How Delta Transformed Vision into Reality in Paris and Seattle

ATLANTA -- ( TheStreet) -- It was five years ago Wednesday that Delta ( DAL) announced a joint venture with AirFrance, bringing the hub at Paris' Charles de Gaulle Airport into Delta's network.

This is a story about how successful businesses create visions of the future and then, over time, translate them into reality.

On a conference call with reporters following the announcement, Executive Vice President Glen Hauenstein said that KLM and Northwest "have had incredible success" building the Amsterdam hub through an alliance. "If they can make such a success of Detroit to Amsterdam, what kind of success can we have on better routes like Atlanta and New York to Paris?" he asked.

Six months later, in March 2008, a month before Delta and Northwest announced a merger, Hauenstein was again chatting with reporters (they love him), this time as Delta executives flew home after taking delivery of their first Boeing ( BA) 777-200L in Seattle. Hauenstein displayed a Delta route map and pointed to Seattle. The city is the closest U.S. gateway to Asia, he said, and would be the perfect place for Delta to add Asian service.

Last week, Delta moved to buttress both of both of Hauenstein's visions: It announced plans to add flights next summer to Paris, where it will have 11 U.S. destinations, as well as to Shanghai and Tokyo Haneda from Seattle.

Both expansions represent "a natural evolution of what we've been doing the past few years," said Bob Cortelyou, Delta senior vice president of network planning, who met Hauenstein on his first day of work at Continental in 1990 and has worked with him much of the time since then. Cortelyou and Hauenstein both joined Delta in 2005.

From Paris, Delta will add service to Boston and to Newark, a United ( UAL) hub, and expand service to its own hubs in Detroit and Atlanta. Atlanta will have four daily Paris flights on AirFrance and Delta. With the expansion, Delta will serve Paris from six U.S. hubs and from Newark, Boston, Seattle, Philadelphia and Pittsburgh. Many of the cities will have lie-flat seats in business class.

Delta intends to bring Paris closer to Amsterdam's service level in terms of trans-Atlantic daily joint venture departures. Currently, Amsterdam has about 20, while Paris will have 12.

"We've had a lot of growth in Amsterdam," Cortelyou said. "We're now focused on Paris, which is the second largest trans-Atlantic market," after London. "It's the natural evolution of what we've been doing the past few years. Amsterdam was always incredibly important (to Northwest) and now we're bringing that emphasis to Paris also."

Seattle was a Northwest gateway to Asia before the merger, and Delta is now expanding there.

The plan is to add non-stop flights from Seattle to Shanghai and Tokyo Haneda Airport, assuming regulators approve; upgauge Tokyo Narita service to a Boeing 747-400 with 376 seats and provide lie-flat seats on key international flights. Additionally, Delta will expand its code-share relationship with Alaska ( ALK), which serves about 70 destinations from its Seattle hub. Delta already serves Amsterdam, Paris, Beijing, Osaka and Tokyo Narita from Seattle. By summer it will offer about 40 daily Seattle departures to 15 destinations, including five daily flights to New York Kennedy.

An advantage in Seattle, Cortelyou said, is that because it is closer to Asia than Los Angeles and San Francisco, Delta can use a wider variety of aircraft to make the flight, rather than depending on 747s and 777s; it would, for instance, fly a 767-300 to Shanghai and Haneda. Also, it can complete a round-trip to Japan with a single aircraft.

"Look at the Delta network," Cortelyou said. "We now have a major presence in the four corners of the country. Atlanta is the busiest airport in the world; we always had that pretty well anchored. We are focused on New York and are now becoming by far the busiest carrier there. We are focused on what we can do in Los Angeles, increasing our footprint there. And capping that is Seattle.

"It's a fundamental structural network piece for us, one of the prime gateways," he said. "Look at those four corners. You can serve almost any place in the world, and you have strong domestic hubs to feed that."

But isn't it American ( AAMRQ.PK) that has been promoting its "cornerstone" strategy? Said Cortelyou, "We had that a lot earlier -- we always called it 'the four corners.'"

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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