Delta charges its way to the top

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

Source: Bureau of Transportation Statistics, Schedule P-12

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

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2.
* Delta Air Lines, after completing its merger with Northwest Airlines, reported combined numbers for the first time in the first quarter of 2010. For previous Northwest reports, see Financial Press Releases

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

Source: Bureau of Transportation Statistics, Schedule P-12

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

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2.
* Delta Air Lines, after completing its merger with Northwest Airlines, reported combined numbers for the first time in the first quarter of 2010. For previous Northwest reports, see Financial Press Releases

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

Source: Bureau of Transportation Statistics, Airline On-Time Data
* Includes canceled and diverted flights
** For flights late more than 30 minutes only. Excludes canceled and diverted flights

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.