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Delta earmarks US$1 billion for retrofits

Delta has announced that it will invest US$1 billion, or about US$300 million per year, through to mid-2013 to improve customer experience in the air and on the ground. The aim is to improve the consistency and level of service provided to Delta’s BusinessElite, first-class and elite-level flyers, as well as increasing the efficiency of the airline’s fleet.

Planned enhancements include installing full-flat bed seats in BusinessElite on 90 trans-oceanic aircraft, comprising 14 B767-400ERs, 52 B767-300ERs, 16 B747-400s and eight B777-200ERs. On completion, each of these fleets will have full-flat bed seats on all aircraft.

The airline will also add in-seat audio/video on demand throughout economy class on 16 B747-400 and 52 B767-300ER aircraft. With these additions, Delta will offer personal, in-seat entertainment for both BusinessElite and economy-class customers on all its wide-body aircraft.

Delta also plans to add first-class cabins to 66 CRJ-700 aircraft operated by Delta Connection carriers ASA, Comair and SkyWest, bringing to 219 the number of regional aircraft with first-class seating. Another part of the investment will be spent on completing the modification of 269 pre-merger Northwest aircraft to feature Delta’s signature blue leather seats, updated lighting, and enhanced cabin amenities such as increased overhead bin space on pre-merger Northwest B757-200s.

Other plans include installing winglets on more than 170 B767-300ER, B757-200 and B737-800 aircraft to extend aircraft range and improve fuel efficiency; renovating and expanding Delta’s Los Angeles Sky Club lounge; and introducing new Sky Club locations in Seattle, Philadelphia and Indianapolis.

“Delta’s planned fleet and product investments mark the most significant investment we have made in our customers in more than a decade,” said Richard Anderson, CEO of Delta. “Our premium travellers tell us that the comfort of a flat bed seat with direct aisle access, a first-class experience on regional jets and in-flight entertainment are important factors in their choice of carrier.”

The announcement comes despite the airline reporting a net loss for 2009 of US$1.2 billion, including US$169 million in ‘special items’. Excluding special items and US$1.4 billion of fuel hedge losses, Delta’s net profit for 2009 was US$291 million. “2009 was a difficult year by any measure and my thanks go out to the Delta people for their hard work through this challenging time,” said Anderson. “As a result of the strategic pieces we put in place in 2009 and the strong momentum of our merger integration, Delta is now positioned to capitalise on the economic recovery under way and expects to generate positive RASM [revenue per available seat mile] improvements each month of this year.”

“This investment will be made while staying well within the level of our historical capital expenditures,” said Ed Bastian, Delta’s president. “Rather than invest in new aircraft, Delta will be spending its capital to improve the quality and consistency of the onboard product and efficiency of the aircraft we already own.”

Delta’s upcoming fleet and product investments build on recently announced improvements including the addition of BusinessElite service on Delta’s transcontinental routes between New York JFK and Los Angeles and San Francisco, and the introduction of the full-flat bed seats on all flights between the USA and London Heathrow. The airline also continues to expand inflight WiFi service, and plans to have more than 530 aircraft equipped with WiFi by mid-2010.

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