Ciro From Brazil, joined Aug 1999, 662 posts, RR: 7 Posted (10 years 3 months 1 week 1 day 4 hours ago) and read 2257 times:
My apologies if my topic sounds stupid, but instead of launching its no-frills airline, wouldn't Delta be better of by trimming part of its operations and forwarding them, under a structured partnership, to AirTran? I have not conceptualized how to strike such deal (maybe equity swap?), but I do believe that codesharing and rationalization are key points to the success of this business.
Would there be regulation problems?
Would you have any ideas or insights about this?
Cheers!
The fastest way to become a millionaire in the airline business is to start as a billionaire.
ConcordeBoy From , joined Dec 1969, posts, RR: Reply 1, posted (10 years 3 months 1 week 1 day 4 hours ago) and read 2235 times:
trimming part of its operations and forwarding them, under a structured partnership, to AirTran
That's called route collusion.. it'd be illegal without antitrust immunity (which those two would never get being based in ATL). Codeshare partners without ATI are still supposed to be competitors.
Also, the primary purpose of codesharing is to allow your passenger base access to destinations/frequencies that are [historically/initially] difficult for you to serve. DL has more destinations and frequencies out of ATL than FL could imagine, so no point.
Ciro From Brazil, joined Aug 1999, 662 posts, RR: 7 Reply 3, posted (10 years 3 months 1 week 1 day 3 hours ago) and read 2188 times:
Well, there you go... The point is not to diminish the offer, but to cut extra capacity, which would be wasted anyways. Isn't the proposed DL / CO / NW alliance all about enhancing flight options while rationalizing operations at the same time?
Also, if Delta embraced AirTran as its low-cost partner, the Florida destinations out of the East Coast could be provided by the latest carrier, instead of Song. There's no big deal in basing aircraft in other airports.
Airplanes would be removed, Delta would offer cheaper seats through AirTran and everyone profits in the end of the day.
So... Why not?
The fastest way to become a millionaire in the airline business is to start as a billionaire.
EA CO AS From United States of America, joined Nov 2001, 12562 posts, RR: 64 Reply 4, posted (10 years 3 months 1 week 1 day 2 hours ago) and read 2174 times:
Why share with a partner when you can have it all for yourself?
Besides, the NE to Florida leisure market prefers to fly nonstop, if possible. Song's model will allow just that, at costs that enable them to be profitable against jetBlue.
Connecting via ATL (on Delta mainline or codesharing with AirTran) adds another stop to the equation, and therefore more cost. This would leave them at a competitive disadvantage with jetBlue.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Ciro From Brazil, joined Aug 1999, 662 posts, RR: 7 Reply 5, posted (10 years 3 months 1 week 1 day 2 hours ago) and read 2170 times:
AirTran can fly non-stop in these particular segments in order to compete with Song and create, at the same time, a friendly environment to stretch the partnership with Delta into other markets.
Of course Delta can do it itself, but I am looking for capacity cuts, while substituting cost structures from a major to a "low-fare" carrier.
The fastest way to become a millionaire in the airline business is to start as a billionaire.
EA CO AS From United States of America, joined Nov 2001, 12562 posts, RR: 64 Reply 6, posted (10 years 3 months 1 week 1 day 2 hours ago) and read 2157 times:
but I am looking for capacity cuts
Yes, but you're looking for them in the wrong way. Don't look for cuts just for the sake of having them. They need to be applied in the right way in order to work.
Delta is removing 36 of their B-757s and committing them to flying NE to Florida leisure markets only. While this means there's a significant capacity increase in this region, it takes a huge amount of capacity out of the rest of the network.
End result? A large capacity drop over the entire mainline network.
This enables DL to better tailor the capacity they can offer over their mainline hub-and-spoke system to the demand, while keeping the "garbage" leisure fares out of that higher-cost system entirely, flying them on the Song routes.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Ouboy79 From United States of America, joined Nov 2001, 4007 posts, RR: 23 Reply 7, posted (10 years 3 months 1 week 1 day 2 hours ago) and read 2156 times:
Ciro you are missing several very good points here. Code-share partners MUST still compete. DL, NW, and CO will all compete on the same routes. UA & US all compete on the same routes. They cannot coordinate fares or schedules. One big thing out of code-sharing is that revenue usually goes to the airline flying the passenger - not the airline code next to the flight number. So if they are flying say US Airways flight 6000 from ORD to DEN, but they are on UA metal - UA gets money...US gets nothing.
Song is doing nothing more than replacing Delta Express - which is already there. They are shifting aircraft with more capacity on to high demand/low yeild routes...while moving smaller aircraft to routes that don't need extra capacity and are higher yeilding.
Airplanes would be removed, Delta would offer cheaper seats through AirTran and everyone profits in the end of the day.
You try to find one airline that is downsizing due to code-sharing in the US. Airlines want all the money - they don't need to be sharing revenue with the other airlines. The whole point of code-sharing is to offer more flight options to attract a bigger market to your product - and keeping them on your metal as long as possible. And no...not everyone profits in the end of the day - as I said above - only the person who is flying that person usually makes money.
Any opinion/comment posted is that of my own and not that of Southwest Airlines Co.
Srbmod From United States of America, joined Mar 2001, 16888 posts, RR: 51 Reply 9, posted (10 years 3 months 1 week 1 day ago) and read 2082 times:
Delta and AirTran have never played nice, it goes all the way back to nearly 10 years ago when Valujet started up. Delta has been trying to pull that thorn out of their side for years now, and still have a few other thorns to worry about as well. Delta and AirTran have as much chance of doing codeshares as I do of buying an NHL franchise.
Ouboy79 From United States of America, joined Nov 2001, 4007 posts, RR: 23 Reply 10, posted (10 years 3 months 1 week 20 hours ago) and read 2030 times:
ConcordeBoy - I would suggest reviewing the UAL/U marketing agreement again. The airline carrying the passenger, in this case, gets all the revenue from them. This is why you will see U & UAL begin new services to the others cities to expand revenue potential - DEN to CLT being one.
Any opinion/comment posted is that of my own and not that of Southwest Airlines Co.
Elwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 7 Reply 11, posted (10 years 3 months 1 week 15 hours ago) and read 1964 times:
Srbmod got it most right. Delta and AirTran hate each other. The only time they cooperate is when it's in both of their best interests.
Song is directly competing with AirTran and JetBlue's NE-Fla routes. Delta wants that money and they aren't going to share it with anyone. They killed off Eastern to get it (though Eastern was never all that profitable) and they want to hold on to it.
AirTran perhaps doesn't want to kill Delta, but they wouldn't be sad to see DL go away.
Besides, why give your biggest single competitor to your home market a cut of your profits?
Cheers!
Those who fail to learn history are doomed to repeat it in summer school.
Sponsor Message: 
From Brazil, joined Aug 1999, 662 posts, 
From , joined Dec 1969, posts, 
Printer friendly format 
