Delta plans to add 'key spokes' from Miami with LATAM tie-up
Quick summary
Do not expect Delta Air Lines to plop down a major new hub in South Florida and challenge American Airlines in the de facto gateway to Latin America any time soon.
But Atlanta-based Delta does plan to add some "key spokes" in Miami (MIA), though not a large hub, to support its new partner LATAM Airlines that it wooed away from American last month, said Delta president Glen Hauenstein during its third quarter earnings call on Thursday.
"We're not creating a new hub, we're not creating a giant connecting complex — we're making selective adds," he said.
Related: Delta eyes Miami build-up under LATAM partnership
Miami is LATAM's largest U.S. gateway with up to 11 daily flights to 10 South American cities, including Buenos Aires (EZE), Lima (LIM) and Santiago (SCL) in Chile, according to Diio by Cirium schedules. Delta serves the airport from its hubs in Atlanta (ATL), Detroit (DTW), New York John F. Kennedy (JFK), Minneapolis/St. Paul (MSP) and New York LaGuardia (LGA), as well as from Havana (HAV) in Cuba.
Delta is due to add service between Miami and its Boston Logan (BOS) hub in December.
For comparison, American serves 54 cities in the U.S. from Miami, Diio schedules show.
There are only a few incremental routes that Delta may add to support LATAM in Miami after their planned codeshare kicks in by the end of the year, said Hauenstein. That may change once the airlines implement their planned joint venture, he added, but that tie-up is likely two years away.
Related: LATAM will remain unaligned after Delta tie-up, Oneworld exit
Hauenstein declined to provide any more details on Delta might go from Miami beyond his comment on "key spokes," when asked by analysts and reporters.
New York and Atlanta — both already served by Delta — were the largest domestic markets for travelers originating in Miami in the second quarter, according to U.S. Department of Transportation data via Diio. Other top 10 markets include Chicago O'Hare (ORD), Los Angeles (LAX) and Washington National (DCA).
Missing from the Miami traffic data, however, is where LATAM passengers —largely South Americans traveling to the U.S. — want to go. For example, Orlando (MCO) is a well-known popular destination for Brazilians, and one that American serves seven times daily from Miami.
For those wanting a flight map of Delta's plans in Miami, Hauenstein said the airline's growth will be incremental and similar to what it has done in Dallas/Fort Worth (DFW) and Denver (DEN). The carrier has grown capacity by double-digits at both DFW and DEN since 2014, according to Diio. Most of that, though, is from added frequencies and shifting flights to larger aircraft, and not necessarily from new routes.
Miami, no matter where Delta goes, is set to become a "war zone" between entrenched American, Delta and LATAM, wrote Brett Snyder on the Cranky Flier blog earlier this month. American, for its part, has already announced additional flights on existing routes to three key LATAM markets: Lima (LIM), Santiago, and São Paulo Guarulhos (GRU).
A larger Delta in Miami is a bit of a throwback to its never-realized partnership with Pan Am in 1991. After Delta purchased the latter's European routes, the two agreed to partner to Latin America with Pan Am continuing to operate flights from Miami. The partnership never went through due to Pan Am's dire financial situation, and the iconic brand joined the airline graveyard shortly after.
Delta has early expectations of 3-4% year-over-year capacity growth in 2020, with executives saying today they will unveil their plans at a December investor day. The airline anticipates a roughly 4% year-over-year increase this year.