Delta confident in competing with Southwest

Washington DC
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Atlanta's largest carrier Delta is showing little concern about Southwest entering the market through its planned acquisition of AirTran.

Southwest's 27 September announcement of its plans to acquire AirTran created some speculation that competition would intensify in Atlanta.

But Delta executives say the carrier is not threatened by Southwest, and explain that based on load factors generated by the carriers today, in order for AirTran and Southwest to achieve $400 million in advertised synergies, fares will have to rise, said Delta chief executive Richard Anderson during an earnings call today. "Southwest is a higher-cost operator," he adds.

"We've been successful in competing with Southwest all across the US," says Anderson, who highlights that Southwest is "down 11% in Salt Lake City during the last 12 months". AirTran has also pulled back in Atlanta during the last year, he adds, by roughly 12%.

Delta president Ed Bastian believes Southwest's decision to eliminate AirTran's business class product and assigned seating is a "significant competitive factor that will feed into the equation".

Bastian also says that Atlanta accounts for less than 10% of Delta's domestic revenue pull. Taking that into account Anderson stresses Delta will "do just fine competing against Southwest".