The past two years have been rough in the South Pacific for Delta Air Lines. All carriers faced the shutdown in travel to and from Australia, save for repatriation flights, leading to many flight cancellations for an indefinite period of time. However, when Australia opened up, Delta Air Lines was dealt a blow in losing its former joint venture partner, Virgin Australia. In losing this partner, Delta has a large hole in the South Pacific, and it begs the question: could Delta stage a turnaround?

Delta Air Lines in the South Pacific

Per scheduling data at Cirium, Delta Air Lines launched nonstop service between Sydney (SYD) and Los Angeles (LAX) in 2009. Until 2020, Delta consistently operated daily service between the two major cities using a Boeing 777-200LR, which was previously the only aircraft in the fleet that could make the route work. The route seemed to be doing well, and Delta jubilantly rolled out its Delta One Suites and Premium Select cabins on the Boeing 777s flying to Australia.

Then, in 2020, the global health crisis hit, and Australia shut its borders tight, limiting both arriving and departing passengers. Delta cut its services, waiting for the right timing to resume flights. However, one of the casualties of the crisis was Delta's Boeing 777 fleet, which were sent out of the fleet for good and have mostly found new homes. Delta replaced its Boeing 777s operating between Los Angeles and Sydney with Airbus A350-900s. This aircraft will continue to fly the route with up to daily service for the foreseeable future.

Also helping Delta's position in the South Pacific was its joint venture with Virgin Australia. Virgin operated a much larger slew of operations between the US and Australia. It operated flights to Los Angeles from Brisbane (BNE), Melbourne (MEL), and Sydney (SYD), giving Delta access to inventory to three unique destinations in Australia and a slew of connecting partners.

Last week, Virgin Australia announced it was ending its partnership with Delta and forming a new one with United Airlines. As Virgin Australia retired its widebody fleet and has no firm plans with dates or deliveries scheduled of a new widebody fleet for the return of long-haul travel, the airline needed a larger US partner and found it in United Airlines. Pre-crisis, United operated flights to Melbourne (MEL) from Los Angeles (LAX) and to Sydney (SYD) from Houston (IAH), Los Angeles (LAX), and San Francisco (SFO).

Delta's now weak South Pacific position

This leaves Delta with the weakest position in the South Pacific of all major US airlines. United and Virgin Australia are partnering and throwing in the joint venture with Air New Zealand, then United has a clear hold on travel to Australia and New Zealand. Separately, American Airlines and Qantas have a strong joint venture, and the airlines have used that as a launching pad for more growth, though some of that remains shelved due to ongoing border closures. Though not a close partnership, Fiji Airways is a oneworld connect and gives access to Fiji and more connecting itineraries.

Delta has, essentially, lost its access to major points in Australia. This includes Melbourne and Brisbane and cities with no nonstop service to the US like Perth. Delta has also lost access to partners who can get passengers to destinations in New Zealand and some other destinations like Fiji. This essentially brings its only South Pacific network to Sydney, where it is entirely reliant on passengers terminating there.

Stay informed: Sign up for our daily and weekly aviation news digests.

What a turnaround could look like

Delta Air Lines is the only one of the big three US airlines that does not fly the Boeing 787 family of aircraft, which have been the primary aircraft of choice between Australia and the United States. However, that does not mean that it is the only aircraft that Delta can fly to the South Pacific. Its Airbus A350-900s have already proven they can make it, though some destinations like Melbourne might be out of reach from Los Angeles. Though a destination like Brisbane or Auckland could easily be served.

The question then becomes how Delta restores its connectivity across Australia. One option could be for Delta Air Lines to approach Rex for some connecting options. While Rex is not a perfect replacement for Virgin Australia, the airline appears to be a little ambitious with its network, and connecting traffic could not hurt its growth ambitions. Regardless of what Delta does with connections in Australia, the airline is still missing access to New Zealand.

There could be an interesting option with Delta's Airbus A330-200s. In August, Qantas announced that it was working with Airbus on some technical changes for its Airbus A330-200s to extend the range of the aircraft to operate from Brisbane to Los Angeles and San Francisco. Based on currently available schedules with the A330-200 in operation, Qantas has blocked some seats for sale on its Airbus A330-200s, limiting the capacity to 234 passengers.

Delta's retrofitted Airbus A330-200s seat 223 passengers. Delta advertises the range of this aircraft at 7,275 miles (11,708 kilometers). The actual range is likely lower when factoring in a full payload and fuel. Brisbane to Los Angeles is roughly ~7,200 miles (~11,500km). Los Angeles to Auckland is roughly 6,500 miles (~10,500km). Los Angeles to Christchurch is roughly 6,900 miles (~11,000km). If Delta could work with Airbus on its Airbus A330-200s, that could be the aircraft that lets the airline operate between Los Angeles and the South Pacific without offering too much capacity yet still offering its segmented product to customers.

A push for Delta to operate some of these services would be to stay relevant, particularly to the Los Angeles-area market. With United (through the joint venture with Air New Zealand) and American able to sell nonstop itineraries from Los Angeles to Auckland and a larger network to Australia, Delta's sole daily flight to Sydney could lead it to lose out on some customers in this crucial gateway.

Delta's CEO, Ed Bastian, told investors last week about part of its international strategy in relation to partners:

"No, we don't have our partnership so that we can offload flying to them. We had our partnerships that can build flying for us and we can build flying together. And then I think that's just the philosophy of why we do this. It's not to find a cheaper way to get lift. It enables us to have greater relevance in the local market, because we know no matter what part of the world you're in, the local airline, the local flag carrier is always going to get the first call."

The Australian traffic is primarily going to funnel to Qantas, and to an extent United Airlines, thanks to Virgin Australia. However, that does not mean Delta is not an unknown presence in the South Pacific. It did have some penetration in the local market thanks to Virgin Australia, which means it is not an entirely new player in the market. Delta did not build up much of its own flying while working with Virgin Australia, but now might just be the opportunity.

A turnaround will certainly not come overnight and will undoubtedly take many years to achieve. This is just one hypothetical strategy that largely will depend on the border reopenings for American travelers, of which Delta has a better shot at capturing.