Howes: Delta soaring, powered by more fliers, auto business
Romulus — Delta Air Lines Inc.’s new CEO, Ed Bastian, is flying high.
The Atlanta-based carrier is setting records for reliability. Passenger counts are expected to reach all-time highs this summer. Fuel costs are down, and Delta is inaugurating yet another route to Europe Thursday — a daily non-stop between Detroit and Munich.
Thank the global auto industry for that one, a seasonal route likely to go year-round if it catches on with German auto types. And for continuing gateway service to Asia through Tokyo’s Narita International Airport. And for being a key reason that Detroit Metropolitan Airport remains a critical hub for Delta.
And for the fact that Detroit is soon to get more service to Mexico, a vital (if controversial) cog in the North American auto industry. Delta is close to acquiring a 49 percent stake in Aeromexico to create a joint-venture that would improve service to Mexico City and Monterrey, Guadalajara and León, a hub for Mexico’s burgeoning auto industry.
“Detroit is the best airport in North America,” Bastian said in an interview Wednesday at Metro Airport. “Period. We compete here against O’Hare” in Chicago. “We’re large in Detroit not just because of Detroit, but for connecting opportunities” — and the prospect of more to come.
Bastian became CEO on May 2, the first insider elevated to Delta’s top job since the 1980s. He served as president, chief financial officer and chief restructuring officer between 2005 and 2007; he helped lead Delta through bankruptcy and its 2008 acquisition of Northwest Airlines.
This is a good time to be running the nation’s No. 2 airline. The cyclical industry falls on hard times, even Chapter 11 bankruptcy, during recessions but soars in better times, especially when fuel is comparatively cheap. Now is one of those times.
Despite long lines, complaints of understaffed federal Transportation Security Administration checkpoints and lingering anxieties about potential terrorism, more people are flying carriers like Delta today than anytime in years.
“We are seeing the strongest summer bookings in our history,” Bastian says. “Fares are down. On average, they’re down about 5 percent from where they were a year ago. Our reliability is the best in the world, and it’s not even close.
“We are in the process, as I speak, of going 400 hours in a row without a single Delta cancellation. We operate over 3,000 flights a day. So that’s over two weeks that we’ve not had a cancellation for any reason, worldwide. Never happened before.”
The string probably will end sooner than later. But the sentiment behind it — a drive for improvement that its predecessor Northwest Airlines generally didn’t share — is a refreshing turn for an airline in the process of upgrading its services and its fleet of 1,400 aircraft with an average age of 15 years.
Over the next three years, Delta plans to add 80 Airbus A-321s to its fleet, 50 Boeing 737-900s, and more C-series narrow-body jets from Bombardier. Next spring, Delta will begin flying the new Airbus A-350 and reconfigure the interiors of its Boeing 777s for long-haul international service.
Delta plans to introduce a redesigned, and separate, “Comfort Plus” section between its luxury Delta One service and its main cabin. Unlike today’s comfort plus seats — identical to economy seats except for a few more inches of leg room — the new sections will feature wider seats and more space more akin to “Premium Economy” already available on Lufthansa’s transatlantic routes.
“The international world really demands that,” Bastian says, acknowledging Delta’s chief competition to be Lufthansa, Air France, British Airways, key Asian carriers and their U.S. partners American and United Airlines.
Still, there is turbulence ahead. Delta lost its effort to block American, United and their Japanese partners from likely claiming the majority of slots to be opened at Tokyo’s Haneda International Airport, just 15 minutes from downtown.
Delta’s response: to apply, along with other carriers, for the remaining two slots because traffic is expected to migrate to Haneda from Narita, 46 miles and a sometimes punishing commute from central Tokyo.
“We’ve asked for Minneapolis to Haneda and Atlanta to Haneda,” Bastian said. “Detroit to Narita is safe. Detroit is a large Asian finger for us. We’ll always serve Tokyo out of Detroit. That’s not a question.”
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.