Delta Air Lines Seeks 'Crown Jewel' for New York-JFK Hub: Nonstop Flights to London

[s80dude]

Delta, United Airlines agree on transfer of London-New York route authority; government OK would allow Delta to begin nonstop flights later this year


NEW YORK, July 28, 2006 (PRIMEZONE) -- Delta Air Lines -- the world's largest airline between the United States and Europe -- has reached a definitive agreement with United Airlines to acquire the route authority to serve London nonstop from its fast-growing hub at New York's John F. Kennedy International Airport. The agreement, which is subject to U.S. Department of Transportation (DOT) approval and certain other closing conditions, will allow Delta for the first time to operate daily round-trip flights between New York-JFK and London's Gatwick Airport. The first daily round-trip flight would begin later this year with a second flight beginning in spring 2007.


http://biz.yahoo.com/pz/060728/102896.html

 

[FA Mikey]

UAL seems to be throwing in the towel in NY. Droping flights to LHR, NRT, EZE, GRU.

 

[Fly]

The 'crown jewel' is Heathrow. Delta didn't get much here. United only flys london and Narita from jfk. Just not too much presence there. Makes more sense to concentrate on hubs than jfk.

 

[WorldTraveler]

NYC – London is still a restricted access market.

If LHR is the crown jewel, then how come DL and CO have consistently been able to get higher average fares to LGW from their ATL/CVG/EWR/IAH gateways than UA has gotten on JFKLHR and even ORDLHR, based on DOT data? Apparently not even LHR is a ticket to wealth, not even when it’s from your hometown hub.

Gotta be a sad day for UA employees, regardless of how they try to spin it.

Great move for DL. UA has allowed DL to take over one of its US-Brazil frequencies, now London, and JFKNRT can’t be far behind. What is UA doing? Sure looks like they are trying to make sure DL succeeds…. Maybe they’ve already decided to sell their ORD and Pacific systems to DL in order to increase shareholder value.

 

[FA Mikey]

Now the cost.

Terms of the deal, which is subject to U.S. Department of Transportation and bankruptcy court approval, call for Delta to pay United $13 million at closing and $2 million a year for four years, Delta spokeswoman Betsy Talton said.

Glad the employees are reaping the rewards of give backs.

 

[Fly]

Let's spin it then. United has officially added iad/nrt sfo/tpe sfo/hkg. (Increasing asia and dropping unprofitable routes for us!)

Where have you been wt? Hiding?

United kept their lhr slot but dumped a nonprofitable route. Fyi, the dropped jfk/nrt too.

I sense the cal/ual rumor is becoming more real. Keep the lhr slot but wait for the merger to use it. Beef up Asia while they can.

 

[WorldTraveler]

Oh, please, Mikey. DL apparently has a $15M spending limit w/o approval of creditors and they have spent that much several times during BK for aircraft and terminal upgrades. It’s why DL was rated in the recent JD Power survey as having some of the best interiors among US airlines. You spend money to make money – and to secure your employees’ futures.

To say that this comes out of DL employees’ hides is preposterous. DL employees are still paid higher than the employees of most other BK airlines, esp. of UA. If you want to talk about taking it out of the hide of employees, I suggest you look at UA. Miss Fly is so happy to give her pension up for the company yet fails to realize that UA’s pension costs probably will be higher than the 4 remaining carriers who are on the verge of getting the pension relief that I predicted long ago they would get.

 

[Fly]

I guess the additional 40 flights to Asia per week, year round, took the wind out of your sales. Right WT?

Looks like CAL and UAL are eliminating their route overlaps as we type.

 

[WorldTraveler]

Au contraire, Miss Fly. In fact, it validates my point that UA has continually pulled back from every region of the world except for Asia. We all know that Asia has held UA together for decades while UA has failed in Europe, S. America, and domestically. I commend UA for that brilliant purchase in 1986 (I believe) because UA clearly wouldn’t still be here without it.

It’s pretty sad that the former world’s largest airline now pins its hopes on a merger with (read: acquisition by) an airline less than half its size. But there is no assurance that a CO-UA merger could succeed. In fact, it is very likely that unless UA and CO pull it off in 9 months or less, DL could well be in the running and would probably present a far more compelling business case to acquire UA than could CO. DL already has lower costs than CO and will have a much stronger balance sheet than CO after it emerges.

Won’t it be a grand day when you commute to ATL to fly? And DL won’t staple you to the bottom of the seniority list like some of those other airlines will do. You’ll even get pension benefits for the “final years†of your flying career. It’s a win-win-win situation.

 

[767jetz]

I guess the additional 40 flights to Asia per week, year round, took the wind out of your sales. Right WT?

Looks like CAL and UAL are eliminating their route overlaps as we type.

I agree.

WT, you are such a JA. It's so simple even a simpleton like you should be able to understand.

Let's keep some facts in mind. Heathrow is by far the prefered destination of travelers. Even Delta says it supports Open Skies so it can some day serve Heathrow.

While I do not like to see anything from JFK abandoned for personal reasons, I do see the business sense of this. Ua is selling a route authority it doesn't want, and keeping the LHR slot that is very valuable and can use in the future. UA's presence in NY has never been very strong, and it is obvious from recent moves that it is reallocating assets to it's stronger hubs.

As for spin, I'm sure you will play this as the end of UA and the obvious triumph of DL, while ignoring the fact that UA is expanding Asia by 40 flights. It's just more hot air from you though.

 

[Ch. 12]

Now the cost.

Terms of the deal, which is subject to U.S. Department of Transportation and bankruptcy court approval, call for Delta to pay United $13 million at closing and $2 million a year for four years, Delta spokeswoman Betsy Talton said.

Glad the employees are reaping the rewards of give backs.

Let's assume $21 M over 4 years. 214 sts per flt. 4 flts per day (2 each way). Over the period of 4 years, that will be 1,249,760 seats. Now...let's assume only a 60% LF. How much is needed to break even? $28 per pax. I think that's doable in NYC to LON. Once you understand the numbers, it doesn't make as good of a negotiating spin. I would say that an obviously well spent investment that would be sure to pay off is defitely a good option. Being nearsighted about investments won't get you anywhere.

 

[phllax]

Here's what I don't understand, why did DL purchase the rights to LHR they cannot use? Any airline that wants to can fly to LGW. They have a slot lottery twice a year!

 

[FWAAA]

Here's what I don't understand, why did DL purchase the rights to LHR they cannot use? Any airline that wants to can fly to LGW. They have a slot lottery twice a year!

LGW access is limited from cities with LHR carriers by Bermuda II. All four LHR-permitted airlines fly JFK-LHR, so nobody can fly JFK-LGW unless one of the four (AA, UA, BA or VS) ceases flying JFK-LHR. DL didn't "buy rights to LHR that it can't use." DL bought rights to London. Because of Bermuda II, its only access to London will be at LGW.

 

[whlinder]

United's long-haul fleet is geared to long-distance flights with high volumes of passengers: 777s and 747s.

Insolvent Delta's long-haul fleet is geared to high frequency service & thin routes, but not nearly the extreme distances: 767s.

Insolvent Delta has to find a place to fly all their 767s. Their NYC hub - London makes sense for that.

 

[christopherrobin]

Don't think that in any merger that DL controls that they will be nice to the employees and give them their seniority. When DL and NW were lookinf at CAL in the mid 90s, the reason that CAL went with NW was because DL was ready to staple everyone to the bottom of their list. DL is not the "fair" company that they make themselves out to be...think about the thousands on furlough and they are hiring FAs for langauge positions.