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Cute New Planes, Same Old Problems - Ted & Song  
User currently offline737doctor From United States of America, joined Mar 2001, 1332 posts, RR: 38
Posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5546 times:

Found an interesting article:

http://yahoo.businessweek.com/magazine/content/04_09/b3872053.htm

I believe that the follow excerpts sum thing up nicely:

"...Ted, which will grow from four aircraft today to 45 by yearend, and the 36-plane Song are just a sliver of the size of their ailing parents. Worse yet, they could prove costly distractions to the main event: the need to dramatically lower the costs of the parent airlines, which are still fighting for long-term survival. "If you're going to fix the factory, fix the factory. Don't create a sideshow somewhere else," says airline consultant Robert W. Mann Jr. of R.W. Mann & Co. That's a sentiment shared by American, Northwest, and Continental, which have shunned sub-brands after watching similar efforts fail before.

and

"Ted and Song seem like so much marketing buzz. And buzz won't help the carriers fly though the inevitable industry transformation that lies ahead."

Now, I'm not trying to predict gloom and doom for Ted or Song or rain on anyone's parade, but I have to agree with the main thrust of the article. Ted and Song seem like so much fluff and very little substance. Neither address the real problems of high costs at the parent airlines, nor do I feel that they will be able to do any substantial damage to the LCC's. As demonstrated by the failure of the many "low-cost" incarnations created in the past to do battle with the legitmate LCC's, it's hard to beat them at their own game.




Patrick Bateman is my hero.
42 replies: All unread, showing first 25:
 
User currently offlineLuv2fly From United States of America, joined May 2003, 12148 posts, RR: 49
Reply 1, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5488 times:
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This whole airline with in an airline, which has a history of being a failure. Reminds me of when couples are having troubles in there relationships or marriages, so to correct it they decide to have a baby, problem is still there only now you have the addition of the baby. If two people are having trouble, the fix is not to add a third to the equation.


You can cut the irony with a knife
User currently offlineCoTXDFW777AA From United States of America, joined Feb 2004, 321 posts, RR: 1
Reply 2, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5443 times:

I am just about sick off all LCCs, whether they are real or not. I like what LCCs do (lower ticket prices on some routes) but I do not enjoy flying many of them, and I hope that one day they won't be my only option. TED and SONG are both bad ideas. The best idea yet is figure out how to actually make it possible to offer low prices, and don't just throw up low fares and expect to make money if the plane is half full. SONG might be the factor that throws Delta in the red, they seem to be failing on all fronts with SONG. TED on paper sounded like a better idea, but it has gotten less than grand reviews.

-COTXDFW777AA



Texas- it's like a whole different country!
User currently offlinePA110 From United States of America, joined Dec 2003, 2010 posts, RR: 23
Reply 3, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5379 times:
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Why are folks so anti LCC? These days the difference between a full service carrier and an LCC are virtually nil. True, Southwest does not have pre-reserved seating, but that's about it. JetBlue has IFE, yet if you fly AA's MD80s, some UA 737s some DL 737/757s, NW's infamous DC9s, you are also not likely to get IFE. Many legacy carriers are now selling food on board, the same as LCC's.

The question is whether Ted and Song are going to last. The question might as well be "will any/all of the full service carriers last"? Given past performance and the fact that neither Ted nor Song have significantly lower operating expenses, there's certainly room to doubt long term success. However, who's to say that the full service carriers don't continue a slow long-term trend of becoming more like the LCC's. Then what will everyone bitch about?



It's been swell, but the swelling has gone down.
User currently offlinePropjock04 From United States of America, joined Dec 2003, 76 posts, RR: 0
Reply 4, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5361 times:

My ponderings: If making a LCC within a larger legacy carrier is such a great idea that will guarantee profitability, why not apply it to the entire airline?

I understand the whole business vs. leisure market concept, but other LCCs seem to be doing just fine AND LCCs have proven that you can offer first class which attracts those oh-so-sought-after business travellers.

If there is any MAJOR flaw in my logic please explain, because right now I don't understand Ted and Song.



User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 5, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5343 times:

Is it just me (and remember that I'm OPNLguy, and not FINANCEguy or EXECUTIVEOFFICEguy), but does it make good economic sense for UAL to be spending all this $$$ to be repainting all these aircraft? I mean, TED, I can halfway understand (not that I agree with the airline-within-an-alirline concept), but also repainting all the other mainline UAL birds, not to mention signage, stationary, and anything/everything else that carries a UAL logo? Wouldn't it have made more sense to accomplish this once out of Chapter 11, and having used the funds for other ways to improve the viability of the company?

User currently offlineFA4UA From United States of America, joined Nov 2003, 812 posts, RR: 20
Reply 6, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5332 times:

This Article doesn't take into account a few basic facts. One in particular is the fact that the fastest growing segment in US aviation is the leisure market. How is a Legacy carrier with an emphasis in Business Destinations supposed to reach leisure markets without something like a TED or SONG.

TED's costs are in line with F9's according to Jack Brace (CFO) at UA so why can't we effectively compete? We're bringing costs down by 25% on mainline but there is no mention of that in this article!

IMO the jury is still out with TED. Song's outlook isn't so great after a couple of weeks ago when DL said they were freezing expansion, however UA's TED is performing well so far. Only time will tell.

I read this article and immediately thought the use of the word "cute" in a news article immediately causes me to discredit it as anything but an opinion article.

just my 2 cents...
FA4UA



The debate continues... Starwood or Hyatt... which is better
User currently offlineRiverVisualNYC From United States of America, joined Nov 2003, 930 posts, RR: 3
Reply 7, posted (10 years 9 months 1 week 2 days 7 hours ago) and read 5302 times:

Back when LCCs like Ryanair and Easyjet became trendy in Europe, British Airways hired an American woman named Barbara Cassani to start an LCC for them, which was meant to be a 'clean sheet of paper' sort of operation, and was named Go. I am not sure how well they did, but after a few years new management at BA decided it was a distraction from their core European business travel and longhaul services, cancelled their growth plans and sold out to Easyjet. I wonder if something similar will happen with Song and Ted...

User currently offlineWireless From , joined Dec 1969, posts, RR:
Reply 8, posted (10 years 9 months 1 week 2 days 6 hours ago) and read 5233 times:

I'm an admitted United whore.

However, while flying Ted this past weekend, I couldn't stop thinking "why can't United just fold these service initiatives into mainline?"

The music selection was better, the flight attendants were friendly (which is hit or miss on just about any airline, so why would UA FA's be nicer just on Ted and not on mainline?)...

I understand that Ted opens up some new leisure markets for UAL, but sheesh. Cost is the bottom line for consumers. Work on improving the perception that LCC's are soooo much cheaper fare-wise.

ah crap, I'm being an armchair airline executive


User currently offlineAlphascan From United States of America, joined Nov 2003, 937 posts, RR: 13
Reply 9, posted (10 years 9 months 1 week 2 days 5 hours ago) and read 5137 times:

TED's costs are in line with F9's according to Jack Brace (CFO) at UA so why can't we effectively compete?

That isn't exactly what Brice said and if you believe its true, you're in for a big letdown. Additionally, F9's CASM is going to drop like a rock over the next 12 months (ala FL's) as their returned aircraft, pilot training and maintanence costs plummet because of fleet commonality. F9 also expects a 5% increase in aircraft utilization.




"To he who only has a hammer in his toolbelt, every problem looks like a nail."
User currently offline747-451 From United States of America, joined Oct 2000, 2417 posts, RR: 6
Reply 10, posted (10 years 9 months 1 week 2 days 1 hour ago) and read 4992 times:

Song--maybe Chopin's Funeral March is more like it. Delta's waste of time cant compete against Lefty Lib Soros JetBlue. Instead of Delta wasting money on lime green paint they should make a concerted effort in matching Jetblue.

Ted - should be called "Duh" since United desn't have the sheckles to waste needless paint jobs and catchy names.

If you want to compete with low cost carriers, lower the fares and match the features to win over customers. Give them a perception of "value" not lime green.

Even though I detest Soros with every fibre of my being, he has the right product mix and value (even though one of the planes tails are a painted like a pair of ugly argyle socks). There is nothing like a new clean plane with a friendly staff and Jetblue has it going on.


User currently offlineFlynavy From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 9 months 1 week 2 days 1 hour ago) and read 4978 times:

Southwest is successful becuase it's an independent company; jetBlue is successful because it's an independent company (and offers a far superior product). These facts are not in dispute.

I'm not anti-LCC, nor am I anti-UA or DL. In fact, I have thousands of Mileage Plus and Skymiles. UA and DL are the airlines I primarily fly.

In today's economy, and the fact that there is a fundamental problem with the menitoned parent company's business model, I have very little confidence that Song and/or Ted will prove cost-effective in the long run.

If I am proven wrong, so be it. At this point, though...I'll vote "neigh."


User currently offlineCorey07850 From United States of America, joined Feb 2004, 2528 posts, RR: 5
Reply 12, posted (10 years 9 months 1 week 2 days 1 hour ago) and read 4960 times:

I flew song once and liked it a lot... So when the time came to book another flight on the same route I thought I would book another $99 Song ticket. Lo and behold the ticket price has skyrocketed to around $200! The mainline DL ticket on the same route, same day was actually cheaper.

I don't understand how they can say they are a LCC if the mainline airline is less expensive to fly?


User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 13, posted (10 years 9 months 1 week 2 days 1 hour ago) and read 4915 times:

i find it interesting how alot of us in here keep this type of thread going in here...only difference is its rebranded last week it was will song /ted make it, this week its cute new planes same old problems. is there any one in here that really knows why ua shuttle went bust??????im sure every one has their opinions but ua shuttle actually made money for ua till contract 2000, until then ua made money...look at the stock holder reports for yrs 98-99 in particular....now ua has come out with ted,, we have the same a.neters in here saying that ua costs are to high. heres some comparisons that make me wonder how ua costs are so much higher than lets say wn 737 wn pilot ca-155.23/hr fo-93.26/hr....ua ca-142.24/hr fo-86.70/hr....ground workers at ua actually make less money topped out than wn counter parts.....do not have numbers for inflite but if wn luvs the f/a as much as they say they do then u can see wn f/a getting a raise soon i hope..with the ua a320 rates the same as a 300/500 rate if ua plays their cards right they should be able to make some money on this.....my 2 centavos


bus driver.......move that bus:)
User currently offlineMattnrsa From United States of America, joined Dec 2002, 394 posts, RR: 1
Reply 14, posted (10 years 9 months 1 week 2 days ago) and read 4877 times:

The article at Businessweek says costs need to be lowered at the parent airline. Isn't this exactly what United did? United is a very diverse airline. It's not a Southwest or Frontier where most of the markets are similar. Where UA is similar to them, we have lowered costs further with TED. You can undertake measures to lower costs to LAS and PHX that would not work to Hong Kong or Heathrow.

User currently offlineUal777contrail From , joined Dec 1969, posts, RR:
Reply 15, posted (10 years 9 months 1 week 2 days ago) and read 4870 times:

This is a thread started by a WN mechanic, he has a very different out look than most others.

He perceives WN as the best airline in the world, past or present. WN Is making money now, and the legacy carriers will catch up to them, they will take back market share and continue to get healthy.

As far as F9 goes, look at fares to LAS or PHX out of DEN, they match the fares, they may have different rules regarding when the ticket is purchased but the fares are just as low. I priced out a ticket 2 weeks ago to see what it would cost $190.00 round trip DEN-LAS, Now if that isn't cheap then I don't know what is, if I would have read the fare rules I may have gotten it cheaper.

The TED flights are FULL to LAS!!! Even if it is a low yield market TED is filling the planes. A small little A318 full or a A320 full? If the price to work both planes, pilot cost and ground are the same, filling a A320 is going to make more money than the A318.

737DR,
don't let it bother you about TED, it isn't going to put WN under, like shuttle up until 2000, we will be profitable.

I dont know anything about SONG and i dont care to, but TED has a good plan, and like those who said UAL wouldnt be here, we are so lets see what little TED can do for US.


UAL 777 CONTRAIL


User currently offlineRichardw From United Kingdom, joined May 2001, 3759 posts, RR: 0
Reply 16, posted (10 years 9 months 1 week 1 day 17 hours ago) and read 4756 times:

Go was sold by BA to Go's management and venture capital investors because Rod Eddington decided it had no contribution to make to BA. The venture capital investor had the majority shareholding and they sold to easyJet and now BA has to codeshare with IB and Swiss to fight the might of easyJet. This could happen to Delta or United if TED or Song end up in competitor's hands at some point in the future.

User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 17, posted (10 years 9 months 1 week 1 day 17 hours ago) and read 4719 times:

Richardw - not that I'm a big fan of BA, but they seem to be fighting their corner pretty well against U2 and FR - they might not be as cheap, but their marketing has been focussed on the difference in service they offer - worldwide connections, big airports close to where you need to be, on board service, self-service and phone and web checkin - you can get roundtrip within Europe on BA (and BD) for around EUR100 incl tax - segment fares from EUR39.00 ow but you have to buy a rt - its not FR's 50p, but you get a fair bit for your EUR100.00. They still manage to fill 757's and 763's LHR-NCE 5 times a day in the summer, so they must be keeping some customers happy.

User currently offlineLuv2fly From United States of America, joined May 2003, 12148 posts, RR: 49
Reply 18, posted (10 years 9 months 1 week 1 day 17 hours ago) and read 4700 times:
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JGPH1A

I agree BA took the right approach, more value for your money. So they can charge a tad more and get it. They have shown you do not have to chase the low fares or match the LCC's fare to survive.



You can cut the irony with a knife
User currently offlineAlphascan From United States of America, joined Nov 2003, 937 posts, RR: 13
Reply 19, posted (10 years 9 months 1 week 1 day 16 hours ago) and read 4638 times:

If the price to work both planes, pilot cost and ground are the same, filling a(n) A320 is going to make more money than the A318.

The point is, the costs are not the same.



"To he who only has a hammer in his toolbelt, every problem looks like a nail."
User currently offlineSlider From United States of America, joined Feb 2004, 6912 posts, RR: 34
Reply 20, posted (10 years 9 months 1 week 1 day 16 hours ago) and read 4635 times:

Flynavy makes a good point indirectly...if he's a guy who has a bunch of UA miles, or whatever airline we happen to be discussing, then chances are he'd like a FC upgrade. Can't get that with Ted, Song, et al.

So if he's conencting through DEN, and finds himself on Ted, there's an adverse perception there. In the end, UA and DL are risking vulturing their own passenger base.

In the case of Ted, the A-320s are configured to 156 seats correct? Considering the mainline config is 148 (someone pls correct me if I'm off here), I don't see the incremental revenue being a savior. (Braniff, hello?)


User currently offlineVC745D From United States of America, joined Feb 2004, 214 posts, RR: 1
Reply 21, posted (10 years 9 months 1 week 1 day 16 hours ago) and read 4582 times:

I realize that the point of Song is to create an operation with lower costs than mainline flights, but, as a New Yorker I wish DL had put the startup money into its very bad JFK facilities. The current conditions there are the primary (though, sad to say, definitely not the only) reason I avoid DL.

User currently offlineVectorVictor From United States of America, joined Feb 2005, 0 posts, RR: 0
Reply 22, posted (10 years 9 months 1 week 1 day 16 hours ago) and read 4566 times:

WN Is making money now, and the legacy carriers will catch up to them, they will take back market share and continue to get healthy.

777Contrail, please post just one Wall Street/Industry analyst who holds the viewpoint in the second half of you comment.


User currently offlineRichardw From United Kingdom, joined May 2001, 3759 posts, RR: 0
Reply 23, posted (10 years 9 months 1 week 1 day 15 hours ago) and read 4475 times:

I was making the point that BA had to respond to the strength of easyJet.
I did BA LHR-NCE in November 1998 and paid approximately £110 even quite well in advance. Now the fare would be about £69.
United and Delta could end up doing the same.
Why don't Delta and United improve the full service product for economy flights longer than 2 hours?


User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 24, posted (10 years 9 months 1 week 1 day 15 hours ago) and read 4417 times:

richardw,
"why dont delta and united improve full service product for economy flights longer than 2hours??,,,,,are you talking flts to lax or las,phx,tpa,mco...

how can you improve the y product on the den-mco route if price is the driven factor....better ife????meals????only difference on the den-mco route is f9 has direct tv and ted does not...other than that the price is the same the a/c are the same and they both depart from concourse a in den...teds only advantage on this is it ff program...f9 can not hold a match to ua or any big lines ff program....as a value driven consumer and if the only differences were the above mentioned i would choose ua as the biggest difference is e+....have not flown f9 but would take my chances and get a e+ seat on ua,,,

now if we are talking den-lax.....if ua and f9 had a flt at the same time and the price is the same would you choose a a318/319 over a 767/777/747???i would rather do the wide body.........



bus driver.......move that bus:)
25 Richard28 : I agree with the article quoted in post 1 completely. The other thing that strikes a cord is that a lot of TED routes were United routes previously -
26 Ord : "...but does it make good economic sense for UAL to be spending all this $$$ to be repainting all these aircraft? I mean, TED, I can halfway understan
27 Alphascan : only difference on the den-mco route is f9 has direct tv and ted does not......teds only advantage on this is it(s) ff program...f9 can not hold a mat
28 FlyCaledonian : I think the points made about BA and Go are pretty much spot on. Bob Ayling thought BA setting up Go was the way to tackle FR and U2. If I remember co
29 Beltwaybandit : im sure every one has their opinions but ua shuttle actually made money for ua till contract 2000, until then ua made money... You can't put much weig
30 Mariner : Ual777contrail: Frontier doesn't use the A318 on DEN/LAS. They use the A319 or the 737. As for FF miles, you can use F9 miles to fly to London, or Sou
31 Ual777contrail : First off lets get the seat numbers right. SLIDER, TED will have 156 seats, a mainline A320 only has 12 first and 126 coach my math comes to 138 seats
32 KKMolokai : How can TED succeed? They're a low-fare airline, rather than a low-cost carrier. Cheap seats, same high labor costs. What's the point?
33 FA4UA : KKMolokai: with slightly higher utilization, a reduced cost basis of over 25%, more seats and a load factor of over 83% on TED... it's working. That's
34 Starlionblue : I think you're (all) looking at it from an airline perspective, not from an investor perspective. While I understand why, you're not thinking like the
35 KKMolokai : FA4UA, "KKMolokai: with slightly higher utilization, a reduced cost basis of over 25%, more seats and a load factor of over 83% on TED... it's working
36 Starlionblue : KKMolokai: The "airline-within-an-airline" concept historically has not worked, and I don't think TED or SONG will prove any differently. Not entirely
37 Travatl : I know this was a statement made earlier in the post, but it really caught my eye. Also, I'd like to preface my response by saying I typically have vi
38 Starlionblue : Travatl said: "I'm sorry... 40 airplanes do not fix a 500 airplane problem. (...for the 50th time)." I agree wholeheartedly. If 40 airplanes did fix a
39 Ual777contrail : Travel, Where do you see a 500 airplane problem? NONE Of the majors are thriving, look at the industry and you will see they are all sick, just becaus
40 Starlionblue : British Airways has pretty much proven that a major CAN make money in this market. They just made the biggest profit in 13 years. They managed to cut
41 Post contains images 737doctor : I have been away from my computer for a couple of days and was surprised to see this thread still going. I knew that it would only be a matter of time
42 Ual777contrail : 737DR, Although I feel the same kind of loyalty for MY company and I would rather work for UAL rather than WN, just my opinion because we offer so muc
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