Delta Has Big Concerns About Low-Cost Trans-Atlantic Competition
Skift Take
Delta is generally considered the most fiscally sound of the U.S big three, and that likely won't change soon. But Delta, like its competitors, needs to come up with a cohesive strategy on how to challenge the discount airlines beginning to move into the trans-Atlantic market.
As new trans-Atlantic discount airlines such Norwegian Air and Wow Air attract more international passengers, often stealing share from established players, Delta Air Lines signaled Thursday it may alter its offerings to keep pace.
"What we know know is that Delta has a very, very strong brand —much stronger than some of the [ultra low cost carriers] — and that people would prefer to fly with us than they would on some unknown, non-brand names," Delta President Glenn Hauenstein told investment analysts. "But in many cases, we don't have similar configuration mixes and product offerings. I think that is where we are going to be looking."
Hauenstein made the comments on Delta's third quarter earnings conference call, after the carrier reported net income of $1.26 billion. That was $278 million less than the same period in 2015, though the airline blamed roughly $150 million of the decrease on its August technology failure that snarled the carrier's flights for days.
While absolute profits are important, airlines and investors tend to focus on another metric, revenue per available seat mile, or RASM, which measures how much money a carrier makes for each mile it flies. On
