Delta Air Lines executives say that their massive build up of a hub at New York’s JFK, along with the creation of a domestic feeder network, will make it the largest US-flag carrier on the North Atlantic.

It is also a crucial step in helping the carrier overcome what chief operating officer Jim Whitehurst calls “a $2.5 billion revenue shortfall”. Delta, which has been in bankruptcy court reorganisation since September 2005, would have been profitable had its revenues not lagged those of American or other comparable legacy carriers. “We already have lower unit costs. We just also have lower revenues,” he said. Of Delta’s total capacity, just 27% is on higher-yielding international routes, compared to 45% at Continental. Only US Airways, at 15%, is lower.

The JFK buildup, which starts this month, has as a key goal the more profitable utilisation of aircraft such as its larger Boeing 767s by taking them out of domestic service and placing them into service on routes such as JFK-Budapest. “Domestic was just not the best use of these planes,” Whitehurst said. The JFK build-up will entail 19 daily departures to 19 cities in Europe, Israel, and India this summer. The carrier will also launch a range of new domestic routes from JFK to build feed opportunities.

Including a parallel buildup from its Atlanta hub to 27 daily international flights to 23 cities (from 18 departures to 15 cities in October), Delta will have about 10% of total North Atlantic capacity, almost equivalent to that of Lufthansa, said Jorge Fernandez, vice-president of international and alliances. Delta’s SkyTeam alliance will have about one-third of transatlantic capacity, ahead of Star and oneworld with about 26% each, Fernandez said.

Bob Cortelyou, Delta vice-president for network, said the European strategy will make many interior US cities reachable by a one-stop journey instead of the two-stop or worse itineraries now required because most competitors have limited domestic network feed. Cortelyou said Delta is using widebodies that flyers prefer to the narrowbodied fleet that Continental uses heavily on its European network from Newark/Liberty, a rival New York City-area airport.

Cortelyou insists that he is not worried about weather or congestion at JFK since New York City rival Continental already suffers those complications at Newark/Liberty. And he is not worried about competing with JetBlue Airways on domestic routes to JFK since “people are going to fly where they can get connections and frequent-flyer points to go international”. ■


Source: Airline Business