Delta Air Lines this week announced plans to begin services to London Heathrow from Boston on a twice daily basis and Miami on a daily basis from March 27th, 2011.
LONDON HEATHROW: LIMITED SKYTEAM PRESENCE
The move comes as oneworld members American Airlines and British Airways were forced to hand back valuable slots at London Heathrow in the wake of the recent oneworld joint venture.
The move is an important step for SkyTeam which is seeking to boost its presence in the lucrative transatlantic market from London Heathrow. Air France had previously tried to operate London Heathrow to the US before cancelling its services. With the new services, Delta will operate ten daily flights from LHR to the US. These services will have significantly improved Delta Air Lines bottom line when previously the carrier had operated a number of services from London Gatwick.
The London Heathrow to US market is largely dominated by oneworld and Star Alliance as the table below illustrates:
|
CARRIER/ ALLIANCE |
WEEKLY FLIGHTS |
DESTINATIONS |
MARKET SHARE |
|
British Airways(oneworld) |
236 |
17 |
40% |
|
American Airlines(oneworld) |
106 |
7 |
18% |
|
Virgin Atlantic (non-alligned) |
76 |
7 |
13% |
|
United Airlines (Star Alliance) |
56 |
4 |
10% |
|
Continental Airlines(Star Alliance) |
49 |
2 |
8% |
|
Delta Air Lines(SkyTeam) |
49 |
4 |
8% |
|
Air New Zealand(Star Alliance) |
7 |
1 |
1% |
|
US Airways(Star Alliance) |
7 |
1 |
1% |
|
Kuwait Airways (non-alligned) |
3 |
1 |
1% |
|
Total |
589 |
20 |
100% |
Source Flightbase 14-20 November 2010
The boost in services at London Heathrow will be an important step for SkyTeam with oneworld having a 58% share of the LHR transatlantic market and Star Alliance a 20% share.
Delta Air Lines currently operates four destinations from London Heathrow to Atlanta, Detroit, New York (JFK) and Minneapolis. Atlanta, Detroit and Minneapolis are Delta’s three largest hubs in the US, with its SkyTeam partners in Europe ,KLM-Air France and Alitalia, also providing significant European feed to Delta’s transatlantic services. This is illustrated by KLM ticketing over 131,000 Amsterdam originating passengers via London Heathrow to the US.
WHY BOSTON AND MIAMI?
Delta Air Lines has a significant presence at Boston, and Logan Airport is the tenth largest market in the Delta system in terms of weekly flights operated and will provide Delta with connectivity in Boston. Delta will be entering a market that is already well served with American Airlines operating 13 weekly flights, British Airways a triple-daily and Virgin a daily rotation operated with A340-300 aircraft.
Between July 2009 and July 2010, over 638,000 O+D passengers flew this sector with the oneworld alliance having a 73% share of these passengers. There is limited non-stop SkyTeam access to the US with a daily Air France service from Paris and a five-times weekly service from Rome Fiumicino operated by Alitalia.
With Boston offering a mix of VFR and leisure and a relatively short sector length, Delta will believe the market is large enough, and their respective connectivity is strong enough for the route to succeed.
Miami is a smaller operation for Delta Air Lines, however is traditionally a strong market from London Heathrow. It is currently operated by American Airlines ten-times weekly (Nov 14-20,2010) British Airways on a double daily rotation and Virgin Atlantic on a daily basis. In the time frame between July 2009 and July 2010, over 587,000 O+D passengers flew between the city pairs, with British Airways having a 33% share of this traffic and American Airlines 12%. Although Miami is a largely seasonal market, demand should be strong enough to support year round daily service from Delta.
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