DeltaSFO From United States of America, joined Nov 2000, 2488 posts, RR: 23 Posted (11 years 8 months 2 weeks 4 hours ago) and read 2739 times:
Delta CEO Leo Mullin is prepared to launch an aggressive marketing attack against US Airways if it reaches a code-share deal with another major airline this summer, and he vowed that Delta would sign its own alliance to compete.
Lindy field From United States of America, joined Mar 2001, 3096 posts, RR: 14
Reply 1, posted (11 years 8 months 2 weeks 3 hours ago) and read 2661 times:
I can't imagine that Delta would partner with AA so that leaves whichever airline (Continental or United) that doesn't form the US Airways. Of course, in the case of Continental there's the question of how Northwest would react.
It seems like someone is going to get left out in the cold... but I would imagine that Delta's partner has a lot more to gain than US Airway's partner, that's for sure. Do you suppose that Uncle Leo is just making this noise to discourage UAL and CO from pairing up with US?
FlyPNS1 From United States of America, joined Nov 1999, 6419 posts, RR: 24
Reply 2, posted (11 years 8 months 2 weeks 3 hours ago) and read 2624 times:
DL certainly has the most to lose if a U/UA codeshare happens. There are projections that DL could lose as much as $450 million dollars annually from a full blown codeshare. So DL has no choice but to react....unfortunately right now DL could be left with no major partner. CO and NW are together, UA and U could line up and AA is already huge after gobbling up TWA....which leaves DL all alone.
A likely partner might be HP. HP lost its linkup with CO so its looking for a new partner. HP could really help DL beef up out West and DL could provide HP with access to tons of new markets on the East Coast, Europe and Latin America. The only problems are that HP is more of a lowfare carriers and DL is a high cost carrier which might make the revenue sharing agreements tough to hammer out. Also, a codeshare on all of HP's flights out of PHX and LAS might hurt DL's SLC hub which is already weak and heavily reliant on connecting traffic.
Alaska might be another possibility but they already have codeshare deals with other airlines. Plus, Alaska doesn't really expand the DL network that much.
Regardless of what happens, I hope DL has a good plan or they could be in real trouble.
762er From United States of America, joined Feb 2001, 542 posts, RR: 1
Reply 3, posted (11 years 8 months 2 weeks 3 hours ago) and read 2611 times:
It's good to see that healthy kind of capitalist competetion. Mullin and Seagel are preparing for a duel and I can't wait to see what happens. For some reason I think Seagel is going to overcome whatever obstacles stand in his way. The current situation would suggest the opposite, but I along with many other US Airways employees have faith in his spirit.
Northwest_guy From United States of America, joined Jul 2001, 217 posts, RR: 4
Reply 4, posted (11 years 8 months 2 weeks 3 hours ago) and read 2599 times:
I would like to see what happens when US Airways teams up with another carrier simply to see Delta's reaction. It will be very interesting. I can't imagine Delta teaming up with Continental simply because of Continental's connections With Northwest.
DCA-ROCguy From United States of America, joined Apr 2000, 4451 posts, RR: 35
Reply 7, posted (11 years 8 months 1 week 6 days 23 hours ago) and read 2340 times:
Mullin must surely be aware that US Airways won't be around for too much longer, and that it would only be a threat as an alliance partner for less than two years. He may be thinking ahead towards the post-US Airways era.
From what I can tell, Delta has the least to gain and the most to lose from the breakup of US Airways (which is the only option DOJ will allow) after the inevitable chapter 11 moves to chapter 7. Delta's too big in the Northeast to buy the assets of the US PHL hub without antitrust grumbling, and CLT is too close to ATL. PIT is too close to CVG, and again would be an antitrust concern. Delta already has a Shuttle so they can't buy the US Airways Shuttle for the same reason.
DL is already a huge presence at LGA and BOS, so there might be antitrust grumbling about them buying US assets there. DCA may be a possibility. CO expressed strong interest when US wanted to spin it off as DC Air; the question here is who would win a bidding war. DL probably could, but the price won't be cheap.
If, as I have long argued, NW buys the PHL hub assets and UA or AA buys the CLT hub assets, Delta's competitive position in the East will be weakened. These facilities, in the hands of a competitor with greater size than US and worldwide alliance connections, would probably cause the "revenue diversion" Mullin speaks of. Just as surely as an unresponded US alliance would.
As far as I can tell, the likeliest US Airways breakup scenario strengthens the hands of DL's four remaining Cartel competitors, esp UA, AA, and NW. Mullin may deploy resources strongly against an alliance-linked US in order to start protecting itself before that happens. If DL can not only keep revenue, but actually tear East Coast market share out of US's hide while it's still alive, DL will be in the best position it can seize, when US's end comes.
DeltaSFO From United States of America, joined Nov 2000, 2488 posts, RR: 23
Reply 8, posted (11 years 8 months 1 week 6 days 23 hours ago) and read 2313 times:
Interesting analysis. I am, however, curious as to what your basis is for believing that CLT falling into the hands of UA or AA would weaken DL's position in the Southeast. Recall that American has made a couple of attempts to break DL's stranglehold on the Southeast, namely through BNA and RDU, both to no avail.
I think Atlanta is so established as the economic center of the Southeastern United States that Delta enjoys an O&D advantage over US or whoever their successor may be in Charlotte. Furthermore, the ATL hub operation alone acts as such a magnet for traffic that I don't think anybody could really expand their Southeast presence beyond whatever they may inherit from US. Atlanta is one of perhaps only three hub operations where one single airline operates a true superhub, encompassing extensive regional, national, and international operations, and achieving the critical mass necessary to truly dominate their particular region. The other two would be American at DFW and United at ORD.
It's a new day. Every moment matters. Now, more than ever.
NWA Man From United States of America, joined Jun 1999, 1828 posts, RR: 13
Reply 9, posted (11 years 8 months 1 week 6 days 22 hours ago) and read 2300 times:
This is a little off track from the conversation, but I wouldn't say that United "dominates its region" at ORD like AA at DFW or DL at ATL. The Midwest is a much more diverse region than the Southeast, and therefore many airlines can share in the region's success (see NW-MSP/DTW, DL-CVG, AA-ORD, UA-ORD, CO-CLE, etc).
Basically, my point is if ORD is a "superhub" like DFW or ATL, then DTW must also be classified as a "superhub" for Northwest.
DCA-ROCguy From United States of America, joined Apr 2000, 4451 posts, RR: 35
Reply 13, posted (11 years 8 months 1 week 6 days 12 hours ago) and read 2031 times:
I think Atlanta is so established as the economic center of the Southeastern United States that Delta enjoys an O&D advantage over US or whoever their successor may be in Charlotte. Furthermore, the ATL hub operation alone acts as such a magnet for traffic that I don't think anybody could really expand their Southeast presence beyond whatever they may inherit from US. Atlanta is one of perhaps only three hub operations where one single airline operates a true superhub...
Hmmm.....You probably know the region better than I, but I get the impression that the Charlotte hub could be built more by an airline with deeper pockets. The region is economically strong, with many growing cities. Although Atlanta is clearly the largest destination city in the region, Charlotte's healthy banking/finance-related O & D is poised to keep growing. It just seems strange to me that one airline hub, even a superhub, is going to be sufficient to serve this entire region well.
Both Nashville and Raleigh-Durham have substantially smaller O & D bases than Charlotte, and Nashville in particular has less business traffic. (Also, those hubs were both run in the days before RJ's and the full use of regional affiliates in general). How Northwest keeps up MEM, which is an MSA about the size and shape of Rochester or Richmond, I don't know, but MEM is an exception.
It seems to me that Charlotte has what it takes to anchor a successful network-carrier hub, and the region has enough economic vitality to feed it. The Charlotte area clearly isn't going to rival Atlanta in size anytime soon, nor could it support a superhub. But it seems to me that a second-tier hub of around 30-35 million pax at CLT is quite feasible with the deeper pockets, alliance connections, and greater national 'support' network of a truly nationwide network carrier. One with high enough yields to be attractive to AA or UA.
That's why Mullin is worried, I think. I would watch for him to beef up ATL and offer FF goodies to US FF pax who switch to SkyMiles.
Ryefly From United States of America, joined Jun 2000, 1389 posts, RR: 0
Reply 14, posted (11 years 8 months 1 week 6 days 11 hours ago) and read 1945 times:
Considering I live in Charlotte, I am sure I may sound biased. However, I totally agree with DCA-ROCguy. US Airways has done a very nice job with CLT and it has continued to grow steadily since the Piedmont's days. The city of Charlotte has grown at a much faster pace in the last ten years. It is nearly double the size it once was and it is forecast to double again with in the next decade.
There has always been a major difference in the size between Delta and US Airways and Charlotte and Atlanta. US Airways typical high cost as an airline has been passed down to it's passengers contributing to US Airways demanding the highest fares in the country out of CLT. This has helped out Delta at ATL for years! The diamond in the rough though is that CLT offers some of the cheapest landing fees in the nation. This could help pose an advatage for an airline that wants a high frequency of flights connecting into CLT at the same time but with out the cost of many of the other large hubs.
Up until the threat of the US/UA merger and now talks of a code share, Delta has enjoyed minimal threats to it's ATL hub from larger airlines since the days of Pan Am and Eastern. This a serious situation for Delta, but excellent for passengers who will enjoy the benefits of stronger competition out of the Southeast.
I still don't think Delta has to worry to much unless a more stable and larger airline takes over the CLT hub in the future. It is a perfect alternative to already over crowded markets in the Northeast, Midwest, and South. If our an airline who wants to expand or even run more efficiently, you want a decent facility with plenty of room to expand, a financially stable city and a region that's growing and will continue to flourish, and a location with good weather and a solid position to complement your existing route structure as well as expand into new markets. Charlotte is currently able to meet all of these requirements.
FlyPNS1 From United States of America, joined Nov 1999, 6419 posts, RR: 24
Reply 15, posted (11 years 8 months 1 week 6 days 11 hours ago) and read 1931 times:
Actually, the hub that might be in most danger isn't ATL but SLC. Right now, the majority of people that live in the Southeast and want to go west fly DL because US has no real presence out West. For example, if I want to fly TLH-BOI....DL is the best option and US can't do it. But if U/UA codeshare, then U can feed people into UA's massive DEN hub which could put a real dent in DL's already weak SLC hub.
I don't think CLT is a real threat to DL in the hands of UA or NW or any other major. CLT lacks the size for any large scale int'l operations...even if U joined Star...you would only gain a few int'l flights. Even CLT's banking/finance operations, though healthy, aren't enough to support much more than what US has now.
A real danger to DL would be if U went under and WN came in and opened up a big shop. This could drive yields down into the ground in DL's precious Southeastern markets and make life for DL very rough.
DeltAirlines From United States of America, joined May 1999, 8861 posts, RR: 12
Reply 16, posted (11 years 8 months 1 week 6 days 8 hours ago) and read 1843 times:
I actually think that Delta has a shot of taking the PHL hub if/when U goes under. I know Delta has a huge presence in the Northeast, but a lot of its flights are to its hubs (BOS, EWR, LGA, BWI, DCA, and IAD all have more than 10 daily ATL flights), and there is little service to non-hubs from the mini-operations in BOS and NYC. BOS only has service to YHZ, YUL, BTV, EWR, PHL, RDU, BGR, and PWM and the Express destinations that are to non-focus cities (the other cities are LGA, JFK, ATL, CVG, DFW, SLC, and LAX; all cities that DL considers focus/hub cities). JFK has very little service (BOS is the only city with continual DL service throughout the day). LGA has flights to the CVG, DFW, and ATL hubs, plus quite a few other cities, but in no way does it compare to U's operation at LGA. While I would expect the DOJ to raise questions if DL tried to take U's LGA assets, BOS would be no problem. However, both these cities are limited in opportunities (BOS and LGA both have no room, LGA has the perimeter rule as well). I think the DOJ would allow DL to take over PHL, but not allow other assets (such as BOS, LGA, DCA facilities in particular) to be touched.
As for an alliance partner for Delta, I think DL would be limited to HP and AS. It will be interesting, as I still don't think U's application for a loan stands a chance, and U has a huge payment due on the 17th I believe. If they don't pay it, I think there is a good chance U will get hit with a lawsuit (this is a much larger payment than the one they already deferred), so it will be interesting to watch and see what plays out.
Srbmod From , joined Dec 1969, posts, RR:
Reply 17, posted (11 years 8 months 1 week 6 days 8 hours ago) and read 1816 times:
What could get interesting is with U.S. Airways wholly owned subsidiaries. Delta may be casting an eye on them if U.S. Airways starts to sell off assets. Other than the U.S. Airways Shuttle, and their DCA ops, the most attractive piece of the U.S. Airways pie is Piedmont, PSA, and Allegheny. If Delta were to buy any of those airlines, they could really become a force in the NE when it comes to regional operations. Move the ops to JFK and really kick it to them. The case with U.S. Airways is not if their going to go under, but rather when are they going to go under. The DCA ops will be the most expensive part, since there would probably be no more than eight or so bidders for those slots and gates (DL, AA, UA, HP, TZ, FL, CO,and NW being the most likely to bid on them). The Shuttle ops will probably go to either NW, CO, AA, or UA, since DL has a snowball's chance of getting it. But someone that could be the wild card in this is JetBlue. David Neeleman could probably come up with the funding to buy the Shuttle ops and some DCA slots and gates. Delta is just doing a little sabre rattling right now, they really think that U can really get into an alliance with another carrier, but with the industry as a whole in a slump, nobody's wanting to lose any of their passengers they've got right now.
SESGDL From United States of America, joined Jan 2001, 3451 posts, RR: 10
Reply 21, posted (11 years 8 months 1 week 5 days 22 hours ago) and read 1565 times:
Get real! "AA could match or undercut DAL to steal pax from ATL." That's a ridiculous statement, AA is not even the airline involved in the issue. I'd like you to tell me how AA could match or undercut DAL service in ATL.