We're pretty sure Richard Anderson won't rest until he puts American Air in his rearview mirror.
Delta Air Lines Inc. passed United Continental Holdings Inc. to become the second-largest airline in the U.S., topping its rival for the first time since a series of mergers changed the industry landscape.
Delta now sits behind only American Airlines Group Inc. as the country’s biggest carrier by traffic, a common gauge of carrier size, according to the airlines. Airline traffic is a common way to measure size, in addition to revenue and passenger count.
Some of Delta’s gain may be chalked up to challenges United had merging with Continental Airlines, said Adam Hackel, an associate analyst at Sterne Agee CRT.
However, “The reality is, Delta offers better service and a better product than United,” Hackel said. “My first thought was people probably prefer to fly Delta now.”
Delta recorded 209.6 billion revenue passenger miles in 2015, an industry yardstick that multiplies the number of passengers by the distance flown. United recorded 208.6 billion revenue passenger miles, the company said in a statement Monday.
American hasn’t released its traffic for December or all of 2015, although it appeared poised to keep its lead. Through November, the airline had recorded 204.7 billion revenue passenger miles.
Representatives for United and Delta didn’t immediately respond to requests for comment.
Delta’s growth at home and abroad in such places as Brazil may have given it an edge over United, Raymond James Financial analyst Savanthi Syth said in September as Delta was gaining ground. Since traffic is calculated with flight distance, growth overseas can bump up an airline’s standing, she said.
While United recorded gains in on-time performance last year, the carrier continues to grapple with the aftermath of its 2010 merger with Continental, Hackel said. The new airline has faced several computer glitches that grounded flights and contended with persistent labor hurdles, such as failing to bring flight attendants of the separate carriers under a single contract.
United has wanted to expand in China and elsewhere but is “still not in a position to do that,” he said. Delta’s smooth merger with Northwest Airlines in 2008, by contrast, probably allowed it to build a new hub for Asian flights in Seattle, he said.
This article was written by Michael Sasso from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo Credit: Delta CEO Richard Anderson appearing on CNBC in December 2015. CNBC
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