Delta Going Head to Head with Quantas and United

Thursday, January 15th, 2009

Delta Airlines recently announced that it would be launching service between Los Angeles LAX and Sydney, Australia.  This is a major move for the airline, which recently merged with Northwest to create the largest single carrier in the world. 

Singapore Airlines has been interested in flying the LA to Sydney route, but Australian authorities have balked at that idea, fearing the struggling national carrier Qantas would be hurt by too much competition.  However, it now appears that the SIA flights won’t be the only competition.  In fact, the trans-Pacific routes are now becoming a hot commodity.  A new airline from the Virgin group (Virgin America, Virgin Atlantic) called V Australia has announced that its LA to Sydney flights will be launched next year.  V’s prices will be significantly less than the current offerings ($1199 versus nearly $1700 announced by Delta). 

With luck, passengers should be in for some for falling trans-Pacific fares.  How far prices fall depends on how hot the competition gets.    

United is currently the only other major US-based airline to fly between the US and Australia.  In 2004, Hawaiian Airlines began service between Honolulu and Sydney. 

Delta’s move also means that a third major airline alliance will be in the US-Aus’ game.  Qantas belongs to the OneWorld alliance with Cathay Pacific and American Airlines.  United is part of the Star Alliance with major Pacific players Thai Airways and Air New Zealand.  Delta’s service means that Skyteam, which includes KLM and Air France, will have be represented on the route.  Also, Delta’s new fleet of Boeing 777s have extensive range, meaning that it is not out of the question for them to add other Australia routes in the future.  The Delta hub Atlanta might be the next in line for an Australia-US service. 

Virgin and Qantas are confident that their lower prices and reputation for service will keep Delta from stealing their share of the pie.