When Delta and Northwest merged, the combined Delta became the largest airline leapfrogging United and American. Then United and Continental merged and took over the number one spot. And of course American and US Airways merged, to become the biggest single airline.
Except that Delta continued to grow organically, and surpassed United.
During part of 2016 Delta generated more revenue than American. Delta’s market cap has been larger than American’s and it’s a more profitable company.
Looking over 3rd quarter 2017 numbers though is striking.
- American has a larger fleet than Delta does.
- For the third quarter of 2017 Delta reported $11.06 billion in revenue compared to $10.88 billion for American. Delta was the larger carrier by revenue.
- American reported 37.4 million passenger enplanements for the quarter. Adding Delta’s passengers boarded for July, August, and September puts them ahead of American by passengers.
American promises not to grow the total number of planes in its fleet. It will grow by swapping smaller planes for larger ones, and adding seats to existing planes. Their goal isn’t to grow as much as it is to squeeze more revenue from existing passengers.
Delta’s transatlantic results were strong in the third quarter, and their performance wasn’t dragged down as much by hurricanes as United (Houston) and American (Miami). Not reflected in the airline’s passenger results, their strategy seems to be to recognize a limit to growth in the U.S. market while experimenting aggressively with new routes such as the subsidized Indianapolis – Paris.
More than that though Delta’s business growth will seem to come internationally via investments in airlines like Virgin Atlantic, Gol, Aeromexico, and China Eastern. They’re betting on Latin America
and China, and they bought access to London Heathrow. Whether or not the strategy ultimately proves successful, it is a strategy. So if you’re betting on American or Delta to be the largest airline going forward it’s hard not to bet on Delta.