Last week, Delta Airlines announced the resumption of multiple domestic routes from Miami that had been previously pulled down. These resumptions signaled the latest attempt by Delta to compete with American Airlines in southeast Florida, either by directly engaging AA at its massive Miami hub or building up services in nearby Fort Lauderdale. While each of Delta’s previous focus city attempts in Fort Lauderdale or Miami have failed, this build-up promises to be different.
Delta traditionally has had a huge frequent flier base in the region and was from the early 1970’s until about 2007 the largest carrier at Fort Lauderdale-Hollywood International Airport while having a strong presence at Miami International. However Delta’s two largest domestic rivals, American and Southwest both have established strong bases in the region – American’s hub in Miami is the largest in the history of the state of Florida and Southwest’s Fort Lauderdale operation represented until the 737MAX groundings, the airline’s largest international gateway. Delta has also been engaged in a turf war in the Northeast with jetBlue Airways, which was Fort Lauderdale’s largest carrier until recently.
The resumption of nonstop Miami-Tampa/Orlando/Salt Lake City and Raleigh-Durham service on Delta is designed more toward connections onward on the airline’s joint venture partners than direct origin and destination traffic (Delta currently already serves Salt Lake City and Raleigh-Durham nonstop from Fort Lauderdale with flight timings suited to local travelers). Last year, Delta swooped in and invested directly in LATAM, taking an equity stake in South America’s largest airline group.
LATAM had been a partner of American’s and part of the One World alliance which American is a member of. LATAM maintains a large operation in Miami, and its synergies with American’s hub created a critical mass bordering on a monopoly for flights to South America.
This critical mass had a knock on effect, hurting other local Latin carriers and driving much of the low fare visiting families and relatives (VFR) business for flights to South America 20 miles north to Fort Lauderdale. Business travel to South America by-and-large remained American’s domain and Miami-based, but the bleed of Latin American VFR travel to Fort Lauderdale is something advocates for Miami International Airport have tried to reverse in the last few years.
Delta’s tie-up with LATAM complimented by Delta’s investment in Virgin Atlantic and joint-venture relationship with Air France-KLM gives the airline an opportunity to funnel passengers through Miami from South America to Europe without touching Delta’s own metal. It also gives the airline the option of transiting passengers via Miami from Orlando and Tampa to South America without flying north to Atlanta, competing with American for these travelers. Delta is not only assuming a 20% stake in the airline group but paying LATAM’s exit fee from the One World alliance and assuming its A350 back orders according to multiple published reports.
Most corporate accounts in southeast Florida are tied to American and smaller businesses often patron jetBlue and Southwest’s large Fort Lauderdale operations. Still Delta might be able to make a play for some corporate travel, as the airline has successfully begun eroding American’s corporate client base in New York with joint venture partnerships and the willingness of federal regulators to allow the airline to be the largest at both LaGuardia and JFK (though it should be noted at both airports Delta controls under 50% of the overall traffic which is a different scenario to American at Miami, where the airline controls close to 70% ). But Delta’s bigger plays are connecting passengers from outside southeast Florida to LATAM’s network and appealing to some VFR travelers.
This latest build-up attempt represents a completely different approach than Delta’s previous attempts in both Miami and Fort Lauderdale to rely on its large frequent flier base and corporate connections to fight American’s entrenched Miami dominance. From where I sit, it’s likely to be more successful than the previous failed efforts.
And yet….no service to TLH…
[…] this year Delta began putting in place plans to eventually ramp up Miami into a hub with its joint-venture and…. It is unlikely now this will happen – between joint-ventures and airline’s Delta has […]
Delta will not be Hubbing in Miami….with or without LATAM who recently Filed for Bankruptcy. AA spent Years building Up MIA and will not Roll Over to give what they BUILT to Delta and their Grand Ideas to Take over the Market. LATAM will be retrenching as South America will continue to struggle and exiting ONEWORLD and many of the partnerships that focused on the Latin Markets will hurt LATAM in the end. AA in MIA and JetB,SPIRIT and Southwest will control FLL….LATAM will be marginalized and Nothing from Delta will counterattack that.