Delta Air Lines is openly challenging United Airlines’ Pacific business. At the IATA annual meeting in Rio de Janeiro, Delta’s president told CNBC that the airline wants to become the top U.S. carrier across the Pacific, directly taking on United’s strong position. Here’s a look at the gap between them, what Delta is doing to catch up, and how United is reacting.
There is a big difference in revenue. United made about $6.89 billion from trans-Pacific flights, while Delta earned $2.79 billion, according to company filings. However, Delta was more profitable overall last year, with over $5 billion in net profit compared to United’s $3.35 billion. Delta’s new president, who took the role in March, believes the airline can bring its domestic profit edge to a market where United is currently ahead.
Delta’s strategy has two main parts. First, its partnership with Korean Air, which is absorbing Asiana Airlines, gives Delta more access and connections across Asia Pacific. Second, Delta is adding new routes. It started daily nonstop flights between Los Angeles and Hong Kong this month, using an Airbus A350-900. In response, United plans to launch a nonstop flight from San Francisco to Sapporo, Japan.
United CEO Scott Kirby, who also spoke in Rio, said he felt flattered rather than threatened by Delta’s challenge. He called Delta’s open competition a compliment and said he aims to beat Delta in every area.
Delta reported adjusted pre-tax income of $532 million for the first quarter, up 42% from last year. Premium ticket revenue grew 14% to $5.4 billion. The airline expects second-quarter earnings of $1.00 to $1.50 per share but warned that higher fuel costs could be a challenge this summer.
