Delta Sees Seattle Boost from Boeing 737 Max 9 Grounding

12.01.2024 - 21:41 / skift.com / Glen Hauenstein / Delta Air Lines / Edward Russell / Airlines

Some Seattle fliers are switching their trips to Delta Air Lines as hometown carrier Alaska Airlines’ schedule takes a hit from the latest Boeing 737 Max grounding.

Delta President Glen Hauenstein said Friday that the carrier has seen a “small uptick” in bookings in Seattle since the Federal Aviation Administration grounded all 737 Max 9 planes with door plugs last Saturday. Alaska operates 65 737-9s with door plugs and the grounding is forcing it to cancel between 110-150 flights per day.

United operates 79 of the 737-9s with door plugs. However, United’s cancellations are a smaller percentage of its schedule – it has a 945 plane-strong mainline fleet compared to 230 for Alaska.

“It’s kind of minimal in the grander scheme of things, but it’s relevant in Seattle,” Hauenstein told analysts on Delta’s fourth-quarter earnings call. Both Alaska and Delta have hubs in Seattle.

Delta reported an adjusted operating profit of $6.3 billion for 2023. That translates to an operating margin of 11.6%. Its adjusted net profit was $4 billion.

The boost Delta sees in Seattle comes amid still strong overall travel demand in the U.S. Executives described the market as “exciting,” and said they expect unit revenues — how much an airline earns per seat mile flown — to turn positive by the end of the first quarter.

The domestic U.S. has faced too much airline capacity since last summer, which has pushed airfares — and unit revenues — down in many markets. Some airlines, including discounters Frontier and Spirit, as well as JetBlue even forecast 2023 losses. That’s why Delta, and others, are focused on slowing growth to boost revenues in the market.

And the fact that Delta executives made no mention of weak or slowing travel demand indicates that the number of travelers is at least holding steady.

One very positive development: Travel volumes from large corporate customers, think Fortune 500 companies, has recovered to roughly 90% of pre-pandemic levels, Hauenstein said. That gives Delta hope that it could see a full recovery in corporate travel volumes this year.

Delta unveiled a long-anticipated order for up to 40 Airbus A350-1000s on Friday. The deal includes 20 firm aircraft with deliveries from 2026, plus 20 options it could exercise later.

More A350s for Delta was not a surprise. The airline made the decision in 2020 to streamline its widebody fleet around Airbus planes — the A330neo and A350 — when it retired its Boeing 777 fleet. And Boeing’s decision to kill its new mid-market airplane program in early 2022 meant the Virginia-based airframer was almost certainly out of the running to provide a Boeing 767 replacement to Delta.

Now we have clarity on Delta’s widebody fleet plan. A350-1000s will sit at the top with