In the past two weeks, a major network adjustment by United Continental has created a bit of a vacuum in the lucrative market for transcontinental flights from New York's JFK Airport to Los Angeles and San Francisco.
JetBlue Airways , which has disrupted this market in the past year with the introduction of its highly acclaimed Mint premium service, quickly responded by adding flights on these routes beginning this fall. This week, Delta Air Lines joined the fray. It announced that it will add an extra flight on the JFK-Los Angeles route, and it will upgrade some of its New York-San Francisco flights to a larger Boeing 767 plane.
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United's big announcementOn June 16, United Continental made a stunning announcement that it would stop flying to JFK Airport in late October. JFK has been the base for United's premium "p.s." transcontinental service to Los Angeles and San Francisco since it introduced the concept in 2004.
United Airlines is flying away from New York's JFK Airport for good. Photo: The Motley Fool
This doesn't mean the end of p.s. flights. Instead, United will transfer the upscale service to its big New York-area hub at Newark International Airport. (United already has frequent flights from Newark to both Los Angeles and San Francisco, but they don't have the flat-bed seats for BusinessFirst customers or upgraded amenities characteristic of its p.s. flights.)
That said, not every customer who frequented United's p.s. flights at JFK Airport will be willing to cross the Hudson River to fly from Newark Airport. As a result, the remaining four airlines that fly from JFK to Los Angeles and San Francisco -- including Delta and JetBlue -- have an opportunity to gain some new business.
Two responsesIt only took JetBlue two days to add flights on both routes to take advantage of United Continental's departure.
In late October -- on the day that United stops flying to JFK -- JetBlue will increase from five to six peak-day flights on the JFK-San Francisco route. At the same time, it will go from a maximum of eight daily flights on the JFK-Los Angeles route today to nine peak-day flights. In early 2016, when it gets additional A321 planes in its special "Mint" premium configuration, JetBlue will begin flying up to 10 daily roundtrips from JFK to Los Angeles.
JetBlue has earned rave reviews for its Mint premium service. Photo: JetBlue
Delta Air Lines was a little slower to make its move. However, on Monday, it announced plans to add another roundtrip flight from JFK to Los Angeles in November, bringing it to 10 peak-day flights on that route. Delta will continue to operate four of those flights with 767s, making it the only carrier to regularly use widebody planes on the transcontinental routes. The other six flights will use 757s.
Delta will stand pat with up to eight daily roundtrips on the San Francisco route. However, whereas it exclusively uses the 757 on that route today, it will upgrade to the 767 for three of those eight flights.
What these moves mean for DeltaDelta Air Lines says that the adjustments will give it the most seats on both the JFK-Los Angeles route and the JFK-San Francisco route. Obviously, this will allow Delta to make a play for some of the current United fliers who don't want to fly out of Newark Airport, rather than ceding that business to JetBlue.
Delta's decision to begin using the 767 on some of its San Francisco frequencies rather than just adding another 757 flight is also a savvy move on two counts.
Delta currently flies only 757s on the JFK-San Francisco route. Photo: The Motley Fool
First, the 767s may help Delta attract more high-paying premium customers. Delta's 767s have a higher proportion of flat-bed Delta One seats than its 757s. The typical configuration for Delta's transcontinental 767s consists of 26 Delta One seats out of 226 total seats. The transcontinental 757s have only 16 Delta One seats out of 168 total. Additionally, all of the Delta One seats on a 767 have direct aisle access, which most customers prefer.
Second, putting more 767s on the popular transcontinental routes will help Delta cut capacity on international routes with weak demand. Delta has recently been increasing its use of the smaller 757 on overseas routes, often at the expense of the somewhat larger 767. Furthermore, Delta's management has said it will cut international capacity by 3% year over year for its winter schedule.
Now, Delta has somewhere to deploy the 767s currently being used on international routes that will be hit by these capacity cuts. With United Continental exiting JFK this fall, Delta Air Lines is likely to have a lot more success in the transcontinental market than in the international markets where it's cutting back.
The article Delta Air Lines Follows JetBlue With Increased Transcontinental Service originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of The Boeing Company, JetBlue Airways, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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