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STT757
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"Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 9:49 pm

Quote:
Delta and Florida: No Longer So Happy Together

Published: September 16, 2005

Ten years ago, when travelers booked tickets to Florida, there was one airline that many preferred: Delta. Eager to fly an airline known for premium service, one out of five passengers flew Delta to Florida, escaping winter doldrums and visiting parents who had moved South.

Delta Air Lines still has roughly the same market share it held a decade ago. But its single-handed dominance in the Florida market has vanished - and so have the fares that it used to charge. Delta now faces increasing competition in Florida from low-fare airlines like Southwest, AirTran, Spirit and especially JetBlue, which has so many daily flights from New York to Florida that it has advertised it as "the sixth borough."

Collectively, these airlines now offer 32.3 percent of seats to Florida - five times as many as they had 10 years ago, according to Back Aviation Solutions, an industry consulting firm, and eclipsing Delta, which once outserved them three to one.

Their service is in addition to flights by numerous big airlines, especially American, which have been forced to cut prices to keep pace with their low-fare rivals. Florida provides one window into why Delta was forced to seek bankruptcy protection on Wednesday, spending its first day under Chapter 11.

While its $21 billion debt load and the sky-high cost of jet fuel are arguably more critical problems, Delta can no longer lay sole claim to markets like Florida where it once owned the skies.

And that adds to the reasons why it is in Chapter 11.

"They're getting it from many different angles," said Michael Allen, chief operating officer at Back Aviation.

Ticket prices help tell the story. Ten years ago, the average fare collected by Delta for one-way tickets to Florida from destinations across the United States was $182. By the year 2000, that had dropped to $148.

This year, its average Florida fare has dropped again, to $138 - or $44 less than the relatively low prices it charged a decade ago, the same pattern that airlines have seen across the board.

"Florida is a bellwether for the rest of the country," said Abraham Pizam, dean of the Rosen College of Hospitality Management at the University of Central Florida.

continued at..

http://www.nytimes.com/2005/09/16/business/16delta.html
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
Orion737
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 9:57 pm

It syas at the begining people flew Delta sor the service. Thats the problem, the major airlines in the US now offer a service worse than that on-board the low cost carriers.

Gone are the hot meals and in are those stupid BOB snacks
 
panamair
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 10:16 pm

Quoting Orion737 (Reply 1):
It syas at the begining people flew Delta sor the service. Thats the problem, the major airlines in the US now offer a service worse than that on-board the low cost carriers.

Gone are the hot meals and in are those stupid BOB snacks

Umm, wake up time - none of the LCCs offer hot meals either!!

Again, GIMME GIMME GIMME...Give me caviar and champagne for $79 one way to West Palm!!  hissyfit 
 
laca773
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 10:20 pm

Quoting Orion737 (Reply 1):

Orion, I completely agree with you. DL was known for their excellent inflight service, decent meals, southern hospitality etc. It's sad to say but DL has gone down the tubes for a few years now, most notably since 9/11. It's even sadder when their low fare arm, Song has a better inflight product than their mainline inflight service. Even though things have drastically changed in the airline market, I think part of DL's survival will be to gradually bring back the customer service and inflight amentites DL is known for. Why would a person fly mainline DL to Florida or anywhere else for that matter when they take a Song flight, get a great flight crew, refurbished ac, IFE's, and decent snacks? Same goes for what B6 offers. It just doesn't make since to fly DL mainline anymore.

LACA773
 
komododx
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 10:57 pm

The article is flawed in that it looks at Delta only from the NYC-SoFla point of view.

Here in TLH, for example, Delta has a monopoly intra-Florida. When FL flew to TLH, fares from TLH to TPA/MCO were about $89+tax return. Fares to MIA were $129+tax, and even lower to FLL and PBI.

Now you'de be lucky if you get a ticket for $250+tax to any SoFla airport. Maybe while in bankruptcy they should reconsider the fare structure in some of their routes. I feel no pity at all for DL.

Stefano  wave 
I'm homeless and unemployed
 
Tornado82
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:03 pm

But once again... if you're not in one of the few dozens cities that the LCC's serve... you're screwed. What does Joe Q. Traveller in Erie, PA do? Drive to PIT? That's 2.5 extra hours off of his vacation. Same with the family in a place like SBN, or hundreds of other small-midsized cities.
 
pilotaydin
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:04 pm

i dont like delta, charging up the butt to fly from DAB to ATL, with college students being the major revenue during the spring and fall season, Delta had unmatched Southeastern monopoly, which pissed me off for my 4 years of college. I could barely find room on flights, and when i did, the price was 350-450 dollars. ONCE i got a ticket WELL in advance for 258$ whopee......

so that averages what? a 50 minute flight? one way being around 300 bucks.... 6$ a minute for my flight  Smile i know that's an unorthadox way to look at it lol

for just a little more, 800$ you can get a return ticket from JFK to Istanbul...now that's BS to me..... no wonder things turned out the way they did!
The only time there is too much fuel onboard, is when you're on fire!
 
pbiflyer
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:12 pm

Quoting Komododx (Reply 4):
Maybe while in bankruptcy they should reconsider the fare structure in some of their routes. I

I have been questioning DL about how they figure what fares will be. They can't give you a straight answer because nobody at DL really knows the answer. I have at least 3 emails in the last month from DL where I have been trying to get an answer as to how they justify fares. Yes, I know competition is one thing, but it still does not make sense for an airline to charge $170.00 for a round trip from PBI - LGA for example, or $300.00 to SEA, but yet charge you at least $250.00 to TLH and $372.00 to MEI, or to any other small city served only by Delta Connection. In June I paid $269.00 round trip from PBI - MEI and now it is $372.00, and increase of over $100.00 for an 800 mile trip.

So, I guess what I am saying is don't expect DL to reconsider their fare structure when they don't even have an answer as to what their fare structure is.
PBI is South Florida's BEST airport!
 
positiverate
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:13 pm

Quoting Panamair (Reply 2):
Again, GIMME GIMME GIMME...Give me caviar and champagne for $79 one way to West Palm!!

Amen. I once sat next to a guy going from FLL to LGA who complained the whole way up that he had to pay $200 r/t on Delta. After we landed we were casually talking about how each of us were getting into the city (he lived on LI actually), and he told me he was taking a cab home (about 30 miles away) and that it would cost him about 65 bucks that time of day with traffic but it was "well worth it". People have a warped view, especially traveling on airlines, of what they should pay.
 
positiverate
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:14 pm

Quoting STT757 (Thread starter):
They're getting it from many different angles," said Michael Allen, chief operating officer at Back Aviation

And honestly, who is this guy and is he an expert?
 
panamair
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:21 pm

Quoting Pilotaydin (Reply 6):
i dont like delta, charging up the butt to fly from DAB to ATL, with college students being the major revenue during the spring and fall season, Delta had unmatched Southeastern monopoly, which pissed me off for my 4 years of college. I could barely find room on flights, and when i did, the price was 350-450 dollars. ONCE i got a ticket WELL in advance for 258$ whopee......

so that averages what? a 50 minute flight? one way being around 300 bucks.... 6$ a minute for my flight i know that's an unorthadox way to look at it lol

for just a little more, 800$ you can get a return ticket from JFK to Istanbul...now that's BS to me..... no wonder things turned out the way they did!



Quoting Pbiflyer (Reply 7):
I have been questioning DL about how they figure what fares will be. They can't give you a straight answer because nobody at DL really knows the answer. I have at least 3 emails in the last month from DL where I have been trying to get an answer as to how they justify fares. Yes, I know competition is one thing, but it still does not make sense for an airline to charge $170.00 for a round trip from PBI - LGA for example, or $300.00 to SEA, but yet charge you at least $250.00 to TLH and $372.00 to MEI, or to any other small city served only by Delta Connection. In June I paid $269.00 round trip from PBI - MEI and now it is $372.00, and increase of over $100.00 for an 800 mile trip.

So, I guess what I am saying is don't expect DL to reconsider their fare structure when they don't even have an answer as to what their fare structure is.

All these issues about our 'upside-down' fare structure are not unique to Delta alone. It can be found all over the nation and around the world. Heavily competitive routes will always have lower fares (even in absolute dollars) than those which have a monopoly or a duopoly. Airlines will charge what the market can bear. Delta's Simplifares in some way was to bring a bit more sense to the whole domestic pricing situation.
 
positiverate
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:25 pm

Quoting Pbiflyer (Reply 7):
Yes, I know competition is one thing, but it still does not make sense for an airline to charge $170.00 for a round trip from PBI - LGA for example, or $300.00 to SEA, but yet charge you at least $250.00 to TLH and $372.00 to MEI, or to any other small city served only by Delta Connection. In June I paid $269.00 round trip from PBI - MEI and now it is $372.00, and increase of over $100.00 for an 800 mile trip.

Actually, it makes a lot of sense. How amny airlines fly PBI-LGA? Im gyuessing 4, maybe 5? How many fly PBI-MEI? It's the whole supply demand theory.
 
pbiflyer
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:29 pm

Quoting Panamair (Reply 10):
All these issues about our 'upside-down' fare structure are not unique to Delta alone. It can be found all over the nation and around the world. Heavily competitive routes will always have lower fares (even in absolute dollars) than those which have a monopoly or a duopoly. Airlines will charge what the market can bear. Delta's Simplifares in some way was to bring a bit more sense to the whole domestic pricing situation.

That's true, but it does not make it right to do so in such a large difference. Simplifares were good to begin with, but fuel prices took care of that in a hurry. One of the problems may be the fact that the 40 - 50 seat CRJ's are so inefficient, and that is what is used on many of the overpriced routes such as I mentioned previously between PBI and MEI. Somewhat lower fares would help fill up those planes as most of the time there are only 25 - 30 people on the ATL - MEI segments with the rj's.
PBI is South Florida's BEST airport!
 
pbiflyer
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:32 pm

Quoting Positiverate (Reply 11):
Actually, it makes a lot of sense. How amny airlines fly PBI-LGA? Im gyuessing 4, maybe 5? How many fly PBI-MEI? It's the whole supply demand theory.

No it does not. Our only choice to MEI is on DL via ATL. I don't expect the fares to be as low as LGA, but give me a break, higher than going all the way to the west coast?

By the way, right now DL (Song) is the only airline flying PBI - LGA. AA runs the route in the winter season and B6 is going to start the route in Nov.
PBI is South Florida's BEST airport!
 
positiverate
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:36 pm

Quoting Pbiflyer (Reply 13):
No it does not. Our only choice to MEI is on DL via ATL. I don't expect the fares to be as low as LGA, but give me a break, higher than going all the way to the west coast?

Yes it does. They have 100% of the market chare, and charge what the market will bear.
 
pbiflyer
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RE: "Delta And Florida: No Longer So Happy Together"

Fri Sep 16, 2005 11:47 pm

Quoting Positiverate (Reply 14):
Yes it does. They have 100% of the market chare, and charge what the market will bear.

And that's also why they can't fill those 40 - 50 passenger rj's. People who live in MEI go to BHM or JAN to get decent fares. This means a 1 1/2 to 2 hour drive, but they save $100 - $200 by doing so. It also means DLC flies with 50% load factor instead of 100% load factor if prices were lower. Again, I don't expect the low fare like we get to the Northeast, just give me a fair price that doesn't go up by over $100.00 in 3 months.

I aprreciate your input, but lets face facts, the LCC carriers have forced prices to many cities to be less than they were 5 years ago. No wonder the legacy carriers keep losing money.
PBI is South Florida's BEST airport!
 
OttoPylit
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RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 12:20 am

Quoting Komododx (Reply 4):
Now you'de be lucky if you get a ticket for $250+tax to any SoFla airport. Maybe while in bankruptcy they should reconsider the fare structure in some of their routes. I feel no pity at all for DL.

Maybe Airtran could offer those low fares because they had the state handing over money to them. As long as that money was coming in to make the company money, they would continue to take it, and once it stopped after 3 years, Airtran dropped TLH like a sack of rotten poi. Delta doesn't have FL handing over money. If the state gives DL money, you would see fares drop, of course. They had no problem giving it to Airtran. So, the reasoning for the fares being so high is because thats what the market supports.

Quoting Pbiflyer (Reply 12):
One of the problems may be the fact that the 40 - 50 seat CRJ's are so inefficient, and that is what is used on many of the overpriced routes such as I mentioned previously between PBI and MEI.

I disagree. Here is the way I look at it. Lets say am head of revenue management at Delta, and I control all current fares. If I am fighting an LCC from ATL-MCO and keep having to lower my ticket prices to keep decent market share, then in order to try and turn a buck, I am going to raise them elsewhere. If I am losing money on my tickets from ATL-MCO, I will raise them in other places that I do have a monopoly and I know people are willing to pay, like ATL-MLU or CVG-ERI or ATL-ILM. Or it could be that those flights into small cities rarely turn a profit being so small, since MLU isn't exactly known as a large business capital, otherwise Delta would still have a hub there. So if your going to lose money to service a city, you might as well make it as little as possible. Thats why you don't see FL, JB, and WN flying into Monroe, LA. Thats why they aren't flying into Key West. That's why they aren't flying into South Bend. But thats just my thoughts on the subject.


OttoPylit
I don't have a microwave, but I do have a clock that occasionally cooks shit.
 
FlyPNS1
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RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 12:28 am

Quoting Pbiflyer (Reply 15):
And that's also why they can't fill those 40 - 50 passenger rj's. People who live in MEI go to BHM or JAN to get decent fares. This means a 1 1/2 to 2 hour drive, but they save $100 - $200 by doing so. It also means DLC flies with 50% load factor instead of 100% load factor if prices were lower.

So what if the planes aren't full? High LF isn't a guarantee of financial success. Which do you think DL would rather have?

1) 25 seats filled with each customer paying $250

OR

2) 40 seats filled with each customer paying $150?

My guess is that option 1 would be preferable since it brings in more total revenue....albeit at a much lower loadfactor. I'm not saying DL should gouge customers in MEI....however given MEI's size they will never have the low fares that BHM/JAN have. MEI will either pay higher fares OR have no service at all.
 
Tornado82
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RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 12:49 am

Quoting OttoPylit (Reply 16):
CVG-ERI

Congratulations, you just chased the Erie Passengers to PIT, CLE, and BUF. What's your plan when that happens and your CRJ's from Erie have 19 people on them?
 
OttoPylit
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RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 12:55 am

Quoting Tornado82 (Reply 18):
Congratulations, you just chased the Erie Passengers to PIT, CLE, and BUF. What's your plan when that happens and your CRJ's from Erie have 19 people on them?

Try reading my post again.

Quoting OttoPylit (Reply 16):
So if your going to lose money to service a city, you might as well make it as little as possible.

Besides, if those pax ran to PIT, CLE, and BUF and got on a DL flight, then Delta still made money, just a little less. And it helps the PIT, CLE, and BUF LF's, which is more inclined to give them bigger planes and more frequency.


OttoPylit
I don't have a microwave, but I do have a clock that occasionally cooks shit.
 
PennPal
Posts: 152
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RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 1:36 am

For what it's worth, I just got done paying $128.00 RT from TPA to BUF on Delta. The only down side was having to sit squished into a CRJ for the TPA-CVG leg. Oh CRJ's...how I hate thee...
 
Tornado82
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Joined: Thu May 26, 2005 10:19 am

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 1:57 am

Quoting Tornado82 (Reply 18):
Congratulations, you just chased the Erie Passengers to PIT, CLE, and BUF. What's your plan when that happens and your CRJ's from Erie have 19 people on them?



Quoting OttoPylit (Reply 19):
Try reading my post again.

My point is, DL needs a Dash 8, Saab, B1900, something smaller and much more economical than a CRJ. Notice I said 19 people, I picked 19 for a reason.

Quoting OttoPylit (Reply 19):
Besides, if those pax ran to PIT, CLE, and BUF and got on a DL flight, then Delta still made money, just a little less. And it helps the PIT, CLE, and BUF LF's, which is more inclined to give them bigger planes and more frequency.

Notice those are all WN, FL, or other LCC cities. Delta will get the pax... still selling the tickets at an unsustainable fare, and NOT making money. Besides, if every airline took your theory, there would be ALOT more traffic in the big city airports, ALOT of empty small/medium city airports, and ALOT more tax dollars being spent to prop up EAS for these tiny cities which can't support traffic "in the LCC business plan."
 
3201
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Joined: Sun Oct 10, 2004 4:16 pm

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 2:13 am

Quoting Orion737 (Reply 1):
It syas at the begining people flew Delta sor the service.

Nobody does that anymore at all, at least domestic economy. People woke up and realized that for 3 hours of their life, service really doesn't matter as much as a few $$$. Would people pay $20 more per ticket for a hot meal? As if, just buy food at the airport for $15 and it's better.

Quoting Pbiflyer (Reply 7):
I have been questioning DL about how they figure what fares will be. They can't give you a straight answer because nobody at DL really knows the answer.

I'm quite certain that *somebody* at DL does indeed know the answer. It's not the job of a res agent at the Bangalore call center to know that answer, and it's not the job of the people who *do* know the answer to talk to individual customers and explain it to them.

Quoting Pbiflyer (Reply 7):
Yes, I know competition is one thing, but it still does not make sense for an airline to charge $170.00 for a round trip from PBI - LGA for example, or $300.00 to SEA, but yet charge you at least $250.00 to TLH and $372.00 to MEI,

It makes *plenty* of sense, as others have explained, but it can be simplified even more. The correct price for a good or service is the one that maximizes profit. Whatever people are willing to pay, it's wrong to charge less. No one questions that a large Coke at McDonald's, which costs them about $0.01 to produce, is priced higher than a $.99 burger, which costs them a lot more. As others have pointed out, you price products and services to get max revenue (less variable costs -- definitely better to fly fewer people paying more $$$ each, it's not only cheaper, it's less risk, and a lot less hassle when there's a problem).
7 hours aint long-haul
 
FlyPNS1
Posts: 5287
Joined: Wed Dec 01, 1999 7:12 am

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 3:34 am

Quoting 3201 (Reply 22):
It makes *plenty* of sense, as others have explained, but it can be simplified even more. The correct price for a good or service is the one that maximizes profit

It's not just profit maximization either. At the unit level, it costs a lot more to operate a station like MEI where you have 3 flights a day with 50 seat planes....compared with PBI where you have a lot more flights with large aircraft. This is exactly why WN doesn't like to open up a market unless it can support at least 10 737's a day. Fewer flights than that drive up the unit costs too much.

You can't operate a market like MEI and sell your seats at WN fares, it won't work.
 
Guest

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 7:06 am

Quoting LACA773 (Reply 3):
I think part of DL's survival will be to gradually bring back the customer service and inflight amentites DL is known for.

No it's not. People won't pay for it.

Quoting Pilotaydin (Reply 6):
i dont like delta, charging up the butt to fly from DAB to ATL,

Hmmm that's funny. I can see on delta.com where they have a $108 rt fare.

Quoting Pilotaydin (Reply 6):
I could barely find room on flights, and when i did, the price was 350-450 dollars.

...and you just solved your own riddle.

Quoting Pbiflyer (Reply 13):
No it does not. Our only choice to MEI is on DL via ATL. I don't expect the fares to be as low as LGA, but give me a break, higher than going all the way to the west coast?

Fares aren't based on distance, it's supply and demand. Ever wonder why prices are higher at convience stores? Same logic applies as to why it costs more to fly out of SWF than it does LGA.

Quoting 3201 (Reply 22):
I'm quite certain that *somebody* at DL does indeed know the answer.

And it's been given here many times, it's just that some people on here don't read / don't care.

Quoting 3201 (Reply 22):
It's not the job of a res agent at the Bangalore call center to know that answer, and it's not the job of the people who *do* know the answer to talk to individual customers and explain it to them.

Excellent! Finally some logic in this post!

B
 
pilotaydin
Posts: 2099
Joined: Tue Sep 07, 2004 12:30 am

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 7:11 am

Quoting NonRevKing (Reply 24):
...and you just solved your own riddle.

riddle? u havent lived if this is a riddle
The only time there is too much fuel onboard, is when you're on fire!
 
Guest

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 7:29 am

Quoting Pilotaydin (Reply 25):
riddle? u havent lived if this is a riddle

you said....

"I could barely find room on flights, and when i did, the price was 350-450 dollars."

Hardly any seats....high fare...think about it.  Wink

No comment about the $108 rt fare?  Wink

B
 
Bobster2
Posts: 1523
Joined: Mon Jan 17, 2005 3:04 am

RE: "Delta And Florida: No Longer So Happy Together"

Sat Sep 17, 2005 7:45 am

Quoting Orion737 (Reply 1):
stupid BOB

Hey! What did I do to deserve the insult? Big grin

BOB
"I tell you this, no eternal reward will forgive us now for wasting the dawn." Jim Morrison
 
OttoPylit
Posts: 2259
Joined: Wed Dec 17, 2003 10:58 am

RE: "Delta And Florida: No Longer So Happy Together"

Mon Sep 19, 2005 7:24 am

Quoting Tornado82 (Reply 21):
My point is, DL needs a Dash 8, Saab, B1900, something smaller and much more economical than a CRJ. Notice I said 19 people, I picked 19 for a reason.

Actually, when the last OH pilot contract was ratified, the contract said they would get more planes, but never specified JETS. The rumors running around OH is that they will be shopping for Q400's for any routes less than 300 miles.

Quoting Tornado82 (Reply 21):
Delta will get the pax... still selling the tickets at an unsustainable fare, and NOT making money. Besides, if every airline took your theory, there would be ALOT more traffic in the big city airports,

Profits don't matter, its all about marketshare. LOL I never said it was a theory that you could follow for everything, but it reserves the high yield small town seats for the high paying travellers, whereas it allows more cheap seats to be sold in the bigger cities. 3 cheap seats in a larger city can equal 1 expensive seat in a smaller city, etc.

Quoting NonRevKing (Reply 24):
...and you just solved your own riddle.

LMAO! I concur.


OttoPylit
I don't have a microwave, but I do have a clock that occasionally cooks shit.

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