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Delta Air Lines Continues Its International Growth in Boston

By Adam Levine-Weinberg - Sep 25, 2019 at 8:26AM

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Additional seasonal service from Boston to Europe next summer will support Boston's growth into a full-fledged hub for the airline.

Over the past few years, Delta Air Lines ( DAL 9.28% ) has grown aggressively in Boston, turning Logan Airport into its newest hub. To some extent, this expansion was opportunistic, seeking to capitalize on strong economic growth in the Boston region and the market's underserved status. However, Delta was also looking for a new connection point for Europe-bound traffic, given that its main transatlantic hub is New York's overcrowded and slot-constrained JFK Airport.

Last month, Delta Air Lines announced plans to add two more transatlantic routes from Boston in 2020. On Monday -- in conjunction with taking full occupancy of Logan Airport's Terminal A -- Delta doubled down on that plan, revealing additional seasonal service from Boston to Europe that will begin next spring.

Delta grows its new transatlantic gateway

Earlier this year, Delta and joint venture partner Virgin Atlantic stated that they would begin flying from New York and Boston to London's Gatwick Airport next year, complementing their existing service to Heathrow Airport. In mid-August, Delta provided more details on the new routes, which will begin on May 21, 2020. Virgin Atlantic will handle New York-Gatwick flights, while Delta will operate the Boston-Gatwick route.

At the same time, Delta announced that it would resume flying to Manchester, England, next year. Daily seasonal service between Boston and Manchester will also begin on May 21, 2020, and will run through Labor Day.

Delta revealed additional transatlantic growth plans from its new Boston hub on Monday. The carrier will start seasonal service to Rome and offer a second daily flight to Paris during the 2020 summer peak season. Like the new Manchester route, both of those flights will operate from May 21, 2020, until Labor Day. Delta will also bring back the seasonal routes from Boston to Lisbon, Portugal, and Edinburgh, Scotland, that it introduced in 2019, but with an extended operating season running until the end of September.

A Delta Air Lines plane taking off.

Delta will add several new transatlantic flights from Boston next year. Image source: Delta Air Lines.

Additional domestic growth coming, too

Back in July, Delta President Glen Hauenstein noted that the airline was connecting nearly 1,000 people each day from other domestic destinations to Europe via its Boston hub. The new routes and expanded seasonal service announced recently will boost Delta's transatlantic capacity from Boston by more than 30% in 2020. That is sure to drive substantial growth in the number of connecting passengers moving through Boston.

As a result, Delta Air Lines will be able to support more domestic flights in Boston. It also has the infrastructure it needs for further expansion there, as Delta now controls all 21 gates at Logan Airport's Terminal A, up from 16 previously.

Indeed, in just a few days, the carrier will begin flying from Boston to three key business markets -- Chicago; Newark, New Jersey; and Washington, D.C. -- with a total of 15 daily roundtrips. This will give it more than 150 peak-day departures in Boston. Twice-daily service to Miami will begin in December, and more domestic growth will follow in 2020 and 2021, based on Delta's plan to grow its Boston footprint to 200 daily departures.

Local market strength and connecting opportunities complement one another

For many years, Boston has been a secondary transatlantic gateway, with larger hubs in the New York City area -- and, to a lesser extent, Philadelphia and Washington, D.C. -- serving far more Europe-bound travelers. However, Boston is a big metro area with a strong regional economy and ample demand for travel to Europe.

Thus, Delta doesn't need a lot of connecting traffic to make numerous routes from Boston to Europe viable. Even though the carrier's Boston hub is small, its European routes have been successful.

Meanwhile, the availability of connecting flights to various international destinations may enable Delta to launch new routes from Boston to smaller domestic markets that couldn't quite justify nonstop service based on local-market demand alone. As such, Delta's nascent hub operation in Boston is both allowing the airline to carry more connecting traffic to Europe and helping it gain share in a big, underserved market. It's just one of the many reasons why the airline continues to produce top-tier earnings and cash flow year after year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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