Published on Monday, October 17, 2016
Delta mulling no-frills transatlantic service
After various hints and warnings revenue is falling on transatlantic routes, Delta Air Lines is considering a no-frills service to counter the growing influence of European based low cost carriers.
Competition from foreign low-cost operators was cited as a cause of falling revenue on transatlantic routes during last week's earnings call.
The airline said 'Brexit' and terrorism fears also impacted revenues.
Delta President Glen Hauenstein said it has to react to market moves and provide what customers want.
"I think we have to look at our entire service offering and ensure that we're supplying what the market wants to buy," he said.
"What we know is Delta has a very, very strong brand and much stronger than some of the ultra-low-cost carriers, and that people would prefer to fly with us than they would on some of the unknown non-brand names. But in many cases we don't have similar configuration, mixes, product offerings, and I think that's where we're going to be looking."
Those 'unknown' airlines Norwegian Air and Iceland's Wow Air are eating into Delta's market share but Delta has ruled out creating a specific low cost brand to directly complete.
"You don't need to create an airline within an airline you just need to adjust to what people want to buy in the marketplace. The closer we can get to what our customers want to buy in every sector, the more successful we're going to be —transatlantic is no exception to the rule," Hauenstein said.
This would become 'basic economy for international,' Hauenstein said.
"It includes cabins we don't have today, and I think that's the exercise we're going through is to see what do people really want to buy and what are they paying for it. How do we capitalize on moving, not providing something that Delta wants to provide, but providing something customers want to buy."