Atlanta-based carrier plans to continue its ambitious international expansion following delivery of its first 777-200LR
Delta Air Lines executives are confident the carrier's ambitious international growth plan and emphasis on improved employee morale and customer service will make it profitable in 2008.
"Our plan is to make money this year. [Even with] fuel at $90 to $100 we're still on plan," says Delta president Ed Bastian. "We made over $600 million in 2007, and while oil wasn't at $100, it wasn't far from that."
Speaking in late February at an event in Seattle marking the delivery of a Boeing 777-200LR (pictured), Delta's first new aircraft in six years, Bastian insisted "we will be a high-service airline". Bastian says his goal is to restore the lustre that the nation's third largest airline had before cost-cutting and internal dissent eroded its long-held reputation for hospitality.
Boeing's Ray Conner (left) and Delta's Ed Bastian cut the ribbon
Bastian points out the new ultra long-range 777-200LR has been named the "Delta Spirit" as a reminder of the Atlanta-based carrier's "golden years" of the early 1980s, when employees donated funds to help the airline purchase the then-new Boeing 767. Bastian says the name echoes that spirit, saying: "We're not asking the Delta employees to pay for this one, but they have paid for this one [through the pay cuts that Delta imposed during its bankruptcy restructuring]. This is their airplane."
The 777-200LR, the first of eight to be delivered by April 2009, will operate between New York JFK and Mumbai, a 7,800-mile non-stop flight. Delta has been serving Mumbai with the shorter-range 777-200ER, which faces weight restrictions on the route. Freed of those limits, the new airliner will be able to carry a full load of cargo and add as much as $10 million year in revenue, says executive vice-president for network planning and revenue management Glenn Hauenstein.
The equipment shift will free up two 777-200ERs that Delta will use to launch in late March an Atlanta-Shanghai service. Hauenstein, the architect of Delta's plan to become a global carrier from both its Atlanta and New York JFK hubs, says Delta has asked Boeing to develop modifications to the 777-200LR to give it the fuel capacity needed to fly non-stop to Australia from its two hubs. Delta is also studying several possible Asian routes that are within the current 19-hour range of the 777-200LR, including Atlanta-Hong Kong and New York-Singapore.
Hauenstein says that Delta will continue to focus on "exotic destinations in Europe", in particular in Eastern Europe, and will also serve the major business centres of Africa. Its total overseas exposure will reach 40% of capacity this summer, and Hauenstein says growing awareness of Delta in Europe was helping fill aircraft.
Delta is now deriving 36% of its transatlantic revenue, or 7% of its total revenue, in Euros. As the Euro rises against the dollar, travel to the USA has become more attractive to Europeans, and the currency difference helps to offset fuel costs, Hauenstein says. Delta's transatlantic network will include 45 destinations this summer, compared to 36 last summer and only 21 in summer 2005.
Source: Airline Business