ssides
Posts: 3248
Joined: Fri Feb 09, 2001 12:57 am

DL's New Pricing And SkyTeam

Wed Jan 05, 2005 4:42 am

I was just wondering how DL's new pricing scheme will affect its SkyTeam partners, namely CO and NW. Under the codeshare agreement, will DL be able to sell seats on CO and NW flights under the new pricing plan? How will this work?
"Lose" is not spelled with two o's!!!!
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 7:02 am

Interesting question. Delta has a history of buying market share by undercutting its partners. Example: Delta regularly undercuts SA on their SA operated codeshares to JNB/CPT. Even within SkyTeam, Delta often undercuts their skyteam partner AF by offering rates lower than AF is willing to offer.

Take SFO-DKR for example:

15MAY05**29MAY05/SFODKR/NLX;AT/TPM ...../MPM 7660
LN FARE BASIS OW USD RT PEN DATES DAYS AP MIN MAX AL R
01/LKANAF1 1490 NRF S15JUN - @21@ 7@ 1M DL M
02 KKABAF 1689 NRF S15JUN - @21@ 7@ 1M DL M
03 TKABUSAQ 1689 NRF S15JUN - 21@ 7@ 1M AF M
04 HKAPUSAQ 1989 NRF S15JUN - 7@ 7@ 2M AF M


DL is willing to sell at $1490 and $1689 versus AF's $1689 and $1989.

I don't see what is to stop DL from doing the same to CO and NW.

It's been swell, but the swelling has gone down.
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:00 am

SA is not a partner of Delta's. DL simply get's a commission for selling SA's inventory.

And you don't know what your talking about with AF since it is a revenue sharing agreement. It all goes into the same pot and is divided out later. I find that AF often has the lower fares compared to Delta, but as I say it all goes into the same pot.
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:16 am

Padcrasher,
SA is in a codeshare partnership with DL. DL offers flights under it's own codeshare flight numbers, and it aggressively markets that pricing, consistently undercutting SA's own tariff structure.

I was not aware that AF and DL are now sharing revenue, if that is in fact the case. If that is the case, I don't see why DL would continually offer lower pricing to West Africa when AF expressely wants to keep pricing as high as possible to their biggest money making destination.

Lastly, there's no need for the attitude.
It's been swell, but the swelling has gone down.
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:24 am

DL does not undercut SA pricing. You cannot buy a seat on an SA codeshare for less than what SA offers it for.

Now what you are talking about may be using Delta to Europe and then another carrier to South Africa? So what? I'm sure the SA mgt is adult enough to manage their own pricing and if someone can go thru Europe cheaper good for them.
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:30 am

Padcrasher,
Checking 01Jun, JFK-JNB:
DL's lowest fare is $1940, valid on SA operated codeshares.
SA's lowest fare is $1838.

Why, Delta plays around the edges... Delta files different seasonality than SA, always staying within the margins so as not to ever have the situation reverse itself where SA can take advantage of a reciprocal seasonal difference.

[Edited 2005-01-05 00:37:49]
It's been swell, but the swelling has gone down.
 
Guest

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:35 am

I was just wondering how DL's new pricing scheme will affect its SkyTeam partners, namely CO and NW.

Delta hasn't announced a new pricing scheme, so there's no affect.

End of thread.  Big grin

B
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:38 am

As I said if you want to go directly to South Africa on SA with Delta the price will be the same or more. SA most rightly feels they can charge more for more direct service. All major airlines operating accross the Atlantic publish the same through fares connecting via European hubs. Delta has for the most part the same fares.

You are implying that DL is undercutting their partner SA, which is silly. DL is siimply offering the same fares that the rest of the airlines charge.

 
nwacrew
Posts: 305
Joined: Thu Apr 24, 2003 12:06 pm

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:45 am

Padcrasher:

While Northwest and KLM revenue share on certain transatlantic routes, I've never read anything to indicate that Delta and Air France do the same. Can you substantiate your claim?
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 8:59 am

Why don't you google "revenue sharing" "air france" "delta" and substantiate my claim for yourself?
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 9:21 am

Padcrasher,
People are allowed to ask legitimate questions. You've had attitude from your very first posting on this thread. If you're having a bad hair day, I'm sorry, but don't take it out on the rest of us.
It's been swell, but the swelling has gone down.
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 9:27 am

pa110 if you're going to make statement like this:

"Delta has a history of buying market share by undercutting its partners"

Then expect to be challenged on it. That statement is absurd. You have no idea whatsoever that DL obtains market share by undercutting their own partners.
 
B4REAL
Posts: 2557
Joined: Sun Aug 10, 2003 5:53 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 9:37 am

B4REAL, spelled like it sounds
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 9:53 am

Padcrasher,
I stand by my statement. I've observed it over 25 years in this business. SA)">DL coerced SA into a straight-rate prorate agreement instead of per-sector nets, even though the carriers were supossedly "marketing" partners on routes to South Africa. SA was so desperate to have a SA)">DL as partner, they agreed to the straight-rate prorate, even though they take a beating on every seat sold with SA)">DL connecting traffic. Don't believe it...check it out with tariffs.

I've been working in this industry long enough to see who plays nice and who doesn't. Although I truly sympathize with the employees at SA)">DL, I find it very difficult to feel sorry for the carrier as a company. They reap what they sow.
It's been swell, but the swelling has gone down.
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 10:34 am

No you've got the wrong idea about SA. They are not interested in alliances or discounting their product. They have little competition in their markets and do not need get into more complex forms of code sharing. They are a low tech airline that is happy to charge a premium for the markets they control. Think of the SA as the Mecedes Benz dealer. (Here is the car. Here is the price.) They would not allow Delta more access to their inventory even though Delta pushed for that. Delta cannot coerce SA as Delta has no natural leverage to hold over their heads. I have a background in marketing and I can tell you you are lucky if you can get a SA agent to return your e-mails. I wouldn't feel sorry for South African.
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: DL's New Pricing And SkyTeam

Wed Jan 05, 2005 11:23 am

While Northwest and KLM revenue share on certain transatlantic routes, I've never read anything to indicate that Delta and Air France do the same. Can you substantiate your claim?

DL and AF have long since had the authority to revenue share in all Atlantic markets excepting ATL/CVG-CDG (DL can also do the same with OK and AZ)

Unlike NW/KL however; they cannot merge their online marketing, FFPs, nor res systems.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
baw716
Posts: 1459
Joined: Thu Nov 20, 2003 7:02 pm

RE: DL's New Pricing And SkyTeam

Thu Jan 06, 2005 3:56 am

Padcrasher,
Question: Do you work as an airline analyst, or have any experience in airline pricing...just curious. I'd appreciate knowing before I ask my questions, because they pretty complex (I have been an airline sales and pricing analyst at UA, and I am very interested about some of your comments, but I want to make sure that I ask the questions in the right way).
Let me know...thanks!
baw716
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998

Who is online