Delta generates $2.79 billion in trans-Pacific revenue versus United's $6.89 billion, but its new president says that gap won't last
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Delta Air Lines president Peter Carter says the carrier intends to become the leading U.S. airline across the Pacific, directly challenging United Airlines' dominant position on those routes, Carter told CNBC in an interview at the International Air Transport Association's annual meeting in Rio de Janeiro.
"We want to become stronger, better, faster in the trans-Pacific, and we want to become the leading U.S. carrier" across the Pacific, Carter said. "Ultimately ... the real goal is to become the leading global carrier, which is a pretty audacious goal."
The revenue disparity on trans-Pacific routes tells the story: company filings show United pulling in roughly $6.89 billion from those flights against Delta's $2.79 billion. Overall profitability runs in the opposite direction, with Delta clearing more than $5 billion in net profit last year to United's approximately $3.35 billion.
Elevated to the president role in March, Carter pointed to Delta's tie-up with Korean Air — itself in the process of absorbing Asiana Airlines — as a key engine of Pacific expansion. New routes are part of the push on both sides: Delta launched daily nonstop service between Los Angeles and Hong Kong earlier this month, operated on an Airbus A350-900, while United has announced plans for a nonstop linking its San Francisco hub to Sapporo, Japan.
Carter acknowledged the competitive pressure from United. "We always have to be hungry to win, and I say that because I know United is out there competing against us and replicating the playbook a little bit," he said. "Bring 'em on."
United Airlines CEO Scott Kirby, whose remarks came at the same Rio gathering, said he was more flattered than rattled by the challenge. "I have a lot of respect for Delta, and what they have done, and I take it as a huge compliment that Delta is beginning to acknowledge that they have an equal that they're worried about and trying to compete with us," he said. Asked to name an area where he wants to outperform Delta, Kirby offered a one-word answer: "Everything."
Carter framed the international push as essential given limited growth prospects in the domestic market. "Really, when we think about the future, it's all about international," he said.
Delta reported adjusted first-quarter pre-tax income of $532 million, a 42% increase over the same period last year, with premium ticket revenue rising 14% to $5.4 billion. The carrier has guided for second-quarter earnings of $1.00 to $1.50 per share, though it flagged rising fuel costs as a pressure point heading into the summer.
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