AIRCRAFTAIRLINEINSIGHTS

How American Airlines Changes Los Angeles To Tokyo Market

American Airlines Boeing 787-8 Los Angeles to Tokyo

American Airlines will start Los Angeles International Airport (LAX) to Tokyo Haneda Airport (HND) flight in about two weeks (News – November 4, 2015).  This insight will discuss how the Los Angeles to Tokyo market will change when commercial operation begins.

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Los Angeles to Tokyo Overview

There are two major airports in Tokyo, Japan. Narita is located 1.5 hours by train from downtown while Haneda is within 20 minutes . The latter is been clamoured as the airport of choice for business travellers looking for shorter distances. Flights to the US has been capped to four flight pairs daily.

Distance between Narita and Haneda Airports to Downtown Tokyo
Map to show the approximate location of Narita and Haneda airports relative to downtown Tokyo. Source: Google Map.

American Airlines

After a long battle with Delta Air Lines (DL) and Hawaiian Airlines (HA) over the slot to Haneda Airport (Insight – Part 1 of 4, Redux). Since Japanese aviation authorities required that only new flights can be introduced to Tokyo Haneda Airport, American Airlines will continue operating its daily flight from LAX to Tokyo Narita Airport (NRT)(Flight Pair AA 169/170). That will leave in the late morning arrive in Tokyo mid afternoon in time for connections to other Asian cities on Japan Airlines.

Alliance Overview

As of February 2016, all three major airline alliances will operate flights between Los Angeles to Tokyo Haneda Airport.  Besides American Airlines, both Delta Air Lines (SkyTeam) and All Nippon Airways (NH) (Star Alliance) also have non-stop flights between these two destinations.

Pre AA Entrance to Haneda

All Nippon Airways and Delta Air Lines have a 56/44 split of total weekly passengers currently. NH is using a larger Boeing 777-300ER while DL uses a Boeing 767-300. Without changing schedules, DL and AA’s schedule will be very similar with DL’s outbound and inbound flights leaving approximately 1 hour before AA. NH chose a different approach and chose an oubound flight time that is 6 hours behind DL’s departure to capture more business travellers who want to finish more work. Inbound departure time is exactly the same as outbound at 0030 (1230am).

Competitive Analysis (Los Angeles to Tokyo Haneda)
Competitive Analysis (Los Angeles to Tokyo Haneda)

February 2016

With AA introducing service in February 2016, another 3,164 seats will be added on this route. The total weekly capacity share is now 32/38/30 for AA/NH/DL. Note that NH will still be the only airline out of the three to offer a First class product on this route.

Competitive Analysis (Los Angeles to Tokyo Haneda)
Competitive Analysis (Los Angeles to Tokyo Haneda)

Los Angeles to Tokyo Narita

Besides the three non-stop flights mentioned above, there are six more non-stop daily flights operated by different carriers between Los Angeles to Tokyo Narita Airport (NRT). Aside from Singapore Airlines, most outbound flights depart LAX between 1050 (1050am) to 1205 (1205pm) and arrive at NRT at around 1600 (4pm) local time. The arrival time allows passengers to connect to other Asian destinations. Inbound flights leave NRT around 1700 (5pm) local time and arrive in time for North/Central/South American connections.

Singapore Airlines is the only one from the bunch that operate an Airbus A380-800 on this route designed to connect to its hub in Singapore. The long connection will continue until the airline receives its first Airbus A350-900ULR aircrafts in 2018 (News – October 13, 2015).

Los Angeles to Tokyo Narita
Los Angeles to Tokyo Narita
Source: Google Flight

From a market perspective, with the addition of the AA flight in February 2016, Star Alliance will trim its flight market share to 44% from 50, Oneworld goes up to 33% and SkyTeam goes down to 22%.

Los Angeles to Tokyo Flight Markshare
Los Angeles to Tokyo Flight Marketshare by Alliances

Pricing

American Airlines worked hard and gained new traffic rights between Los Angeles to Tokyo Haneda. We will monitor traffic and determine whether it will continue to keep the dual flight strategy similar to the one deployed by Delta Air Lines currently.

It is expected that airlines would price competitively on non-stop flights in economy and premium economy classes with no differences between the two Tokyo airports.

For business and first class flights, expect airlines to price Haneda flights much higher as a result of its short distance to downtown.

Analysis

We pulled roundtrip pricing for non-stop flights between LAX to both HND and NRT in Economy, Premium Economy, Business and First class.  Travel dates are outbound – February 11, 2016 and inbound – February 18, 2016.

Economy

Note that NH treats NRT and HND flights similarly and price them within 10% of the lowest price at US$725.  American Airlines and Delta Air Lines place a 40% premium on the Haneda flights.

Fare Analysis - Los Angeles to Tokyo (February 11 - 18, 2016) (Economy)
Fare Analysis – Los Angeles to Tokyo (February 11 – 18, 2016) (Economy)
Source: Google Flight (US$) – prices shown may have changed after publication. Check airlines for updated pricing.

Premium Economy

None of the US airlines offer a true Premium Economy product currently. Singapore Airlines is the price leader here with a 36% discount over the two Japan based airlines (Check this post for Singapore Airlines’ new Premium Economy product).

Fare Analysis - Los Angeles to Tokyo (February 11 - 18, 2016) (Premium Economy)
Fare Analysis – Los Angeles to Tokyo (February 11 – 18, 2016) (Premium Economy)
Source: Google Flight (US$) – prices shown may have changed after publication. Check airlines for updated pricing.

Business Class

Singapore Airlines is also a price leader in business class. It is around 25% cheaper than all the other airlines except American Airlines going to Haneda.  That flight likely has a higher price due to the inaugural nature.

Fare Analysis - Los Angeles to Tokyo (February 11 - 18, 2016) (Business)
Fare Analysis – Los Angeles to Tokyo (February 11 – 18, 2016) (Business)
Source: Google Flight (US$) – prices shown may have changed after publication. Check airlines for updated pricing.

First Class

American Airlines places a significant discount (60% over the most expensive flight from All Nippon Airways) on its NRT flight in first class. This is likely because the airline uses a product that has an older generation lie flat seat. It is also interesting to note that American Airlines prices the first class seat lower than business class on the HND flight.

As expected, the Tokyo based All Nippon Airways charges the highest for its HND flight.

Fare Analysis - Los Angeles to Tokyo (February 11 - 18, 2016) (First)
Fare Analysis – Los Angeles to Tokyo (February 11 – 18, 2016) (First)
Source: Google Flight (US$) – prices shown may have changed after publication. Check airlines for updated pricing.

 

 

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