Delta to End BA Monopoly on London - Seattle

In anticipation of receiving antitrust immunity later this year for its joint venture with Virgin Atlantic Airways, US carrier Delta Air Lines will introduce a new daily non-stop service from Seattle-Tacoma International Airport to London Heathrow Airport from March 29, 2014, ending British Airways’ long-held monopoly on this city pair.

New service from Seattle to London Heathrow gives Delta's customers nonstop access to one of the world's top business markets and is an important enhancement to Delta's growing trans-Atlantic and trans-Pacific network from Seattle. The west coast US city is one of Delta's fastest-growing international gateways. In June this year the carrier added flights to Shanghai and Tokyo Haneda, complementing its long-established service to Tokyo-Narita and adding to its links to Beijing and Osaka, Japan which it has served from Seattle since 2010.

Through its trans-Atlantic joint venture with Air France-KLM and Alitalia, Delta also offers Seattle area travelers non-stop services to Paris and Amsterdam while also providing connecting service to more than 150 additional destinations beyond those European hubs. With new service to London-Heathrow, Delta will operate flights to eight non-stop international destinations from Seattle.

"Our international expansion in Seattle is possible because of our partnerships with Alaska Airlines, Virgin Atlantic and Air France-KLM," said Glen Hauenstein, Executive Vice President - Marketing, Network Planning and Revenue Management, Delta Air Lines. "Together the airlines can provide customers in the Pacific Northwest with an unmatched global network and an industry-leading customer experience on the ground and in the air."

In December 2012, Delta and Virgin Atlantic announced Delta's plans to acquire 49 per cent of Virgin Atlantic. The carriers intend to form a Transatlantic joint venture to optimise schedules and services between North America and the UK. Delta last month obtained unconditional clearance from the European Commission and the US Department of Justice to proceed with the investment transaction and now both carriers are awaiting US Department of Transportation approval of antitrust immunity to implement their joint venture.

On July 3 this year, Delta and Virgin Atlantic launched reciprocal codesharing across 108 routes to 66 destinations throughout North America and the UK and with the new Seattle service, Delta will operate ten daily non-stop flights to London Heathrow from six destinations including Detroit, Minneapolis, New York JFK, Boston and Atlanta. The route will be operated with a 210-seat Boeing 767-300ER featuring 35 full flat-bed seats in Business Elite, 32 seats in Economy Comfort and 143 Economy class seats.

The London Heathrow – Seattle Tacoma route is currently served only by British Airways (BA). In fact the carrier has had a monopoly in this market except for a seven month period between June 2008 and January 2009 when Northwest Airlines also served the route. BA currently operates a daily Boeing 747-400 rotation but ahead of Delta’s expected arrival outlined plans in April to introduce an additional three weekly rotations aboard a 777-200ER from October 27, 2013.

MIDT data shows a rather constant O&D demand on this route but clearly highlights how the arrival of competition and additional capacity stimulated the market in 2008 and 2009. In the table below we highlight how bi-directional O&D demand has changed over the past seven years, a period during which average one-way air fares have remained above the $1,100 figure, reaching a high of $1,297 in 2012.