It seems that there’s an escalating war between the two largest airlines in the world with trash-talking from the executives of both teams. According to Airlne Weekly, American and Delta (who both saw success in 2015 with vastly different approaches), have turned their wrath on each other.
Executives made no mention of American’s longtime rival in Chicago, United. Nor did they talk much about low-cost carriers. Instead, they ripped Delta for losing billions of dollars from fuel hedging. They acknowledged Delta’s operational superiority but downplayed its extent. They noted how American’s pilots earn 7% more per hour than Delta’s pilots. They scoffed at Delta’s reliance on profit sharing to compensate workers. They alluded to Delta’s eventual need to spend heavily on fleet modernization, a process well underway at American. And they attributed Delta’s stronger underlying profits at the moment, excluding fuel hedges, to the simple fact that seven years have passed since the Delta-Northwest merger—it’s been just two since American merged with US Airways, implying lots of unharvested synergies yet to come.
Don’t worry about Delta though. They’ve always had plenty to say about their rivals and have ” become the industry’s preeminent trash-talker.”
Check out the fun read here to see why this war is about more than just talk.
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2 comments
The point about fleet modernization is quite accurate. Delta TechOps is the best in the industry, but everything eventually wears out.
The MD-88s can’t fly forever, despite being the most durable commercial airframe in history IMO. The 717s were an excellent acquisition, but can’t replace an MD88 one for one.
Most of Delta’s other narrow-bodies are starting to get up there in age too. The biggest concern though has to be the 72 767s. Most are over 20 years old, and won’t be easily replaced.
If one subscribes to the theory that the airline industry is due for another downturn in the next five years, that’s bad news for Delta, which would be forced to replace many older aircraft at around the same time that profits would be lower.
William: you’re right, the Mad Dog is an absolute beast, but worn airframes and dwindling spare parts means they’re already on their way out, each airframe likely retired at the next (costly) D-check or mishap (touch wood they’re not the injurious variety).
Delta does have a plan in place though: the 767-300ERs and 747-400s will be replaced by A330neo/737-900ER and A350-900s, and MD80-series (partially) replaced by ex-Air Canada Embrarer E190s, which you will find to be a pleasant upgrade. They also have a dormant B787-8 order on the books.
(source: https://en.wikipedia.org/wiki/Delta_Air_Lines_fleet)
The biggest risk for DAL going forward is fuel costs. They are lucky now that crude is ~$30 USD/barrel, but if their newer on-order aircraft are not in service before oil climbs to $70+ USD/barrel they are in a world of hurt.
In the meantime…. http://reactiongifs.us/wp-content/uploads/2013/02/popcorn_stephen_colbert.gif