September 30, 2022

The Atlanta hub, the best hub in the world, has always made it seem that Delta Air Lines

DAL
is the principal airline of the South.

But in fact, a pandemic reorientation has given American Airlines a larger presence in the region, Vasu Raja, American chief commercial officer, said Thursday during the carrier’s third-quarter earnings call.

“Right now, if you go look at published schedules, about 65%, 70% of the airline is flying really what we call our Sunbelt hubs and short-haul Caribbean kind of markets, where the airline has a unique level of strength,” Raja said, responding to an analyst’s question about the carrier’s post-pandemic hub strategy.

In the first quarter, Raja added, the capacity provided by American’s four “Sunbelt” hubs – Charlotte, Dallas, Miami and Phoenix – was between 70% and 80% of any of the total capacity of any of American’s competitors. That makes American, for now, larger than Delta in the region.

However, Raja noted, the four hubs “are producing unit revenues between 5% to 10% greater than those networks.”

Raja was making the case that pandemic restructuring has made American more profitable than it had been. “That is a major thing, a big part, as we talked about (on the call) of returning to profitability,” he said.

Before the pandemic, American was already poised to take advantage of airport construction that added gates at Charlotte and Dallas, its two biggest hubs, and at Washington National. During the pandemic, it added code share partners Jet Blue in the Northeast and Alaska in the Northwest, both regions where it had been relatively weak.

Also, American has added back capacity more rapidly than Delta has. In the first quarter of 2022, American flew at 89% of same quarter 2019 capacity while Delta flew at 83%.

Before the pandemic, the two carriers’ key Southern hubs were also the top three single carrier hubs in the world. Delta had about 1,000 peak daily departures in Atlanta, while American had 900 in Dallas and 700 in Charlotte. This May, Delta will have 755 in Atlanta, while American will have 754 in Dallas and 612 in Charlotte (rising to 655 in June).

It is reasonable to assume that over time, as international traffic returns fully, the Atlanta hub will regain more flights to more destinations.

The large hubs mean that all three airports were among the world’s seven busiest by passenger count in 2021, with travel slowed globally and particularly in China. Atlanta was first with 75 million passengers, Dallas was second with 63 million passengers and Charlotte was sixth with 43 million.

Delta has long been viewed as the principal airline of the South. “When you die, whether you go to heaven or hell, you have to change planes in Atlanta” is a common expression that, according to Wikipedia, was mentioned in a 1980 Time story. At that time, both Delta and Eastern Air Lines had Atlanta hubs.

More recently, in 2006, Delta played the South card when it was battling a merger effort by US Airways. Its “Keep Delta my Delta” campaign gained the support of Southern legislators, most notably Trent Lott, R-Mississippi. At a meeting of the Senate Commerce Committee subcommittee on aviation issues, Lott told US Airways CEO Doug Parker, “I must say you are an aggressive suitor. But the lady from the South – Atlanta – doesn’t seem to want to be forced into this shotgun wedding.”

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