worldtraveler
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DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 8:43 am

A DL exec for Latin America was quoted in Aviation Daily today as saying that DL is #2 in Latin America and is very much interested in being #1. He also said that DL is nowhere near tapping out their growth prospects in Latin America and the Caribbean despite growing at 30% per year.

Sounds like DL has plenty of markets they intend to enter and make work.
 
MAH4546
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 8:57 am

They applied for extra Colombia frequencies today, but Spirit and possibly Continental will be competing for them.

Some markets left for them, but they are never going to become #1. They'll be a solid #2. I'm willing to bet most growth will shift to focusing on JFK and LAX, and in the much farther future, maybe South Florida.

[Edited 2007-09-28 01:59:07]
a.
 
flynavy
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 8:59 am

Quoting MAH4546 (Reply 1):
Some markets left for them, but they are never going to become #1. They'll be a solid #2.

Has someone invented a time travel machine? Wow, I didn't get that memo.
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MastaHanky
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:00 am

Quoting MAH4546 (Reply 1):

Some markets left for them, but they are never going to become #1. They'll be a solid #2.

Oh, they'll become #1 ... the day that they decide to merge with AA and inherit MIA.  Wink
 
worldtraveler
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:09 am

Quoting MastaHanky (Reply 3):
Oh, they'll become #1 ... the day that they decide to merge with AA and inherit MIA.

you do know that one of AMR's biggest investors says that they want AMR to do more to enhance stockholder value?

And UA said yesterday that they are entertaining the idea of selling assets.

AS' market capitalization is at multi-year lows.

DL has more opportunities to grow internationally than they know what to do.

It shouldn't be hard for DL to grow in Latin America. DL has eclipsed AA to Europe and with LHR soon on the horizon will be able to match AA in its strongest international identity.

I'm betting DL will succeed at being #1 in Latin America within the next 7 years.
 
PanAm747
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:13 am

I would have guessed DL was #3 - behind AA and CO...I guess not...

International expansion is great, but one must have the planes and crews to do so. I hate the thought of more RJ's cluttering American skies for international flights, but if that's where the money is...
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travelin man
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:13 am

Correct me if I'm wrong, but aren't many Latin American countries treaty-restricted in terms of airlines, frequencies & destinations? I'm thinking of Brazil, Mexico, Colombia, Venezuela, and maybe Argentina? Maybe others?

I think it will be much more difficult for DL to expand in that area (especially the major markets) than they have in Europe based on government restrictions alone.
 
elmothehobo
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:19 am

Quoting WorldTraveler (Reply 4):
you do know that one of AMR's biggest investors says that they want AMR to do more to enhance stockholder value?

I hope you're not implying that American is going to sell Miami.

Quoting WorldTraveler (Reply 4):
It shouldn't be hard for DL to grow in Latin America. DL has eclipsed AA to Europe and with LHR soon on the horizon will be able to match AA in its strongest international identity

The US has far more open treaties with European countries than South American countries, which is why Delta could just flood the market with flights. They can't do that in south America, unless they plan on adding two dozen flights from Chile and Uruguay, which is fine by me.

Quoting WorldTraveler (Reply 4):
AS' market capitalization is at multi-year lows.

That's an interesting proposition. Very interesting. I could imagine quite the bidding war once Delta or anyone announces their interest.

Quoting MastaHanky (Reply 3):
Oh, they'll become #1 ... the day that they decide to merge with AA and inherit MIA.  

That, or if a whole bunch of South Americans flood into Atlanta.

Quoting Flynavy (Reply 2):
Has someone invented a time travel machine? Wow, I didn't get that memo.

Mark has a point, American has Miami and New York. Delta has Atlanta and New York. Miami IS Latin America.
 
ConcordeBoy
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:21 am

Quoting MAH4546 (Reply 1):
maybe South Florida.

...so with this statement, are you implying that their alleged plan to beef up MFW (which seemed to result only in a single ill-fated int'l route ex-FLL) is, at least for now, defunt?
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travelin man
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:23 am

Quoting ElmoTheHobo (Reply 7):
Miami IS Latin America.

Miami is definitely South America. You could make an argument that LAX IS Mexico and Central America. Perhaps DL will continue building LAX-Central America (where treaties allow). But I still can't believe they got rid of LAX-MEX.
 
MAH4546
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:23 am

Quoting WorldTraveler (Reply 4):

I'm betting DL will succeed at being #1 in Latin America within the next 7 years.

I'm betting you will be wrong.

Quoting ConcordeBoy (Reply 8):

...so with this statement, are you implying that their alleged plan to beef up MFW (which seemed to result only in a single ill-fated int'l route ex-FLL) is, at least for now, defunt?

I don't think South Florida expansion is going to happen until they reach the point where they need to go there in order to grow more in the region.
a.
 
DL WIDGET HEAD
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:26 am

Quoting WorldTraveler (Reply 4):
I'm betting DL will succeed at being #1 in Latin America within the next 7 years.

It certainly is a very ambitious goal and not impossible to achieve at some point, but also not likely using traditional growth methods. However, DL has a management team in place, particularly in route planning, that can and does think outside the box when it comes to growth. Though, For the foreseeable future, I believe this lofty goal is definately worth pursuing but may end up only being a goal and not a reality any time soon. Not with that Juggernaut down in MIA.
 
FlyPNS1
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:32 am

Before becoming #1, DL might want to work on actually making some profits in Latin America. DL has never made a consistent profit in that part of the world.
 
commavia
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:45 am

That's cute, and laughable.
 
JetBlueGuy2006
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:51 am

Who would # 2? I would have thought it would have been NK, but apparently DL is????
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worldtraveler
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:52 am

Quoting FlyPNS1 (Reply 12):
Before becoming #1, DL might want to work on actually making some profits in Latin America. DL has never made a consistent profit in that part of the world.

while true, DL also is far more profitable on its domestic system than AA is which has allowed DL to subsidize international growth from its domestic system. Given that AA has some of the highest costs in the industry and CO is not growing much in Latin America, this is a perfect time for DL to be aggressively going after the biggest chunk of the Latin American market it can.

And I'll remind you that in the last quarter, DL lost the same 0.14 cents/ASM on its Latin American system that NW lost flying to Asia. No one is suggesting that NW should quit flying to Asia or that it should not seek growth opportunities.

Let me suggest a couple of possibilities for how DL might continue to grow:

1. many of DL's Latin American destinations are served 1X/day from ATL.. some like SJO now have multiple flights per day but it is the exception. There are still opportunities to grow from ATL. It really doesn't matter how big ATL is when they can connect just about the entire country over ATL except for S. Florida (yes, DL carries about as much traffic from Central Florida to Latin America as AA does) - including picking off traffic from NYC which they do - and DL carries far more traffic from Europe and Asia to Latin America than AA does.

2. DL hasn't even begun to build out JFK or LAX to Latin America.

3. LAX growth could very much be augmented by an acquisition of Alaska which already has a large presence to Mexico, which could easily be supplemented with much more service to central and S. America.

4. United is up for selling assets. They continue to hold valuable slots into Latin America yet UA has generally not been able to make money there (they did in the most recent quarter) despite continuing to reduce capacity. I would bet that UA would sell Latin assets if DL were interested.

5. Spirit is building a nice little base from FLL to Latin America. DL could buy that operation after it gets established and have a ready made operation from S. Florida. AA would love the prospect of competing against DL who will intelligently price its product instead of competing with NK. Unlike AA's previous attempts at squashing competition (ie TWA), the DOT would not allow AA to buy NK because of antitrust issues.

The prospects of DL being #1 in Latin America are actually pretty good.
 
Lt-AWACS
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:52 am

Quoting PanAm747 (Reply 5):
would have guessed DL was #3 - behind AA and CO...I guess not...

CO serves more cities than DL. for example CO in IAH Houston has more service to more cities in Mexico than any other airport


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777STL
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:54 am

Quoting WorldTraveler (Reply 4):
I'm betting DL will succeed at being #1 in Latin America within the next 7 years.

Doubtful, unless something happens to AA such that they have to pull back Latin America, which I don't see happening.
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worldtraveler
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:01 am

Quoting JetBlueGuy2006 (Reply 14):
Who would # 2? I would have thought it would have been NK, but apparently DL is????

NK is less than half DL's size. DL is growing because they are adding flights to deep S. America as well as from JFK and LAX where the stage lengths are longer. CO is at a disadvantage from a statistical point of view because they fly from a hub that is closer to Latin America.

Also, CO is not growing to Latin America which is allowing them to push their yields higher but in terms of market share, DL is going for the jugular.

For those that think AA is so invincible, I'll remind you that their primary objective right now is fighting off NK which is a REAL threat. AA's fares this year to Latin America are MUCH lower than they were a year ago. Maintaining market share is secondary when your yields are dropping like a rock. DL may be after the larger Latin American title but it is NK that is stabbing AA in the chest.... over and over again. Their A319s and 320s have more than enough range to inflict some serious damage to all but AA's deep S. America markets.
 
OB1504
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:06 am

Quoting Commavia (Reply 13):
That's cute, and laughable.

You can't blame DL for trying. I like that they're not satisfied with being #2, and that they're willing to give AA a run for their money. In the end, the traveling public can only benefit.

Quoting JetBlueGuy2006 (Reply 14):
Who would # 2? I would have thought it would have been NK, but apparently DL is????

While NK has certainly publicized their recent Latin American expansion, DL still flies more daily frequencies using larger aircraft. I expect that CO is a close third, though.

Quoting WorldTraveler (Reply 15):
5. Spirit is building a nice little base from FLL to Latin America. DL could buy that operation after it gets established and have a ready made operation from S. Florida. AA would love the prospect of competing against DL who will intelligently price its product instead of competing with NK. Unlike AA's previous attempts at squashing competition (ie TWA), the DOT would not allow AA to buy NK because of antitrust issues.

While unlikely, I would love to see this happen, if only to see the new NK livery banished from the skies.
 
fewsolarge
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:08 am

Quoting Commavia (Reply 13):
That's cute, and laughable.

It kind of is. Leapfrogging over AA in Latin America would be a coup of legendary proportions. It would be amazing even if AA completely stopped growing. I'm going to bet that in 2014 AA will still be #1 ... comfortably, but by a significantly smaller margin.

I'd say that Delta's best chance would be buying Spirit and getting serious about FLL ... while continuing the pace of its growth in ATL, JFK and LAX. Time also to get serious about partnerships in the region, which looks like it's finally happening.
 
MaverickM11
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:13 am

Quoting WorldTraveler (Reply 15):
1. many of DL's Latin American destinations are served 1X/day from ATL..

DL has had a rough time filling a good number of those daily flights out of ATL, particularly the last couple rounds of additions. I don't see the local ATL market growing much and they'll have to compete for the connecting traffic, which will continue to grow, with everyone else.
E pur si muove -Galileo
 
FlyPNS1
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:14 am

Quoting WorldTraveler (Reply 15):
And I'll remind you that in the last quarter, DL lost the same 0.14 cents/ASM on its Latin American system that NW lost flying to Asia. No one is suggesting that NW should quit flying to Asia or that it should not seek growth opportunities.

True, but NW isn't growing in Asia at a 30% pace.

Not to mention that DL's shareholders might want to know why DL is growing in a region where it has perpetually lost money. Like AA, DL is going to find itself under shareholder pressure since DL's stock has been lackluster so far.

Quoting WorldTraveler (Reply 15):
DL could buy that operation after it gets established and have a ready made operation from S. Florida.

Except that Spirit's success in FLL is by offering dirt-cheap fares in order to compete with AA. DL's costs are too high to use that business model in South Florida.
 
MAH4546
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:18 am

The "Spirit effect" is ridiculously overstated by many. There is a market for them to co-exist, and that is largely thanks to Spirit's "ultra-low cost model". Delta is also not invisible to them. Spirit flies many Caribbean and LatAm passengers connecting from Atlanta and LaGuardia, among other markets.

Quoting MaverickM11 (Reply 21):
DL has had a rough time filling a good number of those daily flights out of ATL, particularly the last couple rounds of additions.

Especially Managua and San Pedro Sula.
a.
 
worldtraveler
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:21 am

Quoting MaverickM11 (Reply 21):
DL has had a rough time filling a good number of those daily flights out of ATL

Really? DL's Latin load factors are competitive with the rest of the industry. Check their traffic releases.

Quoting FlyPNS1 (Reply 22):
True, but NW isn't growing in Asia at a 30% pace.

Then they shouldn't be losing the .14 cents per ASM that DL is while growing at a 30% rate.

Quoting FlyPNS1 (Reply 22):
Not to mention that DL's shareholders might want to know why DL is growing in a region where it has perpetually lost money.

Or that they see value in cementing DL's position in a strong and growing region. My Latin America funds are growing far faster than are other regions. DL's BOD knows where the world economy is growing.

Quoting FlyPNS1 (Reply 22):
Except that Spirit's success in FLL is by offering dirt-cheap fares in order to compete with AA.

Who says DL has to raise fares? They could continue to price lower than AA because DL has lower costs.

You do realize also that DL lost a boat load of money on Song but it did succeed in finally getting solidly established in the NYC transcon market. DL is a solid competitor in those markets thanks to losing money on Song for a year and a half in the transcons. Considering the size of the transcon market and its importance in the overall NYC market, probably turned out to be a pretty reasonable investment.
 
777STL
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:25 am

Quoting WorldTraveler (Reply 18):
DL may be after the larger Latin American title but it is NK that is stabbing AA in the chest.... over and over again. Their A319s and 320s have more than enough range to inflict some serious damage to all but AA's deep S. America markets.

Assuming DL doesn't purchase Spirit, that's going to cause DL as much difficulties if not more than it will cause AA. AA is already established in Latin America and has a better hub than DL does, Spirit will be hurting DL a lot more than it will AA in a potential three-way battle.
PHX based
 
MaverickM11
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:30 am

Quoting WorldTraveler (Reply 24):
Really? DL's Latin load factors are competitive with the rest of the industry. Check their traffic releases.

On average but by route quite a few of their latest adds, primarily in Central America and the Caribbean are hovering around half full.
E pur si muove -Galileo
 
OB1504
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:51 am

Quoting WorldTraveler (Reply 24):
Really? DL's Latin load factors are competitive with the rest of the industry. Check their traffic releases.

In the end though, it's the profit that counts. Like you said earlier, they're losing an average of $0.14/ASM on their Latin American network: can all of that really be due to expansion?

I'm a big DL fan, but I think you may be overplaying things.
 
MAH4546
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:58 am

Quoting MaverickM11 (Reply 26):
Quoting WorldTraveler (Reply 24):
Really? DL's Latin load factors are competitive with the rest of the industry. Check their traffic releases.

On average but by route quite a few of their latest adds, primarily in Central America and the Caribbean are hovering around half full.

In addition, even though Latin American traffic is becoming more spread out than it used to be, the high-yielding traffic is still extremely focused on Miami and New York City and, short term at least, that isn't changing. AA, for example, doesn't have great loads on a handful of routes - Miami-Cali (averages around 65%) for example - but yield is stellar. The high-yield is still concentrated on Miami and New York. Delta is very much stepping up their game in NYC-Latin America, though. They applied for JFK-BOG today.
a.
 
incitatus
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:58 am

Quoting WorldTraveler (Reply 4):
I'm betting DL will succeed at being #1 in Latin America within the next 7 years.

That depends on the measure to be #1. On number of routes to Latin America served on Saturdays I expect Delta to be #1 in the region very soon.

Quoting WorldTraveler (Reply 15):
DL also is far more profitable on its domestic system than AA is which has allowed DL to subsidize international growth from its domestic system.

The reason why Delta has a survivable domestic network is that it went through a massive domestic downsizing. It closed the hub at DFW. CVG is a shade of its former self. Then there are airports like Newark and many others where Delta reduced mainline seats by more than 50%.

The other problem with Delta is that it has difficulty competing with other large US carriers in large longhaul markets. It always has the best price for US-Brazil travel, which is not a good sign. The other day I recommended Delta to a friend and he saved $400 on a ticket compared to United. Delta has an easier time in markets like Pisa and Accra where there is no United, American or Continental.
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Flighty
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 11:03 am

My, what a nice thick stream of piss coming from the DL camp. This time, the pissing match is over Latin America. Great, whatever. It's just talk.

American Airlines has nothing to fear really.
 
tu154m
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 11:25 am

DL will NEVER compete with AA into this part of the world. Flying RJs on 3hr 15min route out of ATL doesn't help either...................nor does only operating into a city/country once or twice a week.
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BWIA 772
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 11:27 am

Quoting WorldTraveler (Thread starter):
A DL exec for Latin America was quoted in Aviation Daily today as saying that DL is #2 in Latin America and is very much interested in being #1. He also said that DL is nowhere near tapping out their growth prospects in Latin America and the Caribbean despite growing at 30% per year.

Sounds like DL has plenty of markets they intend to enter and make work.

 rotfl 

Base on what I have seen of DL in the Caribbean DL is a long long long long long long long way from achieving this. The was some fuss when they entered BGI after that you haven't heard much out of them. I also heard they are going to start POS JFK easily the most competitive route out of POS so much so that AA does not do it directly... best of luck to DL and their Latin American Aspirations they seem to need it..
Eagles Soar!
 
worldtraveler
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 11:31 am

Quoting MaverickM11 (Reply 26):
On average but by route quite a few of their latest adds, primarily in Central America and the Caribbean are hovering around half full.

they obviously have alot of markets where they are above average loads or they couldn't be maintaining industry average loads.

Quoting MAH4546 (Reply 28):
the high-yielding traffic is still extremely focused on Miami and New York City

yes, right where AA is having to drop fares to compete with NK, right?

Quoting Incitatus (Reply 29):
The reason why Delta has a survivable domestic network is that it went through a massive domestic downsizing.

yet, somehow DLstill has the 2nd largest domestic system in the US as measured by ASMs and the largest network as measured by cities served, both of which are larger than UAs. Appararently DL's reduced size is large enough for DL to generate far larger profits per ASM on their domestic system than AA or UA.
 
DL WIDGET HEAD
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 11:31 am

Quoting Flighty (Reply 30):
American Airlines has nothing to fear really.

If that sentiment were only true from the upper echelon of the AA camp then their dominance could be challenged that much sooner. No doubt, AA must realize that their almost unchallenged dominance in this arena is now squarely threatened. I do not think for one minute that they intend to simply do nothing whilst others carve niches into the markets down south. The fact is, they REALLY do need to fear. Fear is healthy in the airline industry...it keeps airlines motivated.
 
MaverickM11
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 11:59 am

Quoting Flighty (Reply 30):
American Airlines has nothing to fear really.

Well...until recently AA management's seemed asleep at the wheel and ceased growing, ignored seasonality, and refused to react to incursions from competitors.
E pur si muove -Galileo
 
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SLCUT2777
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 1:00 pm

Quoting MAH4546 (Reply 1):
Some markets left for them, but they are never going to become #1. They'll be a solid #2. I'm willing to bet most growth will shift to focusing on JFK and LAX

That is most likely the game-plan they will use to increase their profile amongst the U.S. Latino market. Focus on the two biggest, BUT MIA will remain the ace in the sleeve of AA, which will be the key for them to remain #1.

Quoting MAH4546 (Reply 1):
and in the much farther future, maybe South Florida.

FLL or PBI? I agree they can't utilize ATL the same way AA uses MIA.

Quoting Incitatus (Reply 29):
The other problem with Delta is that it has difficulty competing with other large US carriers in large longhaul markets. It always has the best price for US-Brazil travel, which is not a good sign. The other day I recommended Delta to a friend and he saved $400 on a ticket compared to United. Delta has an easier time in markets like Pisa and Accra where there is no United, American or Continental.

The big problem with UA is that they've allowed any past growth in Latin America to be piddled away, the ace up their sleeve is they have the most direct routes and seats of any U.S. flag carrier to the Chinese mainland. Aside from Latin American growth, DL will likely be the largest U.S. flag carrier with direct service to the African continent, with the new services they recently announced. I do think DL will emerge over the next year or two a solid #2 to Latin America, and move well ahead of CO and US in all greater regions south of the border including Central America and the Caribbean. But it will be some time before they can give AA a run for the number of daily seats and overall viability. AA being as big as they are in MIA, DFW, ORD as well as a large presence in JFK I think is more than DL can overcome in the foreseeable future.  twocents 
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DL WIDGET HEAD
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 1:07 pm

Quoting SLCUT2777 (Reply 36):
I do think DL will emerge over the next year or two a solid #2 to Latin America, and move well ahead of CO and US in all greater regions south of the border including Central America and the Caribbean

DL is solidly ahead of US in these areas now and the margin will only widen over time. If DL hasn't passed CO yet, then they will supplant them soon.
 
ConcordeBoy
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 1:22 pm

Quoting MAH4546 (Reply 28):
They applied for JFK-BOG today.

nice, what EQP?
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
OB1504
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RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 1:42 pm

Quoting WorldTraveler (Reply 33):
yes, right where AA is having to drop fares to compete with NK, right?

AA and NK are going after two completely different markets:

AA caters to the business traveler and the upper-end leisure traveler (medium- to high-yield), the kind who's a high-mileage frequent flyer and values the global and local links that only a legacy carrier can offer.

NK caters to the lower-end leisure traveler (low-yield), the kind who flies only once or twice a year and bases their airline selection primarily on price.

(I don't mean to sound elitist or anything, as I fit into the second category, but this is the truth)

Quoting DL Widget Head (Reply 34):
No doubt, AA must realize that their almost unchallenged dominance in this arena is now squarely threatened. I do not think for one minute that they intend to simply do nothing whilst others carve niches into the markets down south. The fact is, they REALLY do need to fear. Fear is healthy in the airline industry...it keeps airlines motivated.



The people running AA, no matter how much we'd like to think otherwise, are not idiots. They won't sit idly by and let DL erode their Latin American presence. If they do, AA deserves any financial harm that may come to them as a result.

[Edited 2007-09-28 06:42:57]
 
MAH4546
Posts: 24724
Joined: Wed Jan 24, 2001 1:44 pm

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 2:02 pm

Quoting WorldTraveler (Reply 33):
Quoting MAH4546 (Reply 28):
the high-yielding traffic is still extremely focused on Miami and New York City

yes, right where AA is having to drop fares to compete with NK, right?

On a select few coach seats per flight, yes. On last-minute seats and business/first class? No.

Give it up already with the ridiculous Spirit argument. Delta will feel the effects of Spirit's growth just as much as AA. They aim at an entirely different market. Does AA like Spirit? No. Will both be able to co-exist and be profitable? Yes. I really don't think AA is starting to suffer because they are selling a handful of seats on Miami-Nassau for $89 each-way instead of the typical $149.

You act like AA is the only airline putting "South America on sale"

http://news.cheapflights.com/airlines/2007/09/delta-air-lin-1.html

Quoting SLCUT2777 (Reply 36):

Quoting MAH4546 (Reply 1):
and in the much farther future, maybe South Florida.

FLL or PBI? I agree they can't utilize ATL the same way AA uses MIA.

I think Delta could build-up Miami has a LatAm gateway very well. There is room for two, if done right. United didn't play their cards right. FLL could work, PBI would never work, but MIA is where the money is.

[Edited 2007-09-28 07:06:16]
a.
 
DL WIDGET HEAD
Posts: 1469
Joined: Wed Apr 12, 2000 8:18 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 2:46 pm

Quoting ConcordeBoy (Reply 38):
Quoting MAH4546 (Reply 28):
They applied for JFK-BOG today.

nice, what EQP?

I daresay a 737-700 or even a 757.
 
DAL767400ER
Posts: 5084
Joined: Wed Feb 09, 2005 2:47 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 6:06 pm

Quoting ConcordeBoy (Reply 38):
Quoting MAH4546 (Reply 28):
They applied for JFK-BOG today.

nice, what EQP?

Probably a 757. For some reason the PDF of the application comes up blank for me at work, but the main page for the docket mentions that DL has also applied for ATL-Cali/Medellin, for a total of 14 weekly frequencies to Colombia. Sounds like daily JFK-BOG 757 and 3x weekly ATL-Cali 738 and 4x weekly ATL-MED 738, IMHO. Whether they'll get those frequencies obviously remains to be seen, but I'd say they'll probably get 7 weekly frequencies to at least launch JFK-BOG.
 
MAH4546
Posts: 24724
Joined: Wed Jan 24, 2001 1:44 pm

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 6:09 pm

Quoting DAL767400ER (Reply 42):
Probably a 757. For some reason the PDF of the application comes up blank for me at work, but the main page for the docket mentions that DL has also applied for ATL-Cali/Medellin, for a total of 14 weekly frequencies to Colombia. Sounds like daily JFK-BOG 757 and 3x weekly ATL-Cali 738 and 4x weekly ATL-MED 738, IMHO. Whether they'll get those frequencies obviously remains to be seen, but I'd say they'll probably get 7 weekly frequencies to at least launch JFK-BOG.

They will get at least seven frequencies no doubt (21 are available). If NK applies for 14, though, DOT will likely be inclined to give "the little guy" 14 frequencies and give Delta seven. If Continental or anybody else applies, though, then DL, NK, and a third airline will each get seven. I don't foresee more than three airlines applying.

Also, with Barranquilla now Open Skies, AA now has seven free frequencies, which they will now have to find a use for. They aren't going to give those up. They might just go ahead and do JFK-BOG, too.
a.
 
commavia
Posts: 10100
Joined: Mon Apr 25, 2005 2:30 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 6:24 pm

Quoting MAH4546 (Reply 43):
They might just go ahead and do JFK-BOG, too.

It's about frigging time. This is a market that AA served very briefly - with a 767-200, believe it or not - way back in 1998. They should be flying it right now. A daily 757, especially one timed well for Europe connections, would do well IMO.
 
Summa767
Posts: 1776
Joined: Thu Mar 11, 2004 1:30 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 8:45 pm

Quoting MAH4546 (Reply 43):
They will get at least seven frequencies no doubt (21 are available). If NK applies for 14, though, DOT will likely be inclined to give "the little guy" 14 frequencies and give Delta seven. If Continental or anybody else applies, though, then DL, NK, and a third airline will each get seven. I don't foresee more than three airlines applying.

Also, with Barranquilla now Open Skies, AA now has seven free frequencies, which they will now have to find a use for. They aren't going to give those up. They might just go ahead and do JFK-BOG, too.

Great to know that DL have applied for 14 frequencies to Colombia. I hope that they get them all. Now that DL is overhauling its ops at JFK, a DL flight to BOG might complement well AV's existing one, in benefit of onward destinations for both carriers.
Spirit should get the 7 for FLL-BOG. They also wanted to serve BAQ, and should have no problem with that now that it's an "open skies" port. Same applies to CTG. Any further flights between FLL and Colombia, NK can serve by the suggested alliance between it and Aires, that has already fot 7 frequencies and is likely to be allocated some more next at next months Aerocivil's public audience.
 
FlyPNS1
Posts: 5288
Joined: Wed Dec 01, 1999 7:12 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:07 pm

Quoting WorldTraveler (Reply 24):
DL's BOD knows where the world economy is growing.

It doesn't matter how fast it's growing, you still have to eventually make money there.

Using your growth logic, DL should be rapidly growing in Florida. It is afterall, one of the fastest growing states in the U.S. (though it has slown a bit recently). Yet, DL has done the opposite and shrunk its Florida presence. Why? Because DL was tired of losing money there.

I'm not saying DL shouldn't grow in Latin America. However, if DL is going on some zealous quest to be #1 in marketshare, they will be setting themselves up for some hefty losses.

Quoting WorldTraveler (Reply 24):
Who says DL has to raise fares? They could continue to price lower than AA because DL has lower costs.

DL can't charge Spirit type fares and make money. Can they charge less than AA? Yes, but not by that much. The difference between AA and DL's costs aren't enough to allow DL to really come in as a low-cost carrier.
 
Carls
Posts: 194
Joined: Thu Aug 16, 2007 1:22 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:16 pm

To become a #1 USA airline flaying to South America the need to start flaying to MIA not to Atlanta, at least from South America. Most people fly to MIA from the SA capitals. Central America it's a totally different game. But the South American and Caribbean hub is Miami.
 
aal0616
Posts: 217
Joined: Thu Jul 13, 2006 1:16 am

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 9:48 pm

It is old news by now, but DAL did have their opportunity to compete directly with AAL from MIA when they did not acquire the PAA MIA base. UAL did, and the rest is history. That said, it appears there are several ways in which DAL can and will compete on a greater scale with AAL into near and far southern markets from the USA. Several options have been mentioned and here is another way of looking at it:

South Florida is the leading market and MIA is the leading hub and o/d site. AAL will not be dislodged from MIA short of a seismic shift in its fortunes or business model. AAL will continue to focus on business traffic to the deep markets, adding more nonstop service and frequencies when and where available. The enormous and risky asset and investment commitment required to compete fully with AAL at MIA will not be made by DAL. However, there now is and will be more quality gate and terminal space available at MIA with the completion of "J." DAL and its Skyteam allies can coordinate a focus operation at MIA. The closer, leisure markets from MIA could support a 738 mini-hub that feeds ongoing Skyteam services, along with targeted deep south Latin business markets. All of that is not possible from FLL. It could be done from MIA, which AAL realizes and has been watching for. If you walk around H and J and the newer DAL location these days it does not take a great leap to see what they and their partners could possibly do with, while AAL struggles to make progress with the hideous and frustrating North Terminal project. Once "A" closes "J" will be crowded for a while as the roof is made ready for the A-D tram, but long term, there could be an opportunity for DAL and Skyteam to put themselves into a solid and profitable focused #2 position at MIA, which UAL and Star did not.

An acquisition of NKS by DAL does not seem to be their best South Florida option, for several reasons.. FLL is problematic although the second parallel runway will help. Would DAL fly or drop the NKS Airbii? Flying more sorter range leisure markets from FLL should be possible with existing DAL aircraft. However, there is not the possible Skyteam connections that can be realized at MIA, especially if AFR/KLM indeed acquires IBE. MIA is not as constrained and Miami-Dade county is still the stronger o/d market, although Broward is no slouch.

The next option is to develop nonstop service from ATL everywhere, which DAL has been and will continue to do. As with their Atlantic routes, ATL justifies many more options simply because it is so big and flights connect everywhere. If I ran DAl this would continue to be my first choice. It is safe and works. Being #1 to the south vs. AAL in traffic or revenue terms would not be my focus. I would be very pleased with a solid #2 overall but with a rock-solid operation that steals a lot of ongoing USA business and leisure traffic away from AAL by bypassing MIA and conceding the o/d traffic into South Florida.

My second choice would be to target routes south from JFK that have a reasonable chance of success, again, to take advantage of a sizable o/d market as well as my JFK hub. The leisure routes would duplicate and compete head-on with AAL, which might be a problem if things get nasty. I would basically restore and expand the old PAA network as has been done for 2008 with the old Atlantic Division at JFK. By the way, it is interesting to see DAL forget about the turboprops at JFK and use the slots for overseas routes. Smart use of their assets. I do wonder what will really happen as they tear down and rebuild T2 and T3.

Third, DAL can on a more limited and ultimately less lucrative (but still solid) basis do something with LAX. If UAL were to shed anything, their Mexico and Central America authority would be interesting, as their dormant ex-PAA LAX routes to deeper southern markets. I still wonder if UAL and DAL would not be frightening merger partners. I know, the Feds would never allow it to happen.

Also, one might wonder what DAL would or will ever try to do with MCO, which, like FLL, could skirt MIA and be an effort to do something outside ATL.

No, I suspect DAL will be all ATL all the time, with an additional focus on JFK, and a possible experiment with South Florida or LAX, and MIA actually being a better target than FLL. At the end of the day, AAL would have to again be brain dead or the victim of unforeseen circumstances to be dislodged as the leader in traffic, flights and overall customer support between the Americas.

However, DAL need not be "#1" to make money and "succeed."
 
LawnDart
Posts: 862
Joined: Fri May 20, 2005 11:33 pm

RE: DL Exec - We Want To Be #1 In Latin America

Fri Sep 28, 2007 10:19 pm

Quoting MAH4546 (Reply 40):
think Delta could build-up Miami has a LatAm gateway very well. There is room for two, if done right. United didn't play their cards right. FLL could work, PBI would never work, but MIA is where the money is.



Quoting Carls (Reply 47):
To become a #1 USA airline flaying to South America the need to start flaying to MIA not to Atlanta, at least from South America. Most people fly to MIA from the SA capitals. Central America it's a totally different game. But the South American and Caribbean hub is Miami.

DL could build a little presence in MIA without much effort. The new South Terminal could house SkyTeam...so right off the bat, you've got non-stop service to CDG, AMS, FCO, ATL, MCO, TLH, LGA, JFK, EWR, IAH, MEM, CVG, DTW, MSP, CLE, MEX, CUN, PTY...Avianca is a toss-up (I think it will be COPA/AeroRepublica)...SLC could be easily added again...does DL still have MIA-London authority? Doesn't matter...open skies soon. What happened to UA's MIA-deep South America authority? DL could pick up MIA-GIG/GRU/EZE/SCL.

Having flights between MIA and South America, DL could compete in the O&D, not the transfer, market. This has the benefits of being higher-yield...you don't need more than one flight...it strengthens your connecting service via ATL by association, makes you a much stronger competitor in Latin America, especially for the business market. Makes SkyTeam a much stronger presence in Latin America...GOL/Varig might come in to play...

Quoting AAL0616 (Reply 48):
It is old news by now, but DAL did have their opportunity to compete directly with AAL from MIA when they did not acquire the PAA MIA base. UAL did, and the rest is history.

Pan Am management was shocked when DAL came to NY and offered to by the N Atlantic division - PAA thought they were interested in South America and had prepared a case for the acquisition of LatAm. That was Ron Allen...he is long gone.

Quoting AAL0616 (Reply 48):
Also, one might wonder what DAL would or will ever try to do with MCO, which, like FLL, could skirt MIA and be an effort to do something outside ATL.

When DL had a "hub" in MCO, they actually were going to start flights to C. America...the bookings were so poor, the flights were all pulled prior to starting. More recently, MCO-MEX and FLL-SDQ have be tried...

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