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Delta charges its way to the top

28-Sep-2010
Delta Air Lines CEO, Richard Anderson
Delta Air Lines CEO, Richard Anderson

Delta Air Lines is not only the world’s biggest airline but, according to US Department of Transportation statistics, it holds a few more top spots as well.

The department's Bureau of Transportation Statistics has released January-June statistics for US carriers and Delta has garnered the top spot in a number of categories. Any assessment of the figures will doubtless depend on one’s perspective. For Delta and its shareholders, the news may be seen as favourable, while the airline’s customers may have a different take on the numbers.

Reservation Cancellation/Change Fees by Airline 2010
Airlines ranked by year-to-date reservation cancellation/change fee revenue, dollars in thousands (000)

Rank

Airline

1Q

2Q

2010

   

1

Delta Air Lines

165,284

181,824

347,108

   

2

American Airlines

114,367

120,979

235,346

   

3

United Airlines

74,678

83,661

158,339

   

4

US Airways  

62,683

65,643

128,326

   

5

Continental Airlines

58,928

61,146

120,074

   

6

JetBlue Airways

25,755

29,975

55,730

   

7

AirTran Airways

14,226

12,177

26,403

   

8

Alaska Airlines 

13,498

12,719

26,217

   

9

Spirit Air Lines

5,556

5,388

10,944

   

10

Hawaiian Airlines 

4,469

4,598

9,067

   

11

Virgin America

4,502

4,367

8,868

   

12

Frontier Airlines 

3,691

4,273

7,965

   

13

Horizon Air

2,126

2,202

4,328

   

14

Republic Airlines

1,720

2,178

3,898

   

15

Allegiant Air

1,097

1,173

2,270

   

16

Continental Micronesia

704

863

1,567

   

17

Sun Country Airlines

391

213

603

   

18

USA 3000 Airlines

225

130

354

   

19

Mesa Airlines

33

58

92

   
 

All Airlines

553,933

593,566

1,147,499

   

As the chart details, Delta is the clear winner when it comes to levying cancellation and change fees. As the largest carrier, one could assume they lead the pack because they transport more passengers.

However, as shown in Table 1B, their aggressiveness in collecting fees and charges has been unrivalled. There is a clear indication that Delta has chosen to enforce applicable fees in a way that others have not.

As a further indication of their zeal, and as a comparison, the combined collection total of the larger United Airlines/Continental, as a merged carrier, were well below the amounts collected by Delta.

Table 1B: Reservation Change Fee Collections
Ranked by 2nd Quarter 2010 Reservation Change Fee Revenue
Dollars in Millions (000,000)

 

2Q 2010 Rank

Airline

2nd Quarter 2009

3rd Quarter 2009

4th Quarter 2009

1st Quarter 2010

2nd Quarter 2010 (%)

Percent Change 2Q 2009-2Q 2010 (%)

1

Delta*

100.7

112.0

106.5

165.3

181.8

80.5

2

American

109.6

120.4

104.0

114.4

121.0

10.4

3

United

81.1

79.4

71.2

74.7

83.7

3.2

4

US Airways  

64.0

61.0

57.3

62.7

65.6

2.5

5

Continental

59.8

56.0

52.6

58.9

61.1

2.2

6

JetBlue

30.0

28.7

30.4

25.8

30.0

0.0

7

Alaska

15.3

15.6

13.4

13.5

12.7

-17.0

8

AirTran

12.3

12.2

13.5

14.2

12.2

-0.8

9

Spirit

5.9

5.9

5.9

5.6

5.4

-8.5

10

Hawaiian

6.6

6.5

4.7

4.5

4.6

-30.3

 

Industry Total**

606.5

613.5

565.6

553.9

594.0

-2.1

 
 

Heavyweight for bag fees

But it is not just in cancellation and change fees where Delta excels. Figures for baggage fee collections show Delta again leads the way and, as before, out-collects UA/CO combined figures.

Baggage Fees by Airline 2010
Airlines ranked by year-to-date baggage fee revenue, dollars in thousands (000)

Rank

Airline

1Q

2Q

Year-to-date

1

Delta Air Lines 

217,773

255,950

473,723

2

American Airlines 

128,539

152,059

280,598

3

US Airways 

120,720

135,601

256,321

4

Continental Airlines

76,603

91,031

167,634

5

United Airlines

71,145

84,824

155,969

6

AirTran Airways

35,005

39,204

74,209

7

Alaska Airlines 

21,166

25,394

46,560

8

Spirit Air Lines

16,033

16,811

32,844

9

Frontier Airlines 

13,872

15,470

29,342

10

Allegiant Air

14,826

14,437

29,263

11

JetBlue Airways

13,763

14,012

27,775

12

Hawaiian Airlines 

11,672

13,523

25,195

13

Virgin America

7,328

9,124

16,452

14

Southwest Airlines

6,872

7,923

14,795

15

Republic Airlines

6,418

6,366

12,784

16

Sun Country Airlines

3,971

2,406

6,377

17

Horizon Air

762

5,293

6,055

18

USA 3000 Airlines

954

819

1,772

19

Continental Micronesia

585

813

1,398

20

Mesa Airlines

539

731

1,270

 

All Airlines

768,546

891,791

1,660,337

And, as was the case in the previous table, the percentage increase registered by Delta is unrivalled by any of its peers except Alaska, which has moved from a much smaller base number.

Again, it would appear that a passenger’s chances of getting some relief on baggage charges are fairly slim at a Delta counter.

Table 1A: Baggage Fee Collections
Ranked by 2nd Quarter 2010 Baggage Fee Revenue
Dollars in Millions (000,000)

 

2Q 2010 Rank

Airline

2nd Quarter 2009

3rd Quarter 2009

4th Quarter 2009

1st Quarter 2010

2nd Quarter 2010 (%)

Percent Change 2Q 2009-2Q 2010 (%)

1

Delta*

118.4

129.5

131.1

217.8

256.0

116.2

2

American

118.4

119.5

129.2

128.5

152.1

28.5

3

US Airways

104.1

111.4

122.5

120.7

135.6

30.3

4

Continental

63.2

66.0

69.7

76.6

91.0

44.0

5

United

67.4

77.9

64.6

71.1

84.8

25.8

6

AirTran

40.5

40.2

34.3

35.0

39.2

-3.2

7

Alaska

6.2

25.2

21.8

21.2

25.4

309.7

8

Spirit

16.2

16.4

14.3

16.0

16.8

3.7

9

Frontier

13.5

14.9

14.4

13.9

15.5

14.8

10

Allegiant

12.0

10.3

10.2

14.8

14.4

11.9

 

Industry Total**

669.6

739.8

741.6

768.5

892.8

33.3

 
 

Finally, of the top six flights most delayed in the period May-July 2010, Delta owns four of them. Admittedly, in a network of thousands of daily flights, four is a very small number. However, interestingly, none of its legacy competitors appear in the group and the carrier cannot be pleased to be recognised in this area.

May-June-July 2010 Regularly Scheduled Flights with More than 50% Delayed Arrivals of More than 30 Minutes

Carrier

Flight Number

Month

Origin-Dest

Scheduled Departure Time

Total Operations (minimum of 10 per month)*

Number Not On-Time*

Percent Not On-Time*

Average Minutes of Delay (30 min late flights only)**

Delta

2888

May

ATL-GRR

2035

31

17

54.8

119

Delta

2888

Jun

ATL-GRR

2035

30

25

83.3

103

Delta

2888

Jul

ATL-GRR

2035

31

17

54.8

91

                 

Delta

126

May

DTW-JFK

1315

31

16

51.6

82

Delta

126

Jun

DTW-JFK

1315

29

16

55.2

70

Delta

2798

Jul

DTW-JFK

1330

30

17

56.7

71

                 

Delta

1591

May

FNT-ATL

1720

31

16

51.6

96

Delta

1591

Jun

FNT-ATL

1730

26

18

69.2

93

Delta

1591

Jul

FNT-ATL

1730

22

16

72.7

82

                 

Delta

1777

May

ORD-ATL

1905

25

16

64.0

79

Delta

1777

Jun

ORD-ATL

1904

26

14

53.9

114

Delta

1777

Jul

ORD-ATL

1904

25

14

56.0

70

                 

Southwest

595

May

BWI-SDF

2050

19

12

63.2

68

Southwest

595

Jun

BWI-SDF

2050

26

19

73.1

76

Southwest

595

Jul

BWI-SDF

2050

25

17

68.0

81

                 

ExpressJet

2452

May

ATL-EWR

1700

25

14

56.0

129

ExpressJet

2890

Jun

ATL-EWR

1700

26

15

57.7

83

ExpressJet

2061

Jul

ATL-EWR

1700

25

16

64.0

99

Delta seems determined to make fees count

Ancillary revenues are a hot topic in the US. The “Mad as Hell” campaign, sponsored by ASTA, BTC and the CTA, is a concerted effort to root-out stories of passengers surprised, inconvenienced – or both – by “hidden” fees. Later this week they intend to present the results to US Congress in an attempt to spotlight the growing prevalence of fees and charges.

Delta clearly has embraced the concept of fees and charges, and appears to be the most ardent proponent of ensuring they are collected. It is a strategy that has helped the bottom line but may, in the end, bring unwanted focus to its unbridled enthusiasm and perhaps make it a poster child for practices that have raised the ire of consumers.


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