Delta Air Lines Inc. said on Tuesday it would increase flights to New York’s JFK International Airport in a bid to bring more passengers to higher-margin routes to Europe and other destinations.
Delta, which is trying to recover profitability after soaring fuel prices and stiff domestic competition drove it into bankruptcy, said 46 additional daily flights from 17 cities would begin between June and September.
Separately, recently filed court documents show that lawyers, advisers and accountants in the carrier’s bankruptcy case have run up bills of about $41.8 million from September 2005 through January.
The No. 3 U.S. carrier, battered by high fuel prices and competition from low-cost carriers, filed for bankruptcy protection in September and has said it needs about $3 billion in cost savings and revenue increases to survive.
The airline, based in Atlanta, has been focusing on its international routes, where discount carriers do not fly.
Helane Becker, an analyst at the Benchmark Company, said the strategy made sense: “International pricing is much stronger than domestic pricing.”
Roger King, an analyst at CreditSights, said, “They have the largest capacity (to Europe) but not a very good ability to get (passenger) feed from the rest of the country.”
“What they’re doing is trying to increase that, which is positive,” he said.
A few of the planned routes, many to be flown under contracts with regional carriers in the U.S. Northeast, overlap with destinations flown by low-cost carrier JetBlue Airways Corp., Delta Chief Operating Officer Jim Whitehurst said on a conference call.
“There is some overlap,” he said, “but that is certainly not why we did it.”
“This is really more about connectivity at JFK ... It is more focused on us building a true hub here,” he said.
“It doesn’t sound like they’re trying to compete against JetBlue though there will be some competition for local traffic,” said Ray Neidl, an analyst at Calyon Securities.
Delta’s regional carrier Comair and Freedom Airlines, a subsidiary of Mesa Air Group, will do the flying on the Northeast routes, Delta said.
Whitehurst said that aircraft would be redeployed from existing Comair routes as well as leased and operated by Freedom Airlines through an expanded agreement.
The airline said in a separate statement that the fees charged by professionals involved in its bankruptcy case were a small fraction of the savings it had achieved through the bankruptcy process.
The professionals have also accumulated about $1.7 million in expenses during the same period. Delta has already paid most of the fees and expenses.
“We believe the professional fees to date are commensurate with other Chapter 11 cases of Delta’s size and complexity,” it said.
Large bankruptcies like Delta’s typically are bonanzas for the armies of professionals that are hired by the various groups involved in the case.
