The big three U.S. airlines—American, Delta and United—match each other more closely than ever. The three were created from the merger of six large airlines over the past eight years and now each has the profits to spend upgrading its product. They’re all intent on not letting one rival gain a cost or product advantage.
Airlines say the similarities just mean they are all coming to the same conclusions about what customers are willing to pay for and what they aren’t. “The market dictates what your product will look like,’’ says Brian Znotins, United’s vice president of network.
Three mergers later and we are just now figuring out that the three remaining major U.S. carriers are basically copying each other. The “race to the bottom” language is appropriate at times but really the carriers are simply competing for the passengers who do not necessarily care who they fly. With the low cost carriers like Spirit and Frontier offering a no-frills experience, the majors are happy to follow suit and charge for the privilege of more legroom or early boarding. The majority of passengers simply want the lowest fare available that fits their schedule, add to that analysts who want to see profits, and you have what is driving airline decisions.
Remember, they are reporting record profits, all while customer complaints increase. The result is a form of collusion by following. The airlines are not meeting in back rooms to decide what amenity should be cut next, instead they just wait for one to cut an amenity and then follow suit. The latest way of trying to compete with low cost carriers like Spirit and Frontier is the basic economy fare. Delta, American, and United are all working to offer a fare that has zero perks, including no pre-reserved seat assignment and no mileage earning. These fares are not necessarily cheaper than fares of the past, but when you compare them to fares that do earn miles they appear cheaper.
This is not a trend that will be changing anytime soon. With new low cost airlines like Norwegian entering the U.S. longhaul market, the reduction of amenities on the three major airlines while charging for perks will continue. It will take a spike in oil prices along with a reduction in travel before anything changes.
Noon ET UPDATE: Delta has canceled approximately 365 flights due to a power outage impacting Delta operations systemwide. As of 10:30 a.m. ET, Delta operated 1,260 of its nearly 6,000 scheduled flights. While systems are improving and flights are resuming, delays and cancellations continue.
5:05 a.m. ET UPDATE: Delta has experienced a computer outage that has affected flights scheduled for this morning. Flights awaiting departure are currently delayed. Flights en route are operating normally. Delta is advising travelers to check the status of their flights this morning while the issue is being addressed.
At first the outage was reported to be a computer outage, whatever that means, and then it was updated to “power outage”. My guess is that a data center lost power, a generator or other backup power system did not kick on, resulting in an outage that continues to linger. What is interesting is that Delta had no problem throwing their power provider under the bus without first figuring out what happened.
There is a travel waiver up and it is in effect until August 12, 2016. My recommendation if you are flying Delta today or tomorrow? Use their app to rebook for another day, go home and wait this out. Even if they start running more and more of today’s flights, this outage will ripple through the system for at least a few days.
Delta has been growing their Seattle hub operation over the last couple of years, trying to cultivate a west coast hub that can serve Asia as well as some domestic U.S. destinations and parts of Europe. They released a new commercial recently, that you can watch below, that is directly targeting their Seattle market.
In September 2014, then-CEO Richard Anderson told a group in Minnesota that Delta hoped to explore a new nonstop route from MSP to China “in the next three to five years.”
Bastian, who has served as president since 2007, succeeded Anderson, who formally retired Monday. Bastian said he also believes an MSP-to-China route “would be an ideal opportunity” once Delta receives its new Airbus 350 planes — which will replace the retiring Boeing 747 aircraft — next year, and if U.S. carriers are granted more traffic rights in China. Foreign governments negotiate how many flights from each country it will allow to operate within its borders.
So why is Delta focused on building their Minneapolis hub’s reach in China when they have a rather large presence in Seattle, where they can use aircraft that don’t require ultra-long ranges? I am not sure. It seems like the complete opposite of what they were originally trying to do when they opened the hub in Seattle. United has started flying to non-top tier airports in China out of San Francisco, capturing a part of the market that Delta will quickly lose unless they make a move soon. By spreading their transpacific flights over multiple hubs I am a little worried that they are diluting themselves and not really building up the Seattle base. There has already been a slight withdrawal with the reduction of Seattle-Hong Kong and threats to stop flying to Tokyo from a number of U.S. airports if they are not granted certain slots at Tokyo-Haneda. One has to wonder how much more Delta’s presence at Seattle will retract all while they release commercials touting its awesomeness as a hub.
I needed to buy a last minute ticket for work recently and Delta was the only option left that had seats and a schedule that matched what I needed. After I bought the ticket, Delta gave me an option to buy-up to first class. The price was right and I had wanted to compare what I had read about Delta’s first class product being great to what I had experienced on United, so I purchased the buy-up.
Time to examine the hype.
For work travel, I rely heavily on airline iPhone apps to keep me updated and to do basic maintenance on my reservations (change seats, make reservations, etc.). The first thing I noticed using the Delta app is just how clunky it is. Sure, picking a seat is relatively easy, but making a booking in the app is a frustrating process. The app does validation before you submit a flight search and will pop up an error if your origin and destination are the same. So, if you need to reverse your search, you have to put in a third airport code to be able to switch the origin and destination without error. There are quirks like this throughout the app. It is the same thing for flight information as well. Some items are clickable and lead to more info, but there is no visual way to know that an item has that feature without clicking on everything so you end up sitting there, hitting random parts of the screen, looking for what you want. Compared to United’s app, which is powerful, yet relatively easy to use, Delta’s app seems to need some serious work.
Before traveling, I had added my known traveler number to the reservation and on check-in received PreCheck. Knowing I have PreCheck allows me to show up at Portland’s airport about an hour before boarding and have plenty of time to grab a cup of coffee and do some work before getting on the plane, so that’s what I did. I walked up to the security area, opened up my mobile boarding pass and saw an orange icon indicating that my flight had been delayed. Knowing that an agent would be able to help me at the gate, I proceeded through security.
Making it through security, I look at the delay one more time and realize I will miss my connection because of it. I proceed to the gate and get in line to speak with the gate agent. An agent comes over and asks if I need something, to which I reply, “I believe my flight to Minneapolis is delayed and I will miss my connection”. She says, “I am closing out this flight and I’m not working that flight, walk down the hall and there are phones where you can call Delta”. Ok, that makes sense, so I walk down the hall and sure enough, there are phones. They’re all taken by people trying to fix their plans as well but there is a sign with a 1800 number so I dial it. The prompts ask if I am in the airport and when I reply yes, the wait is no more than 2 minutes to speak to an agent. The agent tells me that she cannot find any options on the same day but that she will see if she can find something on another carrier. A few minutes later she tells me my only options are to spend the night in Minneapolis or take a redeye via Atlanta. I ask if the hotel in Minneapolis will be covered to which she replies, “you would need to ask the agents in Minneapolis”. I am not willing to take that risk so I ask her to explore the American Airlines flight to Chicago that is showing an F seat for sale. She can’t find it. I run to the AA gate to see if they will simply sell me the seat (I’d refund the Delta ticket). Nope, they just cleared a standby into it. Sorry.
Back on the phone I accept the redeye option, simply because I was not comfortable spending the night and trusting that Delta would take care of the hotel (there was weather that night in the area). Well, time to head home because I have another nine hours before my new flight leaves. Here is what I originally booked (red), versus what I was rebooked on (navy).
Nine hours later I was back at the airport for the red-eye to Atlanta. I had hoped to review the meal options on the original flight but the delay squashed that idea. Now my goal was to get as much sleep as possible but I knew that would be a challenge. Onboard there was a bottle of water, a small pillow, and a blanket at the seat. The seat pitch was pretty standard but what I noticed was the lack of an adjustable headrest on the seat. It seems that most of the Delta domestic fleet is the same, missing the adjustable headrests that you can manipulate to rest your head to one side. The flight attendants come by asking if passengers would like anything before we take off. I order a whiskey and water, a nightcap if you will, and it’s quickly delivered.
The safety video comes on. It’s cute but man is it lengthy.
The pilot makes a quick announcement that he won’t be making any other announcements until our descent into Atlanta and that our flight time will be four hours (OUCH!). A few minutes later and we’re in the air. I put on an eye mask and attempt to get some sleep, but, to be honest, it didn’t go well. The seats are comfortable but there is not a lot in the way of lumbar support and without an adjustable headrest I can’t really lean one direction. The entire flight was spent with me readjusting to try and get comfortable and I ended up getting maybe 1-2 hours of sleep.
We landed in Atlanta on time and that gave me about 35 minutes to use the restroom, brush my teeth and make my connection. I walked from concourse A to concourse B and made it to the gate right as they were starting to board. I looked for a coffee shop nearby but there was nothing, the upside being I could try the much touted Starbucks coffee that Delta serves in first.
Legroom in First on the Airbus A320.
Onboard the flight attendant greeted everyone with a friendly “Good morning!”. She then came around first class asking if we would like anything before takeoff. A few minutes later and I was tasting the coffee. It wasn’t bad. Not great, but drinkable, which says a lot about airplane coffee. The taste was much more of what you expect in coffee and less of that metallic and chalky taste you sometimes get from airplane coffee. I was in the bulkhead seat on the Airbus A320 and found the legroom to be fine. There is a little cut out for your feet and that makes it comfortable. If I was a little taller the legroom would have been tight.
There was no overhead entertainment so the safety demo was done by the flight attendants and it went by much faster than the video shown above. A short time later we were in the air.
It was a quick flight to Milwaukee so the only service was beverages and a snack basket (I had a banana and some Biscoff cookies, if you were wondering). I tried to use the Delta Studio streaming entertainment but could not get it to work. Every time I connected I received a screen like below and could never get to the list of shows.
Failed attempt to try the streaming entertainment
An hour and half later and we were on the ground in Milwaukee and I was on my way to work.
Overall, there was nothing about the experience that blew me away making me want to switch permanently to Delta. The boarding process was just as chaotic as United’s, with people blocking the boarding lanes 15 or 20 minutes before the flight is scheduled to board.
Boarding. Just as chaotic as on other carriers.
The way the delayed flight was handled left a lot to be desired. I didn’t want to go into details above but the agent was not proactive in finding other options and I had to suggest a number of things. She also insisted on putting me in coach until I pushed back about being in first class. I am not an elite on Delta so I wonder if that had something to do with it.
For flying a relatively old fleet, the Airbus I was on is 23.3 years old, Delta does a pretty good job keeping the interiors clean and well kept. I didn’t see any panels loosely hanging or build ups of dirt and grime anywhere. The lavatories on both flights were the cleanest I have ever seen on an airplane.
I was happy to finally get to try Delta on a mainline flight in first. I am planning a few more flights on them since some of their schedules to certain destinations are better than what United offers. I am also flying Alaska back to Seattle at the end of this week and hope write a review about their new E-175 service as soon as I can.
At LaGuardia, Delta is offering 100 new nonstop flights this summer to 26 new destinations. The expansion was made possible by an unusual deal with US Airways Group Inc (LCC.N), which swapped air traffic slots at LaGuardia for Delta assets at Reagan National airport in Washington.
“New York is a dogfight, and it’s really the holy grail for many of the competitors out there,” said Chuck Imhof, Delta’s managing director for New York sales.
While sitting on the tarmac at LaGuardia a couple of weeks ago it was very obvious that Delta is making a huge push at the airport. Seeing how American and United respond should make for an interesting fall season.
When I first saw the news that Delta Airlines was looking at the former ConocoPhillips refinery in Philadelphia I had to do a double-take. An airline running a refinery is just that strange. At first I thought it was a move by Delta to stir up the market a bit but this most recent news makes me think the Atlanta based airline is very serious about buying the facility.
The Trainer refinery is configured to produce a higher yield of jet fuel – about 13 percent of its output, or 23,000 barrels a day (966,000 gallons). Delta could ship the fuel by pipeline or barge to New York, where it has a large presence at LaGuardia and JFK airports.
Delta would ostensibly receive all of the jet fuel from the facility, but would probably swap much of the gasoline and diesel for jet fuel in other locations near Delta hubs.
I am still trying to understand where Delta thinks they will save the money. They will still be buying oil at the market price, the difference now is that they will be a refiner of said fuel. Refining crude oil is not a “value-add” process, it is a necessity. You can’t fly a plane on crude oil.
“The objective would be to achieve a 10 percent price reduction on a large portion of its fuel needs – which, if were achieved, would represent significant savings,” reported Linenberg, the Deutsche Bank analyst.
How? How are they planning to achieve that much of a reduction? Are they simply offsetting their fuel costs by selling the jet fuel on the wholesale market? If so, then how are they financing the operation of the refinery? Refineries are not cheap to operate and certainly not cheap to maintain. As stated earlier, oil companies do not view them as moneymaking facilities but rather, as necessities to compete in the market. The margins in refining are so small that it is hard to make money from fuel alone. Now, maybe if Delta is going to sell chemicals from the facility they can make the revenue that the article hints at.
I would love to have a sneak peek at Delta’s game plan. They must have some kind of strategy up their sleeve to make this work, but they’re going to wait to make it obvious to the rest of us.