From the January 30th edition of the Dallas Morning News:
Since Song seems to be such a hot topic on this forum, I thought I'd point out this excerpt:
American says it competes with low-cost carriers on 82 percent of its routes. In a Jan. 22 conference call, chief financial officer Jeff Campbell told analysts that when New York-based low-cost carrier JetBlue Airways Corp. entered the Caribbean market last year, American's revenue fell.
The answer isn't to become another JetBlue, American officials say. But getting its costs more in line with JetBlue, while trying to win back premium business travelers, is the goal.
Unlike United Airlines Inc. or Delta Air Lines Inc., American hasn't embraced the idea of starting its own low-cost carrier to combat Dallas-based Southwest Airlines Co. and others.
Delta's carrier – called Song – will debut this spring, while United's remains on the drawing board. American has given it some thought, however, Mr. Garton said.
"I would say we're looking with interest," he said, noting that the concept has failed several times.
Recent research suggests that Delta and other carriers that try the carrier-within-a-carrier route might not fare any better than US Airways Inc.'s Metrojet or Delta's soon-to-be-replaced Delta Express.
Unisys R2A consultants Phil Roberts and Michael Roach say the idea lowers costs for the carrier, but not to the levels of low-cost airlines.
Delta's new airline will have to sell 45 percent more tickets to match Southwest's profit on the same routes, the consultants say in their most recent study.
Mr. Garton and others say that if American were to reshape itself to resemble the nation's most successful low-cost carrier, it would need to dump a third of its planes and half its employees, a wrenching thought for one of North Texas' largest employers.
45% more tickets!?! WOW!