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DL Bordering Fine Line Of Competitive & Predatory!

Sat Jun 23, 2001 8:24 pm

Delta Offers Maximum Flexibility With One-Way, No Minimum Stay Fares

http://biz.yahoo.com/prnews/010622/atf008.html

Oh boy, watch out FL, F9 and NJ!

I hope DL has these fares to places such as DCA, JFK, or BWI where they have no low-fare competition.

Attn: moderator
Why was my last post about this deleted? I couldn't find any other post about this, and I do not find this offensive. Could you please respond by email if you delete this post again, or by posting if it gets archived? Thank you.
 
goingboeing
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RE: DL Bordering Fine Line Of Competitive & Predatory!

Sat Jun 23, 2001 10:22 pm

Get used to it, lowerairfare. SWA hasn't required a Saturday night stay, ever. Neither do any of the others on routes where they compete with SWA. On routes they don't, they are loaded up with restrictions. It's tough, but it's not predatory.
 
deltairlines
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RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 1:12 am

Last I checked, JFK had low fare competition. JetBlue has its hub there, and they compete with Delta Express on JFK-MCO/TPA/FLL.

Jeff
 
nickofatlanta
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RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 1:18 am

Okay, am I slow today? They're offering one-way fares with no minimum stay - how does that make any sense? How can a one-way fare have a minimum or maximum stay for that matter?
 
padcrasher
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Joined: Tue Aug 10, 2004 6:17 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 2:26 am

The DL press release is talking about one-way fares and round trip fares with no minimum stay.

With the lawsuit against AA for anti-competitive pricing being thrown out, DL can take off the gloves with Airtrans.
 
B747-437B
Posts: 8777
Joined: Thu May 30, 2002 6:54 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 3:26 am

I don't think there is anything anticompetitive about this move. In fact, I view it as a very progressive move by Delta to support its own capacity in these markets without devastating yields completely as it has been doing with priceline fares.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
txagkuwait
Posts: 1388
Joined: Fri Aug 27, 1999 7:39 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 3:35 am

I'm having trouble believing that bobody sees what this "really" means.

DL is losing money. A lot of money. Comair not flying has deprived them of a healthy amount of feed. The new pilot contract is gonna cost them out the wazoo. (You know, I never have found the "wazoo" in Gray's Anatomy). Traffic is softening all over. Yields took a dive during the month of May (the merry merry month of May).

AirTran is sitting right there at Hartsfield, behaving themselves, transforming their fleet of tired DC9-30s into a young, not so maintenance intensive, fuel efficient fleet of B717s.

I think Delta is scared. With good reason. AirTran is well positioned, assuming they don't get stupid...to stomp a serious mudhole in Delta's butt.

Delta is retaliating but it is really too little, too late. AirTran has reached critical mass and has demonstrated the ability to make a profit. That's really the secret for a new entrant....start making money before you run out.

Yep, there are a lot of folks addicted to SkyMiles and AirTran's emergence as a viable contender does not mean that a lot of folks won't fly Delta.

Just not as many...and those that do will be paying AirTran prices rather than previous DL fares.

UA may not be the only major on Holly's "Titanic Watch" before long. Delta has some very real issues to deal with. One of their main concerns ought to be "how the heck do we pay for the pilots?"
 
Tom in NO
Posts: 6725
Joined: Thu Nov 11, 1999 10:10 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 3:37 am

I won't say it's competitive or preditory, but I think the case of JFK-MSY is interesting. First, TWA pulls the sole flight out of the market. Then, JetBlue announces two daily MSY-JFK flights (by the way, to be ground handled by DL). Then DL comes on the heels on JB and announces two daily flights in the same market.

Hmmm, from one flight being pulled out due to low loads, to 4 flights being added. Seems a bit ironic to me.

But, hey, we here at MSY need the business.

Tom in NO (at MSY)
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 9:17 am

At ease private!!

The Comair stike is over and operations start to ramp up July 2nd. With yields and demand dropping all over, Delta can afford now to compete on price for Airtrans customers. As it was before, the ATL flights were too full and lowering the price to Airtrans levels just lowered yield.

As far as Delta goes, they have made more money than any airline over the last 3 years and even surpassed your beloved LUVs net yield in two of those quarters. What you have seen over the last year is mainly related to labor problems and DL will be back up to speed at the end of the year. Losing less bags than WN, more on-time than WN, less denied boardings than WN, and paying their employees more than WN. Let's see how WN does with their pilot's in 2004.

Over and out!

 
txagkuwait
Posts: 1388
Joined: Fri Aug 27, 1999 7:39 am

Padcrasher

Sun Jun 24, 2001 11:44 am

You forgot one very important thing DL also does better than my beloved WN.

They bilk the heck out of their passengers with outrageous fares.

With a healthy AirTran in ATLanta, they are going to be able to do less and less of that. You gotta love it.....

Because there are only two ways to make a small fortune in the airline industry.

One is to start with a large fortune.

The other is to carry enough folks to were RASM > CASM.

If you are paying your pilots the moon plus two dollars, that becomes more and more difficult.

All the bistro sandwiches of questionable origin, colorful paint schemes that look like they were rejected by Aeroflot, and sullen CSRs in red jackets are not going to help you if you aren't making any money.

And yeah, operational growing pains notwithstanding...my beloved WN is making money right now. Every day. Is DL?

What happened over the last three years is of no importance now. What is critical is the next three years.

If AirTran is/was not a threat...then why did DL change their fare rules? I somehow doubt they were doing it to be nice to passengers. If they wanted to do that....they'd do something about the grotesque BNA-ATL fare.

 
Guest

RE: DL Bordering Fine Line Of Competitive & Predatory!

Sun Jun 24, 2001 7:06 pm

>>I don't think there is anything anticompetitive about this move. In fact, I view it as a very progressive move by Delta to support its own capacity in these markets without devastating yields completely as it has been doing with priceline fares.<<

These are practically priceline fares. Have you seen the samples they provided in the press release?

As I see it, FL and NJ have the lawsuit card to play. If DL can't make any money right now, why are they lowering their fares like this?
 
cv640
Posts: 843
Joined: Wed Aug 30, 2000 8:10 pm

RE: DL Bordering Fine Line Of Competitive & Predatory!

Mon Jun 25, 2001 12:13 am

Airtran may have some problems of their own. They have been in negotiations with their pilots for the last few years and their last few contract offers were rejected by better the 90% of the pilots. They are still talking but most likely by the end of the summer if no conrtact the pilots will ask to be released from mediation to start the 30 day cooling off period.
By the way for everyone here who thinks that ALPA is just trying to gut all the carriers, Airtran has their own union.
 
padcrasher
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Joined: Tue Aug 10, 2004 6:17 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Mon Jun 25, 2001 3:55 am

Lowfare

Demand is down, the economy is not what is was, and business travelers are more price driven. What would you expect Delta to do in this enviroment, raise fares?
Delta is has every legal and ethical right to match Airtran or even offer lower fares. As I metioned before, when the economy was going gang busters DL's ATL flights were full despite the fact that DL chose not to match Airtrans fares. Lowering rates then would have just lowered yield and barely raised the load factor. Now it's slowed down and DL sees an opportunity to tap into this market. With this AA lawsuit being thrown out, the bar has been raised on proving misconduct in court. Airtran would almost need get their hands on some sort of internal DL document spelling out their attack plan to drive FL out of business. There is no plan, just hard nosed competition. FL should worry about FL and tough it out.
 
exusair
Posts: 658
Joined: Fri Sep 08, 2000 12:15 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Mon Jun 25, 2001 6:52 am

More conspiracy theories!!!!!!

Many business customers are foregoing travel, or are booking on low fare carriers. In order to keep these customers, DL has enhanced the flexibility of these tickets, while lowering the cost.

Behaving competitively in the market place can hardly be interpreted as predatory. By the way, on those outrageously proced BNA-ATL flights, are there ever any empty seats on the plane? DL could sell every seat for $99 on that plane. They instead took a chance and hoped that someone would pay more for that seat 3 days or less from departure. God forbid DL should try to make a profit!

They are behaving more like a business. The next 3 years look great for DL. More economical a/c coming into the fleet (737-800) replacing more expensive models (B727). Some of the savings that are experienced by operating these a/c (>30% compared to the 727) are being passed along to its employees. God forbid DL employees should ever get a raise!

If you're pissed with paying high fares, tough. I'm pissed that I'm paying more than $1.00 a gallon for gas, but I don't vent on the TexacoSux.com board. I'm also pissed that lap dances at the GoGo Rama in Lawrence Harbor, NJ are $20.00, but I continue to patronize the place and I don't vent on their employees.

Get over it. It's not the end of the world. Fares will rise and ebb, try the competitor if the fares are too high at DL. I hear Corporate Express offers a fine product from BNA-ATL at a competitive price.....
 
txagkuwait
Posts: 1388
Joined: Fri Aug 27, 1999 7:39 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Mon Jun 25, 2001 7:27 am

ExUSAir:

A semi-monopoly route should not be a license to steal, gouge, or screw the consumer....just because they can.

Being ex-USAir I guess you are used to that mentality, though. They were never particular notorious for low fares.

Looking at Travelocity...a round trip leaving the 28th in the AM...and returning the afternoon of the 30th.....DL will be glad to carry me RT for only $801.

$400.50 each way on a route that's roughly 275 miles. If you figure Delta's ASM cost is somewhere around 11 cents....well it is costing them around $30 to fly that $400 seat.

That would be like paying $12 a gallon for gasoline...before the govt slapped taxes on it.

That isn't simply "making a profit." That's price gouging. And that alone is plenty of reason for me to avoid Delta...even if I have to fly in and out of another city in order to get to Atlanta.

But no, what Delta is doing with regards to AirTran isn't predatory or illegal. They are just trying to salvage their butt. Because you heard it here first...with a softening economy, new pilot contract that has a profound impact on labor cost...and a viable low fare competitor in Hartsfield...ol' DL is not sitting in the catbird seat.
 
Guest

RE: DL Bordering Fine Line Of Competitive & Predatory!

Mon Jun 25, 2001 8:59 am

I agree with TxAgKuwait; DAL is clearly guoging here, as they and other BigAir operators have learned to over the years. But, I also think that, right or wrong, they have a right to do this, insofar as no Federal agencies are aggressively enforcing airline pricing practices. They could, but they continue to chose not to.

Re: SWA pilots, I thought I recently read a SWA press release saying they were already talking to the pilots, pre-2004, as any good company would do after the UAL/DAL pay raises.

Re: Jetblue at MSY...DAL does the ground ops? Hmmmm. I was wondering how a new airline could make it at so many airports with only 1-2 departures daily. ANyone know of other details for how JetBlue ops are done by other carriers elsewhere?
 
Guest

RE: Padcrasher

Mon Jun 25, 2001 2:42 pm

Trust me, DL has plenty of money. However, some friends at DL have told me that they are considering asking their CSA's to take a 5% pay cut to subsidize the pilot raise, yes Comair striking hurt DL. I see it, that DL won't give anyone else a raise for some time.
And WN isn't always a "low-fare" carrier either, I know this for fact! Airlines are business, too. If you don't like their fare, service, etc...go to another one, that's why we've more than one department store on earth!
 
flashmeister
Posts: 2671
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RE: DL Bordering Fine Line Of Competitive & Predatory!

Mon Jun 25, 2001 10:04 pm

But, I also think that, right or wrong, they have a right to do this, insofar as no Federal agencies are aggressively enforcing airline pricing practices. They could, but they continue to chose not to.

Could someone quote me something from the CFR or FAR that states what price an airline may charge for what route? I thought that ended with deregulation...

Therefore, what sort of airline pricing practice are you expecting the Feds to enforce aggressively?

If you're talking about predatory pricing, that's very difficult to prove. It's not just playing business where sometimes you can't match your competitor's price. You can't sit up and scream 'predatory' every time a major introduces a fare sale to compete with a low-fare. What in hell do you expect them to do? After all, they're a business.

The industry micromanagers expect the majors to play the game with one hand tied behind their back. It's unfair, and fortunately, it's not the way the American economy works.
 
B747-437B
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Joined: Thu May 30, 2002 6:54 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Tue Jun 26, 2001 12:50 am

Trust me, DL has plenty of money.

Do you have any concrete sources for this?

AFAIK, Delta has just under $1 Billion in cash on hand, with a NEGATIVE working capital of around $3 Billion. Long term debt is at $6.1 Billion. That is NOT a healthy financial position.

Additionally, their 2001 bank credit agreement specifically authorizes $1 Bil in unsecured debt ONLY under a business interruption. They can no longer draw down against that, and the cash flow position is now even tighter.

Finally, Delta has expressed an interest in selling more of their priceline holdings to obtain additional cash. That is not the move of a financially healthy company. That's the move of a company sliding the wrong way down a steep financial slope.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
padcrasher
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Joined: Tue Aug 10, 2004 6:17 am

RE: DL Bordering Fine Line Of Competitive & Predatory!

Tue Jun 26, 2001 4:32 am

747

Forward you analysis to Moody's. They rate Delta and AMR's debt higher than NWAC, CAL, U, and UAL. And if Delta is not in a healthy finacial position why do they rate Delta and American and WN as the only airlines having investmet grade debt?
 
DCA-ROCguy
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RE: DL Bordering Fine Line Of Competitive & Predatory!

Wed Jun 27, 2001 1:08 am

TxAgKuwait, the wazoo is in Gray's Anatomy, they just use a different word for it. :+)

The Delta fares and restriction changes do not seem to me predatory. As you noted, Tx, companies are cutting way back on full-fare travel and thus yields at the Six Families are dropping badly. Delta is merely trying to get some wazoos warming those seats, so they get some revenue. On the KCI-IAD route, for instance, they don't even have low-fare competition.

Once again we see that the Six Families' high-cost, high-fare general business strategy puts them at economic risk. They are addicted to $800-$1500 full fares on coach domestic routes in order to feed their excessively high cost structures, and when the economy softens businesses tell them where they can stick those fares (see Gray's Anatomy ;+) ). Business tolerated high fares during the boom times of the '90s, but not now.

Airline travel is about getting people places. Bottom line. In a free market, people will seek the lowest fare unless they have money to burn as business did in the late '90s. The airlines and their unions are about to get a fresh lesson in this truth. From the look of the Comair settlement, ALPA's freewheeling blackmail days are over. Expect UA and DL to be pleading for concessions within a year or two, because they won't be able to pay for their blackmail pilot contracts.

If the Mafia Cartel does use the soft economy as an excuse to turn predatory on the low-fares and shut down the free market, expect Congress to intervene. The threat of profit-killing and yield-management-snarling re-regulation should be enough to make the thugs behave.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
Guest

RE: DL Bordering Fine Line Of Competitive & Predatory!

Wed Jun 27, 2001 8:38 am

Yo', Flash...

...putting my words into context, you will see I was merely stating my agreement with TxAgKuwaits data. $801 RT on DAL for a 550 mile RT does seem a bit high, don't you agree? In fact, I was defending DAL's right to charge so much, while suggesting our government servants could do alot more to help keep this kind of gouging from happening.

What I would like to see the Feds do "aggressively" is not properly stated as a pricing policy (my mistake earlier); more accurately, it would be to take a more aggressive role in ensuring the public knows the pricing practices of airlines. A GAO study comparing seat-mile fares would show a huge disparity for DEN vs. SLC, because UAL/FFT are gouging at DEN while SLC has SWA service. Likewise for DFW vs. DAL. The best government governs least but, if we are stuck paying for government service, that service would best be applied here in simple regular analyses that bring shame to BigAir for their practices (and help us taxpayers to nudge them away from their practices).

I may be the last person who wants FARs/CFRs detailing pricing by airlines, as these would force SWA to charge me lots more for my weekly commute!


 
WiLdmanVzla
Posts: 590
Joined: Wed Sep 20, 2000 12:17 pm

RE: DL Bordering Fine Line Of Competitive & Predatory!

Wed Jun 27, 2001 9:07 am

As least great news for us as a customers... but for how much time it's gonna be?

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