In a landscape dominated by fierce competition, Delta Air Lines stands out as the most profitable airline in the United States. Yet, despite its financial success, Delta finds itself trailing behind its ambitious competitor, United Airlines, particularly when it comes to the lucrative trans-Pacific market. United’s presence in this region is notably larger, a fact that Delta’s new president, Peter Carter, is keen to change.
Speaking at the International Air Transport Association’s annual meeting in Rio de Janeiro, Carter expressed Delta’s aspirations. “We want to become stronger, better, faster in the trans-Pacific, and we want to become the leading U.S. carrier across the Pacific,” he said in a conversation with CNBC. Carter’s vision doesn’t stop there. He boldly aims for Delta to emerge as the leading global carrier, a target he acknowledges is ambitious.
Peter Carter, who took on the role of president in March, sees significant potential for growth in Delta’s partnership with Korean Air, which is currently in the process of merging with Asiana Airlines. This joint venture is anticipated to enhance Delta’s competitive edge across the Pacific region.
Last year, Delta reported an impressive net profit exceeding $5 billion, surpassing United’s earnings of approximately $3.35 billion. Despite this, United’s expansive network over the Pacific dwarfed Delta’s in terms of revenue, generating about $6.89 billion compared to Delta’s $2.79 billion. This disparity underscores the challenge Delta faces as it strives to expand its footprint in the trans-Pacific arena.
Carter, who was promoted in March, said some of that will come from Delta’s joint venture with Korean Air, which is merging with Asiana Airlines.
Delta posted a net profit of more than $5 billion last year, compared with United’s earnings of about $3.35 billion. However, for its trans-Pacific business, Delta’s smaller network generated just $2.79 billion in revenue, compared with United’s roughly $6.89 billion, according to company filings.
Trans-Pacific flying is often highly profitable, with long-haul flights commanding a premium and served by planes with dozens of premium seats.
Both carriers are adding new routes. Earlier this month, Delta launched nonstop service between Los Angeles and Hong Kong. United Airlines, meanwhile, is planning a nonstop between its San Francisco hub and Sapporo, Japan — a play for premium-ski traffic.
Delta and United account for most of the U.S. airline industry’s profits.
Delta spent the better part of the last two decades fashioning itself the luxury airline of the U.S., from high-end lounges to a lucrative partnership with American Express.
United has launched its own campaign using similar tactics, including a heavy investment in technology, massive aircraft orders, and an international network with new destinations from Mongolia to Croatia to Greenland.
The U.S. air travel market — the world’s largest — is mature, meaning there’s little room for significant annual growth. “Really, when we think about the future, it’s all about international,” Delta’s Carter said.
United CEO Scott Kirby said Sunday that he was flattered by Delta’s ambitions.
On the sidelines of the same conference, Kirby said he has “a lot of respect for Delta, and what they have done, and I take it as a huge compliment that Delta is beginning to acknowledge that they have an equal that they’re worried about and trying to compete with us.”
When asked what he wants to beat Delta on, Kirby replied: “Everything.”
Carter said in the interview that Delta can’t rest on its current success.
“We always have to be hungry to win, and I say that because I know United is out there competing against us and replicating the playbook a little bit,” he said. “Bring ’em on.”
