Avianca
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DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 3:35 am

Dear all,

I am just checking some random flights from germany to central america, (MEX, PTY, etc....) I am impressed about the fares they are offering via the DL hubs in JFK, ATL..... both destinations for 565 EURO return, including taxes... Iberia the second cheapest airline on the PTY runs are quoting more than the double 1150 EURO.... is this the way DL will come out from Ch.11, can not imagine that they will get profits with such cheap fares.

Cheers
Colombia es el Mundo Y el Mundo es Colombia
 
DL777LAX
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DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 3:44 am

well, there are a few possibilities here.

first, they may be selling a few seats at deeply discounted prices. This is probably a marketing ploy, which will help generate buzz about DL. Word of mouth advertising is one of the most reliable. For example, this E565 fare would be enough for you to tell others to check DL. Whoever you tell may see that the fare is a little higher. But, still would book because of your luck with such a good fare.

second, The 200 or so Y class seats never are as high-yielding as the F/J seats. Therefore, they can afford to lose a little money in Coach, if they have the creme-de-la-creme first class revenue. F/J make most airlines go around. any additional revenue from Y is a plus. But, its not mandatory. i.e. EK to ZRH with the A345
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Avianca
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DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 3:51 am

Quoting DL777LAX (Reply 1):
second, The 200 or so Y class seats never are as high-yielding as the F/J seats. Therefore, they can afford to lose a little money in Coach, if they have the creme-de-la-creme first class revenue. F/J make most airlines go around. any additional revenue from Y is a plus. But, its not mandatory. i.e. EK to ZRH with the A345

anybody that has the money for C or F will not travel with DL from Europe to Central-America were direct/nonstop flights are available. Specially MEX or PTY or?
Colombia es el Mundo Y el Mundo es Colombia
 
deltairlines
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 4:10 am

Quoting Avianca (Reply 2):

anybody that has the money for C or F will not travel with DL from Europe to Central-America were direct/nonstop flights are available. Specially MEX or PTY or?

Those in F/J might not be booking through ATL or JFK, but there might be enough premium demand for FRA-JFK/FRA-ATL (and domestic connections, such as FRA-ATL-GSO) and likewise to Latin America, such that the premium revenue is split up between those legs.
 
Avianca
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 4:13 am

Quoting DeltAirlines (Reply 3):
Those in F/J might not be booking through ATL or JFK, but there might be enough premium demand for FRA-JFK/FRA-ATL (and domestic connections, such as FRA-ATL-GSO) and likewise to Latin America, such that the premium revenue is split up between those legs.

yes but make it than sence to offer such cheap fares from europe till central-america.... ??
Colombia es el Mundo Y el Mundo es Colombia
 
DL777LAX
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 6:11 am

Quoting Avianca (Reply 2):
anybody that has the money for C or F will not travel with DL from Europe to Central-America were direct/nonstop flights are available. Specially MEX or PTY or?

Well, besides IB to MAD, and some KL/AF to AMS/CDG, there are not really that many links between Latin America and Europe. The main places that you can fly to from Lat-am are LON, CDG, AMS, and MAD. outside of those, you would have to make a connection anyway. And, inter-euro flights service levels don't match the levels of long haul service. So, in a way, its sacrificing time for service. Legacies in Europe make WN good.
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Glareskin
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 6:21 am

Quoting DL777LAX (Reply 5):
Well, besides IB to MAD, and some KL/AF to AMS/CDG, there are not really that many links between Latin America and Europe.

I'm no expert but it seems to me that there are plenty of flights between Europe (for sure FRA and LIS) and Brazil.
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legacy135
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 6:36 am

The major problem I can see for DL as for any airline in this market, connecting trough the US, is the fact that South American citizens will need a transit visa for the United States. So if they don't have a valid visa for the US, in most cases they will have to travel to their capital and visit the US embassy. Then it's a question of costs and time, but I am not sure, if the DL fare is still so attractive, if all is taken in consideration. Fees for visas are relatively high as well.

Regarding this, I could imagine, that DL will get more US and European citizens living in LatAm going for a vacation in their home-country, than South Americans travelling abroad. And those are the major part of the market.

Cheers
Legacy135 Wink
 
DAL767400ER
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 6:52 am

Quoting Glareskin (Reply 6):
I'm no expert but it seems to me that there are plenty of flights between Europe (for sure FRA and LIS) and Brazil.

Perhaps, but last I heard, Brazil is in South America, not Latin America  Wink .
 
legacy135
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 7:26 am

Quoting DAL767400ER (Reply 8):
Perhaps, but last I heard, Brazil is in South America, not Latin America

Interesting link for you Big grin

http://en.wikipedia.org/wiki/Latin_america

Cheers
Legacy135 Wink
 
burnsie28
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 7:55 am

Also remember that fare is $732.06 US dollars wich is typical for Europe flights during the slow season.
 
Avianca
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 8:09 am

Quoting Burnsie28 (Reply 10):
Also remember that fare is $732.06 US dollars wich is typical for Europe flights during the slow season.

but not from MEX, SJO or PTY...
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RCS763AV
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 11:26 am

Quoting DL777LAX (Reply 5):
fly to from Lat-am are LON, CDG, AMS, and MAD.

Also BCN, LIS, FRA, MUC, MXP, FCO, TFN and OPO can be reached.

But the Central America market is indeed badly covered for the number of European tourists visiting the area (the new AF flights will do very well for sure), and since europeans don´t need a transit visa to go through the US, i would think DL is snatching a bit of the market with those lower fares.
 
EddieDude
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 11:30 am

Avianca, you do realize Mexico is not part of Central America, don't you? Mexico is part of North America.

Quoting Avianca (Reply 11):
but not from MEX

I would say that during the low season, a U.S.$732 fare between MEX and Europe can be found if you are a good seeker. I've found in the past U.S.$900 fares for travel during September (which does not qualify as low season) for MEX-Germany with IB... even better, I've found U.S.$900 fares for September flights for MEX-Germany-JFK-MEX with a layover in JFK with DL/AF. You can also see in newspapers and the internet offers for less than U.S.$800 or so MEX-CDG-MEX with AF non-stop during the low season.
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worldtraveler
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 11:45 am

you didn't really tell us when you are looking to travel.... peak season for Europe doesn't start for 3-4 more months at least so DL has every incentive to maximize revenue across its ENTIRE network. These kinds of fares from Europe to Latin America are much higher than what DL can get this time of year between Europe and the US alone. While demand to Latin America is higher during the US winter, there are still many times in the next couple months where demand does not dictate the highest level fares.

And, yes, part of DL's network goals are for DL to become a significant international to international carrier between Latin America and both Europe and Asia. ATL is better suited to connecting Latin traffic to other parts of the world than any other US hub. And many of the cities Dl serves in Latin America are not connected to anywhere the number of cities DL serves in Europe. DL's growth from ATL to Asia is directly tied to its ability to carry traffic from Asia to Latin America and the large growth in traffic that is occuring in those regions. As DL grows its network, you will see DL adding more Latin America service from JFK and then they'll repeat the same processs at LAX. And while Latin America traverlers often do require US visas, most Europeans and citizens of several Asian countries do not. And remember that many Latin American residents who travel to Europe also hold US visas.
 
Cubsrule
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 12:39 pm

Quoting Avianca (Reply 4):
yes but make it than sence to offer such cheap fares from europe till central-america.... ??

Sure. You put cheap butts in the seats on two segments rather than just one. If DL has already covered their fixed costs with high yielding pax, then it's just a matter of covering the marginal costs-- which, all things considered, are not that high-- with the fare itself.
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Avianca
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 1:32 pm

Quoting EddieDude (Reply 13):
Avianca, you do realize Mexico is not part of Central America, don't you? Mexico is part of North America.

heard the Isthmus of Tehuantepec is the natuarl border between Central and North America... so you are right Mexico is part of NorthAmerica  Silly
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rogerbcn
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 2:13 pm

Hola!

Well, I must say that not only Central America but South America as well. I've just checked Delta web and you can fly between BCN-EZE for just 1,033€ compared to IB 1295€... so you get more flight for less. As long as you don't mind flying for almost 24 hours on your inbound and 28 hours for your outbound and getting through TSA and US Customs it is just fine.

Salut!

Roger
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Sean-SAN-
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RE: DL Stealing The Europe - Central America Market?

Mon Jan 22, 2007 2:30 pm

Delta, being a US-based company, is definitely taking advantage of the low USD/Euro exchange rate by busing Europeans to South America. Makes sense to me!
 
luvflng
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 12:30 am

Purpose of Revenue Management is to maximize revenue. DL has a forecast of how many connecting passengers will be traveling on this particular O&D. In fact they have forecasts for most significant O&D's that will be using these legs. There is a concept of displacement costs in RM that tells you that you will not accept a passenger fare that is below this displacement cost.

Thus when you searched for the fare, it happens that the O&D had no bookings and the flights are empty. Keep in mind that with the displacement cost idea all itineraries are competing and the one bringing the most revenue will be accepted. In fact, if you are quoted fares through any distribution channel, these are already greater or equal to the displacement costs. You should have bought that ticket b/c it will not be available for long.
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haggis79
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 12:57 am

Quoting DL777LAX (Reply 5):
The main places that you can fly to from Lat-am are LON, CDG, AMS, and MAD. outside of those, you would have to make a connection anyway.

maybe... but as long as transit procedures in the US are as complicated as they are now I would expect most Europeans rather to pay a little more and connect in LON, CDG, AMS, MAD or FRA than in JFK or ATL... this doesn't give you the pain of having to go through immigration and customs twice (and customs&immigration in the US is certainly neither known for speed nor for friendlyness...) and doing all this just to make a transfer? I wouldn't do it unless saving a real signifacant amount of money.

Quoting DL777LAX (Reply 5):
And, inter-euro flights service levels don't match the levels of long haul service. So, in a way, its sacrificing time for service. Legacies in Europe make WN good.

While it is true that service levels in Y in intra-European flights have significantly decreased in the past 5-10 years, this statement is just blatantly wrong (FYI: U2 and FY are NOT legacy carriers). Actually, I find the opposite being true: service on any intra-European flight I have been flying on the the past years has been significantly better than any intra-US flight I've been on in the same time, especially if you look the fact that a typical flight within the EU is 1-2 hours while a US transcon can take up to 5 hours and more and still you don't get a meal despite something like the infamous "snack basket" on DL.

Plus, from my experience, service on carriers like AF is certainly better than on DL... so I don't see where flying DL is sacrificing time for service... for me it would be more like sacrificing time, convenience and service for money.
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roseflyer
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 4:05 am

Quoting Avianca (Reply 11):
Quoting Burnsie28 (Reply 10):
Also remember that fare is $732.06 US dollars wich is typical for Europe flights during the slow season.

but not from MEX, SJO or PTY...

I think DL pricing strategy might be having the connecting flight to Central America be closer priced to a domestic tag on. In most cases a domestic tag on to an international flight isn't too terribly expensive. Flights to Central America are operated by domestic equipment at those standard levels, so it isn't that unreasonable for DL to be offering fares to such cities at similar fares to those of US-Europe flights.
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andessmf
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 4:10 am

My aunt goes back to Ecuador at least once a year, and her traveling option keep increasing year to year.

30 years ago, to get from SMF to GYE you had to drive to SFO, then the route would be SFO-LAX-BOG-UIO-GYE. This time she traveled SMF-ATL-UIO, using the new DL flights. They might be doing something right.
 
Avianca
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 10:00 am

Quoting RoseFlyer (Reply 21):
I think DL pricing strategy might be having the connecting flight to Central America be closer priced to a domestic tag on. In most cases a domestic tag on to an international flight isn't too terribly expensive. Flights to Central America are operated by domestic equipment at those standard levels, so it isn't that unreasonable for DL to be offering fares to such cities at similar fares to those of US-Europe flights.

very intresting point, sounds logical
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speedbird747BA
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 10:05 am

I dont think 1 airline can 'steal' the market for an entire region. Its simply not that cost effective. I mean, Im sure there are not nearly as many flts from Panama City to FRA as there are ATL-FRA.


Cheers,
Kyle
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B4REAL
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RE: DL Stealing The Europe - Central America Market?

Tue Jan 23, 2007 10:28 am

The other scenario I am seeing - disclaimer: I am not sure where AA and CO are on this matter - is that DL is running the best fare (by a lot) on routes Central America to Northern S. America (UIO/GYE/BOG/CCS/LIM). I flew GRR-CVG-CCS (CVG-CCS via ATL) last week, and the guy sitting next to me was all upset that the SJO-CCS non-stop flight was 2x or 3x the price of SJO-ATL-CCS on the route we flew.



Quoting Legacy135 (Reply 7):
The major problem I can see for DL as for any airline in this market, connecting trough the US, is the fact that South American citizens will need a transit visa for the United States.

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