Delta to Launch Chicago – London Heathrow Link this winter

US major Delta Air Lines is to launch services between Chicago and London Heathrow from late October this year as it further strengthens in Transatlantic partnership with UK carrier Virgin Atlantic Airways.  The new daily link will start from October 26, 2014 and will be operated using a Boeing 767-300ER.  It will be Delta’s sixth route from ther US to the UK’s main international air gateway.

The airline will enter a tough market that is already served on a year-round basis by oneworld partners American Airlines and British Airways and Star Alliance member United, but will be boosted by the existing seasonal services of Virgin Atlantic Airways, which will likely codeshare on the route as part of the two airlines’ growing synergies across the Atlantic. 

The news was exclusively first revealed by our blog, Airline Route, earlier today and has since been spread around other media channels.  You can see the original article here: Airline Route - Delta to Launch Chicago - London Heathrow.

Virgin Atlantic launched flights on the route in April 2007 initially on a year-round basis but switched the service to a seasonal operation from 2009 with flights operating between May and October each subsequent year.  It is not clear if the introduction of Delta’s service from the forthcoming winter 2014/2015 schedules will result in Virgin ending its own seasonal operation in summer 2015.

According to official traffic data from the UK Civil Aviation Authority (CAA), 1,188,005 passengers travelled between Chicago O’Hare International Airport and London Heathrow in 2012, down 1.6 per cent from 1,207,424 the previous year.  Our own analysis of MIDT data suggests that around 36.7 per cent of this demand was point-to-point traffic with an estimated 63.3 per cent of passengers connecting onwards from London or Chicago to other destinations.

Delta already offers flights to London Heathrow from Atlanta, Boston, Detroit, New York and Minneapolis/St Paul and this year introduces a link from Seattle: all markets where it has a much larger home presence than Chicago (see table, below) and can offer significant onward connection options.  It is the largest carrier by capacity in all these markets bar Boston and Seattle; although it is the largest US major at these two destinations.

DELTA AIR LINES MARKET POSITION AT US AIRPORTS IT LINKS TO LONDON HEATHROW (non-stop departures; 2013)

US Airport

Delta Capacity Share

Delta Ranking

Atlanta Hartsfield-Jackson International (ATL)

78.8 %

One

Boston Logan International (BOS)

14.4 %

Two

Chicago O’Hare International (ORD)

4.3 %

Three

Detroit Wayne County (DTW)

79.3 %

One

New York John F Kennedy International (JFK)

23.7 %

One

Minneapolis St Paul (MSP)

73.8 %

One

Seattle Tacoma International (SEA)

12.0 %

Two

In Chicago, Delta will face much stronger competition as it had just a 4.3 per cent share of capacity in 2013, significantly below United (45.4 per cent) and American Airlines (35.1 per cent, rising to 38.1 per cent when you also include the operations of US Airways).  This will mean that Delta will need to secure a much greater share of the O&D demand on the Chicago – London city pair.

Delta Air Lines and Virgin Atlantic Airways last year outlined details of a new joint venture flight schedule beginning summer 2014, aligning their services and offering more flight choices for travelers on both sides of the Atlantic.  The two airlines are combining their slots at London Heathrow to offer maximum customer convenience, particularly for business travellers, from the launch of the 2014 summer schedule on March 30, 2014.

As part of this arrangement, Delta, in cooperation with Virgin Atlantic, will operate a second daily service between London Heathrow and Detroit Metropolitan Airport effective June 1, 2014.  The service will be particularly appealing to corporate customers needing an early morning arrival into London while offering more schedule choice for customers between London and the US Midwest.  This additional flight will complement Delta's previously announced new West Coast route between Seattle and London Heathrow, which will launch on March 29, 2014.

In the table below we look in more detail at transatlantic operations from London Heathrow to the US and how frequency and capacity will change in May 2014, compared to the same month last year.  Our analysis shows that frequencies will increase 2.5 per cent in May 2014 but capacity will decline 2.3 per cent versus last year.

TRANSATLANTIC SERVICES FROM THE US TO THE UK IN MAY 2014 VERSUS MAY 2013 (non-stop departures)

Rank

Airline

Frequency

% Change

Seat Capacity

% Change

1

British Airways (BA)

1,387

3.8 %

396,008

(-3.4) %

2

Virgin Atlantic (VS)

545

1.1 %

181,921

(-6.6) %

3

United Airlines (UA)

733

0.1 %

147,245

(-1.9) %

4

American Airlines (AA)

496

(-5.9) %

129,829

(-0.5) %

5

Delta Air Lines (DL)

332

7.1 %

75,659

2.4 %

6

US Airways (US)

134

31.4 %

33,223

20.0 %

7

Thomson Airways (TOM)

41

(-6.8) %

11,377

(-20.7) %

8

Air New Zealand (NZ)

31

-

10,292

0.0 %

9

Kuwait Airways (KU)

14

7.7 %

3,822

7.7 %

10

Thomas Cook Airlines (TCX)

13

New Flight

2,405

New Flight

TOTAL

3,726

2.5 %

991,781

(-2.3) %

The latest data from OAG Schedules Analyser shows that Delta is one of only three carriers reporting capacity growth during this period with 7.1 per cent and 2.4 per cent more seats: Kuwait Airways also has a notable 7.7 per cent growth thanks to the addition of one more flight rotation in May 2014 versus the same last year due to monthly day variations.  US Airways shows the most significant growth with capacity up by a fifth. 

The expanding operations of Delta between the US and the US will help it strengthen its penetration in the Transatlantic market.  Based on this May’s flight schedules, Delta is currently the fifth largest carrier in the market between the US and the UK with a 7.7 per cent capacity share, behind British Airways (39.9 per cent), Virgin Atlantic (18.3 per cent), United Airlines (14.8 per cent) and United Airlines (13.1 per cent).  Combining Virgin and Delta's seat capacities result in them holding a 26.0 per cent share of the current market, still significantly smaller than British Airways' share.


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