially viable slots into Haneda and you get tremendous yield pressure, especially for Asia connecting traffic (interport).

As you state, there are alternatives, but they are all more costly and risky.

Or maybe if we pump and dump, our part of the bankruptcy settlement is the access, the gates and continued 5th freedom rights. (think of the ASA purchase by SkyWest as a relevant example)

Unfortunately the last ten years has created a lot of expert bankruptcy deal makers in the United States.

The part of the nut JAL could not crack was using legacy jets and a legacy cost structure to compete with other Asian based start ups with practically free airplanes and Ab Initio flight crews with pay rates that fail to match our pre 1999 regional contracts.

Yes, Delta has an incredible network. But, have we figured out how to make money?

Snap back to NorthWest's anti competitive moves to keep AirTran out of MKE. Not only did NWA throw millions to the wind, they also inadvertently kept AirTran alive by saving them from a real liquidity crisis in 2008.

My point is, I liked our post bankruptcy management's focus on our operation, profitability and organic growth. Our core product has to be excellent. ( and I'm not saying it isn't ) But I am concerned that these "deals" are a distraction which bring us no closer to long term profitability.

I'd like to hear some analysis on getting us off Travelocity, Orbitz and the other third party sales channels. Everywhere I go people complain to me about bag fees, which were driven by the fight to get to the top of the page on search engines. Southwest has built real loyalty by not nickel and diming revenue from the back end of the sale.

Obviously we need Haneda access. I just hope what we have to pay for it pays us back. It was a "no brainer" for ALPA to support this at this stage and let management commit to a plan of action. As I understand this, management still has to negotiate with us.

Kind of like getting the jets on the property and THEN figuring out the pay rates :)

Am I in the ball park?

BUMPED because this is what we're up against!

That is all in the press release. I know the break down, but it started near 500 million signed and sealed. That was my point. Add to it that AMR and Oneworld will up their offer as they have stated.

As so the governments "other" needs. I am glad they see the other issues, but in reality it cannot and should not be as one sided as the Japanese want. I am sure even they know that.
They understand the notion of you never know how much you can get until you ask! They have asked, and now it is time for the US government to push back.
I have written many congressmen and women on this issue. We need to stop making this lopsided. If our government does this, they are just nailing one more nail in this industries coffin.

The Japanese will either have to come to their senses or this deal will be signed under official protest by DAL. We need to remove that complaint, and all parties want us to. What we want is not the end of the world, and the Japanese know that allowing the JAL deal to fall to our side is the cleanest and easiest way to ensure a WIN closest to their version of OPEN SKIES (two words) ;)