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.