Delta chief says US consolidation ‘great for market’
Ian Taylor
ian.taylor@travelweekly.co.uk
US airline consolidation has been “great” for the market, Delta Air Lines chief executive Ed Bastian insisted last week, rejecting claims that it has caused harm to consumers.
Bastian said: “The quality of the
[US airline] business is unlike ever before. Consolidation has been unambiguously great for the US marketplace.” European associations
representing air passengers, travel technology groups, travel agents and OTAs have called on the European Commission to review airline consolidation in Europe this month, citing the impact in the US (Travel Weekly, October 12). A report suggested airline
mergers and joint ventures had cut competition, especially in a US market now dominated by Delta, United, American Airlines and budget giant Southwest. However, Bastian insisted:
“In real dollar terms – including
“In real dollar terms – including baggage fees – fares are exactly the same as in 2008”
baggage fees – fares are exactly the same as in 2008.” Speaking in Atlanta, he said:
“On more than 240 days last year Delta didn’t have a cancellation. We could not have fathomed that 10 years ago. That is because we’ve been able to invest in the product. “We’re investing $4 billion in a
year to enhance the experience for our customers – and we’re paying all that in cash, not running up a bill.” Bastian said: “Our customer
net promoter scores six years ago were in the low single digits. Today they are in the low 40s. We moved our customers’ [view] more than 30 points from ‘I don’t like Delta’ to ‘I’m a massive fan of Delta’.” The report on ‘The Impact of Airline Consolidation on
BASTIAN: Delta chief says tie-ups have enabled airline to invest
Consumer Choice’ by aviation consultancy GRA suggested consolidation can lead to “higher fares and restricted supply” and concluded: “Evidence from the US suggests further consolidation may be costly.” It was commissioned by the
European Travel & Technology Services Association (Ettsa), the European federation of travel agents’ and tour operators’ associations Ectaa, and the European Passengers’ Federation. Bastian was speaking at an
event to unveil Delta’s first Airbus A350 which will commence flying between Atlanta and Tokyo Narita on Monday (October 30).
Alitalia sale delayed but flights guaranteed until September
The sale of Alitalia has been delayed until next April despite administrators receiving seven offers for the carrier by last week’s deadline, including from Lufthansa and easyJet. The Italian government pushed back the sale, blaming the delay on “strategic dynamics” in the airline sector, but most likely to avoid the carrier’s break-up becoming an issue in a general election expected in March. Alitalia entered bankruptcy protection in May and is in the hands of administrators.
Lufthansa Group confirmed it had submitted
an offer for “only parts” of the airline’s business and proposed a ‘NewAlitalia’. The German group has already acquired more than half the fleet of bankrupt rival Air Berlin this month in a €210 million deal. Both Alitalia and Air Berlin went into administration after leading shareholder Etihad withdrew support for the airlines. EasyJet also confirmed interest in parts of a restructured Alitalia. British Airways’ parent
IAG is also reported to have made an offer. But Ryanair withdrew from the bidding process last month to focus on its own crisis after cancelling the flights of more than 700,000 passengers between September and March. The Italian government agreed to provide an additional €300 million to keep Alitalia flying, guaranteeing flights up to September 2018 and taking its total provision since May to €900 million. Administrators had originally hoped to secure a deal by next month.
26 October 2017
travelweekly.co.uk 71
Bastian rejects notion that Delta runs Virgin Atlantic
Delta Air Lines has dismissed the idea that it runs Virgin Atlantic, with chief executive Ed Bastian insisting: “We paid for that brand to stand alone.” IAG chief executive Willie
Walsh told an aviation summit in May: “Virgin Atlantic is controlled by Delta. It has a 49% stake, but Delta controls Virgin Atlantic and leads the joint venture.” But speaking in Atlanta last
week, Bastian said: “Delta is not in control of Virgin Atlantic. We’re not in an economic position to control that airline. Of course, we provide our thoughts on how to enhance the company, but they provide their thoughts to us. Our Sky lounges reflect that. They look like a Virgin Atlantic Clubhouse.” Delta bought 49% of Virgin
Atlantic in 2013. Its partner Air France-KLM acquired a 31% stake in the UK carrier from Virgin Group in July.
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