Delta Fought Over Detroit’s Iceland Route—Then Canceled It Once The Competition Was Gone

One Mile at a Time points out that Delta added a flight from Detroit to Reykjavik, Iceland after Icelandair added the route. It’s not a route that really works with two airlines in the market, and Icelandair couldn’t make it last. They ended service this year. That left the route all to Delta, so it should have been much better for them! Except once Icelandair pulled out, Delta no longer had a reason to offer the flight either. They’ve pulled the route as well, and will fly Boston to Reykjavik instead. Delta was clearly doing ‘strategic flying’ It wasn’t making money, they just didn’t want to allow the competitor to go unanswered at their hub. That’s also classic anti-competitive behavior. It’s exactly the sort of thing we see from airlines all the time. In fact, we’ve seen it with Reykjavik before. When Icelandair and Wow Air announced service to Dallas – Fort Worth, American Airlines launched Dallas – Reykjavik as well. There were three different airlines flying that route in 2018! American had the local customer base, and connecting traffic. They even talked about making the flight year-round rather than summer seasonal. Icelandair and Wow Air pulled out. And American then pulled out, too. Three flights down to none. American moved its Reykjavik flight to Philadelphia. Then-American Airlines CEO Doug Parker explained the strategy, in a leaked recording of an employee meeting. Somebody starts flying a flight from Dallas to anywhere and American either is already there or we’re gonna be there. Because we’re not going to let customers have another option other than American in and out of here. Now, in Delta’s defense, Icelandair wasn’t just competing for Detroit – Iceland passengers. It offered connections throughout Europe, giving Detroit customers an alternative to Delta across many destinations. Customers already had plenty of one-stop options to Europe, of course, like Detroit – Chicago, Newark, or Washington Dulles – and onward on United or Detroit – Frankfurt – and all over Europe on Lufthansa. Delta – and American – also want the message to reach future potential competitors. An airline considering Detroit will know that Delta will respond, and they may not even try. That drives up fares and limits choices in the long run without Delta even having to respond. More competition today can mean fewer choices in the future. A dominant hub airline can add service when a new entrant comes into the market, and pull the service when that option is gone. Of course even one flight on its own might not have survived.