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onwFan
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Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 10:35 pm

According to its CFO, Delta will emerge as a “smaller” carrier from the covid crisis.

https://thepointsguy.com/news/delta-air ... virus/amp/

Which are the focus cities and routes that can be expected to disappear from DL’s map?

1. Good news for KE. A further shift in focus from TYO to ICN is a given, unless they are not committed to the KE partnership.

2. A lot of routes from non-hubs and secondary/focus cities to CDG, AMS, LHR to disappear? AF/KL will be supported by France and the Netherlands.

3. LHR? Virgin Atlantic - will have to wait and see.

4. PVG and China Eastern - will probably come out in good shape with airline consolidation in China. Expect focus on PVG.

4. MIA hub- Is it now worth it? LATAM will probably the biggest loser, losing AA, IB and an alliance in the middle of the biggest crisis in aviation history.

5. SEA & BOS - I leave it for discussion.
 
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atcsundevil
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 10:39 pm

onwFan wrote:
According to its CFO, Delta will emerge as a “smaller” carrier from the covid crisis.

https://thepointsguy.com/news/delta-air ... virus/amp/

Which are the focus cities and routes that can be expected to disappear from DL’s map?

1. Good news for KE. A further shift in focus from TYO to ICN is a given, unless they are not committed to the KE partnership.

2. A lot of routes from non-hubs and secondary/focus cities to CDG, AMS, LHR to disappear? AF/KL will be supported by France and the Netherlands.

3. LHR? Virgin Atlantic - will have to wait and see.

4. PVG and China Eastern - will probably come out in good shape with airline consolidation in China. Expect focus on PVG.

4. MIA hub- Is it now worth it? LATAM will probably the biggest loser, losing AA, IB and an alliance in the middle of the biggest crisis in aviation history.

5. SEA & BOS - I leave it for discussion.

So that this discussion doesn't drown in the coronavirus discussion thread, I have split it into its own topic.

✈️ atcsundevil
 
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lightsaber
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 10:57 pm

Good question. 600+ Aircraft to be parked:

https://news.delta.com/ed-bastian-memo- ... our-future

I personally think SLC and MSP are a bit close for hubs. One or the other will be downsized, but I fully admit, I do not know which.

Complete aircraft deferals tells me DL negotiated well.

I expect many long/thin routes to be cut. The era of yours truly having a selection of TCON direct flights is probably over.

Lightsaber
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jayunited
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 10:58 pm

I think this is true of all airlines, no airline will be the same size it was when this is crisis is over. It will be years before this industry fully recovers from COVID-19. A lot of airplanes are going to be retired and not replaced because many airlines will defer new deliveries which will have a huge impact on Airbus and Boeing.
 
stlgph
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:01 pm

Doesn't Everything Lead Through Atlanta?


In serious - I see a focus on the main hubs and a cut back on point to point routes. Would not be surprised to see a number of secondary-to-international routes cut.
if assumptions could fly, airliners.net would be the world's busiest airport
 
flyboy80
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:10 pm

Does Deltas current network of hubs work in a system where traffic, especially corporate, is down 10-15% (maybe more) long term versus what we've seen in recent history?
 
DDR
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:12 pm

It's a given that ATL is safe. Anything else is up in the air. I do hope they retrench from SEA and keep to their other historic hubs.
 
IWMBH
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:15 pm

But, why wouldn't air traffic return to normal after the virus outbreak is over? In Europe most governments are pouring money into their economies to keep businesses 'alive' till they can reopen again after the crises. I'm sure the US economy will also get incentivises.
 
TW870
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:16 pm

jayunited wrote:
I think this is true of all airlines, no airline will be the same size it was when this is crisis is over. It will be years before this industry fully recovers from COVID-19. A lot of airplanes are going to be retired and not replaced because many airlines will defer new deliveries which will have a huge impact on Airbus and Boeing.


Absolutely agree. There is just no way to speculate right now on what the recovery looks like or when it happens. We also don't know how the crisis will develop on a regional basis. Some national economies will be hit harder than others, and some regions will lose more airline capacity than others. No one can guess at this point about which markets will recover the fastest. Therefore, guessing which fleet types will be reintroduced first is unknowable. This is true inside the United States as well. SEA, LAX, MSP, ATL, and LGA - just to take a few - all have a very different economic base. They will not necessarily all recover evenly, and their rate of recovery will drastically impact the types of aircraft and routes that will need to be restarted first.
 
SESGDL
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:18 pm

lightsaber wrote:
Good question. 600+ Aircraft to be parked:

https://news.delta.com/ed-bastian-memo- ... our-future

I personally think SLC and MSP are a bit close for hubs. One or the other will be downsized, but I fully admit, I do not know which.

Complete aircraft deferals tells me DL negotiated well.

I expect many long/thin routes to be cut. The era of yours truly having a selection of TCON direct flights is probably over.

Lightsaber


MSP has historically been DL's 2nd largest O&D airport and 2nd highest revenue generating base. SLC is not in the top 5. That should help to answer which will stay. If anything, DTW and MSP compete more with each other. Considering DL's success has largely been a result of dominating medium-large markets (DTW, MSP, SLC), I don't see them abandoning any of the core hubs: ATL, MSP, DTW, SLC, LGA/JFK. BOS and SEA could certainly be at risk though if DL truly intends to shrink as a result of all this. Very sad times these are...

Jeremy
 
SESGDL
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:20 pm

DDR wrote:
It's a given that ATL is safe. Anything else is up in the air. I do hope they retrench from SEA and keep to their other historic hubs.


Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy
 
TTailedTiger
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:26 pm

Why do they need to keep both MSP and DTW. They overlap quite a bit. Shrink one to just O/D demand.
 
iadadd
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:27 pm

Long shot, but I think Seattle will be relatively safe. Asia is likely going to fare much better in a post COVID-19 world than Europe will. Europe's inability to contain this disease is going to have a medium-long term economic impact, and I don't think the continent will return back to where it was before for a while. Therefore, with Seattle serving as a hub to Asia, I believe it'll be able to weather the storm

JFK and LAX will be able to retain their glorified focus city status. ATL will remain the crown jewel

Between DTW, MSP, and SCL a reduction will need to occur ...
 
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Midwestindy
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:27 pm

SESGDL wrote:
DDR wrote:
It's a given that ATL is safe. Anything else is up in the air. I do hope they retrench from SEA and keep to their other historic hubs.


Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy


LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
wedgetail737
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:33 pm

Midwestindy wrote:
SESGDL wrote:
DDR wrote:
It's a given that ATL is safe. Anything else is up in the air. I do hope they retrench from SEA and keep to their other historic hubs.


Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy


LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


I think there is a significant risk to the SEA hub. WA being the epicenter of this virus and the cruise traffic being pretty much nil, who would want to come to WA? DL should shut down SEA and concentrate on their larger, more established hubs.
 
SESGDL
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:40 pm

Midwestindy wrote:
SESGDL wrote:
DDR wrote:
It's a given that ATL is safe. Anything else is up in the air. I do hope they retrench from SEA and keep to their other historic hubs.


Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy


LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


Why does DL need a West Coast hub though? Before adding SEA and LAX DL didn't have one. SLC serves the West just fine. If anything, DL will maintain a large presence at LAX to the major cities: ATL, JFK, SLC, MSP, DTW, CVG, SEA, SFO, SAN, LAS, etc. But there's no doubt its presence there will shrink (along with all other cities).

Jeremy
 
asuflyer
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:40 pm

IWMBH wrote:
But, why wouldn't air traffic return to normal after the virus outbreak is over? In Europe most governments are pouring money into their economies to keep businesses 'alive' till they can reopen again after the crises. I'm sure the US economy will also get incentivises.


IMHO, DL is really getting ahead of the game here. Depending on how long this shutdown will last, with the loss of service industry jobs you lose consumer spending power. Many current middle class US citizens will no longer be able to afford to travel should the virus be prolonged. Even if the airlines are bailed out they will not see customer levels return for months if not years after the crisis is over.
 
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Polot
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:42 pm

wedgetail737 wrote:
Midwestindy wrote:
SESGDL wrote:

Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy


LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


I think there is a significant risk to the SEA hub. WA being the epicenter of this virus and the cruise traffic being pretty much nil, who would want to come to WA? DL should shut down SEA and concentrate on their larger, more established hubs.

SEA provides a unique role in DL’s network though- DL’s west coast Asia hub. DL is not going to want to give that up then have AA build it up with AS or something and now suddenly locked out of a hub. Seattle will also still remain a relatively strong and important city after the virus with companies like Microsoft and Amazon.

It’s planned or growing focus cities such as BOS, RDU, or AUS that are most at risk. They are made largely redundant by other hubs in terms of connecting opportunities and were being built more for O&D and to try and keep other out.
 
afgeneral
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:43 pm

IWMBH wrote:
But, why wouldn't air traffic return to normal after the virus outbreak is over? In Europe most governments are pouring money into their economies to keep businesses 'alive' till they can reopen again after the crises. I'm sure the US economy will also get incentivises.


I don't get it either and I am an actual economist.

Probably going to be a V shaped event, 3 months of severe recession followed by 3-6 months of recovery. Growth might suffer a bit in 2021 overall but H2 2021 and 2022 should see a resumption of growth compared to 2019.
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:44 pm

Midwestindy wrote:
LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


DL's in a flight for its life, strategy is largely irrelevant; cuts will be made based upon repairing the bleeding. While I think DL will try to salvage its investments, I'd be surprised if SEA didn't experience significant cuts, or SLC wasn't cut back to its early 2010s form. Longish flights to second- and third- tier communities simply won't be sustainable for ahwile.

TTailedTiger wrote:
Why do they need to keep both MSP and DTW. They overlap quite a bit. Shrink one to just O/D demand.


All hub overlap, but if you think there's a large degree of overlap between DTW & MSP, you need to take a good look at their schedules.

iadadd wrote:
Long shot, but I think Seattle will be relatively safe. Asia is likely going to fare much better in a post COVID-19 world than Europe will. Europe's inability to contain this disease is going to have a medium-long term economic impact, and I don't think the continent will return back to where it was before for a while. Therefore, with Seattle serving as a hub to Asia, I believe it'll be able to weather the storm

JFK and LAX will be able to retain their glorified focus city status. ATL will remain the crown jewel

Between DTW, MSP, and SCL a reduction will need to occur ...


ATL, DTW, MSP and SLC are DL's profit engines. NYC, LAX, BOS and SEA are long-term investments; NYC and LAX are likely marginally profitable, whereas BOS & SEA are unquestionably money losers. I realize the a.net community is going to fantasize about DL moving forward with its sexiest hubs, but at the end of the day, DL's goal is to make money...
 
flyingisthebest
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:45 pm

The biggest winners if they give up SEA/MIA and BOS will be AA, AS and B6.
 
usflyer msp
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:47 pm

lightsaber wrote:
Good question. 600+ Aircraft to be parked:

https://news.delta.com/ed-bastian-memo- ... our-future

I personally think SLC and MSP are a bit close for hubs. One or the other will be downsized, but I fully admit, I do not know which.

Complete aircraft deferals tells me DL negotiated well.

I expect many long/thin routes to be cut. The era of yours truly having a selection of TCON direct flights is probably over.

Lightsaber


MSP and SLC are 1000 mi apart. How is that close?
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:50 pm

afgeneral wrote:
I don't get it either and I am an actual economist.

Probably going to be a V shaped event, 3 months of severe recession followed by 3-6 months of recovery. Growth might suffer a bit in 2021 overall but H2 2021 and 2022 should see a resumption of growth compared to 2019.


It really isn't hard to get. We're basically shutting our economy down, and there's going to be dire consequences, including tens of thousands of small businesses on the verge of collapse. The businesses that do survive will be cutting discretionary spending indefinitely. It's going to have a rippling effect, and it's going to be ugly. It'll be years, not months, before we reach traffic levels we saw prior to last month.

usflyer msp wrote:
MSP and SLC are 1000 mi apart. How is that close?


There's more connection overlap between MSP & SLC than MSP & DTW. MSP was histrionically NW's western gateway, whereas SLC played that role for DL. In recent years, DL's added oodles of routes (e.g. CMH, CLE, etc.) from SLC that rely almost exclusively on connections, overflying MSP. I expect that SLC will experience a much greater impact, rolling back to resemble the regional hub it played in the early 2010s.
Last edited by WidebodyPTV on Fri Mar 20, 2020 11:54 pm, edited 1 time in total.
 
onwFan
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:52 pm

jayunited wrote:
I think this is true of all airlines, no airline will be the same size it was when this is crisis is over. It will be years before this industry fully recovers from COVID-19. A lot of airplanes are going to be retired and not replaced because many airlines will defer new deliveries which will have a huge impact on Airbus and Boeing.

True. Nonetheless, DL is a unique case study in that they operate a disproportionate number of routes that don’t touch their own hubs. It cannot be easy to sustain many of these routes in a situation like this...
 
flyboy80
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:53 pm

Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?
 
tphuang
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:53 pm

based on their initial cuts, I think RDU is getting reduced for sure. Their focus city strategies is going by the away side. After that, it really depends on where corporate spending is at. If that is down 20%, then one of BOS or SEA is getting axed imo. If they want to keep up the fight with AA, then SEA/MIA size stick around.

In the end, for DL to be successful long term, they are reliant on ATL and their core hubs. So none of the core hubs should be reduced. And they are definitely not going to abandon ship on NYC or LA.

We should probably also have the same conversation about other carriers. It's not fair to just speculate on DL reductions.
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:57 pm

flyboy80 wrote:
Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?


Sure, but DTW is DL's third largest station behind ATL & NYC (the combined JFK/LGA) in terms of generating local passengers and local revenues...
Last edited by WidebodyPTV on Fri Mar 20, 2020 11:58 pm, edited 1 time in total.
 
Silver1SWA
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 20, 2020 11:57 pm

asuflyer wrote:
IWMBH wrote:
But, why wouldn't air traffic return to normal after the virus outbreak is over? In Europe most governments are pouring money into their economies to keep businesses 'alive' till they can reopen again after the crises. I'm sure the US economy will also get incentivises.


IMHO, DL is really getting ahead of the game here. Depending on how long this shutdown will last, with the loss of service industry jobs you lose consumer spending power. Many current middle class US citizens will no longer be able to afford to travel should the virus be prolonged. Even if the airlines are bailed out they will not see customer levels return for months if not years after the crisis is over.


Something that is underreported is that whether we are talking airline capacity cuts or other service industry cuts including people already laid off, the moves are done with the intentions of being temporary...for now.

This is truly an unprecedented situation so I don’t think anyone really knows what the other side will look like. I hope for the best but expect the worst.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
dtw2hyd
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:01 am

Depends on how busy AMS, CDG, and LHR would be after this event, Delta should develop a low cost no curfew Eastern European hub for Eastward traffic.
All posts are just opinions.
 
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Midwestindy
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:04 am

SESGDL wrote:
Midwestindy wrote:
SESGDL wrote:

Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy


LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


Why does DL need a West Coast hub though? Before adding SEA and LAX DL didn't have one. SLC serves the West just fine. If anything, DL will maintain a large presence at LAX to the major cities: ATL, JFK, SLC, MSP, DTW, CVG, SEA, SFO, SAN, LAS, etc. But there's no doubt its presence there will shrink (along with all other cities).

Jeremy


LAX is extremely important in the aviation world, it is a hub for AA, UA, & WN. If DL were to draw it down, they would be at a significant disadvantage in corporate travel.

They also have significant investment in LA, they just spent $400 million to sponsor the 2028 Olympics, in addition they just spent (or planned to spend) over a billion on Modernizing LAX.

SLC does not serve the west just fine, UA has DEN, LAX, & SFO, AA has PHX & LAX. SLC is too small of a market to effectively allow for significant international connections to Europe/Asia

DL has numerous other stations to cut before getting to LAX

wedgetail737 wrote:
Midwestindy wrote:
SESGDL wrote:

Totally disagree. ATL, DTW, MSP, SLC and LGA/JFK are all safe. Why would DL abandon "captive" markets? Air travel will eventually rebound. Giving up markets would be lunacy. LAX, BOS and SEA could definitely be at risk, though.

Jeremy


LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


I think there is a significant risk to the SEA hub. WA being the epicenter of this virus and the cruise traffic being pretty much nil, who would want to come to WA? DL should shut down SEA and concentrate on their larger, more established hubs.


I'm not saying SEA is not at risk, I'm saying they wouldn't drawdown SEA AND LAX.

flyboy80 wrote:
Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?


Probably not, DTW is a pretty large TPAC station based on O&D to Asia, and as a result DTW is an ideal TPAC gateway for the East Coast. BOS & JFK wouldn't be ideal for that, & MSP is a significantly smaller TPAC market.
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
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Polot
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:05 am

dtw2hyd wrote:
Depends on how busy AMS, CDG, and LHR would be after this event, Delta should develop a low cost no curfew Eastern European hub for Eastward traffic.

Delta will still be partners with AF/KL/VS. What you are suggesting sounds like a recipe for disaster.
 
TTailedTiger
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:08 am

WidebodyPTV wrote:
Midwestindy wrote:
LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


DL's in a flight for its life, strategy is largely irrelevant; cuts will be made based upon repairing the bleeding. While I think DL will try to salvage its investments, I'd be surprised if SEA didn't experience significant cuts, or SLC wasn't cut back to its early 2010s form. Longish flights to second- and third- tier communities simply won't be sustainable for ahwile.

TTailedTiger wrote:
Why do they need to keep both MSP and DTW. They overlap quite a bit. Shrink one to just O/D demand.


All hub overlap, but if you think there's a large degree of overlap between DTW & MSP, you need to take a good look at their schedules.

iadadd wrote:
Long shot, but I think Seattle will be relatively safe. Asia is likely going to fare much better in a post COVID-19 world than Europe will. Europe's inability to contain this disease is going to have a medium-long term economic impact, and I don't think the continent will return back to where it was before for a while. Therefore, with Seattle serving as a hub to Asia, I believe it'll be able to weather the storm

JFK and LAX will be able to retain their glorified focus city status. ATL will remain the crown jewel

Between DTW, MSP, and SCL a reduction will need to occur ...


ATL, DTW, MSP and SLC are DL's profit engines. NYC, LAX, BOS and SEA are long-term investments; NYC and LAX are likely marginally profitable, whereas BOS & SEA are unquestionably money losers. I realize the a.net community is going to fantasize about DL moving forward with its sexiest hubs, but at the end of the day, DL's goal is to make money...


But Delta will no longer need dozens of flights from MSP and DTW to places like GRB and LSE. Both Europe and Asia travel will be hit hard for many years and that puts DTW in a bad position with all of its Asia flights and shuttle to AMS. MSP can take all of the Midwest traffic.
 
SESGDL
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:11 am

WidebodyPTV wrote:
flyboy80 wrote:
Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?


Sure, but DTW is DL's third largest station behind ATL & NYC (the combined JFK/LGA) in terms of generating local passengers and local revenues...


DTW is actually a smaller O&D airport and revenue generator for DL. There was a publication a few years ago that showed this. ATL was 1 (obviously), followed by MSP. DTW is a larger connecting hub than MSP, however.

Jeremy
 
Boof02671
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:11 am

flyingisthebest wrote:
The biggest winners if they give up SEA/MIA and BOS will be AA, AS and B6.

MIA isn’t even a focus city now.
 
TTailedTiger
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:13 am

flyboy80 wrote:
Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?


Yes. I never could figure out having two hubs (MSP and DTW) so close together. No other airline does that.
 
SESGDL
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:15 am

TTailedTiger wrote:
flyboy80 wrote:
Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?


Yes. I never could figure out having two hubs (MSP and DTW) so close together. No other airline does that.


Umm... AA: DCA, PHL, JFK, BOS. CLT and PHL are also close together. UA: LAX, SFO. AS: SEA, PDX. The list goes on.

Jeremy
 
kavok
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:16 am

flyboy80 wrote:
Could MSP, BOS, JFK/LGA, & SLC not theoretically do everything that DTW does today...?


No, as of two weeks ago DTW was DLs biggest TPAC base as far as number of TPAC seats being offered on DL metal (yes even bigger than SEA, as DL flew all the same destinations and frequencies, but with bigger planes from DTW). DTW is in a great geographical location to collect TPAC pax from the eastern USA, package it with Detroit’s industrial OD, and basically compete as well as anyone but United at SFO and maybe AA at LAX. None of the other hubs can offer that.

DTW is also a great connecting airport for mid/small market USA Northeast to west coast domestic flights, due to the short stage length on the eastern leg of the connection.

Finally, DTW is also a great location to connect middle America to Europe. Yes it doesn’t get the glamour flights like JFK or BOS, but there is a reason AMS was scheduled 4x daily from DTW in the summer, and why it also had double LHR, double CDG, and FRA, MUC, FCO. I am not saying all of those flights will be retained going forward, but again there is a reason it was so much bigger TATL wise compared to any of the other interior hubs sans the mega ship in ATL.

And that is not a knock on MSP, SLC, etc. I am merely pointing out that DTW served a significant role (as do the other interior hubs) that makes no sense to eliminate.
 
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lightsaber
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:21 am

It occurred to me how vulnerable FLL is without cruise demand.

WidebodyPTV wrote:
afgeneral wrote:
I don't get it either and I am an actual economist.

Probably going to be a V shaped event, 3 months of severe recession followed by 3-6 months of recovery. Growth might suffer a bit in 2021 overall but H2 2021 and 2022 should see a resumption of growth compared to 2019.


It really isn't hard to get. We're basically shutting our economy down, and there's going to be dire consequences, including tens of thousands of small businesses on the verge of collapse. The businesses that do survive will be cutting discretionary spending indefinitely. It's going to have a rippling effect, and it's going to be ugly. It'll be years, not months, before we reach traffic levels we saw prior to last month.

usflyer msp wrote:
MSP and SLC are 1000 mi apart. How is that close?


There's more connection overlap between MSP & SLC than MSP & DTW. MSP was histrionically NW's western gateway, whereas SLC played that role for DL. In recent years, DL's added oodles of routes (e.g. CMH, CLE, etc.) from SLC that rely almost exclusively on connections, overflying MSP. I expect that SLC will experience a much greater impact, rolling back to resemble the regional hub it played in the early 2010s.

A "V" recovery assumes the credit bubble continues. I do not believe the current junk bond market is sustainable.

I cannot recall a prior event where all services in a service economy were shut down. I went to the barber shortly after 9/11, as well as restaurants.

We have entire industries parked. Who is itching for a cruise?

Let us also do game theory on costs/benefits for Delta:
1. Planned 30% downsizing while market down. Allows differing $6 to $8 billion of capital investment, plus salary savings. Downside is loss of market share in an under served but highly profitable market. Profitable earlier than rivals allows growth from strength. Only risk is cutting routes or frequency that rebounds with business and losing leasure to Spirit and Allegiant.
Mitigation, if economy booms, pull 757s, 767s from storage, DL will not have trouble hiring, but it will take 6 months of elevated profit s to pay for return to service.

2. Planned 15% downsizing. Requires cash to replace aircraft during time of uncertainty. Or about $2 billion more for aircraft, $300m more for maintenance, and $600m more for salary. This risks having enough cash to come out viable.

3. Maintain size, not viable for the 9+ months of downtime.

The profit if Summer is already lost. No plausible scenario allows DL to recover by July. Recovering in 9 months means a recovery by slow season. DL needs to have plans to recover by June 2021, but not before.

Doing more game theory DL is numbers run. If they can order MAX, A321/320NEO, A220, or A330NEO prior to other airlines having confidence, they will pay low prices and obtain good slots. Note: I assume A350s will not be easy to procure cheap.

Looking at this, it is a bet the company for maintaining even close to capacity from a cash flow analysis. I simply cannot come up with a viable scenario where DL doesn't plan for a 30% reduction in six months. If in six months DL is very profitable again, they can pull the trigger to return to normal by Summer 2021. Any worse growth and they have preserved cash.

DL should manage the downturn with a plan to restore about half of cut capacity. They have 15+ months to plan the remainder of capacity addition.

Of course, my numbers assume no large competitor leaves the market.

Lightsaber
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runway23
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:23 am

dtw2hyd wrote:
Depends on how busy AMS, CDG, and LHR would be after this event, Delta should develop a low cost no curfew Eastern European hub for Eastward traffic.


At this point AF/DL can't even make ATL-CDG work, speaks loads about how critical the situation is and just how quickly things have changed.
 
umichman
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:23 am

IAD-EWR and CLT-PHL and both closer than DTW-MSP. We could possibly see commercial service end at TOL and FNT (and perhaps LAN) which would result in more DTW O&D demand.
 
kavok
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:24 am

TTailedTiger wrote:
WidebodyPTV wrote:
Midwestindy wrote:
LAX is not at risk, they won't drawdown SEA & LAX, that would leave them with nothing on the west coast & no-TPAC gateway(Excluding DTW)

With DL retiring some 767s RDU/CVG/IND-CDG & TPA/MCO-AMS are probably at risk, not to mention p2p routes from RDU/CVG


DL's in a flight for its life, strategy is largely irrelevant; cuts will be made based upon repairing the bleeding. While I think DL will try to salvage its investments, I'd be surprised if SEA didn't experience significant cuts, or SLC wasn't cut back to its early 2010s form. Longish flights to second- and third- tier communities simply won't be sustainable for ahwile.

TTailedTiger wrote:
Why do they need to keep both MSP and DTW. They overlap quite a bit. Shrink one to just O/D demand.


All hub overlap, but if you think there's a large degree of overlap between DTW & MSP, you need to take a good look at their schedules.

iadadd wrote:
Long shot, but I think Seattle will be relatively safe. Asia is likely going to fare much better in a post COVID-19 world than Europe will. Europe's inability to contain this disease is going to have a medium-long term economic impact, and I don't think the continent will return back to where it was before for a while. Therefore, with Seattle serving as a hub to Asia, I believe it'll be able to weather the storm

JFK and LAX will be able to retain their glorified focus city status. ATL will remain the crown jewel

Between DTW, MSP, and SCL a reduction will need to occur ...


ATL, DTW, MSP and SLC are DL's profit engines. NYC, LAX, BOS and SEA are long-term investments; NYC and LAX are likely marginally profitable, whereas BOS & SEA are unquestionably money losers. I realize the a.net community is going to fantasize about DL moving forward with its sexiest hubs, but at the end of the day, DL's goal is to make money...


But Delta will no longer need dozens of flights from MSP and DTW to places like GRB and LSE. Both Europe and Asia travel will be hit hard for many years and that puts DTW in a bad position with all of its Asia flights and shuttle to AMS. MSP can take all of the Midwest traffic.


LSE was EAS funded, and TPAC will likely rebound much quicker from this than TATL. China is getting back to normal, Japan wasn’t hit hard, and South Korea kept it under control. And those are the only TPAC destinations DL flies to anyway.
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:26 am

SESGDL wrote:
DTW is actually a smaller O&D airport and revenue generator for DL. There was a publication a few years ago that showed this. ATL was 1 (obviously), followed by MSP. DTW is a larger connecting hub than MSP, however.


The difference between the two is immaterial; the differential between revenue passengers carried by DL, its affiliates and partners at DTW & MSP in 2019 was in the hundreds (!) out of nearly 28M. It's like splitting hairs. But in 2019, DTW did slightly edge MSP in terms of local passengers generated by DL, although MSP is a larger overall local market. Both were dwarfed by ATL and NYC.
Last edited by WidebodyPTV on Sat Mar 21, 2020 12:26 am, edited 1 time in total.
 
strfyr51
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:26 am

Delta has "Hubs at ATL, DTW, MSP, SLC. and now SEA. Other than ATL does anybody notice something wrong? Where ARE hubs along the southern tier or in the West? why not a Texas or Southwestern Hub? American Has PHX, in the Southwest Nobody really owns LAX as a hub So? Where would they spread their hubs TO?
Southwest went in big at Denver so they have a large hub in the gateway to the west. From there they hub OAK. So? Delta can diversify their hubs but to exactly where?
 
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lightsaber
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:26 am

Polot wrote:
dtw2hyd wrote:
Depends on how busy AMS, CDG, and LHR would be after this event, Delta should develop a low cost no curfew Eastern European hub for Eastward traffic.

Delta will still be partners with AF/KL/VS. What you are suggesting sounds like a recipe for disaster.

Developing a new hub is out if the question. It is a while out before hub congestion in Europe or Asia influences strategy. Now, DL might buy LHR slots while competition is hurting, but that is all for Europe investment in 2020.

Lightsaber
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intotheair
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:33 am

Last in, first out.

I think a lot of the more recent network growth is most vulnerable. I don't see how BOS, RDU, and whatever else DL has been calling a hub or focus city these days lasts. SEA is probably safe because of all the tech traffic, which will rebound. I bet a lot of the TPAC doesn't for anyone. I think the core hubs (ATL, DTW, MSP, SLC) are relatively safe.
300 319 320 321 332 333 345 346 380 717 733 734 735 73G 738 739 744 752 753 762 763 772 77W 788 789 CR2 CR7 CR9 CRK Q400 E175 DC10 MD82 MD90
AA AF AS AY AZ B6 BA BR DL F9 FI GA HA KF LH MI QX SK SN SQ UA US VY WN
 
TYWoolman
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:34 am

This entire situation will be "used' to extract the left-over merger inefficiencies that have existed in the larger carriers. Everything will all be relative so most airlines will do fine as each finds a balance in discovering where growth will re-emerge.
 
4engines4lnghll
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:46 am

Every airline will become smaller as far as operations. TPG likes to think they know the ends and outs of airlines, but in fact they're just repeat travel bloggers.
4engines4lnghll
 
jfk777
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:50 am

Whatever happens at Delta Amsterdam & CDG will still be important to Delta. Miami and Latam not looking so good.
 
runway23
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:54 am

4engines4lnghll wrote:
Every airline will become smaller as far as operations. TPG likes to think they know the ends and outs of airlines, but in fact they're just repeat travel bloggers.


TPG is just a platform to rake in credit card referral bonuses. They even managed to publish an article on travel credit cards offering the best value an hour ago when absolutely nobody is traveling (if you can't travel then there's no value...).
 
Bradlee102896
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Re: Delta plans to emerge a "smaller" carrier

Sat Mar 21, 2020 12:54 am

I feel like out of the actual “hubs” DTW could end up being the odd one left out of all this when it’s all said and done.
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