For many years, United has differentiated itself from both Delta and American with its global route network. The airline simply operates on a different level when it comes to the scope of its international network, especially across the Pacific.
We know that Delta is trying to grow across the Pacific, as we’re seeing the airline pursuing a “once in a generation” growth opportunity in Los Angeles (LAX). The airline has just launched flights from there to Hong Kong (HKG), and Manila (MNL) flights are expected as of 2027 as well. Just how big are Delta’s aspirations across the Pacific, though? Well, bigger than we may have expected…
In this post:
Delta wants to become leading US carrier across Pacific
Leslie Josephs at CNBC had an interesting interview with Peter Carter, Delta’s new President (who recently replaced Glenn Hauenstein), at the current IATA AGM, in Rio de Janeiro, Brazil. One of the main topics involved Delta growing across the Pacific, where he shared the following aspirations:
“We want to become stronger, better, faster in the trans-Pacific, and we want to become the leading U.S. carrier” across the Pacific, Carter told CNBC in an interview here during the International Air Transport Association’s annual meeting. “Ultimately … the real goal is to become the leading global carrier, which is a pretty audacious goal.”
The U.S. air travel market — the world’s largest — is mature, meaning there’s little room for significant annual growth. “Really, when we think about the future, it’s all about international,” Delta’s Carter said.
The other noteworthy thing here is the comments from United CEO Scott Kirby, which can only be described as rather competitive, along with Carter acknowledging how United is increasingly becoming a competitor (Delta executives have historically taken the approach of basically not acknowledging United by name):
On the sidelines of the same conference, Kirby said he has “a lot of respect for Delta, and what they have done, and I take it as a huge compliment that Delta is beginning to acknowledge that they have an equal that they’re worried about and trying to compete with us.” When asked what he wants to beat Delta on, Kirby replied: “Everything.” Carter said in the interview that Delta can’t rest on its current success. “We always have to be hungry to win, and I say that because I know United is out there competing against us and replicating the playbook a little bit,” he said. “Bring ’em on.”
Will Delta more than double its transpacific capacity?
Admittedly airline executives make all kinds of questionable claims with words like “leading,” “premium,” etc., so perhaps things shouldn’t be read into too literally.
However, I think suggesting that Delta will become the leading carrier across the Pacific lays out some pretty clear aspirations… and that will require quite the ramp-up.
Doing some very rough math, it looks like Delta’s Pacific revenue last year was around $2.8 billion, while United’s Pacific revenue was around $6.9 billion. So if Delta actually wants to surpass United in terms of size, it’ll need to grow its Pacific revenue by roughly 150%, and that represents a lot of new service. Now, a few points:
- I’m sure someone will be along shortly to point out that Delta has better margins across the Pacific than United; that’s true, because the carrier’s network is so much smaller, and United’s Pacific strategy is much more about building a portfolio of routes that make the airline appealing overall, rather than each and every route being mega profitable
- Delta acknowledges that some of its “leading” position across the Pacific will come from its joint venture with Korean Air, and admittedly that’s a bit larger of a transpacific joint venture than United has, with All Nippon Airways
- It’s interesting to see Kirby and Carter be so direct with their competitor commentary, with Kirby saying he wants to be better than Delta at “everything,” and Carter saying “bring ’em on”
- United has the major structural advantage of having a mega hub in San Francisco (SFO), the most lucrative West Coast market for Asia, where the airline has a ton of connectivity, and I don’t think Delta can fully replicate that success in Los Angeles, and splitting things with Seattle (SEA) doesn’t help either
Anyway, it’ll be fascinating to see what comes next. Beyond the new Hong Kong route that was just added and the Manila route that has theoretically been announced, what more could we really see? We have reason to believe that Delta’s LAX strategy includes adding flights to Seoul Incheon (ICN), flying year-round to Auckland (AKL), and possibly upping Shanghai (PVG) flights to daily. We also know that Delta is at least considering flights to Singapore (SIN).
However, that still leaves Delta a long way from matching United’s Pacific network. So either Delta has a lot more growth planned across the Pacific, it’s relying a lot more on Korean Air to make it “leading” than it’s suggesting, or this is just a lot of talk. Also, are you really a global airline if you don’t fly to Greenland or Mongolia? 😉
Bottom line
We’ve known that Delta wants to grow across the Pacific, especially with the airline seeing a lot of potential at LAX. However, the extent to which the airline plans to grow is quite something, as it claims it wants to be the “leading” airline across the Pacific, beating out United. United currently has around 2.5x the Pacific revenue that Delta has, so Delta has quite a bit of catching up to do.
It remains to be seen how literally means that it wants to lead across the Pacific, and to what extent it’s using Korean Air as a crutch to make that claim.
The trash talking associated with this is quite something as well, with United CEO Scott Kirby saying he wants to beat Delta at “everything,” and Delta President Peter Carter telling United to “bring ’em on.”
What do you make of Delta’s goals across the Pacific?
It is clear to me that Delta Dunn is well ad truly DONE.
I believe that what you were trying to say Wayne is that Delta Airlines is positioning itself to become the dominant U.S. carrier across the Pacific, challenging UA. You claim that Delta’s earlier Asia strategy via Tokyo Narita has failed. Were you working from Delta at that time, I understand so?
You go on to say that the airline is now rebuilding...
It is clear to me that Delta Dunn is well ad truly DONE.
I believe that what you were trying to say Wayne is that Delta Airlines is positioning itself to become the dominant U.S. carrier across the Pacific, challenging UA. You claim that Delta’s earlier Asia strategy via Tokyo Narita has failed. Were you working from Delta at that time, I understand so?
You go on to say that the airline is now rebuilding with a stronger approach. Could that be because they now have more informed and less blinkered analysts on board?
The key advantages you stress include higher revenues and margins. Stronger corporate and eastern U.S. traffic. Significant fuel-cost savings from its refinery and a modern long-haul fleet centered on the Airbus A350.
Delta’s planned delivery of 20 larger A350-1000s, combined with its partnership with KE, you predict will drive substantial growth in Asia-Pacific markets. You also predict an aggressive expansion through the decade and believes Delta could reclaim leadership across the Pacific while potentially establishing a stronger Texas hub.
In summary Wayne, lots of words and predictions in your original screed to say very little. Is that why Delta sacked you?
Maybe they'll just serve ICN from every airport in the US.
lots of big words from Delta but I still don't see where the gates are to do anything from the West Coast to Asia unless they have a good side deal going with LAWA at TBIT. They sure aren't getting any more gates in Seattle.
But hey, proof is in the pudding whenever it shows up beyond fancy words.
Fancy words... "Oh hey, great name... Yeah, isn't it? I got it off a hair dryer."
I like a man that can poke fun at himself. Oh hey, my 1p cancelled. Have you had any lunch?
Within the context of these blogs, I think "Fatso Goes Nutso" is wildly appropriate, too. It's from The Simpsons episode "Politically Inept, with Homer Simpson," in 2012. YouTube it.
Also, "that's the way Max Power is... decisive, uncompromising, and rude!"
I wonder how many times Ben used "admittedly" in the 43+ million words he wrote so far in his blogs! :) My comment is "admittedly" unrelated to this article, but I just wanted to show that some words add nothing to a sentence other than increasing the word count.
Poor Tim is going crazy.
now, it is the UA fan nuts that are on the verge of meltdown.
DL is fairly reserved in its competitive comments, certainly compared to UA.
and Ben is right that DL and UA have largely stayed in their own orbits while feeding off of other carriers. Now DL is explicity stating that its target is UA and its west coast and TPAC advantage. I don't recall when DL specifically mentioned any carrier like that.
...now, it is the UA fan nuts that are on the verge of meltdown.
DL is fairly reserved in its competitive comments, certainly compared to UA.
and Ben is right that DL and UA have largely stayed in their own orbits while feeding off of other carriers. Now DL is explicity stating that its target is UA and its west coast and TPAC advantage. I don't recall when DL specifically mentioned any carrier like that.
For DL execs to state multiple times over the course of a week that they intend to grow the one region where a competitor has a distinct advantage and then come out and say that they intend to surpass that competitor will lead to some major conversations at Willis Tower this week.
DL simply has "once in a generation" advantages that they intend to take advantage of not just at LAX but across their network.
so, no, I am quite happy. The meltdowns are those that are realizing I have been right all along in saying that the Pacific would become DL's primary focus.
Given that Asia is fastest growing, DL will take a disproportionate share of the growth even as it eliminates UAs advantage.
TO be clear, neither I or DL are predicting UA's demise - just that DL will now have an advantage in every part of the world and eliminate the deficit to UA
Delta will go to SE Asia and gobble down the vile SE Asia food , get the Delhi belly and the Saigon belly , and cancel the flight home .
Delta must grow by only 70% to pass United, if all of the growth is at United's expense. They both would split their $9.7 billion total market share. Since it's unlikely that Delta will convince 150% more people to fly to Asia, the goal is to take the existing customers away from the major competitor.
Wow this Carter chump seems like a low T beta wimp. Tiny Timmy D, your fluffing skills may be needed soon!
poor you.
Wake up to find out that DL has checkmated UA and your week and year and life just fell apart.
Will the new DL A35Ks be able to do ATL to AKL, BNE, MEL, and/or SYD?
They'd probably need a ULR (900, like SQ, or the new 1000, like QF's Project Sunrise, recently tested on June 2!), but, you ignore my comments, so we'll have to just let our resident Delta expert correct us... everything is possible with Delta!
not known yet because we don't know the technical specs for these aircraft but they are likely the most capable 350-1000s that Airbus can build and ATL to the S. Pacific could be in range if DL sees value in those markets.
DL doesn't need 20 hour capable aircraft and QF is going to get that range by flying about 50 less seats than DL - but DL's 35Ks will be well below average...
not known yet because we don't know the technical specs for these aircraft but they are likely the most capable 350-1000s that Airbus can build and ATL to the S. Pacific could be in range if DL sees value in those markets.
DL doesn't need 20 hour capable aircraft and QF is going to get that range by flying about 50 less seats than DL - but DL's 35Ks will be well below average in number of seats.
AA and UA are much more getting range for its 789s by getting the number of seats down below 240 or 225. DL has 275 seats on its 359s and 315ish seats on its 35Ks. the newest 359s and the 35Ks should be capable of doing 18 hour flights - and still carry far more cargo than any AA or UA aircraft.
let's also keep in mind that AA and UA both had 350s on order; AA walked away from the 350 years ago and that made sense given how little TPAC network AA has. UA continues to hold onto 777s and while the 777-300ER has incredible capacity, it burns $50,000 more in fuel per trip than the 35K carrying similar amounts of cargo - and slightly more pasengers - and the 35K can go much further.
UA seems to think they should get 350s at 10 year old prices which will preclude the 350; the 777X will simply not be as capable at similar costs.
DL's move to grow the Pacific is undoubtedly based on its fleet advantage.
Tim, as expected, super optimistic in Delta's favor, but not likely technically viable with the mere a35K, non-ULR. Sure, newer Airbus may be better than the aging 777s. But, for better or worse, United still dominates S. Pacific. UA uses 789/78K for SFO/LAX to AKL/SYD/MEL/BNE/ADL. Personally, I hope Delta does compete even more here, because that'd benefit us consumers.
We're having quite the field day on TPAC networks of late. I have to admit even I haven't thought that DL would dream, let alone execute to become the largest carrier over the Pacific.
First, DL was the largest carrier across the Pacific for a short period post NW merger. that size was based on the NRT hub which didn't work financially. DL started to pull down NRT and many spokes "came off" NRT...
We're having quite the field day on TPAC networks of late. I have to admit even I haven't thought that DL would dream, let alone execute to become the largest carrier over the Pacific.
First, DL was the largest carrier across the Pacific for a short period post NW merger. that size was based on the NRT hub which didn't work financially. DL started to pull down NRT and many spokes "came off" NRT and DL became less and less relevant to Asia. UA used DL's drawdown to grow TPAC but UA did so by operating its TPAC system at just breakeven size. Post covid, UA made the right decision to re-add capacity and its margins are decent across the Pacific but, yes, DL gets more per ASM.
second, AA is not relevant in this discussion. Kirby is right that there is really only a place for 2 legacy carriers to Asia and DL intends to challenge UA.
third, as noted, UA is focused on size and the vast majority of its TPAC route network is from SFO which is a geographic advantage but the western US but is a liability from the eastern US where DL is already the largest US carrier to E. Asia. There are scores of cities - small and medium sized - that DL serves from ATL, DTW, and MSP that UA does not serve from SFO. and if I am paying for premium service, I don't want to fly halfway across the US before getting into a lie flat seat or premium select.
fourth, DL is not higher margin because it is smaller; it is higher margin because it gets higher revenue across its entire system including domestic, Latin and TATL where there is far less of a size difference. DL carries more corporate traffic, more domestic traffic, is larger in the eastern US, and has more non-transportation revenue including Amex revenue which do add to DL's bottom line even if Kirby wants to exclude it because UA is #3 out of 3 US global carriers in credit card revenue.
fifth, DL has a significant fuel cost advantage that will continue. We will find out how big it is in about a month when DL and UA report a full quarter's worth of operations under a high fuel cost environment. I have previously said that DL could save $1 billion/yr on this Iran war that shows no signs of ending and DL's $300 million/year estimate for Q2 fuel cost savings because of the refinery is very much in line wiht my estimate. a $1 billion fuel cost advantage is huge and subsidizes a huge amount of growth.
next, DL has some notable holes in its TPAC network including JFK to Asia as well as potentially BOS; ATL can make just about any route work and the 350 can make just about any route to anywhere work.
finally, DL's greatest advantage is its TPAC fleet which currently is operating almost entirely on A350-900s, larger and more capable than the 787-9 which is UA (and AA and AS') best aircraft for ultra long haul flights. But DL has 20 A350-1000s, the first of which will be in service in a year - and they will apparently all enter service within a couple years for a very aggressive fleet buildup. DL is buying them for the Pacific and S. Asia, not to fly to partner hubs in Europe which the 787-10 willl do. that is a lot of capacity and capability coming online in a pretty short period.
and the engines on the 359 are getting more efficient by 1.8% thanks to improvements by Rolls Royce. even a 1.5% improvement is huge on TPAC routes.
and KE and DL will work together across the Pacific including providing new acces to Asia from cities that have no E. Asia routes at all.
this will be an exciting end of the decade as DL aggressively grows TPAC.
Glen Haenstein undoubtedly knew this plan was coming as he went into retirement. Anyone that thinks that DL was going to do nothing now that he is gone are clearly mistaken.
Joe Esposito's legacy will undoubtedly be regaining DL's position as the leading airline across the Pacific and in building or acquiring a Texas hub; I'm not convinced that there isn't a N. Texas hub again in DL's future
this will be fun to watch; indeed, bring it on.
Oh, so, United-bad, Delta-perfect. Got it.
For real, though; good on Delta for at least trying to leverage its a350 to close the massive revenue gap that United currently enjoys across the Pacific.
Time will tell... *Delta launches service to Ulaanbaatar* jkjk
Seems that you were quite right about the toilet 1990. The analyst has just ‘dumped’ its first load. It’s a pity that I must walk the dog before getting down to the stench …. :-)
Aero, it does feel good to 'drop the load' and re-fuel. So, I say, bring it on. Let's go for another round!
This comment section is going to be a total sh!tshow… *pulls up a chair*
It must be taking the data analyst a lot longer than usual to ‘massage’ the figures …. we will just have to be patient before having a laugh.
Ben is naughty but nice! …. :-)
More like, pull up (to) a toilet and down some Ex-Lax...
Seems that you were quite right about the toilet 1990. The analyst has just ‘dumped’ its first load. It’s a pity that I must walk the dog before getting down to the stench …. :-)
And, if the Ex-Lax doesn't do it for ya, double-up by snorting some Metamucil... and, if that still has you backed-up... SNL recommends: Colon Blow! "I think I get the picture!"
US airlines having a competition with each other is like watching 2 overinflated bros talking about which one of them can run faster with their backs against the olympic games.
They don’t have the hubs for it
Delta is finally back to growing their transpacific flying. They finally have a nice scheduled to Australia including Melbourne and Brisbane. Their service to Tokyo is good (though they do not fly to JFK, which is a major hole in their network).
Tokyo is the single biggest destination for US airline customers in Asia and Delta is without a partner there. That leaves that at a major disadvantage. Sure, they do have Korean Air,...
Delta is finally back to growing their transpacific flying. They finally have a nice scheduled to Australia including Melbourne and Brisbane. Their service to Tokyo is good (though they do not fly to JFK, which is a major hole in their network).
Tokyo is the single biggest destination for US airline customers in Asia and Delta is without a partner there. That leaves that at a major disadvantage. Sure, they do have Korean Air, but flights to Korea take ~2 hrs longer. That’s a big deal.
Delta is far ahead of American, though very behind United in the pacific. Delta can add some more and fill its network in but it won’t catch United anytime soon.
No ADL though? Aww, shame. At least United flies there. Better wines than MEL, anyhow… *farts audibly in a crowded elevator*
That’s cute.
Delta:
SEA-ICN
SEA-PVG
SEA-TPE
SEA-HND
LAX-HKG
LAX-MEL
LAX-PVG
LAX-HND
LAX-SYD 1
LAX-SYD 2 (seasonal)
LAX-AKL (seasonal)
LAX-BNE (seasonal)
ATL-ICN 1
ATL-ICN 2
ATL-HND
DTW-ICN
DTW-PVG
DTW-HND
MSP-ICN
MSP-HND
SLC-ICN
HNL-HND
United:
LAX-HND
LAX-NRT
LAX-PEK
LAX-HKG-BKK
LAX-HKG-SGN
LAX-SYD
LAX-MEL
LAX-PVG
SFO-AKL
SFO-ADL...
That’s cute.
Delta:
SEA-ICN
SEA-PVG
SEA-TPE
SEA-HND
LAX-HKG
LAX-MEL
LAX-PVG
LAX-HND
LAX-SYD 1
LAX-SYD 2 (seasonal)
LAX-AKL (seasonal)
LAX-BNE (seasonal)
ATL-ICN 1
ATL-ICN 2
ATL-HND
DTW-ICN
DTW-PVG
DTW-HND
MSP-ICN
MSP-HND
SLC-ICN
HNL-HND
United:
LAX-HND
LAX-NRT
LAX-PEK
LAX-HKG-BKK
LAX-HKG-SGN
LAX-SYD
LAX-MEL
LAX-PVG
SFO-AKL
SFO-ADL (seasonal)
SFO-CHC (seasonal)
SFO-CTS (seasonal)
SFO-PEK
SFO-BNE
SFO-HKG 1
SFO-HKG 2
SFO-MNL 1
SFO-MNL 2
SFO-MEL
SFO-KIX
SFO-PPT
SFO-PVG
SFO-ICN 1
SFO-ICN 2
SFO-SYD 1
SFO-SYD 2 (seasonal)
SFO-TPE 1
SFO-TPE 2
SFO-HND
SFO-NRT
SFO-SIN 1
SFO-SIN 2
IAH-NRT
IAH-SYD (seasonal)
ORD-HND
ORD-NRT
IAD-HND
EWR-DEL
EWR-NRT
EWR-HND
EWR-ICN
DEN-NRT
HNL-MAJ-KWA-KSA-PNI-TKK-GUM
NRT-CEB
NRT-GUM
NRT-KHH
NRT-ROR
NRT-SPN
NRT-ULN (seasonal)
GUM-NGO
GUM-TPE
GUM-KIX
GUM-HND
GUM-NRT
GUM-MNL
GUM-YAP
Good luck, Delta. And nobody cares, Tim.
How many of those are profitable? I would say Pacific is a good reason why United is behind Delta on profitability each year. Sexy routes don't pay bills. Winning isn't always by quantity.
Let them ROR!
In other words, this is an admission that Delta’s retreat from Narita and intra-Asia routes for a JV with Korean out of Seoul was a huge mistake. Delta flying to Singapore would be a return of something they haven’t done since pre-pandemic. It’s been almost 10 years since Delta has flown New York to Tokyo. Delta had an incredible Asian network. Even credit cards in Guam!
FTN, it is worth holding one’s breath for the retort …. :-)
Aero, let Tim have coffee and a piss first. Sheesh!
"In other words, this is an admission that Delta’s retreat from Narita and intra-Asia routes for a JV with Korean out of Seoul was a huge mistake."
You might wish to familiarize yourself with the term "anecdotal conclusion."
"Delta had an incredible Asian network."
And was losing their ass on it. By their own admission, nearly 80% of NW's intra Asian routes were losing money on a per-segment basis, at the time of the merger....
"In other words, this is an admission that Delta’s retreat from Narita and intra-Asia routes for a JV with Korean out of Seoul was a huge mistake."
You might wish to familiarize yourself with the term "anecdotal conclusion."
"Delta had an incredible Asian network."
And was losing their ass on it. By their own admission, nearly 80% of NW's intra Asian routes were losing money on a per-segment basis, at the time of the merger. Continuing to operate that model, without a Japanese partner nor a j/v partner in Asia overall, would've been financial suicide.
Oh, lordy, yes, what a Tim-ism: your opinion is “ancedotal”… whereas his opinion is “data” and “facts.” *smh*
I am unconvinced by your data and facts submission 1990. The numpty is very economical with all of the facts and uses the data to substantiate is version of the fact, don’t you know?
Thank you for 're-educating' me, Aero. I feel like I've taken a roundtrip to Xinjiang!
So you knew all the time? You know what he’s like then, do you think that he is currently trying to justify why Delta have allowed United to dominate them in Asia? Perhaps it was he who proposed the hub move from Japan to Korea and was sacked for it?
I don't know. Narita is good for connecting, but Haneda is so much more convenient if you're staying in Tokyo. I do not miss having to take a 50+ minute train to Narita. Haneda is only 20 minutes from where I typically stay. It would depend on which customer base you are trying to serve.
Jetiquette, 100%. Not to mention, HND has that awesome upstairs flight-seeing deck! Av-geek paradise!
Jetiquette is correct.
NRT's doom as a hub came when the Japanese government decided to allow HND open enough to serve the majority of US Tokyo demand.
Even now, JL and NH's NRT hubs lack most of the local Tokyo revenue because it flows to HND. UA's attempts to add a bunch of narrowbody spokes onto NRT isn't about the great local markets to secondary and tertiary cities that UA is flying but...
Jetiquette is correct.
NRT's doom as a hub came when the Japanese government decided to allow HND open enough to serve the majority of US Tokyo demand.
Even now, JL and NH's NRT hubs lack most of the local Tokyo revenue because it flows to HND. UA's attempts to add a bunch of narrowbody spokes onto NRT isn't about the great local markets to secondary and tertiary cities that UA is flying but an attempt to keep the total amount of revenue that goes through NRT from further falling.
and let's keep in mind in this whole discussion that DL is essentially building a TPAC operation from scratch - one based on US hubs. UA bought Pan Am's TPAC network 40 years ago that had a lot of TPAC routes to other than Tokyo. DL and NW had only a few of those and most were from DTW or ATL.
Tim, glad you've had your coffee. Maybe take a few more sips, though, or switch from decaf to caffeinated, because you're forgetting Northwest. Delta was handed a turn-key Pacific network in 2008 and spent a decade dismantling it to build their current model (ICN JV). Sure, sure, ignore Guam at your peril. Meanwhile, United is still printing money on underserved routes using high-yield fifth-freedom rights that Delta willingly threw away.
Submission 1990, if you please?
It occurred to me that it was because of the Delta flawed analysis of the Asian market that Delta Dunn was fired?
Xi told me ….
Ahhh, so... that's what Xi said... ;-O