Delta Air Lines’ history of international flight dates back to its first years as a Louisiana crop dusting operation.
In 1927, the two-year-old company extended dusting services to Peru and operated a mail and passenger route on the west coast of South America the year following.
Its first U.S. passenger flight abroad was in 1953, from New Orleans to Havana and Caracas. Its first trans-Atlantic flight left Atlanta for London in 1978. It began trans-Pacific service in 1987.
And in its next 100 years, the Atlanta-based carrier says its future growth will be global.
Today, Delta’s business is about two-thirds domestic and one-third international CEO Ed Bastian told The Atlanta Journal-Constitution in a January interview. Over the next 10-15 years, he expects that international business will grow closer to half.
“Only one in five people in the world have ever been on an airplane, which is humbling as an American,” he said. “And that’s the opportunity, to continue to make the world a more accessible place and in doing so, make the world a better place.”
But beyond reaching those across the world who aren’t frequent flyers, Chief External Affairs Officer Peter Carter explained that by expanding globally, Delta is also responding to its customers.
They are increasingly interested in international travel, he said, as the world has “gotten smaller in many respects.”
“That’s why we believe our future is global, because we think that’s where our customers want to be,” he said.
Global destinations are also where the company has the most room to grow. The U.S. map of air service is very mature.
‘One of our true superpowers’
Delta, which traces its history to Huff Daland Dusters, founded in March 1925 in Macon, is one Georgia’s most important companies.
It’s metro Atlanta’s largest corporate employer and one of the state’s best known brands. Delta is largely responsible for Atlanta being home to the world’s busiest airport and a major driver of the state’s economic development.
Delta currently serves more than 290 destinations in 190 countries and territories on six continents, with global hubs including Amsterdam, Bogota, London, Lima, Mexico City, Paris, Sao Paulo and Seoul.
But like other airlines, those planes don’t all have the word “Delta” painted on them. And that’s been a crucial part of its strategy — and a key way the airline says it will continue to be able to grow.
Credit: Geography Photos/Universal Image
Credit: Geography Photos/Universal Image
Due to international aviation regulations that prevent foreign airlines from serving domestic routes in other countries, most enter into strategic alliances to link networks and allow customers seamless international travel — while earning loyalty rewards.
Delta’s “SkyTeam” alliance includes 18 airlines. But what sets its alliance apart from others in the world is the way Delta has bought into several of those partners.
The company owns 49% of the parent company of Virgin Atlantic, 20% of Aeroméxico’s parent company, 15% in the largest shareholder of Korean Air, 3% of Air France and KLM and 2% in China Eastern. Delta also owns 10% of its South American partner carrier LATAM.
Credit: TNS
Credit: TNS
What that does, Carter said, is give Delta “a deeper perspective because we’re in the boardroom.” The company can better understand a partner’s long-term strategy and the risks they’re managing, he said.
“It gives us more skin in the game,” he said. Plus, it allows Delta to ensure its partners share things like a “premium customer vision” and sustainability best practices.
“We think one of our true superpowers, I’ll say, is our ability to partner with other airlines, and this strategy of joint venture agreements with what we think are the best brands in the world.”
Doing so, he said, reciprocally leverages loyalty to those other brands.
Koreans and Korean Americans, for example, he said, are very loyal to Korean Air.
But if they’re flying from Seoul and connecting into the U.S., booking through Korean will ultimately connect them to a domestic Delta flight.
Credit: Charlie FURUSHO
Credit: Charlie FURUSHO
Where to from here
As to where Delta will continue to look for more growth, Carter pointed to areas in Africa, India and the Middle East as some of its “white spots” on the map.
“We serve around 90% of where our customers want to go, but we want to be able to serve 100%,” he said.
Presently, the company has nonequity “codeshare” marketing relationships with many carriers including Kenya Airways and Saudia that offer linked service and expand Delta’s reach.
In an effort to better serve the Middle East, it also has signed an agreement with startup Saudi airline Riyadh Air, which is backed by the Kingdom of Saudi Arabia.
That airline isn’t flying yet, but Carter predicted it “will someday have a commercial relationship” with Delta, likely as a codeshare.
Africa is unique in that no carrier serves the continent broadly like LATAM does in South America for example, he said.
Carter said he didn’t know if there’s a need for Delta to reach a future equity agreement with Kenya. He said he thinks Delta can, for now, grow within the continent by relying on its own existing service to Africa, as well as its European partners' routes there.
But Africa, a continent with more than 1.5 billion people, is a market that will continue to grow and “we’ll look for opportunities as a result,” he said.
India, another massive economy with a huge diaspora of Indians and Indian Americans, is another market they’re hoping to serve better, Carter said.
But doing so is particularly complex due to the closure of Russian airspace to American carriers since the start of the war with Ukraine. “We cannot really serve India until Russian airspace is reopened and none of us know when that will be,” he said.
It’s not alone. United Airlines is the lone U.S. carrier to hold onto one daily flight between Newark and Delhi, but had to stall plans for big future growth.
While Bastian last year reportedly said the company would try to relaunch flights in to India in the next couple of years, Carter backtracked on a firm timeline in his interview with the AJC: “It’s fair to say that someday we hope we can serve India, we just can’t put any sort of date out there under the current landscape.”
Best laid plans
The way that the Russia-Ukraine war has prevented U.S. airlines from serving a possibly profitable market is just one example of the litany of things that can go wrong with an airline expanding its global route map.
Delta is “not planning anything for the next 100 years,” says Mike Boyd, an air service development consultant with Boyd Group International.
“They’re planning for the next three to five, knowing full well that anything beyond, say, 36 months is in pencil.”
Delta at the very last minute was forced to cancel its first Atlanta-Nairobi flight in 2009 due to terrorist threats. In 2017, it discontinued Venezuela flights because the government withheld nearly $200 million in ticket-sale revenue.
Several years ago, Boyd said, China was seen as a hot market for expansion. Today, the Chinese government’s policies have dried up much of that.
Delta, which does fly to Shanghai from Detroit and Seattle, will relaunch service from Los Angeles this summer after suspending it during the pandemic. Its Atlanta-Shanghai route, however, will not return due to a decline in demand and Russian airspace closure complications.
There are also the costs to serve international airports. Some European airport fees have gotten very expensive, Boyd said. And on the other end of the spectrum, some airports in less-developed parts of the world aren’t usable by U.S. carriers without meeting certain safety requirements.
Aircraft availability is also a challenge for long-haul route growth, as well as fuel prices.
Delta has said that allowing for more international growth is a driver of the company’s sustainability strategy. International agreements are already pushing airlines to ramp up efforts to reduce carbon emissions, and Delta is also supporting a slew of other pilot programs and research to bring more fuel efficient planes and strategies to market.
‘No one better connects the world’
Then there’s the domestic competition. United currently is the world’s largest global airline in terms of seat capacity.
That airline has shown to have the “sharpest” international long-term planning department in the industry, Boyd said, finding unique secondary markets like Málaga, Spain.
Carter challenged that Delta is more profitable than its competitors, “And depending on what parts of the world you look at, they’re trying to catch up with us in a big way.”
He predicted Delta will surpass United in the trans-Pacific with the impending growth of Korean’s hub at Seoul’s Incheon Airport.
“We do say no one better connects the world, and we want to be able to say that with sort of a sense of pride and humility at the same time,” he said. “I think we really are that airline, in all due respect to our competitors.”
Bastian says global growth is about more than just business, “because that should help in bringing better understanding to parts of the world.”
As a result, he thinks Delta “has a role to play” in bridging some of the geopolitical tensions that the company currently must navigate.
Boyd said Delta will ultimately “expand where they can make some money.” But it won’t be exponential growth.
“They’re going to be looking at what makes sense to them, and in some cases, not expanding makes more sense than expanding.”
Delta will weigh the multitude of challenges to charting global expansion at every turn, he said.
“Those markets are there. But this is not like a giant pinata floating in the sky you whack on until some good new routes come out.”
The Atlanta Journal-Constitution has launched a series of stories to mark the 100th anniversaries of both Delta Air Lines and Hartsfield-Jackson Atlanta International Airport. This is the second story in the series.
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