News & Views of the Week

Well our last venture to you introduced you to FALL.  

With the holidays now behind us we move into the all important winter season just full of travel deals so please check out our website as just about every cruise line and tour operator has specials.  There are just too many to even begin to advise you of.

Less people are traveling for now so they want to fill rooms and cruise ships up and you might even find some very last minute deals so don't be shy and call us and we'll see if we can get you to GETAWAY FROM YOUR EVERYDAY on the cheap OK?
In the meantine some NEWS AND VIEWS for you and we will update when necessary.

 

Did an unrealistic schedule precede Southwest's meltdown?

By Robert Silk 

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Jan 26, 2023

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Southwest reported a fourth-quarter net loss of $220 million.

Southwest reported a fourth-quarter net loss of $220 million. Photo Credit: Southwest Airlines

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The Department of Transportation is investigating whether Southwest Airlines executives engaged in unrealistic scheduling ahead of its holiday season operational collapse, a practice that the department would regard as "unfair and deceptive" under federal regulations.

"DOT will leverage the full extent of its investigative and enforcement power to ensure consumers are protected and this process will continue to evolve as the department learns more," a DOT spokesperson said in an emailed statement.

Though the statement doesn't reference potential penalties, the DOT generally has the authority to fine airlines found to be engaging in unfair or deceptive practices. For example, the department has issued numerous fines against carriers for violating a regulation that limits the length of time airlines can keep flyers in a plane on the tarmac. That regulation was written based upon the DOT's authority to crack down on unfair and deceptive practices.

Southwest canceled 16,700 flights between Dec. 21 and Dec. 31, an event that was precipitated by a winter storm that affected a large swath of the U.S. But more than 13,000 of those cancellations came between Dec. 24 and Dec. 29, when the storm was over and the airline was working to restore its operations. 

Southwest executives discuss tech problems

During Southwest's year-end earnings call on Thursday, company executives stated repeatedly that they had enough staff and enough aircraft to fly the airline's holiday season schedule. CEO Bob Jordan and COO Andrew Watterson said that a final determination on the specific causes of the operational collapse will come from an outside assessment by consulting firm Oliver Wyman. The airline expects Oliver Wyman to complete that review in a matter of weeks, Jordan said. 

But Watterson nevertheless explained the carrier's current thinking on how the meltdown developed. As the winter storm was approaching, he said, Southwest took its usual step of proactively canceling some flights. However, the storm turned out to be worse and more widespread than the airline had anticipated. As a result, the carrier implemented a large number of close-in cancellations, which overwhelmed SkySolver, its automated crew-assignment system. 

Once the system was behind, Watterson said, Southwest did not have the capability to catch up. Crew members who needed to be placed on new flights couldn't be properly reassigned because the system hadn't recorded the change that had already occurred to their schedule. 

SkySolver, which was designed by GE Digital, is used by other U.S. airlines as well, he and Jordan noted.

Watterson said that the large volume of late cancellations exposed a functional gap in the software, which excels at making forward schedule changes but was unable to retroactively record changes. 

GE Digital, said Watterson, has developed a patch to resolve that software limitation, which Southwest is testing. The carrier expects to have that update online in the next few weeks.

"We are intensely focused on preventing another operational failure like we had last month," Jordan said.

Southwest meltdown cost $800 million

Hurt by what the carrier now says was an $800 million impact from the December meltdown, Southwest reported a fourth-quarter net loss of $220 million. 

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For full-year 2022, Southwest reported net income of $533 million, a drop of 44% from 2021.

The company is also estimating that it will finish in the red in the first quarter of 2023, which ends on March 31.  Such a loss would be driven by an estimated $300-$350 million carry-over impact from the December collapse. A portion of that figure includes customer reticence to fly Southwest, said chief commercial officer Ryan Green. But he added that advance bookings indicate that those impacts will wear off before March.

United Airlines CEO speaks out on capacity, but is it substance or spin?

By Robert Silk 

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Jan 27, 2023

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United Airlines CEO Scott Kirby said, "The industry's capacity aspirations for 2023 and beyond are simply unachievable."

United Airlines CEO Scott Kirby said, "The industry's capacity aspirations for 2023 and beyond are simply unachievable." Photo Credit: United Airlines

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United CEO Scott Kirby turned heads in the airline industry earlier this month when he boldly predicted that U.S. airlines, and in particular some discount carriers, will fall victim to more Southwest-style operational meltdowns this year if they push ahead with current capacity plans.

"We believe that the industry's capacity aspirations for 2023 and beyond are simply unachievable," Kirby said during a Jan. 18 earnings call. 

But while analysts say that Kirby's warning has merit, it also must be viewed with a degree of caution.

"It's their version of a story with their spin on it to suit their investors, isn't it?" said John Grant, senior analyst for air travel data provider OAG. "He's saying the system is creaky, but don't worry, we're in a better place to see our way through than anyone else." 

According to Cirium data, U.S. airlines are scheduled to operate 3.7% more domestic flights during the first half of this year than they did during the rocky first half of 2022 and 9.5% fewer than they did during the first half of prepandemic 2019. 

Strategies, however, differ sharply by airline. The Big 3 network carriers (United, Delta and American) as well as Alaska, JetBlue and Hawaiian expect to fly fewer flights than 2019. However, each of those airlines, excluding American, has scheduled more flights from January through June of this year than it flew last year. United has scheduled a 1% increase in flights compared with last year but expects to remain 16.7% below its 2019 domestic total.

Southwest, and especially the ultralow-cost carriers, have been more aggressive in scheduling during the pandemic recovery. Southwest plans to operate 2% more domestic flights during the first half of this year than it did in 2019.

Spirit and Frontier have each scheduled 34% more flights than 2019. Compared with last year, Southwest's schedule is up 12.7%, while the schedules of Frontier and Spirit are up 12% and 21.4%, respectively. 

Kirby's argument is a multipoint one. Airlines, he said, simply can't run as lean an operation as they did in 2019, and external constraints will continue to limit growth below the rate carriers would like to achieve. 

He estimated that U.S. carriers will need to hire 10,000 pilots this year to meet their goals, but there's only 6,600 new pilots available. Aircraft delivery delays and other supply chain limitations will also constrain growth. Kirby also said airlines need more staff per flight hour than prepandemic. He noted that sick calls at United were up 19% in 2022 compared with 2019. Outdated FAA air traffic control technology is also slowing the national airspace system.

"The system can't handle the volume today, much less anticipated growth," Kirby said. 

The Big 3 U.S. airlines have big advantages

But Kirby's analysis was as much about United's relative strength as it was about industry constraints. The Big 3 airlines, he said, are best positioned to grow despite existing challenges. They have the most to offer pilot candidates and along with JetBlue have the most modern IT systems.

United, in particular, moved quickly during the pandemic to upgrade its IT systems, Kirby said, and to make structural changes geared toward improving reliability. 

In some respects, Kirby's observations are already playing out. According to the most recently available Bureau of Transportation Statistics data, U.S. airlines had 4.8% more employees in November than three years earlier, despite diminished flying levels.

And at least one budget carrier already appears to have recognized that its growth strategy has been overly ambitious. For the first half of this year, Allegiant has scheduled 2.8% fewer flights than the prior year.

In 2022, Allegiant flew 14.8% more flights than it did in 2019. But the carrier also canceled 4.43% of its flights in 2022, the most among the 10 largest U.S. airlines, according to OAG. (United had a network-wide cancellation rate of 2.57% last year.) 

OAG's Grant, despite his circumspection, said that United does indeed have some advantages over other U.S. airlines. For example, United does relatively less flying to Florida, where air traffic capacity is especially constrained, than network competitors American and Delta, providing it with a structural edge. 

Brett Snyder, an analyst who pens the Cranky Flier blog, noted in a recent post that by speaking about the pressure currently facing discount carriers, Kirby is offering music to the ears of United shareholders. 

"That being said, Scott has a strong track record when it comes to predicting macro changes," Snyder wrote.

American Airlines touts improvement in its operations

By Robert Silk 

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Jan 26, 2023

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For the fourth quarter, American Airlines bested all but Hawaiian in terms of cancellations rates among U.S. carriers.

For the fourth quarter, American Airlines bested all but Hawaiian in terms of cancellations rates among U.S. carriers. Photo Credit: Bradley Caslin/Shutterstock

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American Airlines is boasting about the carrier's strong recent operational performance, and company executives are promising more of the same going forward.

"American is in a position of strength coming out of the pandemic," CEO Robert Isom said during the company's Q4 earnings call Thursday. "We're going to focus on our goals: reliability and profitability." 

For 2022, American finished behind hub-network competitors Delta and United in terms of on-time arrivals and cancellations, according to airline industry data provider Cirium. American's cancellation rate, including regional American Eagle flights operated by American subsidiaries and contracted partners, was 97.4%. It's on-time arrival rate was 80.21%.

But Isom said American had the best operational performance among the mainline domestic carriers over the holiday period. FlightAware data backs up that assertion, at least in terms of cancellations, showing that American has canceled just 1% of its flights since the Friday prior to Thanksgiving. That ranks the carrier ahead of traditional stalwarts Delta and Hawaiian as well as the remainder of the top 10 U.S. carriers. Those figures don't include regional American Eagle flights, but FlightAware data shows competitive cancellation rates during that period -- 2% for each of the three American-owned regional carriers, Piedmont, PSA and Envoy.

For the fourth quarter, American also bested all but Hawaiian in terms of cancellations rates, according to FlightAware. The carrier's mainline on-time performance lagged behind Delta and United but bested Southwest and the remaining top 10 U.S. carriers.

How American Airlines improved its performance

Isom explained that the operational improvements have been due to scheduling discipline more than anything. "We don't put out a schedule we can't fly," he said. 

But Isom also said IT upgrades related to tracking crew and planes, combined with having the youngest fleet among the network U.S. airlines, have also played a role in American's progress.

American COO David Seymour added that the carrier has especially focused on enhancing its processes and procedures for recovering from weather-caused network disruptions, such as Winter Storm Elliott, which rolled across the U.S. just a few days before Christmas.

"We started building our recovery plan before the storm hit, and that's what we're very focused on," he said. 

American Airlines profitable in 2022

American reported net income for 2022 of $127 million, its first profitable year since 2019. The carrier recorded the profit despite losing $1.9 billion in the first quarter. American's revenue for the year was $48.97 billion, up from $45.77 billion in 2019. Expenses were $47.36 billion, up from $42.7 billion in 2019, due in large part to high fuel prices.

Related: 

For the fourth quarter, American had record net income of $803 million and record operating revenue of $13.19 billion on 6.1% less capacity than 2019. Pre-tax operating expenses were $11.8 billion.

The carrier said that demand remains robust for the first half of this year. American expects capacity during the first quarter to be up 8% to 10% from the first three months of 2022, which were marred by the omicron variant of Covid-19. 

Southwest Airlines Being Investigated for ‘Unfair and Deceptive Practice’

AIRLINES & AIRPORTS  DONALD WOOD  JANUARY 26, 2023

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A Southwest Airlines Boeing 737.

A Southwest Airlines Boeing 737. (photo via SkyCaptain86/iStock Editorial/Getty Images Plus)

The United States Department of Transportation announced an investigation into whether Southwest Airlines deceived travelers by scheduling more flights in late December than the carrier could handle.

According to The Associated Press, Transportation Department officials said they have launched a “rigorous and comprehensive investigation” into the 16,700 flight cancellations over the last 10 days of December.

The government is looking to determine if Southwest’s decision to schedule too many flights could be considered “an unfair and deceptive practice under federal law.” Officials said they would also hold the airline accountable if it fails to meet standards for refunds and reimbursements.

In a statement, the Transportation Department said it would “leverage the full extent of its investigative and enforcement power” to protect travelers. The Christmas chaos started with a winter storm, but it was an overloaded crew-scheduling system that forced so many disruptions.

Union officials revealed they had previously warned Southwest about the potential issues.

In response to the government’s investigation, Southwest said its December schedule was “thoughtfully designed,” but admitted it was working with consulting firm Oliver Wyman to study what went wrong.

“Our systems and processes became stressed while working to recover from multiple days of flight cancellations across 50 airports in the wake of an unprecedented storm,” Southwest said in a statement.

Southwest CEO Robert Jordan said the carrier would cooperate with any government investigations and consider increasing spending on technology upgrades to avoid similar issues in the future.

Earlier this month, the airline announced the travel chaos was forecast to cost the carrier a pre-tax impact between $725 million to $825 million and revenue loss between $400 million and $425 million.

In addition, the U.S. Senate Commerce Committee announced it would hold hearings related to Southwest’s delays and cancellations during the winter holiday travel period.

 

Where Major Cruise Lines Stand on Muster Drills

CRUISE LINE & CRUISE SHIP  NORWEGIAN CRUISE LINE  LAURIE BARATTI  JANUARY 26, 2023

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life jackets, railings, safety, cruises, muster drills, rescue, equipment, floatation

Life jackets laid out on a railing. (photo via iStock/Getty Images Plus/Anton Ilchanka)

Norwegian Cruise Line Holdings (NCLH) has just announced that it will be discarding the current electronic muster drills and reverting to the traditional, in-person variety. The change takes effect immediately, across all three of its brands: Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

According to Travel Weekly, NCLH explained in a statement, "We continuously evaluate our procedures for providing detailed instructions on safety and security measures to our guests, and as such have made the decision to reinstate synchronized, in-person muster drills on embarkation day across all vessels within the fleet."

It’s not the first major cruise line to do so. Disney Cruise Line announced in mid-November that it was going back to the old ways, requiring passengers to complete in-person muster drills aboard all of its vessels. While Disney gave no specific reasons for the policy reversal, Cruise Hive speculated that it came down to a lack of guest participation.

E-muster protocols were widely adopted after cruising resumed from its pandemic-prompted hiatus in 2021, providing guests with a socially distanced and more flexible means of fulfilling their safety drill requirements upon embarkation.

While guests have undoubtedly appreciated the transition to e-musters—which make completing the mandatory maritime safety training more convenient and hassle-free during a hectic boarding process—cruise companies seem to have found cause to abandon the tech-based approach in favor of the traditional format.

Will Other Major Cruise Lines Follow Suit?

Other major lines say they see no reason to return to the old ways, which require guests to find time during the boarding process to physically find their way to an assigned meeting place, assembling with their fellow passengers, for a presentation on emergency procedures.

Greg Purdy, Royal Caribbean International’s Senior Vice President of Marine Operations, told Royal Caribbean Blog that the company has no intention of resurrecting the traditional muster drills. "We have no intention of moving back," he said on the subject. "We're always open to change, but we're not so open to going backwards. So, we will always look for moving forward and doing things if they're better to do for our guests and our crew."

Purdy opined that guest participation has actually improved with the e-muster method. "We're fairly aggressive about ensuring that you complete the safety drill prior to sailing. So, we see rates typically upwards of over 97 percent on our ships for participation," he said, adding, "That's actually better than the old traditional drill."

The tech-based approach is also arguably more efficient and effective. Purdy also said Royal Caribbean has found that passengers absorb the information better with e-musters. "For us, this is really an improvement in the transfer of knowledge," he shared. "We actually did surveys to test that, is their retention of knowledge better, and in fact, it was."

As guests complete the training virtually via presentations in-app or on their stateroom televisions, stateroom attendants can see which guests have completed the e-muster and answer any questions.

Another big name in the industry, Carnival Cruise Line, also apparently sees no reason to backtrack its approach to muster drills. In response to questions on the subject, John Heald, Carnival Cruise Lines’ Senior Cruise Director and Brand Ambassador, shared the company’s official response in a social media post.

Carnival leadership said, “Our experience with the e-muster process has been extremely positive and we are able to provide our guests with critical safety information in a more individualized manner, including them understanding very specifically where their muster station is and how to get to it. The e-muster process has also generated positive comments for effectiveness during our post-cruise survey results. We will continue to utilize our e-mustering process while always looking for ways to improve its effectiveness.”

 

Carnival Corp. will upgrade internet across all brands

By Andrea Zelinski 

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Jan 18, 2023

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Carnival Corp. and Royal Caribbean Group have deals to install Starlink for internet service.

Carnival Corp. and Royal Caribbean Group have deals to install Starlink for internet service. Photo Credit: Maridav/Shutterstock

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Carnival Corp. plans to roll out faster internet service across all of its brands as it enters into an agreement to use SpaceX's Starlink satellite technology. 

Starlink uses low Earth orbit satellites to provide lower latency (the time it takes for data to reach a device) and higher connectivity. 

The company began rolling out Starlink on Carnival Cruise Line and Aida Cruises ships in December and plans to install Starlink on Princess, Holland America Line, Seabourn and Cunard Line along with international brands P&O Cruises in Australia and the U.K. and Costa Cruises. 

Carnival Corp. is the latest in a series of cruise companies contracting with Starlink to provide faster internet service at sea. Royal Caribbean Group plans to install Starlink across its entire fleet, including the Royal Caribbean International, Celebrity Cruises and Silversea brands. Hurtigruten also uses Starlink and Windstar has been exploring whether the service would work for several of its ships. 

The move to faster internet comes as guests expect to be able to make video calls, stream content and post on Instagram and TikTok as they do on land. 

Carnival Corp. said the company has tripled bandwidth since 2019 and said the Starlink agreement will offer brands the capability to introduce new guest services and features while boosting operational functions like onboard equipment monitoring and communications between ship and shore teams and offer better internet connectivity to its crew members.  

Flush with infrastructure funding, Amtrak readies new trains

By Donna M. Airoldi, Business Travel News 

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Jan 23, 2023

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On the Northeast Corridor, leisure demand has exceeded 2019 levels, while business demand is growing but not yet at pre-pandemic levels.

On the Northeast Corridor, leisure demand has exceeded 2019 levels, while business demand is growing but not yet at pre-pandemic levels. Photo Credit: BrandonKleinPhoto/Shutterstock.com

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Amtrak directly was awarded $22 billion in the 2021 $1.2 trillion infrastructure bill and will take a share of another $44 billion to be divvied up by the Federal Railroad Administration. Two new types of trains -- Acela and the newly announced Airo, set to debut in 2026 -- are on the way to enhance the national rail provider's customer experience, particularly for business travelers. Jina Sanone, vice president of Amtrak's Northeast Corridor Service Line, spoke with BTN senior editor Donna M. Airoldi recently about these changes. Edited excerpts follow.

BTN: Are the new Acela trains part of the $22 billion infrastructure money or were they already on the way?

Jina Sanone: Those were already in the works, and many already have been manufactured, so that was well on its way. But the funding does help the new Airo trains, and some of the money that goes through the FRA will end up with Amtrak and many of our state partners.

BTN: What will be some of the improvements to the business-class cars?

Sanone: The majority of the train is business class. It's a nine-car train set: one first-class car, one cafe car, seven business-class cars, so we will have more business-class seats. The seats are very comfortable, they'll have individual power. Today there is an outlet for every customer, but they will be easier to get to on the new trains. They also will be modern with digital displays, the cafe cars will offer self-service, a more customer-friendly option. Those are a few things in the works.

BTN: How many more seats?

Sanone: About 30% more.

BTN: How will the trains be more sustainable?

Sanone: The new Acela trains will be even more efficient and more sustainable. Train travel by its nature is sustainable across our country and around the world. The new Acelas and everything on the Northeast Corridor (NEC) operate on electric power, which makes them very sustainable. And the new Acela's are light, so it will take less electricity to power those.

BTN: When are they due to be put into service?

Sanone: We are going through testing right now. Many of them have already been made. We don't have a firm date, but we are looking toward May 2023. 

BTN: Another new train announced in December is the Airo. How will these cars be an improvement over current ones, particularly for business travelers?

Sanone: The new Airo trains represent the future of Amtrak and will be available across the country. Many will be operating in the NEC and on the corridors around that. The Keystone trains, the Empire service, service into Virginia, those are all very popular routes with business travelers on top of the NEC.

These trains are an elevated experience. One of the really exciting things is the windows are very large, panoramic. Even though these trains are not built yet, I had a chance to evaluate the seats that we were choosing. They are incredibly comfortable. They will have wrap-around head rests. Tray tables are larger and sturdier. One of the things I love is there is a cupholder you can utilize with the tray down or up. There are individual power and USB ports. The restrooms are touchless. You can enter and use everything in there without touching anything. 

A great advantage of these trains is there is one-by-two seating in business class. That's an improvement compared to what we have today on our regional trains that operate in the NEC. Most of those are two-by-two in business class. This business class will be like the Acela trains today that have that in first class. It will be in all the business-class cars for Airo trains. 

Another point that will make the service better for those traveling between Virginia and the corridor is that the Airo will have the capability to move seamlessly between the two because everything on the corridor is electrified. Today, for the trains that operate on the corridor and off, they have to switch locomotives in Washington Union Station. The new train sets won't have to do that anymore. Customers will have faster trip times. 

BTN: How many of each new type of train are you expecting?

Sanone: Twenty-eight new Acelas, and the Airo is to be determined. We've ordered 73, but have options to take more of them.

A great advantage of Airo trains is there is one-by-two seating in business class. This business class will be like the Acela trains today that have that in first class. It will be in all the business-class cars for Airo trains.

BTN: What additional investments is Amtrak making to make the Northeast Corridor more efficient with its new funding?

Sanone: There are many [including] repair work and refurbishments. There are some major projects like replacing the B&O tunnel outside of Baltimore. There is other bridge and tunnel work that will happen, infrastructure work with the tracks, and the Gateway project in New York, which is the 10 miles of track between Newark and New York. There is a whole catalog of infrastructure work and repairs that will take place with that funding. [Of the $22 billion allocated to Amtrak, $12 billion will go toward NEC repair, according to Amtrak.]

BTN: What are your ridership numbers on the Northeast Corridor in terms of recovery to 2019 levels?

Sanone: We are seeing strong demand for ridership. Leisure demand has rebounded quickly and has exceeded the 2019 levels. And business demand is growing, but it's not yet at the levels we saw before the pandemic. Every month it's a little stronger. 

BTN: How far along is it?

Sanone: It's getting close to about two-thirds, but it's changing month by month.

BTN: Which segments have shown the most improvement?

Sanone: It's pretty even. Our business demand is so concentrated on the corridor. The north end between Boston and New York and the south end between Washington and New York, the business travel on those has rebounded similarly. We know the pandemic has changed the way people work and where they live and where they work, and we are constantly looking at those changes so we can adapt and meet the customers' needs.

BTN: How is the Amtrak Corporate Incentive Program doing? How has interest in it been since Covid?

Sanone: We have great group of customers that we work with and have relationships with that use [that program]. They valued it before and value it now. Individual employees of these companies might feel it's safer traveling on the train, and we've seen some positive shifts with specific companies.

BTN: Any planned changes to that program?

Sanone: We are always looking at enhancements, but there are no major changes to the program. It's working well for us, and I think it works well for our customers. 

[I want to add] that the New Acela trains will be even more efficient, as will the Airo trains. Our corporate customers value that a lot. It's an important part of their partnership with Amtrak because we help them meet their corporate overall sustainability goals. Amtrak helps them deliver on that. Taking the train on the NEC is up to 83% more efficient than driving and up to 73% more efficient than flying from a greenhouse gas emissions standpoint

Delta will fly to New Zealand

By Robert Silk 

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Jan 20, 2023

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Delta will fly daily to Auckland.

Delta will fly daily to Auckland. Source: Delta

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Delta will start flying daily from Los Angeles to New Zealand on Oct. 28, competing with Air New Zealand on the route.

Delta will use an Airbus A350-900 with business, premium economy and economy cabins.

The carrier will also introduce seasonal flights between Atlanta and Nice, France, beginning May 12. Delta will operate Atlanta-Nice daily through Sept. 29 on Boeing 767 aircraft. It will be the lone carrier in the market.

The newly announced routes are part of Delta's broader international expansion plans for this year. Delta has previously announced new routes between New York and London Gatwick and between New York and Geneva, as well as several transatlantic route resumptions. 

Overall, Delta plans to fly more seats across the Atlantic this year than ever before.