Delta Air Lines (DAL) competes with United Airlines Holdings, Southwest Airlines, and American Airlines Group for domestic and international airline travel business in the United States. Reduced travel as the result of the COVID-19 pandemic significantly impacted revenue at airlines around the world in 2020, and Delta was no exception.
Before the pandemic forced travelers to stay home, Delta billed itself as the world's largest airline by revenue and also the industry's most profitable carrier. It could point to pre-tax income of $5 billion or more in the five years through 2019.
But the coronavirus left the travel industry reeling. Airlines were forced to accept billions in Paycheck Protection Program funds to keep their pilots, flight attendants, mechanics, and other workers on the payroll.
Below is a quick snapshot of Delta's performance compared with its main rivals.
|How Delta fared against its main competitors in 2020|
|Revenue||$17 billion||$15.35 billion||$9 billion||$17.33 billion|
|Net Loss||$12.38 billion||$7 billion||$3 billion||$8.88 billion|
SOURCE: Delta Airlines, United Airlines, Southwest Airlines, and American Airlines.
Delta Air Lines is headquartered and has its largest hub in Atlanta, Georgia. Its other major hubs are in Minneapolis-St. Paul, Detroit, and Salt Lake City. Prior to the onset of the pandemic, it offered more than 5,000 daily departures and as many as 15,000 affiliated departures including via the SkyTeam alliance, of which Delta is a founding member. Delta served about 200 million customers in 2019, a figure which dropped to 70 million in 2020.
As of end-December 2020, Delta Airlines had 750 mainline aircraft within its fleet, of which 660 were active and 90 were parked temporarily. Delta lost $12.4 billion on $17 billion in revenue in 2020. This compares to a $4.7 billion net income in 2019 on $47 billion in revenue.
On a revenue passenger mile basis, Delta is ahead of Southwest Airlines, about even with United Airlines, and lags behind American Airlines. Below we look at Delta's top competitors in greater detail.
1. United Airlines Holdings
United Airlines Holdings (UAL) is one of the largest airline holding companies in the world. It flies throughout North America and also services Asia, Europe, Africa, Latin America, and the Middle East. Its major hubs are located in Chicago, Denver, Houston, Los Angeles, San Francisco, Washington D.C., Guam, and Newark in New Jersey.
As of end-December 2020, United Airlines operated 812 mainline aircraft. It transported nearly 57.8 million passengers in 2020, compared to roughly 162.4 million the year before. United Airlines lost $7 billion on $15.35 billion in revenue. This compares to a $3 billion profit in 2019 on a top-line figure of $43.25 billion.
United targets the same customer groups as Delta: the upper-middle class, high-net-worth individuals (HNWIs), and frequent business travelers. Both are known as premier airlines offering high-quality service. United is a member of the Star Alliance, which serves nearly 1,000 airports in 154 countries.
2. Southwest Airlines Co.
Southwest Airlines (LUV) has had a major impact on the airline industry since launching service in Texas in 1971 with just three planes. It is known for friendly customer service and cheap flights to secondary airports along popular, high revenue routes. The airline relies solely on the Boeing 737 for all routes, which minimizes maintenance expenses.
As of end-December 2020, Southwest operated 718 Boeing 737 aircraft and flew to 107 airports in 40 states. Despite reduced travel due to the COVID-19 pandemic, the airline began service to six new destinations in 2020: Hilo on Hawaii, Cozumel in Mexico, Steamboat Springs in Colorado, Telluride and Crested Butte in Colorado, Palm Springs in California, and Miami.
Southwest Airlines transported nearly 67.8 million passengers in 2020, compared with 162.7 million the year before. It lost $3 billion on $9 billion in revenue in 2020. This compares to a profit of $2.3 billion in 2019 on revenue of $22.42 billion.
Southwest targets middle-class fliers as opposed to luxury or business class travelers. It is also more dependent on the domestic travel market compared to Delta.
3. American Airlines Group
American Airlines Group (AAL) is a holding company for American Airlines and its wholly-owned regional carriers Envoy Aviation, PSA Airlines, and Piedmont Airlines, which operate under the brand name American Eagle. Its major hubs are Charlotte, Chicago, Dallas-Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington D.C.
As of end-December 2020, the company operated 855 mainline aircraft and 544 regional aircraft. American Airlines transported 95 million passengers in 2020, compared with 215 million the year before. It lost $8.88 billion on $17.33 billion in revenue in 2020, compared with a profit of $1.68 billion on $45.76 billion in revenue in 2019.
American Airlines caters to the upper-middle class and frequent business travelers, the same target group as Delta. It is a founding member of the oneworld Alliance. The airline is known for having the best customer loyalty program, AAdvantage, which offers five mileage credits for every dollar spent, though higher tier customers earn additional mileage credits of 40~60%.
The Bottom Line
Despite the pandemic, Delta remains committed to its leadership as one of the best-performing airlines in the world. Known for customer care and luxury, Delta has maintained its upper-middle-class and business travel customer base.
Delta Airlines. "2020 Annual Report," Pages 2-3. Accessed April 8, 2021.
U.S. Department of Treasury. "Payroll Support Program Extension Payments." Accessed April 8, 2021.
Delta Airlines. "2020 Annual Report," Pages 25, 40, 112-113. Accessed April 8, 2021.
United Airlines. "2020 Annual Report," Pages 32, 35-36. Accessed April. 8, 2021.
Southwest Airlines. "2020 Annual Report," Page 51. Accessed April 8, 2021.
American Airlines Group. "2020 Annual Report," Pages 7, 60, 70. Accessed April 8, 2021.
Delta Airlines. "2020 Annual Report," Page 25. Accessed April 8, 2021.
Delta Airlines. "2020 Annual Report," Pages 112-113. Accessed April 8, 2021.
United Airlines. "2020 Annual Report," Pages 3-4. Accessed April. 8, 2021.
United Airlines. "2020 Annual Report," Page 32. Accessed April. 8, 2021.
United Airlines. "2020 Annual Report," Pages 35-36. Accessed April. 8, 2021.
Southwest Airlines. "2020 Annual Report," Page 3. Accessed April 8, 2021.
Southwest Airlines. "2020 Annual Report," Pages 3, 51. Accessed April 8, 2021.
American Airlines Group. "2020 Annual Report," Page 7. Accessed April 8, 2021.
American Airlines Group. "2020 Annual Report," Page 60. Accessed April 8, 2021.
American Airlines Group. "2020 Annual Report," Page 9. Accessed April 8, 2021.