Delta has a new secret weapon against American and Southwest
Delta's new Bombardier C-Series jet will enter service next spring. The jets will be based in New York and Los Angeles. Delta has 75 C-Series jets on order with an option for an additional 50 planes. Next Spring, Delta's new fleet of Bombardier C-Series jets will enter service and they are expected to go straight into two of the airline's most hotly contested markets, New York and Los Angeles.
During Delta's most recent earnings call, company president Glen Hauenstein confirmed that the first of its new Bombardier jets will be based in New York.
On Monday, Bloomberg's Michael Sasso reported that Delta issued an internal memo to pilots regarding plans to also base its C-Series fleet in Los Angeles. In addition, the report identifies Dallas as another major market targeted by the C-Series.
A Delta representative declined to comment on the matter.
"We cannot comment on potential future commercial activities for regulatory compliance reasons," the spokesman said in an email. "Delta will only confirm flight schedule detail when flight schedules are published for sale or as part of regulatory filings."
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However, the importance of these base locations cannot be overstated. New York, Los Angeles, and Dallas are not only three of the most highly competitive market in the country, they are also home to American and Southwest.
Benjamin Zhang/Business InsiderOver the past few years, Delta's direct competition with the two Dallas-Fort Worth area airlines has increased considerably. With its acquisition of AirTran Airways in 2012, Southwest's presence in Delta's Atlanta fortress has grown considerably, even though its operation in the city wasn't quite as large as AirTran.
While the newly merged American Airlines now has the benefit of US Airway's former fortress hub in Charlotte, which has become a popular transit location, effectively siphoning traffic from Atlanta.
With the C-Series, Delta has a long range, ultra-fuel efficient, 100-seat jet capable of making money in markets where competition has depressed profits. In addition, the new Bombardier jet will allow Delta to operate mainline service in markets that traditionally made do with smaller regional jets.
"Having a 100-seat long range jet does open up some new market opportunity that we don't have today," Hauenstein said during the call.
SwissAccording to the airline's president, Delta plans to use the C-Series on a number of routes currently operated by its 76-seat regional jets. This will, in turn, allow the 76-seaters to replace tiny 50-seat jets, which are exiting the airline's fleet.
In April 2016, Delta placed an order for 75 Bombardier C-Series jets worth as much as $5.6 billion at list prices. In addition, the deal includes an option for 50 additional C-Series jets. This order makes Delta the C-Series' single largest customer.
The Bombardier C-Series is the Canadian airplane maker's first attempt at a modern mainline airliner in competition with the smallest variants of the Airbus A320- and Boeing 737-families of jets. The state-of-the-art airliner entered service in 2016 with SWISS and Baltic Air. Both airlines report that the C-Series has delivered fuel economy even better than Bombardier's claimed 20% improvement over previous generation jets.
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