In recent years, we’ve seen an unbelievable number of new long haul routes to Riyadh, Saudi Arabia (RUH). The narrative around this growth is interesting, but what’s really driving all of this new service?
In this post:
The argument for more flights to Riyadh, Saudi Arabia
Within the next year, we’re supposed to see the launch of Riyadh Air, an ambitious airline startup that has the goal of connecting Riyadh to the world. The government is funding this project, as part of Saudi Vision 2030, with the goal of diversifying the economy, including greatly increasing tourism (early reports suggest that the country may have been a little overly optimistic).
There are some really smart people running Riyadh Air, and the argument they’ve made for the airline is simple — essentially, Riyadh is a way underserved aviation market without enough direct links to global points, and that needs to change. Riyadh Air CEO Tony Douglas has gone so far as to say that it’s “haram” and “totally, utterly unacceptable” that “the number one premium passenger for Qatar Airways, are Saudi nationals.”
Douglas makes a fair point, and indeed, Saudi Arabia is a much more populous country than some of its Gulf neighbors (Bahrain, Kuwait, Qatar, UAE, etc.), so one would think there would be more demand for the market to be served.
But here’s the big question — if Riyadh Air is launching soon, why are we also seeing a bunch of new airlines launch flights to Riyadh, regardless of whether or not they have any planned partnership with Riyadh Air? If Riyadh has been so underserved, why have airlines only been adding service there in the past year or two, when the market will no doubt get significantly more saturated in the near future?
Sure, we’ve seen Air France and Virgin Atlantic launch flights to Riyadh, and Delta claim it will launch flights to Riyadh soon. But all those airlines plan to partner with Riyadh Air. But we’ve seen a countless number of other airlines launch flights recently. Just look at China, as one small example — Air China, China Eastern, and China Southern, have all launched Riyadh flights recently. What’s actually going on here?
The Saudi Air Connectivity Program is the answer
To figure out why so many airlines are suddenly launching flights to Saudi Arabia, just follow the money. No, I’m not necessarily talking about the money in terms of passenger demand generating revenue, but instead, the money Saudi Arabia is willing to give airlines for flying to the country.
The Air Connectivity Program (ACP) is Saudi Arabia’s program that incentivizes airlines to fly to the country. As Saudi Arabia’s Tourism Minister has described this:
“The main purpose is to create direct flights to our main target markets. The program will compensate airlines to cover their losses from flying direct flights to these very important hubs for us. We have to negotiate with every carrier to size it.”
Saudi Arabia is currently investing tens of billions of dollars in its aviation sector, and the Air Connectivity Program is part of that. It seems that the exact terms that airlines receive varies, but the concept seems pretty clear — fly to Saudi Arabia, and you won’t lose money.
In fairness to airlines, the concept of some sort of incentives to launch new long haul service is nothing new. However, it sure seems like the scale of incentives being offered here are on a different level than what we typically see.
I think Delta is a funny example to look at. It’s the world’s second most profitable airline (I know that hurts, I’m sorry), yet the carrier’s ultra long haul service adds seem exclusively focused on serving joint venture hubs, on chasing subsidies. Delta’s last non-joint venture ultra long haul route addition was to Brisbane (BNE), a market that’s providing massive incentives to airlines at the moment.
Now Delta is adding Riyadh service, again, with significant subsidies. How times have changed compared to a decade ago, when Delta executives complained the loudest of unfair competition due to subsidies.
Anyway, it’s going to be fascinating to see how Riyadh service evolves over time, given the massive amount of capacity growth the airport is seeing, combined with the launch of a new airline. The amount of capacity that the government is trying to force almost seems counterintuitive. It’s going to cause airlines to do quite a bit of capacity dumping, with super low fares, and they’ll be competing directly with government owned Riyadh Air.
Bottom line
It’s no coincidence that we’re seeing so much new service to Riyadh, Saudi Arabia. It’s specifically because the Saudi Air Connectivity Program is providing incentives to airlines, to the point that the government covers losses of this kind of service.
With the amount of capacity being added, and especially with Riyadh Air launching in the near future, it’s going to be interesting to see how this amount of capacity expansion plays out.
How do you see this Riyadh air service situation evolving?
Consider that a similar situation happens all the time. Take a popular pair JFK-CDG - Air France and Delta both have flights and both sell seats on each others flights. The same will be true for the Riyadh Air flights if they are partnered with Skyteam. The big question will be about the Riyadh Air connections if they really want to make it compared to other Middle East airlines. Yes, the hard and soft product...
Consider that a similar situation happens all the time. Take a popular pair JFK-CDG - Air France and Delta both have flights and both sell seats on each others flights. The same will be true for the Riyadh Air flights if they are partnered with Skyteam. The big question will be about the Riyadh Air connections if they really want to make it compared to other Middle East airlines. Yes, the hard and soft product do matter and that is in part how many Middle East airlines made their cities a central transit place, but also because of other factors for connections and the airlines' networks.
and yet, according to Ben, RX is not planning first class. DL is upgrading their product and is supposed to further enhance onboard services in the near future. DL and its largest JV partners don't have identical products although KL and NW did.
and it is doubtful that DL and RX will have service in the same market right now; there is far more value in adding as many unique routes as possible.
and...
and yet, according to Ben, RX is not planning first class. DL is upgrading their product and is supposed to further enhance onboard services in the near future. DL and its largest JV partners don't have identical products although KL and NW did.
and it is doubtful that DL and RX will have service in the same market right now; there is far more value in adding as many unique routes as possible.
and DL and RX do not have a JV. Yet. So they can't talk about what routes they will jointly serve but you can bet JFK is on RX' list.
According to Jon, Delta is rumored to start LAX-ORD, after many years of being denigrated for not serving it. Quite an interesting turn of events I must say.
Surprised this site’s regular soothsayer (who knows everything going on at DL, and studies the industry), missed that one. Oops.
Jon actually said
"I'd anticipate LAX-ORD being added, keep AA on their toes :)"
he isn't making any predictions and I don't mind if he or anyone else guesses what routes DL might fly.
what I do have an issue w/ is publishing internal company documents and that is just as true about AA or UA as it is for DL.
and Jon apparently picked up on comments that DL execs made at the...
Jon actually said
"I'd anticipate LAX-ORD being added, keep AA on their toes :)"
he isn't making any predictions and I don't mind if he or anyone else guesses what routes DL might fly.
what I do have an issue w/ is publishing internal company documents and that is just as true about AA or UA as it is for DL.
and Jon apparently picked up on comments that DL execs made at the recent employee rally -since I have heard similar things - indicating that DL is "playing second fiddle to no one" or "lowering the boom" or whatever phrase you want to use.
I don't need to know every detail about any carrier in advance to know that I have seen the big picture of the industry w/ perfect clarity.
After years of trailing UA by shrinking percentages in NYC, DL has taken a commanding lead and carried 2X as many domestic passengers as UA did in May.
The FAA is not relaxing the capacity restrictions on EWR anytime soon which means that AA and DL both sent their sales teams out in force as soon as the capacity cuts were put in place.
NYC and LA are huge corporate contract markets and the reason why DL has such an advantage over B6 and AS in their hubs is because of their nationwide coverage.
Scott Kirby has done lots of trash talking about the industry for years - but has largely spoken about DL as the airline he wanted to be like.
DL has an enormously valuable and successful domestic franchise.
I have said for years that DL would expand even more internationally when it has the pieces in place - and they couldn't be more in place for DL including in major coastal competitive markets like NYC and LAX than they are now.
If winning in LAX involves adding HKG, SIN and ORD, then DL is more likely than ever to start checking cities off that list now.
You children can argue and squabble as much as you like. You can call each other names and so forth …. however, what you people cannot escape from is the truth about the state of the U.S. commercial aviation industry.
Fact …. No U.S. airline can hold a candle to the world class airlines which you constantly attempt to belittle.
Fact …. The vast majority of the American airline passengers are totally bereft...
You children can argue and squabble as much as you like. You can call each other names and so forth …. however, what you people cannot escape from is the truth about the state of the U.S. commercial aviation industry.
Fact …. No U.S. airline can hold a candle to the world class airlines which you constantly attempt to belittle.
Fact …. The vast majority of the American airline passengers are totally bereft of knowledge about none U.S. airlines.
Fact …. Some of you who gibber on herein are truly ignorant of what it is like to be a passenger onboard a World Class airline.
Fact …. Ben provides you with extremely detailed reviews of a wide range of carriers and yet you still fail to take on board his advice.
Fact …. It is abundantly clear that few of you actually read Ben’s reviews, for were you to do so then you would not have the audacity to post your venomous comments about each other and other airlines.
Give us a break and concentrate your trolling arguments elsewhere.
since copied and pasted your comment below here while I was responding below, I will do the same w/ my reply
---
aero,
yes, we have flown on the carriers that you worship.
but we also understand that even in the competitive international marketplace, US airlines hold their own.
Let us know traffic share in the NYC-ATH and NYC-MXP market where EK as well as several US airlines operate.
and...
since copied and pasted your comment below here while I was responding below, I will do the same w/ my reply
---
aero,
yes, we have flown on the carriers that you worship.
but we also understand that even in the competitive international marketplace, US airlines hold their own.
Let us know traffic share in the NYC-ATH and NYC-MXP market where EK as well as several US airlines operate.
and if EK was so successful, they would undoubtedly add more 5th freedom routes - but they don't.
and then let us know how much competition EK faces in ITS home market; it is typically one foreign airline to EK.
none of which changes that the Gulf carriers do as well financially as they do because they pay substantially less than European, US and some E. Asian airlines - even w/ the hefty QOL benefits that the ME carriers provide.
---
and specific to Riyadh Air, part of the development plans that MBS is enacting is to employ Saudis rather than bringing in labor from around the world. THAT is what economic development should do.
Tim Dunn this BA alter ego of yours is a fool, get a new identity.
Ben (who actually sees IP addresses) and I have to laugh at all of the people that think multiple other posters are all the same person.
and he has called out some people who do use the same IP or email address for the same user name.
You can fool yourself but those who know are not the least bit fooled.
and while I like what aero posts, it doesn't take too much analysis...
Ben (who actually sees IP addresses) and I have to laugh at all of the people that think multiple other posters are all the same person.
and he has called out some people who do use the same IP or email address for the same user name.
You can fool yourself but those who know are not the least bit fooled.
and while I like what aero posts, it doesn't take too much analysis to see he and I have very different outlooks on a lot of things and even more different writing styles.
Fares out of Riyadh are already extremely cheap, likely as a result of these subsidies. I was able to book a one-way ticket in December relatively last minute from Riyadh to Beijing, and there were tickets on Etihad for $300 one-way via AUH, or on Cathay for $280 one-way through HKG. I just checked again, and I found tickets this month for $200 one-way to Beijing (via HKG) on Cathay! That is the cheapest ticket to East Asia from the Middle East by a lot.
None of the Arab monarchies, plus the House of Windsor, followed the protocols of succession. MBS should never be a crown prince. It should have been his father's next brother in line. After he ordered "house arrest" on other royal family members in Ritz Carlton, imprisoned religious leaders and banned mutawa, he now faces numerous rivals and enemies from within. He might become " the last Sha" of House of Saud. He will bankrupt the...
None of the Arab monarchies, plus the House of Windsor, followed the protocols of succession. MBS should never be a crown prince. It should have been his father's next brother in line. After he ordered "house arrest" on other royal family members in Ritz Carlton, imprisoned religious leaders and banned mutawa, he now faces numerous rivals and enemies from within. He might become " the last Sha" of House of Saud. He will bankrupt the country while pursuing his illusive dreams to open SA for tourism: $2B investment in Kushner's equity funds, the virtual Noem city, LIV golf league, airline startup, etc.. There is a reason why US President must be at least 45 years old--maturity. Hoping 70 years old is the cut off age for all politicians as well. King Salman might have been in the hospice or freezer when the world did not see him greet Trump back in March.
US carriers and news media CEOs and politicians are joined at the hip because their main job is PR. They will scapegoat everyone to deflect their flaws and errors. The unfair competitiveness is not primarily due to labor costs. The obscene executive compensation packages are the elephant in the room. Is there a difference between
easy access to government credit line vs government bailout or it is just semantic?
why are people going to the middle east/israel? They abuse people's human rights, they commit genocide, they kill people for being gay. Surprised they haven't arrested ben for being gay
Same reason they go to The United States of America, where people die in ICE custody. The horror stories are outliers. Ben has written adequately on the topic of your comment and needn't defend himself repeatedly. As a gay Canadian, I wouldn't hesitate to visit Saudi Arabia, although I'm currently boycotting all US travel other than transit on awards.
Why haven't you gone to Saudia Arabia then?
Go renounce your Canadian citizenship and live with the Saudis, if it's so much better of a place.
Your irrational anti-Americanism is showing... the fact that you think, as a gay person, that Saudi is A-OK but the USA is not. (OK, there is an administration you disagree with - so do many Americans). Completely hysterical response, similar to during COVID when Canadians had this hysterical fear that every single American was spreading COVID to Canada, when, in fact, Covid was being spread in Canada by Canadians.
Enjoy you fun filled holiday...
Your irrational anti-Americanism is showing... the fact that you think, as a gay person, that Saudi is A-OK but the USA is not. (OK, there is an administration you disagree with - so do many Americans). Completely hysterical response, similar to during COVID when Canadians had this hysterical fear that every single American was spreading COVID to Canada, when, in fact, Covid was being spread in Canada by Canadians.
Enjoy you fun filled holiday in Saudi - Dont forget your pride shirt, and see how that works out
No one is going to arrest you for just “being gay”.
I mean, they can simply offer free fuel for th ereturn trip. That would automatically reduce fuel cost to half so only need to fill in half the plane to make profit
It's actually not an unreasonable strategy: lure in major carriers with subsidies, contingent upon various degrees of partnership with Riyadh Air.
Then when RX (finally) launches, it'll be able to immediately sell major destinations all across the globe, under its own code, despite most of the flights being operated by foreign carriers.
Not a conventional start, but it's the only way they could hope be even remotely competitive with EK and QR, for probably the...
It's actually not an unreasonable strategy: lure in major carriers with subsidies, contingent upon various degrees of partnership with Riyadh Air.
Then when RX (finally) launches, it'll be able to immediately sell major destinations all across the globe, under its own code, despite most of the flights being operated by foreign carriers.
Not a conventional start, but it's the only way they could hope be even remotely competitive with EK and QR, for probably the first decade or more.
Yes, this makes sense to me as well.
Hmm, who are the target customers to go to Riyadh?
Not sure there is much of a leisure play here. Maybe new business and government?
There may be a few transiting folks to the subcontinent/Asia especially if Riyadh Air adds more destinations east.
For better or worse, the Saudis are actively trying to turn Riyadh and parts of Saudi Arabia into a major tourism and non-oil business destination on par with Dubai and Doha (let alone the likes of New York/London/Paris/Tokyo).
That is why they have become so big into sponsorship (or outright ownership) of golf, soccer, and F1 through Riyadh Air, the PIF, and Aramco. Just as UAE and Qatar-owned/affiliated entities have been doing for the latest...
For better or worse, the Saudis are actively trying to turn Riyadh and parts of Saudi Arabia into a major tourism and non-oil business destination on par with Dubai and Doha (let alone the likes of New York/London/Paris/Tokyo).
That is why they have become so big into sponsorship (or outright ownership) of golf, soccer, and F1 through Riyadh Air, the PIF, and Aramco. Just as UAE and Qatar-owned/affiliated entities have been doing for the latest 15-20 years. They also want to host the 2034 World Cup as a critical part of this given that it's one of the two biggest events on Earth.
"The amount of capacity that the government is trying to force almost seems counterintuitive."
Trying to make sense of the things a government that is building NEOM does is not going to go well.
I'll not be going to Saudi Arabia because, like Jamal Khashoggi, I have a severe bone saw allergy
Sure, though that was in Turkey, not Saudi Arabia.
An embassy building, yes. But still.
A pedantic and useless distinction. Embassies are sovereign territory, and if they'll do it there, I'm quite confident they'll do it at home.
Brainwashed by propaganda.
How many people still don't realize where it happened.
Lucky you, even if you're also allergic to brain saw, you'll be fine because they have a hard time finding where to saw.
Who in their right mind is going to take any notice of your “Brainwashed by propaganda” post Eskimo? You don’t even know that Southend-on-sea is NOT in London. Numpty bro, numpty!
Who in best example of “Brainwashed by propaganda”?
The dumb that don’t even know that Southend-on-sea is NOT in London but IS a London airport Numpty bro, numpty!
But the best for last, Gatwick is in West Sussex NOT in London !!!!!!!
Major fail for a Brit!!!!!!!
So is WAS Saudi soil, by international law.
Ok ImmortalSynn - here are a few human rights abuses that occurred IN Saudi Arabia under MBS since 2017:
- 2017 Ritz-Carlton mass detentions/torture of hundreds (Saudis and foreign business executives)
- Record executions: 196 in 2022, highest in 30+ years
- Royal family purges - detention of rival princes on fabricated coup charges
- Mass arrests of clerics, intellectuals, women's rights activists
- Death sentences for social media posts criticizing...
Ok ImmortalSynn - here are a few human rights abuses that occurred IN Saudi Arabia under MBS since 2017:
- 2017 Ritz-Carlton mass detentions/torture of hundreds (Saudis and foreign business executives)
- Record executions: 196 in 2022, highest in 30+ years
- Royal family purges - detention of rival princes on fabricated coup charges
- Mass arrests of clerics, intellectuals, women's rights activists
- Death sentences for social media posts criticizing government
- Systematic abuse of migrant workers under kafala system
- Mass killing of Ethiopian migrants at Yemen-Saudi border by border guards
- Forced detention of Lebanese PM Saad Hariri (2017)
- Codified discrimination against women in 2022 Personal Status Law
- Transnational spying/intimidation of Saudi dissidents abroad
Sources: Human Rights Watch, Amnesty International, US State Department
> How times have changed compared to a decade ago, when Delta executives complained the loudest of unfair competition due to subsidies.
To be fair, there is a massive difference in subsidies that ensure an unprofitable operation continues and is able to dominate entire regions of travel at costs that simply aren't possible for an unsubsidized airline to operate and subsidies available broadly to any airline in order to ensure connectivity to a region. For...
> How times have changed compared to a decade ago, when Delta executives complained the loudest of unfair competition due to subsidies.
To be fair, there is a massive difference in subsidies that ensure an unprofitable operation continues and is able to dominate entire regions of travel at costs that simply aren't possible for an unsubsidized airline to operate and subsidies available broadly to any airline in order to ensure connectivity to a region. For example, EAS in the US is a subsidy that is based around connectivity, even if it's not broadly available to every airline, whereas airlines being subsidized by their states (such as the ME3) can create unfair competitive advantages *or* create a race to the bottom on fares that make it so nobody else can compete on certain routes. The same is applicable for state-owned airlines where the "subsidies" (in the form of taxpayer-funded losses) exist only for that airline with the hope/expectation that tourism taxes will more than offset the losses on the aviation side.
@ Arthur -- I largely agree with you, but I'm not sure that's necessarily relevant here? For example, Delta was campaigning most heavily against Emirates, and the airline wasn't unprofitable. The government was simply the primary shareholder, which obviously comes with access to more attractive financing, etc.
and let's not forget that US airlines - along w/ the entire US economy was heavily "subsidized" during covid.
The irony is that DAL and LUV are the two airlines that could have survived; they pulled down tens of billions of dollars in lines of credit as soon as the financial system was "unlocked" which affected lots of industries.
AAL's CEO was credited for leading the charge to Washington to get covid handouts,...
and let's not forget that US airlines - along w/ the entire US economy was heavily "subsidized" during covid.
The irony is that DAL and LUV are the two airlines that could have survived; they pulled down tens of billions of dollars in lines of credit as soon as the financial system was "unlocked" which affected lots of industries.
AAL's CEO was credited for leading the charge to Washington to get covid handouts, AA was the most fragile and got the most amount of money.
so, yes, there is a difference between complaining about state supported unprofitable airlines and market-specific opportunities that the western financial system allows governments and local/regional/state economic development organizations to provide to companies to get what they want.
and DL's primary beef was with the Import-Export bank which gave low interest loans for new aircraft built by Boeing which US airlines could not access; the same was true for European airlines and Airbus planes. There is a point at which companies of any size shouldn't need any form of taxpayer assistance - but that isn't the reality.
I won’t pretend to know all the details involved in what the actual costs were to Emirates, but one factor to consider is that the Emirati/Dubai government absolutely subsidizes businesses in other, less obvious, ways; for example, no income tax for expats, which is absolutely a subsidy from the government to employers. This doesn’t exclusively apply to aviation but applies outside of it, so I do think one needs to look at it in totality...
I won’t pretend to know all the details involved in what the actual costs were to Emirates, but one factor to consider is that the Emirati/Dubai government absolutely subsidizes businesses in other, less obvious, ways; for example, no income tax for expats, which is absolutely a subsidy from the government to employers. This doesn’t exclusively apply to aviation but applies outside of it, so I do think one needs to look at it in totality to see the full picture.
Are subsidies a bad thing? Not necessarily, but it absolutely can create an uneven playing field. I think these are different insofar as the Saudi government is subsidizing foreign carriers with the goal of building up a dominant market share (more of a regional rivalry than anything).
My uneducated two cents: airlines will move relevant aircraft to Riyadh from their least profitable routes, this will then have the effect of making them “profitable” (because they won’t lose money on the existing route, and will be guaranteed break-even here) and will move on when the money dries up or when there’s a more lucrative use of the aircraft.
Government-run/owned ventures don’t necessarily need to be profitable, there are many reasons they can exist, however it can make it impossible to compete or require a major differentiation to compete (look at USPS or Amtrak in the US — they don’t need to be profitable and in reality shouldn’t be since they’re a public service, so it’s hard to compete with them without a big differentiator)
"subsidies that ensure an unprofitable operation continues and is able to dominate entire regions of travel at costs that simply aren't possible for an unsubsidized airline"
Are you referring to US government bailout money handed to AA DL UA?
#hypocrites
"yet the carrier’s ultra long haul service adds seem exclusively focused on serving joint venture hubs, on chasing subsidies"
Isn't this specifically why Delta is so profitable? They don't do any "sexy" flying and just focus on boring, low risk, high reward flying.
It's not a surprise that the top 10 international stations for Delta include mostly JV partners hubs like ICN, GRU, etc.
Fun fact is that SEA is the only top 10 international...
"yet the carrier’s ultra long haul service adds seem exclusively focused on serving joint venture hubs, on chasing subsidies"
Isn't this specifically why Delta is so profitable? They don't do any "sexy" flying and just focus on boring, low risk, high reward flying.
It's not a surprise that the top 10 international stations for Delta include mostly JV partners hubs like ICN, GRU, etc.
Fun fact is that SEA is the only top 10 international station for Delta that is US based, despite all the flack it gets. (Yes, SEA outperforms even the interior hubs on international)
It's also not accurate - ATL-DEL which hasn't been announced any more than LAX-HKG - is not to a JV partner hub.
I don't think RAK is subsidizing either DL or UA services.
If anything, the message DL is sending specifically to a certain Chicago based airline - is that DL is not playing second fiddle to anyone in the international arena esp. since DL handedly leads UA in the domestic marketplace including as the...
It's also not accurate - ATL-DEL which hasn't been announced any more than LAX-HKG - is not to a JV partner hub.
I don't think RAK is subsidizing either DL or UA services.
If anything, the message DL is sending specifically to a certain Chicago based airline - is that DL is not playing second fiddle to anyone in the international arena esp. since DL handedly leads UA in the domestic marketplace including as the largest airline at LAX and in NYC.
and to your latter point, DL IS a domestic and international airline so having someone pick out the domestic flights and not understand how airline revenue is prorated at hubs
What are you blabbering on about LMAO?
Q1 2025 results (UA will release Q2 results in 2 days) - passenger revenue:
UA domestic rev: $7.2B
UA intl rev: $4.7B
UA total rev: $11.9B
DL domestic rev: $8.1B
DL intl rev: $3.4B
DL total rev: $11.5B
The gap at least in Q1 2025 between UA and DL in intl passenger revenue in UA's favor exceeds UA and DL in domestic passenger revenue...
What are you blabbering on about LMAO?
Q1 2025 results (UA will release Q2 results in 2 days) - passenger revenue:
UA domestic rev: $7.2B
UA intl rev: $4.7B
UA total rev: $11.9B
DL domestic rev: $8.1B
DL intl rev: $3.4B
DL total rev: $11.5B
The gap at least in Q1 2025 between UA and DL in intl passenger revenue in UA's favor exceeds UA and DL in domestic passenger revenue - not to mention you can throw out all the numbers about alleged DOT profitability by region, but the net result was that UA was more profitable than DL in Q1 2025 so at least one large portion of UA's network is performing much more profitably than DLs given DL has a far more lucrative credit card contract.
So "not playing second fiddle" and other odd claims don't really hold any message - DL's lead at LAX is marginal (4% market share) and has declined since 2022. It only recently took the lead in market share in NYC, and this is expected to be temporary as EWR has operational restrictions - let's revisit in a year or so if it still holds.
Regardless both airlines have taken strong measures and are performing well, but UA is the leading US intl airline by a distance (with more incoming planes that will build that advantage) while DL has been historically the most profitable airline and typically well-run (although UA has bridged most of that gap). No need to throw stones at each other when neither airline can cash them in.
One thing that needs to be factored in UA's numbers is that it still has outstanding labor agreements that need to be included in costs (i.e. cabin crew). Once UA and DL are on the same employee cost level, that's when we can see the true profitability gap (if any) between UA and DL.
Once Delta is fully unionized, like United, with all the work rules and inability to easily fire employees like Delta can, then we'll see true profitability comparisons between Delta and United. Until then, United is more than welcome to benefit from the cumbersome processes of the National Mediation Board and union negotiations under the Railway Labor Act just like Delta has benefited from non-unionization financially since their merger with NW.
Personnel costs for a unionized...
Once Delta is fully unionized, like United, with all the work rules and inability to easily fire employees like Delta can, then we'll see true profitability comparisons between Delta and United. Until then, United is more than welcome to benefit from the cumbersome processes of the National Mediation Board and union negotiations under the Railway Labor Act just like Delta has benefited from non-unionization financially since their merger with NW.
Personnel costs for a unionized labor force go far above simple wage comparisons. The contracts mandate many things that cost a lot of money -- items Delta can do if they want, on their own time, or never.
take a deep breath and read and respond to what is written, Jeremy.
1. Using the very data that you posted, DL is a much larger DOMESTIC airline than UA
2. You fail to note that airlines report TOTAL revenue and DL still handedly leads the GLOBAL industry in that metric. The fact that UA tried to buy a refinery but failed doesn't provide a basis for excluding DL's refinery revenue. and the fact that...
take a deep breath and read and respond to what is written, Jeremy.
1. Using the very data that you posted, DL is a much larger DOMESTIC airline than UA
2. You fail to note that airlines report TOTAL revenue and DL still handedly leads the GLOBAL industry in that metric. The fact that UA tried to buy a refinery but failed doesn't provide a basis for excluding DL's refinery revenue. and the fact that DL figured out years before UA that credit cared revenue is driven by DOMESTIC revenue - which UA didn't bother to develop as it chased service to Malaga and Mongolia.
and
3. Evan (below) gets that the discussion was about profits and when UA resolves it SIX outstanding labor groups, we will have the basis to compare PROFITS - not just cherrypicked revenue numbers - while excluding others
and FINALLY - NOT PLAYING SECOND FIDDLE TO ANYONE refers to DL's decision - if it happens - to start flying LAX-HKG - which would eliminate any E. Asia route advantages UA has since HKG IS the market that UA serves from LAX that DL does not.
someone in the article responses said they heard DL is restarting LAX-LHR which would EVEN MORE confirm that DL is PLAYING SECOND FIDDLE TO NO ONE - esp. after announcing MEL and BNE while UA has withdrawn from LAX-AKL on its own metal and ended LAX-BNE.
as for UA's earnings, we will be watching but a drop in 1400 domestic flights per month at EWR is bound to impact UA's domestic revenue esp. since it came on such short notice - and also explains why DL swung to a SEVEN PERCENT share advantage in NYC after years of the two running neck in neck. and let us know when the FAA and DOT FULLY lift EWR capacity restrictions to allow UA to overschedule EWR as they have done for years but don't be surprised if that NEVER happens.
and, no, Jeremy, a 4 percent share advantage is not marginal when one of the carriers has a 15% share and someone else has 19%.
If your math is so bad that you "excuse" a 25% difference, then you should leave data analysis too someone else.
@Tim Dunn\ With the very data I posted, the UA-DL gap in intl is bigger than the DL-UA gap for domestic by ~400M - that is a fact you completely ignored LMAO
Sure DL leads when you look at total revenue (albeit I wouldn't say "handedly" since the lead is $4B in FY2024 or ~7%) which is driven by the refinery. UA had higher FY24 passenger revenue i.e., the topic we are talking about.
Also...
@Tim Dunn\ With the very data I posted, the UA-DL gap in intl is bigger than the DL-UA gap for domestic by ~400M - that is a fact you completely ignored LMAO
Sure DL leads when you look at total revenue (albeit I wouldn't say "handedly" since the lead is $4B in FY2024 or ~7%) which is driven by the refinery. UA had higher FY24 passenger revenue i.e., the topic we are talking about.
Also DL plays second fiddle to UA even if it does add LAX-HKG - UA serves it 2x daily, serves HND 3x daily when you include the NH JV vs DL's 1x daily, and has a far stronger, more important nearby T-Pac hub vs LAX at SFO where it serves AKL and BNE. Technically UA does serve AKL with its Air New Zealand JV - also love how you're ignoring that DL was last (#3) in avg. fare on LAX-AKL vs AA, Air New Zealand in FY23 and Q1 FY24 by ~15%?
Regardless when talking about LAX, one of those carriers (AA) has 10 gates incoming of additional capacity by 2028, an amount that neither DL or UA will be able to match. Just based on pure math DL will not be able to maintain its ~19.5% share in 3-4 years - unless all of AA's additions end up flying at 40-50% LFs (which is not going to happen), guess who's going to be #1 in share in 4 years again? Sure that doesn't specifically speak to profitability, but for someone that wants to add supplementary information for a complete picture ironic how you'd ignore that.
and it was ONE QUARTER. Life and business is a marathon and not a sprint
and the comment about profits is still very much about UA underpaying all of its non-pilot large workgroups for years while touting its rising profits. Get back w/ us about UA's profit comparisons AFTER they settle w/ all of their labor groups.
And YOU want to talk about passenger revenue and exclude the things where UA doesn't do as well...
and it was ONE QUARTER. Life and business is a marathon and not a sprint
and the comment about profits is still very much about UA underpaying all of its non-pilot large workgroups for years while touting its rising profits. Get back w/ us about UA's profit comparisons AFTER they settle w/ all of their labor groups.
And YOU want to talk about passenger revenue and exclude the things where UA doesn't do as well as DL precisely because you want to cherrypick to avoid reality.
We all get that UA carries more passenger revenue - but they also fly a whole lot more ASMs.
and GAAP revenue and profit statistics are GAAP precisely because they represent the totality of a company.
and DL does exclude refinery revenue and profits precisely because the refinery is a DL-unique operation.
They do not exclude credit card or MRO revenue because those are lines of businesses that UA does - even if they do it less well than DL.
and let's see what AA does when those gates come. AA tried international and failed miserably. They are nowhere near competitive w/ DL or UA in transcon capacity. Dreams of them coming back are delusional. And, no, I don't deal in made-up projections just to try to prove that someone will be dethroned.
Deal w/ reality - which is that DL appears very much to be walking well away from UA in the NYC market and using that strength to go after corporate contract revenue that includes routes which UA has served including LAX-HKG.
there are several issues here.
1. Saudi Arabia realizes it was missing out economically and in many other areas. MBS and others are moving the country forward. Specific to aviation, they have been leaking a lot of premium revenue to others which is just as true for India.
2. Riyadh Air knows it is starting after other Gulf carriers and is building an ecosystem of airlines to achieve its purposes - a stark contrast...
there are several issues here.
1. Saudi Arabia realizes it was missing out economically and in many other areas. MBS and others are moving the country forward. Specific to aviation, they have been leaking a lot of premium revenue to others which is just as true for India.
2. Riyadh Air knows it is starting after other Gulf carriers and is building an ecosystem of airlines to achieve its purposes - a stark contrast to the strategies used by other Gulf airlines that are trying to be one side fits all and do not even participate in alliances
3 There were ample charges that other Middle East carriers were subsidized so, if anything, RX is just copying what other airlines got from their governments.
4. Route specific subsidies continue to exist just as there are subsidies by US and foreign states to draw manufacturing plants.
5. DL has benefitted and been burned by subsidies, including having PIT decide they wanted LHR service in addition to DL's subsidized PIT-CDG service which caused DL to pull out. Some of the routes that DL is starting under some form of subsidies were subsidized for other carriers including SFO-BNE on UA.
6. Some governments continue to offer subsidies including apparently DL for LAX-MEL service even though UA and QF serve the route and also apparently for DL LAX-HKG service even though UA and CX serve the route.
and DL employees are some of, if not the highest paid in the world. Given that fuel prices - one of the top expenses besides labor is the same for everyone - ,it isn't hard to make more profits if you pay your people less, a lesson that UA is learning.
"and DL employees are some of, if not the highest paid in the world. Given that fuel prices - one of the top expenses besides labor is the same for everyone - ,it isn't hard to make more profits if you pay your people less,"
Delta pays what they deem a market rate to their non-union members, just like Emirates. Your excuses don't work here. The revenue and labor markets are different in Dubai vs Atlanta.
the market rate is clearly less than what DL pays = that is definitional since DL was the carrier that has initiated every pay raise for its union and non-union workforce since covid.
And the market rate in the UAE is less than what it is in the UK or US. also basic economics.
The comparison is with AA, UA and WN which are DL's direct peers. one of those 4 has SIX amendable labor contracts while the other 2 are current on all of their contracts.
Yep
And emirates is more profitable than delta and that profitability is based on their revenue and labor market, just like delta in their revenue and labor market
This is one of my alt accounts
—The real Julie
Not Tim Dunn posing as someone else again... "Julie"
You need mental help, Tim
you two and others can work it with Ben.
none of you are smart enough to register your username with him and the only question is: what you are trying to hide?
And yet Ben has said you, Tim Dunn, directly used fake names to get around his ban of you. What were you trying to hide?
This is a blog site. And a good one. It's amusing when someone so desperately wants to use my name (aka. you, Tim). And this is a commenting site.
You aren't allowed on the one many of us use -- "the kiddie table" as you put it. Banned,...
And yet Ben has said you, Tim Dunn, directly used fake names to get around his ban of you. What were you trying to hide?
This is a blog site. And a good one. It's amusing when someone so desperately wants to use my name (aka. you, Tim). And this is a commenting site.
You aren't allowed on the one many of us use -- "the kiddie table" as you put it. Banned, in fact.
How many fake usernames have you used over the years? Sometimes you claim Tim Dunn is your real name on your drivers license then you reverse yourself and say it is not and that it doesn't matter what your real name it.
Calm down, Timmy. You of all people can't criticize others for usernames given your documented history of using MULTIPLE ones to get around bans and to agree with yourself. but nice attempt at taking the high ground as you watch the rest of us from the ditch.
--The actual Julie (not Tim trying to reply to himself)
feel free to post a single post on this site that was POSTED on this site by me under two user names. Didn't happen.
Ben also knows IP addresses. He laughs his backside off when you accuse me of using your username because you don't want to register your name and allow other people to mock you.
You children can argue and squabble as much as you like. You can call each other names and so forth …. however, what you people cannot escape from is the truth about the state of the U.S. commercial aviation industry.
Fact …. No U.S. airline can hold a candle to the world class airlines which you constantly attempt to belittle.
Fact …. The vast majority of the American airline passengers are totally bereft...
You children can argue and squabble as much as you like. You can call each other names and so forth …. however, what you people cannot escape from is the truth about the state of the U.S. commercial aviation industry.
Fact …. No U.S. airline can hold a candle to the world class airlines which you constantly attempt to belittle.
Fact …. The vast majority of the American airline passengers are totally bereft of knowledge about none U.S. airlines.
Fact …. Some of you who gibber on herein are truly ignorant of what it is like to be a passenger onboard a World Class airline.
Fact …. Ben provides you with extremely detailed reviews of a wide range of carriers and yet you still fail to take on board his advice.
Fact …. It is abundantly clear that few of you actually read Ben’s reviews, for were you to do so then you would not have the audacity to post your venomous comments about each other and other airlines.
Give us a break and concentrate your trolling arguments elsewhere.
aero,
yes, we have flown on the carriers that you worship.
but we also understand that even in the competitive international marketplace, US airlines hold their own.
Let us know traffic share in the NYC-ATH and NYC-MXP market where EK as well as several US airlines operate.
and if EK was so successful, they would undoubtedly add more 5th freedom routes - but they don't.
and then let us know...
aero,
yes, we have flown on the carriers that you worship.
but we also understand that even in the competitive international marketplace, US airlines hold their own.
Let us know traffic share in the NYC-ATH and NYC-MXP market where EK as well as several US airlines operate.
and if EK was so successful, they would undoubtedly add more 5th freedom routes - but they don't.
and then let us know how much competition EK faces in ITS home market; it is typically one foreign airline to EK.
none of which changes that the Gulf carriers do as well financially as they do because they pay substantially less than European, US and some E. Asian airlines - even w/ the hefty QOL benefits that the ME carriers provide.
Hopefully overcapacity results in plenty of premium award availability.
From my (limited) understanding the largest chunks of demand through the Middle East are people transiting through from South Asia or the Africa. Are there really that many travelers to sustain all this transit traffic through DXB, AUH, DOH, and now RUH? If no then at some point this house of cards has to fall somehow, right? Other than Dubai who really is going to these transit hubs as a travel destination?
Riyadh is the capital city for a rich country of 33 million. If they're successful in diversifying their economy at all I'm sure they'll have no problem housing a home airline (though probably not two).
It will be interesting to see what happens when Riyadh Air starts flying the same routes that the airlines mentioned and receiving subsidies fly. I am guessing the loss making top up will evaporate.
I am also curious as to why Riyadh Air needs to fill the void of an airline for Saudi nationals? Saudi Arabia has a national airline already - Saudia. Why did the government not just invest and expand and rebrand an airline that already exists?
I think they are targeting a different client base. I think the rationale for launching Riyadh Air is the fact that Saudia is more of a traditional Islamic airline. There is nothing wrong with that, but it might not be the best airline when it comes to catering to western tourists. Going with a newer airline that can focus on the tourism aspect makes the most sense.
Not to be deterred, American Airlines has also jumped in on the action by adding another flight to Albuquerque New Mexico
(I know that hurts, I’m sorry) LOL. Sadly, sociopaths don’t have emotions, Ben.