DL to start ORD-LHR

[737823]

AA BOS-LHR went from double daily 777s to nothing in four years, the market is there but AA gave it such a pitiful product on the 75L towards the end of its run, especially compared to JBV partner BA.

Having flown all the carriers on the route, DL and VS have the best C cabin product both above of BA IMO.

Josh

 

[metopower]

Cvg only has 737 and m88... 767-400 is in atl and JFK only

 

[WorldTraveler]

thanks, meto.

Just to validate your comment, Josh, the increase in DL's average fares both from BOS to LHR and in the US to LHR as a whole in the most recent DOT reporting period was larger than the growth for any other US carrier.

DL's problem at LHR isn't that it can't attract premium passengers but rather than it hasn't had access.

The VS JV and ownership stake is about giving DL access to LHR and to use DL's proven experience with TATL JVs to make VS a financial success across the Atlantic, something they haven't been able to do for quite some time.

DL has the right ingredients in hand to compete at LHR and it is certain that they will aggressively compete in that market, particularly given that VS is now DL's largest foreign investment.

 

[eolesen]

Can't fault DL for trying, but I think you're really overstating the value of the VS network at LHR.

Outside of North America and the UK, VS only flies from LHR to 8 destinations, all of which are served by DL if I recall.

 

[WorldTraveler]

The DL-VS JV does not extend beyond the UK because the DL-AF/KL already is the "beyond gateway" JV for DL in Europe.

DL's interest in VS is almost entirely at LHR where VS offers the 2nd largest number of seats to the US. In a market with virtually no growth and very limited rearrangement of the market, VS is in a very strong position - and DL's partnership with VS is meant to maximize both carriers' strengths.

 

[eolesen]

VS is in a very strong position

They have strong brand recognition, but like many airlines, their position is a bit disproportionate with their actual presence and network coverage.

In the case of ORD-LHR, they haven't been able to maintain year-round service since 2007.

Today, they account for 16% of the US-UK capacity, compared to AA at 13%.

Yes, they're the #2 carrier, ahead of the US carriers about 1000 seats a day.

That's due mainly to their larger gauge aircraft -- their smallest aircraft has 316 seats. That lead is going to shrink a bit in 2014 as AA deploys the 773 (going from 247 to 310 seats per departure).

 

[WorldTraveler]

VS has little brand recognition in the US outside of the big east and west coast markets. Their marketing pull is in the UK for the most part. DL helps with that.

AA and BA still use LHR as their primary connecting hub within and beyond Europe. That is not DL and VS' intention and therefore the sheer number of seats between carriers isn't the real criteria.

DL hasn't hasn't had sufficient access to LHR to be able to compete effectively. All the evidence says that on competitive routes like JFK and BOS where they have a presence now, they do fairly well - average fares and LFs not far from AA and BA.

It isn't even clear that DL will operate ORD-LHR beyond the winter... schedules haven't been released that far out. At the minimum, DL is going to be able to operate a route thru the winter that VS hasn't been able to operate on its own. Given VS' traditional weakness on the route, it would seem that any information that Craig Kreeger, formerly of AA, and DL's sales help in ORD (remember DL now has 20% share at industry average fares in the ORD-LGA market) will help DL in this market.

On a larger level, it is very likely that DL will expand its presence at LHR thru the VS partnership, possibly including larger aircraft and additional routes operated by DL. VS will benefit from being able to put its code on DL's US flights and from DL's sales efforts as part of the JV.

Given what has happened with every other JV that has involved a US carrier, the chances are very good that DL and VS will both be stronger in the US-LHR market within a couple years.

remember also that there is a LHR slot that is supposed to be divested from AA/US according to the order of the EU but there has been virtually nothing more said about that.

 

[eolesen]

Don't disagree that the JV will help, and that's ultimately going to come at UA's peril.

Compared to what will become 64% for AA/BA and 23% for DL/VS, UA's the one who likely loses here.

Historically, they squandered the franchise they bought from PA at LHR, and only just recently got back up to 12% with what s-CO was flying from EWR and IAH (they represent >40% of UA's lift to LHR). With the loss of BD's feed for Star Alliance, that 12% will shrink as DL/VS grows.

 

[WorldTraveler]

I have noted that DL's growth at LHR is likely going to come from UA, not AA/BA. UA doesn't fly JFK-LHR which is the biggest US int'l route. I'm sure there are Wall Street guys that are accustomed to heading to EWR and over to LHR but the majority of NYC travelers still overwhelmingly use JFK - and that is where both AA/BA and DL/VS have their largest operations.

AA/BA waited for so long to form the JV because they recognize the value of the LHR market - it is "landlocked" and it is a valuable market. AA/BA's strategic problem is that they need to be able to push alot of their connecting traffic off of LHR - either on AA nonstops to the rest of Asia or via a large hub on the continent - and for now MAD isn't in the same league as AMS, CDG, or FRA/MUC.

When you factor in that UA is still overhubbed and those hubs are dependent on small RJs far more than AA/US is, then the likelihood is that UA will have to rationalize their hubs which will have an effect on their int'l presence.

But it is also true that AA/BA has been in a class of its own at LHR... DL might not be sitting at the front for quite some time but they have gotten both feet squarely in the room which hasn't happened before.

Like Latin America, LHR is AA's backbone and I have no expectations they will retreat from it or yield it to anyone else.

But, again, we are talking about DL/VS making one flight/day work compared with, what 8-10 or more, between ORD and LHR?

 

[eolesen]

It's a pretty saturated market -- UA and AA each have 3, and BA has 2 for the winter schedule (which is the season we're discussing). 2 of those are daytime departures.

This will make 6 evening departures. In winter.

DL relying only on the local market is going to be a lot uglier than what they're seeing on ORD-CDG, which I've heard has been running <50% over the winter.

Granted, the overall O&D is larger for LHR than CDG, but feed traffic takes away a lot of the stink in the off season.

 

[WorldTraveler]

just a reminder that VS does offer connections within the UK as part of Virgin Red so the market is not just ORD-LHR.

Further, this is clearly a development route. All new routes are. DL and VS are apparently comfortable enough with the early results of the JV (it has been in effect for about 45 days) that they are willing to give ORD-LHR a try. Given how new the JV is, it either says the results are coming in strong or that both sides are willing to invest in some new routes in order to expand their footprint.

Also, the route start is over 8 months away.... don't be surprised if you see DL make other moves in the domestic Chicago market to strengthen its marketing position.

It's still just a 767 and DL and VS do have the ability to discount to help fill seats if they need to.

 

[topDawg]

I find this move surprising even with the JBV. DL doesn't have a large presence at ORD and never really has, unlike BOS, MIA, PDX, SFO, etc where they operate long haul flights. I assume this flight will operate from T5 as I doubt their gates in T2 can accommodate a 763.

Josh

Yes it will be in T5 like the CDG fight. 
 

Does DL have a crew base at ORD? If not, safe to assume they'll stage the crews something like DTW-CDG-ORD-CDG-DTW?

Josh

FA's have a base. 
for the pilots it will be covered via other bases. 
 

I am quite certain that DTW pilots fly the CVG-CDG flight now so your assumption is probably correct.

 
Its not just DTW 7ER. IIRC NYC/LAX also gets some of the flying. 

what crew and aircraft does dl use from pit to cdg   if they still do that run?  I remember they started shortly after us pulled the plug on the pit fra and pit cdg run

its on a 757. 
 

Meto or Kev might wish to comment but I believe CVG is now only a pilot base for one of the narrowbodies - I think the M88.

I also believe the only 764 (which is not common with any other fleet type) pilot bases are ATL and JFK.

relatively small pilot bases are expensive to operate given reserves so it is more economical to do W patterns like you noted. DTW doesn't have that much 767 int'l activity so the more it serves as a regional pilot base, the better it works.

It also argues that a common fleet for the city could help put a pilot base there but there are very different demand patterns between AMS, CDG< and LHR.

quick list here
 
ATL
717
73N
7ER
765
777
320
330
M88
 
DTW
717
73N
7ER
777
744
320
330
 
NYC
73N
7ER
765
320
M88
 
MSP
7ER
320
M88
 
SLC
73N
7ER
320
 
LAX
73N
7ER
 
SEA
7ER
330
 
CVG 
73N
M88 
 
7ER= 757-200/300 767-300/300ER
765= 767-400ER
777= 777-200ER/200LR
73N= 737-700/800/900ER
M88= MD88/90

 

[FWAAA]

According to airlineroute.net, the inventory has been pulled and the flight removed from the timetables.

 

[AdAstraPerAspera]

Wow, I didn't think DL would give up that quickly! I guess the battle was lost before it had begun.

 

[metopower]

Did that flight ever start?