Delta makes Boston one of its hubs, sets aggressive new expansion target
Watch your back, JetBlue. Delta is hot on your tail.
Atlanta-based Delta has now designated Logan Airport as one of its hubs, and has set an aggressive new growth target for the Boston market. Delta execs expect daily departures out of the booming airport to jump to 200 by the fall of 2021, up from 140 or so today.
For close followers of Logan’s airplane wars, that number might sound familiar. That’s because JetBlue, Logan’s No. 1 airline, has already set 200 as its target for daily departures.
Who will get there first?
JetBlue has a tremendous head start. For the first five months of the year, JetBlue had 31 percent of the market share at Logan based on passengers, compared to 19 percent for Delta. JetBlue also has a commanding lead in terms of share of flight operations, 28 percent versus 18.5 percent. JetBlue’s average number of daily departures in May, as tracked by Massport, was 156. Delta had 111. (Delta includes its overseas partners in its count of 140 daily departures.)
JetBlue says it will exceed 175 daily departures this year at Logan. Boston is one of six “Focus Cities” — the term JetBlue uses for its hubs. Andrea Lusso, JetBlue director of route planning, says the company has been committed to building its Boston operation since arriving at Logan 15 years ago, and will continue investing in its fleet and Terminal C, its local home. Lusso says JetBlue will hit 200 “in the coming years.”
But Delta has momentum on its side now. The airline soared past American last year to capture the No. 2 spot at Logan. Delta president Glen Hauenstein raved about the airline’s Boston performance in a conference call with analysts last week: Quarterly revenue in Boston rose 25 percent, year over year, leading Delta’s system. (Delta’s passenger capacity at Logan, meanwhile, grew 18 percent over the same time.)
Hauenstein also discussed the goal of 200 daily departures and an announcement made in June that Boston is now considered a hub city for the airline. That means more connections will flow through Boston for other flyers, and more direct flights for us. It also translates into more opportunities for Delta’s 1,600-plus employees here. Expect Delta to also emphasize its international partners, particularly several that Delta has invested in directly. One example is Korean Air, whose new service to Seoul out of Boston has been a huge success, according to Hauenstein, with expansion expected by next year.
Talk about a turnaround. The airline suffered a big embarrassment in 2005 not long after opening shiny new Terminal A to considerable hoopla. The $500 million project was built with Delta in mind. But then Delta landed in bankruptcy court later that year, as soaring fuel prices clipped its wings. Delta would be forced to share the terminal with competitors.
Not anymore. Southwest Airlines will leave its five gates in Terminal A, for new space in Terminal B, later this summer. Delta takes full control of 21-gate Terminal A in September, just in time to offer new flights to Chicago O’Hare, Newark, and Reagan National. One asterisk: WestJet stays at one gate, but Delta regional sales director Charlie Schewe points out that WestJet is a business partner, with a joint venture in the works.
In 2017, chief executive Ed Bastian had promised Boston’s business community he would retake all of Terminal A. And in two months, Bastian will deliver on that promise.
So what drove Delta’s obsession with Boston, to make the Hub its hub? Consider the region’s powerful economy as the gift that keeps giving: We’re buoyed by a diverse mix of sectors and a low unemployment rate. Logan’s proximity to downtown is an advantage, as long as the tunnels don’t get too jammed. And Delta executives always had their eyes on regaining those lost gates.
On the conference call last week, a reporter with Forbes posed the question: Is it important to be the number one carrier, in terms of market share, in Boston?
It’s not important to be No. 1, Hauenstein responded. It’s important to be the most profitable, he said, and the most loved.
How Delta matches up against those lofty goals will determine how successful it will be for the long haul at Logan.
But don’t blame executives there for celebrating if they someday, somehow leave their rivals at JetBlue in their contrails.