Delta upbeat on Japan with new routes, strong yen as airline recovery continues

Delta upbeat on Japan business amid strong yen

TOKYO — Delta is upbeat about its business in Japan as new routes and the surging yen boost travel and help along the recovery in the industry, a top executive said Thursday.

Delta, the world’s biggest airline, is investing more than $1 billion in its global operations through 2013, and the robust results from its Japan business underline the soundness of such investments, Delta Air Lines President Edward Bastian told reporters at a Tokyo hotel.

“Our goal in Asia is to be the carrier of choice for both Asian as well as American customers,” he said. “We have seen significant improvement in our outbound travel.”

The strengthening yen, which has battered Japanese exporters, is a major blessing for Delta as it reaps the benefit of increased travel by Japanese whose spending power has jumped and are flying in droves to spots like Guam, Hawaii and Saipan.

Delta has seen its Asian revenue climb 30 percent year-on-year in the latest quarter, largely because of the yen’s rise, and Delta is seeing strong results in July and August as well, Bastian said.

“It has been an important contribution to the recovery,” he said.

The dollar recently hit a 15-year low against the yen and continues to trade near the 84 yen level.

Bastian said Delta sees Japan and Asia as key parts of its global business, and Delta’s recent strong financial performance puts it in a good position to grow in the region.

Delta, the leading U.S. carrier to Asia in departures and seats, has added 12 new nonstop trans-Pacific routes since 2008, according to the Atlanta-based carrier.

Among Delta’s planned Japan routes are Narita-Palau, Nagoya-Honolulu and two flights from Haneda, to Detroit and Los Angeles.

Haneda has long served as a domestic airport but is adding international flights, starting next month. Delta is among three U.S. carriers that secured Haneda landing slots.

Bastian said Delta still sees Narita, the main Tokyo international airport, as the regional hub, and foresees no capacity reductions there, despite competition from Seoul and other regional airports, as well as Haneda’s potential.

Bastian also said he was disappointed that Japan Airlines chose to stay with American Airlines and spurned Delta as its alliance partner.

JAL, which is restructuring after filing for bankruptcy protection in January, had been in talks with both airlines before making the decision in February.

“We wish them nothing but success,” Bastian said of JAL.