Things in the Sky

Last Friday, Delta announced its post-slot swap schedule for LaGuardia, revealing an expansion plan that includes multiple daily flights to new destinations such as Charlotte, Dallas, Houston, and Miami. That move makes a whole lot of sense considering Delta’s push to win the market for New York business travel. (Cranky Flier noted yesterday that the boosts in large-city service comes at the expense of smaller markets.)

Over the weekend I dove into some DOT O&D data to take a look at Delta’s additions to see what it meant for the airline’s coverage of the top 50 destinations from LaGuardia (table below). By my count, Delta already had service to 24 of the largest 50 domestic destinations, and will be adding service to 13 more with this latest schedule move. That leaves 13 remaining markets not served. Let’s take a look:

• Ten of those thirteen markets, like Los Angeles and San Francisco are restricted by LaGuardia’s perimeter rule. Delta could fly to these longer-haul destinations if it wanted to, but would only be allowed to do so on Saturdays.
• One of the top markets is Chicago-Midway, and Delta already has ample service to O’Hare. (In 2010, Delta ended Midway-LaGuardia service and replaced it with O’Hare flights. It’s worth noting that the MDW-LGA flights initially replaced O’Hare-LaGuardia flights back in 2007!
• The remaining two airports are Akron-Canton and Williamsburg, both of which have nonstop service from AirTran. In the case of the former, Delta is already adding service to Cleveland so it isn’t much of a big deal, in my opinion. In the case of the latter, Southwest is closing that station altogether in March, and Delta will be adding service to nearby Norfolk.

Edited at 11:49pm on 12/20 to note that the data used to generate the table only included domestic markets.

Delta is adding regional service between Los Angeles and Denver (again), according to the always-informative Airline Route blog, with four daily CRJ-700 flights launching on June 7.  The service will be operated by SkyWest, according to Delta.com.

If this route sounds familiar, it should! It was added by Delta back in 2007 back when ExpressJet was a Delta Connection airline. (The partnership didn’t last.) Northwest even gave this route a try back in 2004, but I believe that was a move against Frontier, especially as Frontier decided to experiment on the Los Angeles – Minneapolis route.

So, why is Delta giving the route another try? It’s quite competitive already, with multiple daily flights from American Eagle, Frontier, Southwest, and United (including a 777 flight!).

Back in March 2010 when the carrier announced some new Los Angeles service (including regional service to San Francisco), it included this interesting blurb from Glen Hauenstein EVP of Network Planning and Revenue Management:

Los Angeles’ strategic position in the Delta network continues to gain importance as we expand opportunities for customers to connect to our trans-Pacific services from this growing, thriving gateway. We are pleased not only to continue to expand service for Delta customers via L.A. but also to offer the convenience of L.A. connections to customers flying our alliance partners.

That quote, of course, is now over a year old, but I think it’s still valid. Delta has its own trans-Pacific service from Los Angeles (Sydney and Tokyo), and many of its partners fly there as well, including joint venture partner Virgin Australia.

Nevertheless, it’s been interesting to see Delta build up some regional flying out of Los Angeles, including Oakland and Sacramento service that began earlier this year. We’ll just have to see how it develops.

Slightly-Related Side Note!

New routes like this one is why I’m sometimes a bit skeptical about American’s cornerstone strategy. I think it’s fair to say that American is just one (albeit large) player in a crowded market, as Delta, United, and Virgin America all put some kind of focus on Los Angeles. In New York, meanwhile, American faces a strong competitor in United, and Delta’s position in New York will only be bolstered if the slot swap is implemented (it was approved yesterday, but DOJ is concerned about DCA). Lastly, American already has to co-exist with United at O’Hare, and Southwest  has a substantial operation at Midway.

So the only two cornerstones where American is dominant, really, is Dallas and Miami. In the case of the former, American will start facing stronger competition from Southwest once the Wright Amendment restrictions are fully removed in 2014.

Based on the latest Air Travel Consumer Report from the DOT, Delta Air Lines’ performance in areas such as complaints, baggage handling, and on-time arrivals appears to have improved considerably.

First off, let’s take a look at complaints. In June 2010, Delta was the worst of all carriers, with 3.08 complaints to the DOT per 100,000 enplanements. Complaints in June of this year, however, were only 1.03 per 100,000 enplanements.

Of course, it might be unfair to look at only one month of complaints. But Delta’s complaint performance for the first half of 2011 has also been good, at 1.27 complaints per 100,000 enplanements, a decrease from 2.20 during the same period one year ago. Perhaps the additional training Delta has been giving to its customer service agents has been making an impact?

Delta’s performance on baggage handling has also improved, recording 2.99 mishandled baggage reports per 1,000 passengers in June, a decrease from 3.47 reports a year ago. Reports for the first six months of 2011 decreased to 3.00 reports from 3.67 reports in 2010.

Finally, Delta’s on-time performance relative to peers has also improved. 78.5% of Delta’s flights arrived on-time in June, enabling Delta to beat American, Continental, United, and US Airways in this metric for the second month in a row.

I asked Delta why on-time performance has been improving compared to last year, and the airline provided a few interesting reasons. A major factor was weather, especially in important areas in Delta’s network like the Southeast and New York. Summer thunderstorms can gum up any airline operation, especially when ground stops and delay programs are implemented by ATC.

In addition, Delta earlier this year launched initiative focused on D0 (“D-zero”) times, a metric that summarizes how many flights leave on time. Naturally, such an initiative involves many employee groups, including pilots, flight attendants, gate agents, ground crew, and dispatch.

Another reason that Delta’s on-time numbers look better this year is that in 2010 the carrier faced some hurdles as it ramped up flying for its summer schedule. The airline had already been operating the mixed Delta-Northwest fleet for awhile last year, but Summer 2010 was the carrier’s first under a combined operating certificate. In some cases, Delta had problems with aircraft availability due to maintenance issues. The airline has added seven line maintenance bases (five in summer/fall 2010, and two in 2011) in its network to help improve reliability.

But back to D0 times. I played around with the raw DOT on-time numbers and found some interesting results. When one compares June 2011 to June 2010 results, it appears that Delta has been making progress with this latest effort. This year, 51% of Delta mainline flights from Atlanta had pushed back by scheduled departure time, 5 points higher than one year ago. Granted, I’ve only looked at one year-over-year comp, so more digging is needed, but nevertheless I find this interesting.

Delta Air Lines is seeking some flexibility on the slots it uses for its service from Detroit to Tokyo-Haneda…this according to a filing with the Department of Transportation (DOT).

When the DOT awarded Haneda slots (two to Delta, and one each to American and Hawaiian), it imposed 90-day dormancy conditions on them. While I’m speculating here, DOT would not like to see a carrier win a bid for slots and not use them, especially if there’s the possibility of other carriers using them.

Anyway – Delta wants to be exempt from those conditions until June 1 next year. The carrier claimed in its filing that demand to Haneda is very week, and exempting the slots from the dormancy condition will allow Delta to “judiciously manage the re-introduction of capacity over the off-peak winter months and shoulder season in the early spring.”

Delta’s service from Los Angeles to Haneda has already resumed, and Detroit service is slated to come back on the 16th. The airline said it will operate daily Detroit-Haneda flights “for a portion of the current summer season” but it would also “temporarily reduce or suspend service until Tokyo business demand returns to more normal levels.”

Interestingly, Delta also proposed that it  ”is willing and prepared to operate the slots on an interim basis for beach market service.” Delta had also proposed Honolulu service in the original bidding process for Haneda slots – is it still interested in that market?

This has to be a very interesting issue from both sides.

If I were at the DOT, there would be a few factors that I would consider. The most obvious item is the earthquake and tsunami that hit Japan, which certainly seems like a good reason to temporarily suspend service. But at the same time, Delta had already delayed the launch of its Haneda service and had downgagued flights from 747s to 777s before the earthquake, implying that the route was not performing as well as hoped. In addition to that, both Hawaiian and United have already filed with the DOT to express their interest in picking up on Delta’s slots in case they go dormant. So what’s the best decision?

At Delta, meanwhile, what happens if the DOT doesn’t give the carrier the relief its seeking? Does Delta keep flying the route? That would let the carrier hold on to the slots, but potentially have negative financial ramifications if the market remains weak. But such a move could be worthwhile if the long-term prospects of Haneda’s profitability are good, and it also means keeping a competitor out of the Haneda market.

This one will be fun to follow over the next few days, as I’d be shocked if other airlines didn’t comment.

Anyway – Delta did have some interesting tidbits in its filing. First, the carrier said it expects the earthquake’s effects to cost between $250 and $400 million this year. Delta also noted that it “has been able to mitigate the effects on its Narita operation by increasing the mix of flow traffic through its hub.”

Delta also included some interesting graphs with its filing, showing the weakness of US-Tokyo demand, especially bookings from the US: