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Why are full-service US airlines winning against LCCs? Delta VP APAC has the answers

Australian aviation experts are keeping a keen eye on the competitive US domestic airline market to see how it might play out in Australia. With US full-service airlines maintaining market share against low-cost carriers, Delta Vice President APAC Jeff Moomaw explains what customers really want when they fly.

Australian aviation experts are keeping a keen eye on the competitive US domestic airline market to see how it might play out in Australia. With US full-service airlines maintaining market share against low-cost carriers, Delta Vice President APAC Jeff Moomaw explains what customers really want when they fly.

In an aviation turnaround, ultra-low-cost carriers such as Spirit Airlines and Frontier are struggling in the US, seeing profits plummet, while full-service airlines are thriving.

Increased competition from network carriers and reduced operational efficiencies have created a challenge for budget airlines despite travel demand.

The shift towards premium airline offerings also hasn’t helped since ULCCs don’t have a comparable cabin compared to other legacy carriers.

Delta Air Lines General Manager APAC Justin Lau, Country Manager Australia & NZ Kelly Clive & Vice President APAC Jeff Moomaw at CAPA Airline Leader Summit Australia Pacific 2024 at The Star Brisbane.
Delta Air Lines General Manager APAC Justin Lau, Country Manager Australia & NZ Kelly Clive & Vice President APAC Jeff Moomaw at CAPA Airline Leader Summit Australia Pacific 2024 at The Star Brisbane.

Speaking at last week’s CAPA Airline Leader Summit Australia Pacific 2024 in Brisbane, Seoul-based Moomaw outlined the state of play in the US aviation industry.

“Over time, what you’ve seen is a lot of the mainline, full-service carriers have adapted different products to those you would typically fly on an LCC. So for Delta, we call it Basic Economy. It gives you the same sort of entry point. The difference is it also comes with all the same service that you would get regardless of what class of service you choose to have,” he said.

Premium rises in popularity

Delta's Premium Select cabin.
Delta’s Premium Select cabin.

Moomaw said travellers increasingly want premium experiences in cabins and lounges, which low-cost carriers can’t offer.

“There is an appetite for more premium experiences and Delta has invested in this for quite a long time. The premium economy product is one example; the premium lounges are another and those are products that the LCCs don’t really have, right? And so it’s a little bit challenging [for LCCs],” he said.

BNE announces the new service. (R-L) BNE CEO Gert-Jan de Graaff, Deputy Qld Deputy Premier Cameron Dick & Delta Australia Manager Kelly Clive.
BNE announces the new service. (L-R): Delta Australia Manager Kelly Clive, Queensland Deputy Premier Cameron Dick & BNE CEO Gert-Jan de Graaff.

Talking up the new seasonal Brisbane-Los Angeles service, which launches on 6 December 2024, Moomaw said Delta was the only airline flying between Brisbane and LA to offer a premium economy cabin on this route.

Using the flagship Airbus A350-900 aircraft, Delta will offer four products: Delta One Suites, Delta Premium Select, Delta Comfort+ and Main Cabin; with 48 premium economy seats available.

International is where it’s at

Delta Air Lines A350-900 aircraft in the sky.
A350-900 aircraft.

Moomaw also noted that the international market was the only growth aviation sector, particularly the potential for the Asia Pacific region, whereas the US domestic market had reached its ceiling.

“Mainline carriers, like Delta, know the future and the growth is international markets. The US market is fine, and it’s going to grow moderately, but a lot of the future growth is going to be in international, particularly in Asia Pacific, if you look at what the forward GDPs look like, and the LCCs generally don’t participate much in that realm,” he said.

“If you follow the demand set, it all points towards bringing more international experiences, and that’s where mainline carriers like Delta and the rest will thrive and the LCCs are having to consider that [challenge].”

Burgeoning bleisure travel market for Brisbane

Delta Air Lines Vice President APAC Jeff Moomaw at CAPA 2024.
Delta Air Lines Vice President APAC Jeff Moomaw.

Interestingly for the new Brisbane-Los Angeles route, Delta is seeing a 50-50 split in point-of-sale demand between the two destinations.

“There’s a very interesting dynamic where you’re seeing about an equal point-of-sale demand mix between the two,” Moomaw said.

“It’s a really good combination of tourist-type business and commercial business and just premium leisure, which is another new line of business that we haven’t seen quite a lot of before.”

Emporium Hotel South Bank Brisbane couple overlooking the river and city from infinity pool.
Emporium Hotel South Bank Brisbane overlooking the river and city. Image: BEDA

He added that Brisbane offers the ideal ‘bleisure’ travel destination that would see US business travellers extend their time in the Sunshine State, including his personal intention to do so.

“One of the other things that we saw emerge after COVID was corporate travellers were choosing to extend their experiences abroad or bring the family, and this market is one of the best markets in the world to be able to facilitate that,” he said.

“I will do that with my family – I’m sure others will as well. It’s a great opportunity to be able to expand that trip and have others enjoy it too.”

Delta debuts BNE-LAX flights at Queensland agent events

LA Tourism’s Craig Gibbons with Delta Air Lines’ Nicole Laurie, Kelly Clive & Clint Jones at the Gold Coast event.
LA Tourism’s Craig Gibbons with Delta Air Lines’ Nicole Laurie, Kelly Clive & Clint Jones at the Gold Coast event. Image: Kirra Smith Photography

Delta Air Lines and Los Angeles Tourism recently held two of four training events in regional Queensland to raise awareness of Delta’s new Brisbane-Los Angeles route and the US airline’s entry into the Queensland market.

Group of people at Delta Air Lines & LA Tourism event at Gold Coast. (L-R): LA Tourism’s Craig Gibbons with winner Melissa Deering (Helloworld Southport) and Delta Air Lines’ Clint Jones  Nicole Laurie & Kelly Clive.
(L-R): LA Tourism’s Craig Gibbons with winner Melissa Deering (Helloworld Southport) and Delta Air Lines’ Clint Jones Nicole Laurie & Kelly Clive. Image: Kirra Smith Photography

Taking place in Gold Coast and Cairns so far, Delta showcased the new route, introducing the services and network to around 100 Queensland advisors.

LA Tourism's Craig Gibbons with winner Hollie Johnson (Main Beach Travel) and Delta Air Lines’ Clint Jones, Nicole Laurie & Kelly Clive.
LA Tourism’s Craig Gibbons with winner Hollie Johnson (Main Beach Travel) and Delta Air Lines’ Clint Jones, Nicole Laurie & Kelly Clive.

In addition, two lucky attendees won an exciting prize package, including a roundtrip Main Cabin ticket to the USA; two nights’ accommodation at either Moxy Downtown LA, The Garland Hotel, Marriott Beverly Hills or AC Hotel Downtown LA; Academy Museum of Motion Pictures and Warner Bros. Studio Tour Hollywood passes and a Citadel Outlets ‘LA VIP Shopping Day’ certificate.

Delta Air Lines' Nicole Bennett with event winners Cassie Melody (MTA Travel) & Lisa Metzl (Travel Managers Australia).
Delta Air Lines’ Nicole Bennett with event winners Cassie Melody (MTA Travel) & Lisa Metzl (Travel Managers Australia).

The Gold Coast winners were Melissa Deering (Helloworld Southport) and Hollie Johnson (Main Beach Travel) while the Cairns winners were Cassie Melody (MTA Travel) and Lisa Metzl (Travel Managers Australia).

For more info, head to delta.com