Aviation Daily: Delta's Mullin Prepares Defense For Potential US Air Code Share By Steve Lott/Aviation Daily 01-Jul-2002 7:58 AM U.S. EDT Delta CEO Leo Mullin is prepared to launch an aggressive marketing attack against US Airways if it reaches a code-share deal with another major airline this summer, and he vowed that Delta would sign its own alliance to compete. In an interview last week, Mullin told The DAILY that Delta is clearly the "target" airline of a US Airways alliance deal, and he fears that Delta would see "revenue diversion" if US Airways partners with a larger airline, such as United. A code-share deal "doesn't increase the revenue pie," he said, but instead allows for those partner airlines to "get a bigger piece of that pie." If US Airways partners with United, Continental or Northwest, Mullin is prepared to form his own alliance with another domestic carrier and take quick marketing actions in the areas of pricing and product development to prevent US Airways and its potential code-share partner to bleed revenue from Delta. "I will not allow revenue diversion to be accomplished by the code share," he said. Even though Delta has the clear upper hand over US Airways along the East Coast, they are still bitter rivals on many routes to Florida and on the Northeast shuttle routes. A code-share deal with a major airline with a larger network, however, could have a significant impact on Delta's revenue recovery. Ready To Use An 'Armada' Normally mild mannered, Mullin expressed great passion for protecting Delta's network and pledged to use carrier's "armada" of products and subsidiaries to compete with a new US Airways alliance and the existing low-fare carriers, such as Southwest and AirTran. Because US Airways seems have taken longer than expected to sign an alliance with another carrier, Mullin is in a wait-and-see mode. However, he said he does stay in touch with "all parties" and is considering "a number of options" if and when US Airways signs a deal. Ironically, US Airways for many years has been "the least attractive girl at the airline prom," said JP Morgan analyst Jamie Baker. "Yet, suddenly, suitors are lining up, flowers in hand." Of all the potential partners, he said a US Airways alliance with United or Continental would be "materially more beneficial to US Airways' East Coast network than to the suitor's network." He noted that the "apparent eagerness" exhibited by Continental and United stems from the fact that "the alternative -- sitting back and doing nothing -- is far more dangerous." For Continental, in particular, it is better to "dance with the lonesome prom partner in her current form than find out down the road what a few years at the gym and a facelift can yield." Similarly, given United's prior attempt to purchase US Airways, it has the "requisite analysis that can be easily dusted off as it pursues US Airways," which may give it the lead over Continental, Baker said. Regardless of which carrier US Airways picks as a partner, Mullin said he is just as concerned now as he was during the period last year when US Airways and United were attempting to merge. "Delta is still the target," he said.