Delta Air Lines CEO Satisfied with U.S./UAE Agreement, Hints At New International Routes Including India

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Following the agreement between the U.S. and the United Arab Emirates (UAE) regarding air traffic, Delta Air Lines CEO Ed Bastian voiced satisfaction and announced new international flights are under consideration.

Delta management took a very aggressive stance over the years when it came to the subject of Middle East carriers, crying foul over the competition and complaining that they cost them too much business.

Delta along with American and United have been extremely vocal (whining really) alleging that gulf carriers receive government subsidies, don’t have to turn a profit and siphoning off customers with their exclusive products.

CNBC (access here) reports about an interview Delta CEO Ed Bastian has with Bloomberg following the signing of the airline pact between the U.S. and the UAE which John wrote about earlier this week.

Delta Air Lines plans to announce new international routes in the coming weeks after U.S. and three Gulf carriers resolved a more than three-year-old dispute over unfair competition, the airline’s CEO said Monday.

Delta and competitors American Airlines and United Airlines have complained for years about the expansion of three Persian Gulf carriers — Qatar Airways, Abu Dhabi-based Etihad Airways and Dubai-based Emirates Airline, saying they receive state subsidies that have created unfair competition for the U.S. airlines. …

But on Friday, the U.S. and the United Arab Emirates, home to two of the three carriers mentioned in the dispute, reached a deal in which Etihad and Emirates would open up their books, providing financial statements that are up to international accounting standards. Qatar reached a similar agreement with the U.S. earlier this year.

Delta’s CEO Ed Bastian said the deal would allow Delta to add new destinations.

“We’ve been hurt in India,” he said, although he did not specify which cities Delta is planning to add. He said routes currently served by those three Gulf carriers is “ripe for our opportunity to fly.”

Delta called off its Atlanta-Dubai flight in 2015, saying it was because of unfair competition from the Gulf carriers. United is the only U.S. carrier offering nonstop service to India.

Emirates, which has added flights to the U.S. in recent years, has also introduced what is known as “fifth freedom” flights, flying to or from a destination other than the carrier’s home country, with service to Milan and Athens from the New York City area.

If I read phrases like “we’ve been hurt in India” in combination with “ripe for our opportunity to fly.” I feel like he still hasn’t seen the light why passengers are flying the competition rather than Delta. Their prices are totally out of control, their loyalty program is horrible and the service both in the air as well as on the ground is atrocious. The choice of flying an Asian or Middle East carrier isn’t hard hard under these circumstances. I’m surprised he for one stopped the whining about the competition and talks about actually offering the customer more choices.

In regards to fifth freedom routes, Emirates is hardly alone with those. Singapore Airlines still operates Tokyo-Los Angeles, Seoul-Los Angeles, Hong Kong-San Francisco as well as Frankfurt-New York all of which are very popular with customers.

Conclusion

Have them start new routes and see how successful they are. Unless the U.S. carriers are doing something on the pricing and service front I can’t see it being very successful.

Let’s face the realities: The only reason that U.S. based carriers are able to compete on these routes are that people (especially business travelers) are addicted to their local frequent flyer programs that offer benefits on domestic routes such as complimentary domestic First Class upgrades and international upgrade vouchers for top tier members.

Those who have plenty of qualifying miles over the year have no problem ‘cheating’ on their main carrier with a Middle East one on occasion and are in awe of the product. You can follow these discussions on various Facebook groups where frequent fliers of American, Delta and United gather.

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