Northwest, Delta Aim at Overseas Expansion

Northwest Airlines´ daily Amsterdam-to-Bombay run fetches $1,400 a ticket, the airplane flies nearly full, and JetBlue doesn´t go there. Which is why international flying is a moneymaker for most U.S. carriers –and why Northwest and Delta Air Lines Inc. are both making international flying a big part of their bankruptcy makeovers.

Delta says it will increase international flying by 25 percent while cutting domestic flying as much as 20 percent, and this week it announced new nonstop service from Atlanta to Tel Aviv beginning in March. Northwest increased international capacity 5.1 percent last month while domestic capacity stayed flat, and it says it will cut domestic capacity at least 10 percent. It´s adding nonstop service from Amsterdam to Bangalore, India.

In Northwest Airlines Corp.´s bankruptcy filing, Chief Financial Officer Neal Cohen went so far as to call the carrier´s Pacific routes one of its “most valuable assets,” adding, “I believe that (Northwest´s) viability as a going concern is dependent upon the maintenance of these foreign operations.”

Northwest and Delta are following the lead of UAL Corp.´s United Airlines. Before bankruptcy, United got a third of its passenger revenue from overseas flying. Now it´s half.

Overseas routes “are the brightest spot for the U.S. airlines at the moment,” said Morgan Stanley airline analyst Douglas Runte. “International has been the place for (legacy) U.S. carriers to hide from low-cost competition.”

Adding flights to Europe, where Delta has a strong presence, is easiest because of relatively relaxed rules about who can fly there. Not so in much of Asia.

Agreements between the U.S. and China limit the number of flights there. Northwest and United are the only American carriers with the right to pick up passengers in Japan for flights further into Asia, a huge advantage over other U.S. carriers trying to do business in that booming region.