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Wed 4 Nov 2015 10:37 AM

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Delta claims it lost money on Atlanta-Dubai route for 2 years

Senior legal officer responds to Emirates “political move” claim, saying it doesn’t cancel profitable flights

Delta claims it lost money on Atlanta-Dubai route for 2 years

Delta Air Lines said it has lost money on the Atlanta to Dubai route for two years, hitting out at claims by Emirates Airline the route was profitable and it was “a political move” to cancel the service.

The US carrier announced last week it would be cancelling the route from next February, claiming overcapacity on US routes to the Middle East operated by Gulf airlines has made it unsustainable.

Having already reduced service between the world’s busiest airport and the Middle East’s largest hub last month, Delta said it would use the 777 aircraft on other Trans-Atlantic markets "where it can compete on a level playing field that’s not distorted by subsidised state-owned airlines".

The decision was met with criticism from some rivals in the aviation sector, with some pointing out that Delta did not have any competition on the Atlanta-Dubai route from the Gulf carriers.

Delta’s chief legal officer, Peter Carter, responded with a letter to Air Transport World, a monthly magazine that serves the global airline and commercial air transport manufacturing communities, outlining why Delta cut the route.

“Atlanta is Delta’s (and indeed the world’s) busiest hub, and is heavily reliant on connecting traffic to support its international service,” Carter said in the letter.

“Customers traveling from the US to Dubai today have a choice of 16 daily departures from 12 US cities – 14 of which are operated by Emirates. That airline’s extensive interline and code sharing agreements with US carriers means most passengers travelling to Dubai can easily book one-stop service on Emirates through the gateway of their choice. Delta is competing with every one of those flights, all of which are heavily subsidised by the United Arab Emirates.”

It was also pointed out, following the decision last week, that Delta, or any of the US carriers, do not have a sub-Indian continent network, and so Dubai was a dead end for the airlines.

“In the past Delta had flown nonstop to Mumbai from both New York and Atlanta. Today the US airlines operate almost no service to India because they have been driven out of the market by the subsidised Gulf airlines,” Carter said.

“The same phenomenon has occurred with European airlines, which have been driven out of the market by Gulf subsidies. It is shocking to realise that US airlines have just two flights to the second most populous country in the world,” he added.

Carter also responded to Emirates’ claim that the route was profitable and that it was “a political move” to cancel the route.

“That’s just nonsense. Airlines don’t cancel profitable routes, and Delta is no exception. Our Dubai service lost money for nearly two years,” he revealed.

Delta, along with American and United through the Partnership for Open & Fair Skies have asked the US government to open consultations with Qatar and the UAE to address the issue of government subsidies being given to the Gulf carriers, which they claim total $42 billion.

All the Gulf carriers strongly deny the subsidy claims.

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Paolo Avitabile 4 years ago

This issue is a distraction from the bigger issue, which is that Delta, United, and American treat their customers like dirt. They lose money because their customers are abandoning them
Be loyal to your customers, treat them with respect and deliver them value for their money. They will be fiercely loyal to you and you can have a profitable, long-term business relationship to them.

Salman 4 years ago

I flew Delta once from Atlanta-London (Business Class) I think it was code share flight with Virgin at that time. I had been at that point a Gold member with Emirates for quite a few years already. The service on Delta, even in business class, was unbelievable. No genuine Smiles, no genuine taking care of the customer and the aircraft was so old. And then they come and complain about the Gulf carriers like this? its absolute nonsense. American Airlines just like the American Service industry have totally lost the plot for good customer service.
Even now when I plan about going to the US from Dubai using British Airways I make sure there is going to be no codeshare with United. Where there is a codeshare with United the price of the ticket falls down a LOT. What does that tell you about US Carriers? Not a lot of people getting line to buy their tickets....its all self explanatory.

Jay 4 years ago

I really find that hard to believe. Every time I try to fly Delta the flight is booked up and crowded no seats open. If they are losing money on those flights its something else going on.

Ivan Fernandes 4 years ago

I and my family have been frequent travellers on Delta ever since it started direct flights from Dubai to Atlanta as it is very convenient for us to connect to our final destination in Florida. Every time I traveled, the flight was full. So I am at a loss to understand how this sector is not profitable. The only justified reason can be that the majority passengers on these flight are military personal involved in the war in Iraq and Afghanistan. So the chances are that Delta seriously discounts these tickets. Else, based on load factor this sector can never be loss making. Their fares are fairly competitive and they have a vast network of connections in the US through Atlanta which is a huge advantage for those travelling to the US from Dubai. Under the circumstances, I do see any justification to the argument that this sector is loss making.

Bharat Jashanmal 3 years ago

Interesting that the response from Delta was from its Chief Legal Officer (Peter Carter), and not from an individual from the 'operations' side of the business.

One of the principal factors in arriving at the decision by the three major Gulf carriers to aggressively enter the US market was precisely because no US carrier had built a 'sub-Indian continent network' (especially given the number of 'Indian-origin citizens living in the US), nor indeed a Pan- African network, nor a China network, nor for that matter a comprehensive South East Asia network, and this applies to both passenger and cargo services. Whilst FedEx and UPS do provide a good cargo network, it is hardly surprising that Emirates and Qatar Airways are now also major cargo service providers, with Etihad also adding additional capacity, capacity that would not be there if US carriers had addressed the opportunities that these regions offered. In their complacency, they chose not to.

A bit late for sour grapes chaps!