Delta last week announced it would continue its slow growth of Austin as a focus city, adding three new destinations while cutting one as it looks to cement its position as a clear number two behind Southwest. This, of course, follows American’s failed efforts to do the same coming out of the pandemic. Having two airlines try to build up the same city so close together gives us a great opportunity to see just how differently these airlines run.
Austin looks like a microcosm of how both airlines have operated in general. Delta is careful and calculated while American was haphazard and reckless, at least at that time.
American Goes Fast and Breaks Things
American under Vasu Raja was something of a wild child. Vasu had big ideas and not many checks and balances. Some of his ideas, like the Northeat Alliance with JetBlue, were great. Others not so much. Austin, well, that fell somewhere in the middle.
At the time, Austin was a hot market that was gate-constrained. American saw an opportunity with the pandemic starting to let up for it to become the primary non-Southwest airline at the airport. Austin was in the airline’s backyard, and it already had a strong loyalty presence. So, the airline acted fast.
American Seats and Departures From Austin Over Time
Data via Cirium
As you can see from the above chart, the ramp-up was fast and furious. American went from shy of 66,000 seats in Dec 2020 to over 300,000 by the Dec 2021. Even comparing to before the pandemic, this was more than a doubling of seats. Before the pandemic, American served Austin from 8 destinations. It had 6 in Dec 2020 but that spiked to 37 by Dec 2021.
The growth was explosive and shocking, but there were problems quickly. The airline was the quickest to try to get back to normal in the US after the pandemic, and it stressed its — and its regional partner — systems. In 2022, only two months saw American fly on-time (arrivals within 14 minutes of schedule) more than 80 percent of the time. Four months didn’t even top 70 percent. Meanwhile, the completion factor tanked. Five months in 2022 saw more than 2 percen of flights canceled from Austin, on par with the whole system.
While the operation was under strain, American had other problems that it apparently hadn’t considered before it put this plan into motion. See, in American’s pilot deal, it is limited on where it can deploy regional jets. They need to be used primarily to feed the hubs, and there’s a formula to determine what counts as a hub. Spoiler alert: Austin did not count.
American’s ramp-up in Austin was hugely dependent upon regional capacity. At its peak, American had more than 45 daily flights on regional aircraft that were not connecting Austin with a recognized American hub. This created friction with the pilots who went to arbitration over the issue.
In the end, this adventure didn’t perform well enough to keep it going. That dismantling started in Jan 2024 and it was done by the time 2025 rolled around. Of course, American is different now. With Vasu gone, it has been trying to get back to status quo with no real inspired push to tackle new ground. But for a brief period, American was ready to move fast.
Now let’s contrast this with Delta.
Delta Plays the Turtle to American’s Hare
Delta is an airline that has long been methodical and ruthless in how it approaches a market it wants to win. You need to look no further than New York, Boston, and Los Angeles as prime examples of how Delta gets what it wants when it wants it.
Delta had designated focus cities before, but it had never really added a network component to that strategy. Hell, Austin was named a focus city well before the pandemic, but then nothing happened at all.
Once American decided to abandon its perch in Austin, Delta saw an opportunity, but it approached it very differently.
It started building in October 2023 when it went with big leisure destinations, Las Vegas and Orlando. In April 2024, it took advantage of Austin’s geography to connect smaller cities in Texas into the Delta network since those couldn’t reasonably be served from more distant hubs in Delta’s network. This year, it started building even further with a mix of leisure like New Orleans and Tampa alongside other useful cities like Indianapolis and San Francisco.
For this coming winter, the airline had already filed new leisure flying to Cancún, Los Cabos, and Palm Springs. And now it’s adding Denver twice daily in this latest announcement. But this latest release was more about next summer when it will not only boost San Francisco from 1 to 2x daily and Indianapolis from 1 to 3x daily, but it will also add new daily service to Columbus (OH) and double daily to Kansas City.
Not everything has worked. It’s not mentioned in the gushing press release, but Delta did file an exit on Midland/Odessa, and it will halve New Orleans from 2x to 1x daily, but there is still net growth. The end result is a much more measured and steady increase that has required tinkering:
Delta Seats and Departures From Austin Over Time
Data via Cirium
Does this mean Delta will be more successful? Probably. It isn’t trying to do as much, and it’s presumably closely watching performance before tweaking the last round of flying and adding more. If we look at domestic DB1B data in Cirium, Delta has been getting a significant unit revenue premium over American in Austin even after adjusting for average stage length.
Austin SLA PRASM for Delta Compared to American
DB1B data via Cirium
Now we wait to see how market leader Southwest responds, if at all. The airport remains heavily constrained until the new terminal opens several years down the line. At that point, it’s likely that Delta and Southwest will still be numbers one and two, because Delta doesn’t go in and out of markets quickly the way American did here before.
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