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ALTA: Delta heads for Latin America

Delta Air Lines plans to beef up its presence in Latin America in 2014, and expects to surpass United Airlines as the second-largest carrier to the region from the USA.

Forward capacity is already up double-digits through the middle of 2014, says Glen Hauenstein, executive vice-president and chief revenue officer of the Atlanta-based SkyTeam alliance carrier. He predicts that Delta will wrest the number-two spot between Latin America and the USA from United in either January or February.

Available seat-kilometres (ASKs) on Delta between Latin America and the USA is scheduled to increase nearly 22% in June 2014 compared with a year earlier, Innovata FlightMaps Analytics data shows.

Capacity from Los Angeles will be up more than threefold – the most of any of Delta’s hubs – to 86 million ASKs during the period. Detroit capacity will grow by 25.6%, Atlanta's by 14.8% and New York John F Kennedy's by 10%.

New routes include ones from Los Angeles to Belize City, Leon/Guanajuato and Costa Rican capital San José, and from JFK to Guatemala City and Liberia, Costa Rica. Delta will also add a second daily flight between Atlanta and São Paulo Guarulhos in March 2014.

Delta could have grown more from New York. Its application to the US Department of Transportation for seven US-Brazil frequencies to launch a second daily JFK-São Paulo flight in 2014 was denied by the agency in June.

“The desire is there,” Gail Grimmett, Delta’s head of New York, told Airline Business earlier in November, ahead of this month's ALTA Airline Leaders Forum in Cancun.

Strategic partnerships with Aeroméxico and Gol, both of which Delta owns equity stakes in, are another way the airline is expanding in Latin America.

“We came up with a very creative answer in partnering with a major carrier in Mexico and the largest domestic carrier in Brazil,” says Hauenstein. “I think that’s really a really creative answer to say how you can be more relevant in Latin America without having some key components that your competitors have.”

He cites American’s hub in Miami and United’s hub in Houston as “key components” they have that Delta does not.

Combined capacity on Aeroméxico, Delta and Gol between Latin America (including Gol’s US-gateway in Santo Domingo) and the USA is scheduled to be up 21.6% to 1.34 billion ASKs in June 2014 versus June 2013, Innovata data shows. Delta will add the most capacity to the market, with 204 million additional ASKs, but Gol will grow its by a third, to 16 million ASKs.

“The Latin American economies and Mexico are doing extraordinarily well,” said Richard Anderson, chairman and chief executive of Delta, in an October speech. He cites this as a reason why the carrier plans to expand in the region in 2014.

While Delta continues to grow – and overtakes some of its competitors – it does not seek to be the carrier of choice for everyone going to Latin America. Hauenstein says the airline focuses on adding capacity where it can move passengers as efficiently as possible within its network – not simply to capture an untapped market.

For example, Delta pulled a planned service between Fort Lauderdale and Mexico City due to an “underwhelming response” in March. The route would have competed with nonstops between nearby Miami on Aeroméxico, American Airlines and Interjet.

“Sometimes we say well we can’t do that because other [airlines] are better suited to do it,” says Hauenstein. “Everybody has their strengths and weaknesses.”

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