Cubsrule wrote:Keeping in mind that most of the passengers that DL would target with BNA-AUS have WN status (as one of my partners says, "I don't like WN but I like flying nonstop"), I'm not sure the fare premium is as sure a bet as you think. First, for close-in purchases WN is actually better because people with status are guaranteed a non-terrible seat. As upgrades on DL become rarer and rarer, I don't see the chance of an upgarde as as much of a driver of demand as it used to be. That's especially the case for those of us who buy fewer than 5 days in advance, when upgrades have already started to clear.
That is why DL was hiring for Corporate Sales positions a year or so ago, if they are doing their job they are capturing corporate accounts in the area. WN struggles in terms of F500 corporate accounts because of their lack of int'l presence, and corporate accounts drive a large amount of air travel decisions. If DL does decide to add AMS, that would be major in terms of securing corporate accounts in the region.
If DL secures significant accounts in the region, personal preferences won't matter as travelers will be required to take DL nonstop per company policy.
Jshank83 wrote:I don't exactly get the thoughts in the thread sometimes.
On one hand, BNA is growing like crazy and people want a bunch of new routes added because of it.
On the other, There is no way DL could do well on other routes.
I think DL would do just fine strategically adding some business routes. They don't have to go full blown hub, just pick and choose routes that had decent DL demand on both ends and the business community wants. If they do add a TATL flight like most people have decided is a foregone conclusion, wouldn't it make sense to add other offerings and that way you can get some business traffic away from the other airlines. I don't think anyone is saying DL is going to grow and to some WN level but as Cubsrule mentioned "as one of my partners says, "I don't like WN but I like flying nonstop"" to me means DL could get some traction if they are smart about it.
It seems like some people are all about growth until you even suggest anyone could go up against WN on some routes even a little bit. There is plenty of demand to go around. If WN has 3 daily routes instead of 4 on some segment because DL wants to add it, then that is okay. Competition is better for the traveler.
tphuang wrote:Midwestindy wrote:
You can't generate higher yields until you generate brand loyalty, you do this in part by increasing service in a market (the point of a focus city)....so that is why DL would be interested in flights like these.
Adding a couple of flights against an airline that's not strapped for cash and have plenty of market share is not going to get them to higher yield. They already capture good portion of ff due to proximity of ATL and their one-stop international flight options. They would have to add a whole lot of flights if they want to get to a point where they get higher Point of sale out of BNA. This kind of mirrors their other "focus cities" of SJC and AUS. Do they have gates to add enough flights to be competitive. And do they have the desire to have a big fight with WN? Up to this point, it seems to me DL has avoided full frontal assault on one of AA/UA/WN's major stations. And even if it's willing to fight with, it seems like AUS is a higher priority to them.Competition from WN/NK wouldn't negate DL's ability to gain a fare premium over WN & NK.
-While DL might chose to compete on basic economy pricing 2-5 months from departure, a majority of DL's tickets would be purchased relatively close in where basic economy is not available and tickets are significantly more expensive.
-DL would have the advantage in tickets purchased close-in, as business travelers are generally the ones booking close-in tickets and are not price sensitive and will usually prefer upgrade availability.
-Looking at BNA-AUS Q2 2019 there were 64 PDEW paying over $300 each-way, presumably many of which were business travelers purchasing tickets close-in to their departure date. Now, while DL will not capture all of this close-in demand, it is highly likely that they would be able to tap into a significant portion of it, thus meaning there is strong potential for a route like this to be viable.
DL got revenue premium of 5 to 10% on a route like BOS-BNA because it's operating RJ vs A320/B737 type of aircraft. The cost difference between that is humongous. Hard to see how it can get revenue premium if it was operating A320/B737 on this type of routes. I mean you've seen their fares on BOS-BNA and BOS-IND, the gap is pretty large. How much money do you think they are making when averaging $195 on non-stop itinerary and 83% LF on a regional jet flying 942 miles?
And that's likely what will happen when it adds BNA to places like AUS/MCO. Just the mere presence of NK will bring down the fare overall by taking a lot of price sensitive demand that would otherwise connect at ATL or chase the cheapest available non stop fare. When there are less demand left for DL/WN, their fares will also suffer.
Over the next 2 years, NK is adding a lot of capacity. WN will also do that once MAX comes back online. Fundamentally, a lot of major WN is going to get invaded by NK. It's hard for me to see DL wanting to get in the middle of that. I don't see the strategic value of BNA in their network.
They would not need to add a whole bunch of flights for greater POS strength, DL has an inherent strength over WN due to its international network. Not to rehash what I have already posted, but DL is much stronger than WN in terms of corporate sales. It's a major reason why WN has become weaker in IND after DL added IND-CDG, if DL were to add BNA-AMS DL would gain significant leverage. To be clear though, WN and DL can coexist, their fundamental goals serve two different markets with a bit of overlap in the middle.