United Continental Holdings Inc.’s (UAL - Analyst Report) stock reacted positively to the news that its Japanese partner All Nippon Airways has won 11 additional take-off slots at Tokyo’s Haneda airport. All Nippon’s win increases United’s prospect in Tokyo’s downtown airport.
Haneda – the second busiest airport in Asia – is set to gain 40 new daytime landing slots for flights from Mar 2014. Notably, Haneda airport resumed international operations in 2010 after it opened a new international terminal. Back then, United did not win any slots.
Haneda, which is located in the heart of the city, holds more attractions for business travelers than Narita airport, located 40 miles east of Tokyo. To tap this opportunity, Chicago-based United Airlines is vying to get a slot of its own in Haneda, whereas its Japanese ally All Nippon Airways wanted to get a major portion of the 20 slots reserved for the local carriers. If successful, United Airlines will use the slot to connect Haneda and San Francisco.
All Nippon, which is the largest airlines in Japan, earlier argued that government’s biasness toward Japan Airlines at the time of its financial restructuring tipped the balance in favor of the latter. However, Japan Airlines has won five slots this time.
United’s archrival Delta Airlines Inc. (DAL - Analyst Report) , which is the sole U.S. airlines without a Japanese partner, currently has 2 night time slots at Haneda. Delta now wants 25 slot pairs that they were forced to shift to Narita airport in 1978.
Tokyo’s extended business relationship with various parts of the world makes it an important destination for major carriers and United is no exception. We believe that getting 11 slots is a major win for both these star alliance members, which will be able to connect many more domestic and international markets from Japan via their collaboration.
United Airlines, which operates with JetBlue Airways Corp. (JBLU - Analyst Report) holds a Zacks Rank #3 (Hold). However, another stock worth a look within this sector is Republic Airways Holdings Inc. , which carries a Zacks Rank #2 (Buy).