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travatl
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It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 3:05 pm

The legacy carriers just don't seem to understand that you can not fix a 600 airplane problem with 40 airplanes. Ted better watch out.

From the Dow Jones Business Wire:

Delta Air Grounds Expansion Plans for Its Song Unit

Thursday February 5, 12:31 am

ATLANTA -- Delta Air Lines is playing a different tune with its low-fare Song unit, putting a much-anticipated expansion on hold as the company conducts an operational review to find more ways to cut costs companywide, Thursday's Wall Street Journal reported.

The nation's No. 3 carrier had promised a January cross-country rollout from New York of its stylish airline-within-an-airline experiment, as it faces an assault from low-fare carrier JetBlue Airways (JBLU) and other low-cost rivals. Song currently flies mostly from the Northeast to leisure destinations in Florida.

Those plans for Song have been shelved on orders from new Chief Executive Gerald Grinstein, who wants to determine whether pursuing that strategy makes sense, company officials said. The review, expected to be completed by June, extends across the entire loss-plagued Delta operation, officials say. Meanwhile, Delta is in tense talks with its powerful pilots union, seeking wage concessions that the company says it needs to stay competitive with rivals.

Launched last April, Song was formed to operate at lower costs while providing perks such as leather seats and in-flight entertainment. Some of the lower costs are achieved with shorter aircraft turnaround times at airports, borrowing a strategy from low-cost carriers that get greater use of their aircraft than so- called hub-and-spoke carriers such as mainline Delta.

Wall Street Journal Staff Reporter Evan Perez contributed to this report.



[Edited 2004-02-05 07:08:31]
 
NIKV69
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RE: It's Official...Delta Unahppy With Song

Thu Feb 05, 2004 3:11 pm

This is beginning to get ugly, I think this airline within an airline experiment is failing, especially while Delta is trying to cut costs with wage cuts. Delta is finding out the hard way that they can't compete with JetBlue or Southwest even with a fancy new name..
 
jhooper
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 3:23 pm

Where did it say Delta is unhappy with Song? All it says is that expansion plans have been suspended pending a review of the entire Delta operation.
 
rockyracoon
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 3:30 pm

You're exactly right, jhooper. You guys are jumping the gun here, delta isn't nessecarrily happy or unhappy at this point. This examination will drive their opinion of song.

peace
 
Matt D
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 3:33 pm

Join the Club, Song:



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travatl
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 3:43 pm

Hmmmm.... you've lost over a BILLION dollars, and have created a new division of your company to regain marketshare, and increase revenue. If that division is meeting those expectations, would you then STOP a planned expansion of that division?

NO!

Pull your heads out of the sand. Delta is doing the right thing here. Song is not the answer...

I reiterate... You can NOT fix a 600 airplane problem with 40 airplanes . Now speaking slowly

If....it....WERE....working....they...wouldn't....be...stopping...PLANNED...expansion....

Travis

 
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jfklganyc
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:03 pm

First of all, let me say . . . GO JETBLUE!
It's funny that you guys are so quick to pounce on B6 and say they're falling apart at the seams after they pull out of one market, but if it's Delta's baby we cover it up by saying it's just a review.

Of course they're unhappy. Song is turning out to be a bigger load of crap than Express ever was. At least the -200s were small enough to go into places like Indy and Islip. Song completely gave up on those routes with these gigantic 757s and now they can't even make money in big cities.

We didn't need to see a press release or article to know this. Delta's big JFK expansion (recently announced) didn't include Song. (except for RSW) Weren't we all recently speculating that Song would takeover all of JFK mainline domestic ops--like to see that happen now!

What Delta didn't anticipate is a few key things:
1. Today's airline passengers go for the lowest fare--they are not brand loyal. However, if you ask an ordinary New Yorker (Song and JetBlue's largest market) who knows nothing about airlines or flying, he knows that if he had to fly, he would fly B6. That is what Neeleman and his crew did. While every airline spoke of bankruptcy, loans, and slashing service, JetBlue was the one bright spot--a positive ray of light in a dark hour. As a result, B6 has a colt following.
2. A320s were designed to compete with 737s, not 757s. Delta should have considered the 737-800s for this operation. The 757s are to big! At one point, DL was advertising "most seats from JFK to Florida." Seats don't mean anything to customers--flight frequency does. More flights on smaller jets is better than fewer flights on larger jets . . . the secret to the success of the RJ.
3. People liked Delta. When it comes to a "legacy" carrier, DL had and still has a good reputation. There was no need to remove the DL product that it had built for many years on the Florida routes.

Delta faces a tough road ahead. Hopefully United will take a close look at this before they make the same mistake. Song is nothing more than a second-generation, low-fare loser.
 
kaitak
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:11 pm

It appears to me that Song is a victim of its own success; are they annoyed because Song is too successful and taking business off the mainline carrier?

It doesn't seem to make sense to stop it from growing while the rest of the airline has to catch up, something which could take a very long time.
 
n102daman
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:15 pm

I always thought that the reason Delta created SONG was to compete with the LCCs in the leisure market.

Does this news report say anything about Delta being unhappy with Song? Does it say that Delta is going to Shut Down the operation?

Point is that Low Cost Carriers are forcing the Full Service Carriers to compete with them. Passengers are not necessarily traveling for the service they receive but for the least expensive fair. Delta created the Song operation for that reason. United's "Ted" is another example. Two Full Service Carriers taking the fight to the Low Cost Carriers on their level. Hopefully it works. If it doesn't then the two airlines have learned a valuable lesson.

"Keep Singing Song"
"Fly Widget Fly"

 
tu154m
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:33 pm

Trust me guys........DL is REALLY giving Song a 2nd look. It's not bringing in the loads they expected and it's costs are WAY to high. As someone said.........Song is a low fare carrier, NOT a low cost carrier. As an employee, I'm not gonna say what I've heard(I don't want to get my "little birdies" into any trouble) but Song is gonna have to prove itself on its current routes before anything is expanded............
S
 
FA4UA
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:49 pm

Song's first mistake: using the 757. Way too large of a plane!

It will be verrrrrrry interesting to see United's Launch of TED in the shadow of all this! At least 156 seats is less to fill then 199 on DL!

"TED, a more petite and slender airline within an airline!"  Laugh out loud

FA4UA
 
jhooper
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:53 pm

As an employee, I'm not gonna say what I've heard(I don't want to get my "little birdies" into any trouble) but Song is gonna have to prove itself on its current routes before anything is expanded............

There have been so many rumors circulating in ATL during the past several days, I'm not sure what I'd believe.
 
Areopagus
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 4:53 pm

As a result, B6 has a colt following.

Well, then they'd better be careful when they throttle up.  Wink/being sarcastic
 
DC10GUY
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 5:00 pm

It seems Delta has lost its rudder.... It needs a heading. Song ain't it.
 
MAH4546
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 5:34 pm

While I don't really think Song was the greatest idea, I must say, I fail to see how it is not working.

Let's forget the fact that this is Song, because it is still Delta. Go to delta.com, try to book FLL-BOS, and they'll put you on Song. In the Miami-area, for example, only American Airlines has a larger flyer base than Delta. These Delta frequent flyers are going to fly Song because it is Delta. They might not even know what Song is, but when they booked thier flight with Delta, they got on Song. From FLL, they are serving heavily traveled markets, like New York City, Los Angeles, and Boston, yet not filling up planes. Delta Express and Delta used to, why not Song? It technically is the "same" airline, flying out the same passengers. I know how I'm putting it sounds confusing, but hopefully somebody gets my drift.
 
Guest

RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 5:39 pm

Errrrr.............

Isn't DL undergoing an Executive Management change??? If so, a product re-evaluation would be about the norm.
 
panamair
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 7:10 pm

The comment above is right about song being a low-fare airline but not a low-cost airline. Remember they still use Mainline pilots for this operation which immediately puts them at a cost disadvantage vis-a-vis the LCCs. They may be as efficient as B6 or WN in other areas of this operation (e.g., turnaround times, more flexible work rules for ground staff and f/as) but is still at the end of the day higher-cost.
 
DeltaMD11
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 8:45 pm

I've honestly never really agreed with the ideas behind the creation of Song. Delta was a well-established name on the routes that Song has taken over and instead of trying to lower fares while offering that good old rugged DL service to lure people in, they have spent millions of dollars repainting and re-outfitting aircraft with new interiors, et cetera, et cetera. It just never quite added up in my mind, but then again what the hell do I know? The airline within an airline concept has failed miserably in the past and I think DL has headed down that well-trodden path. This has been my feeling all along. It's great that they are trying to tackle jetBlue because they are truly seeing and feeling the effects of jetBlue's presence but I think that they went about it wrong.

I'm not really a huge fan of Low-Cost carriers. I have flown Southwest a few times, and probably will fly them when they start serving PHL, however if a full-fare carrier can give me a price within a reasonable range to a LCC I'll take the full-fare. They need all of the support that they can get these days, and my money is as good to them as it is to another carrier. That and I like a little bit of service. Don't get me wrong here, I've never had any kind of a problem with Southwest but if I'm going to pay a few hundred dollars to fly I want as much bang out of my buck as I can get. In B6's case, leather seats and PTV's honestly don't impress me. That's all superficial. It's fluff. I care about the product itself---service, cleanliness, kindness, cheerfulness and most importantly reliability. I have found all of these traits consistently in DL, CO, NW, and HP. I have yet to fly jetBlue and probably wont even consider it unless they start serving PHL (unlikely until they get their 190's). Even at that B6 would have a rough time in PHL because they'd have to butt heads directly with Southwest if they did. Just my two cents.
 
goingboeing
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 8:53 pm

It's funny that you guys are so quick to pounce on B6 and say they're falling apart at the seams after they pull out of one market, but if it's Delta's baby we cover it up by saying it's just a review.

Oh puhleeze. Lets see...JetBlue scales back (way back) from LGB-OAK and SLC and LAS after Southwest flexes their muscles, and all we hear is "They are only protecting the slots at LGB" Then after Delta and Airtran smack them in the ATL market, the pull out of there...again citing the "protecting the slots". It's too damn bad that AA wasn't slot restricted at STL - they could have pulled every plane out of there and cited "slot protection" as the reason. Instead, it's "AA is dying" Song was a mistake (as Ted will be proven to be as well). But don't give me the crap about how anybody's covering up any more dirt than JetBlue covers.
 
GSPSPOT
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 10:22 pm

I wish Song would do more routes from it's parent company's base in ATL (close to my home airport). I'd like to give it a try, but can't...
 
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EA CO AS
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 10:27 pm

But don't give me the crap about how anybody's covering up any more dirt than JetBlue covers.

Amen to that!

The majors always get gored here, but for some reason B6 always gets a free pass from this crowd.  Insane
 
petazulu
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 10:53 pm

If Song's expansion was already in the plans- and now it is under review- this indicates to me that Song is not doing as well as had been planned. You do not "review" (code word for reevaluate, reacess, etc) a planned product rollout that your investors are anticipating- unless there are signs of serious problems with the product and/or its impact on the company.

That is the case in any of our work environments (I am not in aviation). Similar to a hiring "freeze". or other top-level executive decision. It indicates someone at the high level is cutting the power.

That's my opinion. I'd like to see Song succeed, however- some of you seem to have blinders on.
 
JAL777
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 10:55 pm

Start singing the bluuuuuuuuuuuuuuuues...
 
RL757PVD
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:22 pm

Lets look at the management here.....Mulllin did not voluntarily retire, He had a lot of new innovative ideas, and Delta has traditionally been a good ole boys airline. Grinstein one of the Grey-hairs from Western may have a different approach to alot of things that Delta may have been doing. Having flown Song, Delta was on the right track to an extent. The product was good and had many things that the passengers were looking for.

The problem is # 1 the aircraft are too large which resulted them in dropping cities that were profitable with the smaller jets (PVD,IND, ISP) Now those low fares are routed through ATL killing the ATL flight yeilds. Also they are largeting the large capacity where there is all competition, meaing more pax spread out over more airlines at lower fares.... nobody wins.

The best way to combat the competition can be seen in Delta's latest JFK expansion. A person is going to fly the most convinent airline with resonable costs. The reasons why the hubs get the vast majority of local biz traffic is their schedule, not their fares ( DFW-AA, ATL-DL etc) So by DL adding 10 new cities to JFK, whener it be RJ, mainline etc...that will make Delta much more appealing because theu can take you to more places, meaning that when its time to go to a JetBlue destination, that passenger will choose Delta. By just going head to head on the same routes and thats it is just asking for trouble.

The is most likely the main reson for their re-evaluation of their JFK strategy. the latest DL/ DL connex exp of JFK makes much more sense then pouring on more song. Song can work if it is done smart, and not just out of competition. Lastly, just for my $0.02, If DL had ordered 20-30 737-700's and painted them white and neon-green, and kept most of the same DLX routes, i think it'd have worked out much better.
 
goingboeing
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:25 pm

That's my opinion. I'd like to see Song succeed, however- some of you seem to have blinders on.

No blinders here...I always thought the "airline within an airline" concept was always the wrong route to go. All I'm saying is that if it were JetBlue who was "reassessing" a route or plan, then all you'd read on these boards is "David Neeleman is a genius...he understands that there is no shame in changing plans if it doesn't appear to be working". However, if Delta makes the same move before expanding on what I believe was a losing concept from the get go, you never read anything about the wisdom of their managment team. So I'll say it - Grinstein is a genius...there is no shame in reassessing a plan that his predecessor put in place. Only the wisest execs have the cajones to put the brakes on before commiting even more money into a losing proposition.
 
richierich
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:27 pm

What's your favorite Song?

Nah-nah-nah nah, Nah-nah-nah nah, Hey-hey-hey, goodbye.
 
elwood64151
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:31 pm

Actually, there are better ways Delta can cut costs and increase revenue, all without cut payroll or anything else. Delta is creating a new problem for itself because it doesn't see the underlying problem it really faces.

I'll let you wonder what the real problem is, and if you think you know it, contact me.
 
luv2fly
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:32 pm

Goingboeing

I have to disagree with you, as you know after B6 announced leaving ATL it was all over this board that DL drove them out, sure like any company the press release put a positive spin on it, tho on this board it was all how DL ran them out with there tail between there legs.
 
goingboeing
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:35 pm

Richie...I'd hold off on the grave dancing for a while....in case you haven't noticed, every airline that is competing with JetBlue is aggressively trying to reduced ASM costs... while JetBlue appears to be taking fairly aggressive steps to INCREASE ASM costs. When the difference in costs between JetBlue and Delta or American gets within a penny, Jetblue won't be in much of a dancing mood. Not saying they'll disappear, but it will most certainly be much harder to maintain profitablity when your product and their products are comparatively priced - and the competition has costs that are bumping right up against JetBlue's.
 
bucky707
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:46 pm

I agree with all those who think the 757 was too big an airplane for Song. I think Song is a good idea, and it seems to be well recieved by the pax. But, 199 seats is a lot to fill on every flight. The 738 with on class would have been right around 155-160 seats. They picked the wrong aircraft.
 
upgradeplease
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:50 pm

What a load of crap! No where in that article does it say Delta is unhappy with Song. I suggest a name change to this thread or deletion all together.
 
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RayChuang
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:50 pm

I think the biggest problem with Song is the fact they're using WAY too big a plane for that operation. If they had used the 737-800 it probably would have been a bit more profitable.

Actually, what really helped JetBlue (B6) was the fact one of their first markets they went after aggressively was JFK to FLL/PBI in Florida, destinations with a historically very large ex-patriate NYC population (one that dates from the time of the opening of the Florida East Coast Railroad at the beginning of the 20th Century!). Why do you think B6 flies from JFK to PBI/FLL multiple times per day?
 
richierich
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:56 pm

No gravedance here, Going. I just think that Delta made a mistake with Song and clearly it will be going away soon. AS I have reiterated several times in another post, the writing is or was on the wall. They will be gone soon.

Does this mean JetBlue or AirTran or Spirit or Continental can do the silly dance because Song is no more? Of course not. Delta will still be a major force in the NY-Florida market. Grinstein is a respectable leader who knows what he is doing. In fact, I think Delta's domestic mainline could serve to benefit from some of Song's attributes, and Song may have helped them better understand what customers want. The idea of Song was never a problem for me, it was the execution....



 
DeltaMIA
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RE: It's Official...Delta Unhappy With Song

Thu Feb 05, 2004 11:58 pm

All the article says it that Delta is doing an internal review of Delta as a whole which includes Song, DCI and Delta Shuttle. This occurs anytime top management changes. Mullin did the same thing after Allen. During a review one is not going to pull planes and reconfigure them, everything will stay as is until afterward. Grinstein's primary goal is to bring down labor costs with the pilots.
But nowhere does the article say it is unhappy with Song the article just discusses why Song did not expand in January as previously announced under Mullin.

[Edited 2004-02-05 15:59:18]
 
DCA-ROCguy
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 12:00 am

JetBlue isn't the only one redeploying....the NY Times reports that Song is cutting their Dulles flights this spring to redeploy them on JFK-RSW. JetBlue is not reducing their Dulles-Florida flights, and AirTran isn't reducing their southbound schedule at IAD. Not to mention Indy Air coming online in a few months. Sounds like Song lost that particular battle.

Ditto to those who say the 757 is too big for Song. Song is indeed a good idea, and it's targeted to a natural low-yield corridor long served by its parent airline which has a big FF base in that corridor. But Delta will need to get Song's crew costs in line with JetBlue's in order to compete. Also, Song should have been done with 73G's or 738's, so that it could reach into medium-size markets as PVD757 noted. And JFK isn't congested, so more frequency would make the product even more attractive.

Frankly, I would argue that using the 757 shows a certain amount of contempt for medium-size markets: "you all don't matter to Delta, thank you." Which is probably just as well, because it only makes it easier for B6, WN, and FL to grow in those markets.

Jim
 
DeltaMIA
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 12:05 am

For those that debate the size of the 757. This has already been covered as to why Song is operated by the 757 and not the 737.
Song can not make enough of a profit operating a 737 with the labor costs of the pilots. This was one of the top questions when Song was introduced to the employees and management was straightforward in telling us that the added capacity of the 757 is what will drive Song's success.
 
DeltaMIA
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 12:10 am

"JetBlue is not reducing their Dulles-Florida flights, and AirTran isn't reducing their southbound schedule at IAD"

Um Jetblue operates IAD-FLL, which isnt the same as IAD-MCO and Airtran operates no flights from IAD to FL, so I guess technically they aren't.
 
goingboeing
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 12:26 am

One thing that Delta is "quietly" experimenting with (MCI-ATL and Houston-ATL) is a one class concept with about 35" of seat pitch. I've been on a couple of flights and my wife has as been on a couple more. Loads were quite full...and the overwhelming reaction of the passengers was "pleasantly surprised". No PTV's - fares quite competitive with Airtran - and near first class legroom. I wouldn't be surprised to see that concept extend to flights or 2 hours or less.
 
DeltaMIA
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 12:33 am

Goingboeing,

That isn't quietly being done, DL has issued press releases on the service being provided ATL-HOU, ATL-MCI. These are simply being operated by DL Shuttle 737-800's. They are also operated on the ATL-MDW route. These aircraft are more or less being borrowed from Delta Shuttle and will being given back as soon as demand warrants the extra capacity on the NE Corridor routes.
I think there are 2 800's that have been given back to DL Shuttle already.
 
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STT757
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 12:51 am

From Today's New York Times business section:

"Delta Scales Back Plans for Low-fare Airline
By MICHELINE MAYNARD

Published: February 5, 2004


Delta Air Lines is scaling back plans for Song, its low-fare airline, as it conducts a complete review of its operational structure, company officials said yesterday.

In an interview, Song's president, John Selvaggio, insisted the year-old airline can play a key role as Delta battles other low-fare airlines, like Southwest and JetBlue, for passengers on the Eastern seaboard and elsewhere in the country.

However, the airline is studying the future of Song under an extensive re-evaluation of its operations that was ordered by its new chief executive, Gerald Grinstein, who assumed his job on Jan. 1, Mr. Selvaggio said.

The airline is striving to cut costs and is pushing its pilots union to grant concessions so that it can keep pace with lower labor rates at other airlines like American and United.

Song, which cost Delta $65 million to develop, was started last April after much fanfare as an airline-within-an-airline, meant to appeal to passengers who have been defecting in droves from major carriers in search of cheaper tickets. Delta configured 36 Boeing 757 jets, with 199 seats each, to fly route routes from New York to Florida and elsewhere.

Last year, low-fare airlines carried 24 percent of all passengers in the United States, according to the Department of Transportation, and that figure is expected to climb again this year as new low-fare carriers begin service and existing carriers expand.

In particular, United Airlines will start its own low-fare carrier, named Ted, next week, with service from Denver to a series of cities in the west and in Florida. Ted has been seen as United's effort to keep pace with Delta and its other low-fare rivals.

However, Delta for now is not carrying through with previously announced plans to expand Song service that it had planned to put in place this year. Although Delta said last week that it would invest at Kennedy Airport to expand its service there, it announced only two new flights for Song. By contrast, soon after it announced the new carrier, Delta said it hoped Song eventually might replace Delta Express, its regional carrier flying to smaller cities.

Meanwhile, Delta plans to eliminate three Song flights from Washington Dulles airport by April, the trade publication Aviation Daily reported last night. Song only began flying from Dulles to Orlando in September. Aviation Daily said the Song planes instead will be used on Delta flights from New York to Fort Myers, Fla.

In the interview, Mr. Selvaggio said Delta had originally envisioned Song as a defensive measure to keep from losing passengers to other carriers. But he said it could be an offensive weapon as well, aimed at passengers who prefer direct flights to the connections that are the norm for travelers on Delta.

``What Mr. Grinstein wanted to do was undertake a strategic review'' of the kind of service the airline would provide, Mr. Selvaggio said. He said routes would be examined to determine, ``Is it Song or is it Delta? Going forward, we want to have a strategy that makes sense.''

http://www.nytimes.com
 
DCA-ROCguy
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RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 1:48 am

Um Jetblue operates IAD-FLL, which isnt the same as IAD-MCO and Airtran operates no flights from IAD to FL, so I guess technically they aren't.

But AirTran does offer IAD-MCO through ATL, and UA offers several nonstops. Song, it seems to me, should have an advantage on a route whose demand as leisure is typically less brand-loyal and more fare-sensitive. The route must not be performing up to DL's expectations if they're moving the planes elsewhere.

Maybe the 757 hasn't lowered pilot costs as much as DL expected. Maybe Delta, a publicly held company, will disclose those numbers after the "internal review." In any event, it looks like another case of unions hindering flexibility of market response. Smaller a/c need fewer pax to be profitable.

Jim
 
alphascan
Posts: 795
Joined: Mon Nov 24, 2003 12:04 am

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 1:49 am

GoingBoeing:

I couldn't agree with you more that DL's reassessment is a very wise move. It shows that DL can be nimble and not try to force revenue out of an earlier bad decision. It's a strength, not a weakness...just as B6's move out of ATL was a sign of strength, not a weakness. I hope United management sees the writing on the wall before they shoot themselves in both feet. 757's vs. 320s won't make a difference on DEN's much thinner routes.

Had DL not gone to the trouble of creating an "airline within an airline", they would be able to make these moves without anywhere near the volume of people yelling "failure". It seems to me that the ATL/MCI experiment is a more rational way of testing how to tweak services to see what will be effective vs. the LCCs. It would allow the opportunity to use a mix of aircraft to tailor the the number of seats to the route and schedule (assuming costs will be cut enough to make a profit on fewer seats ala DeltaMIA's valid point).

Come on Elwood, let's hear it. I want to know how DL can cut 2 to 3 cents off of CASM without reducing "payroll or anything else".
 
UA744KSFO
Posts: 411
Joined: Fri Dec 12, 2003 5:55 am

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 1:58 am

The article in the preceding post makes a good point. The issue with Song is that its costs (as well as Delta's in general) are too high, and this review period is one in which I think Delta's management team will have to try and figure a way to reduce Delta's costs in general (on all routes).

United, on the other hand, has been able to reduce its costs by a lot while in bankruptcy. That's why I don't think that Ted will have the same problem as Song.

Remember that an LCC means that the costs are low enough that the carrier can charge a low fare and still make a profit. If a high cost carrier creates a so-called LCC, all that creates is a loss for the company.

 
DeltaMIA
Posts: 1622
Joined: Wed Feb 04, 2004 11:53 am

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 2:04 am

That is correct DCA-ROCguy.
The fewer seats the easier it ease make a profit.
DL does not have one single unprofitable RJ route nor will they probably ever. However the trick is putting the RJ on a route which will generate the most profit.
DL isn't reducing its flights from IAD to ATL which give customers even more options into Florida then any other airline.
They knew the 757 wasn't going to give them lower pilot costs, it was they needed the extra capacity to balance the pilot costs.
 
AApilot2b
Posts: 481
Joined: Wed Nov 01, 2000 12:38 pm

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 2:18 am

Song joins the loss making ranks of similar carriers Shuttle By United, Air Canada Jazz, US Airways Metro Jet, British Airway's Go, etc.... It seems everyone could predict this except Delta. You would think United would have learned as well, but they are basically relaunching their loss making Shuttle as the newly (and might I add stupidly) named Ted. When will the majors learn?
Nonethless, like many of you have said, you have to give Delta's management kudos for realizing their poor decision earlier and their current reassessment of Song's operations.
 
juanchie
Posts: 188
Joined: Thu Jan 29, 2004 7:17 am

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 2:21 am

Personally, Delta should be reevaluating their whole operation. IMO, Song isn't competing against Jetblue, Delta is. Delta is trying to be a LCC with song, but they aren't. Delta is a conventional airline. Because of this, they have conventional airline problems but they also have the benefits as well. Instead of trying to focus on their strengths (more destinations, more choices, more flights, international flights etc) they try to become something they aren't. If they want to be a LCC, they need to completely change the company so the whole airline is LCC. Of course, that's a horrible idea. What they should do is scrap song and try to lower costs on the WHOLE operation. Faster turnarounds on ALL planes. More utilization on ALL planes. Ignore the IFE fad, in the general public, most passengers don't buy a ticket with leather seats and TV on their mind. Who has ever used those Verizon phones that cost an arm and a leg on the delta planes? Exactly. Look at the little things of the airline. I can fly JFK-FLL on either Delta or Jetblue. But I cannot fly JFK to Birmingham Alabama on Jetblue. They need to show the flying public that they can take you wherever you wanna go. If they correct their global operation, they might lose a little bit of money on routes competing directly with Jetblue, but they will make a lot more money in the operation as a whole. You gotta look at the big picture!


Juan Carlos
 
planemaker
Posts: 5411
Joined: Mon Aug 25, 2003 12:53 pm

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 2:41 am

Juanchie: Yes, you cannot fly JFK to Birmingham on a LCC today... but at the rate that LCC's are growing you will in the future. What you posted, in fewer words, is that Delta should become an LCC. What people do have on their mind when they buy coach tickets is cost - plain and simple. Everything else is bonus. Until the majors can compete head to head on costs they are doomed to shrink to the point where their coach pax loads reflect their higher costs. Eventually, the only people flying coach on the majors when there is an LCC alternative will be people that are hooked on FF points, or die hard fans that don't mind paying more for no other reason.
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 2:44 am

Oh puhleeze. Lets see...JetBlue scales back (way back) from LGB-OAK and SLC and LAS after Southwest flexes their muscles, and all we hear is "They are only protecting the slots at LGB"

This is true. They've said that since the day they got the routes.

You really are quite the conspiracy theorist.

N
 
Guest

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 4:24 am

This is true. They've said that since the day they got the routes.

You really are quite the conspiracy theorist.


Did Jetblue tell their ATL employees that it would be only temporary and they would get laid off because they're only flying to ATL to protect their slots? If not, that's a poor way to treat your employees.

Brian - SPOT THIS!
 
DCA-ROCguy
Posts: 4234
Joined: Fri Apr 21, 2000 5:03 am

RE: It's Official...Delta Unhappy With Song

Fri Feb 06, 2004 4:58 am

That is correct DCA-ROCguy. The fewer seats the easier it ease make a profit.DL does not have one single unprofitable RJ route nor will they probably ever. However the trick is putting the RJ on a route which will generate the most profit.

That's a pretty precise statement--how do you know that every one of hundreds of RJ segments is profitable?

DL isn't reducing its flights from IAD to ATL which give customers even more options into Florida then any other airline.

But they're taking out Song, which was nonstop, which means one mark in the defeat column for Song. Is DL upping mainline or RJ capacity to ATL, or are they clearly ending the experiment with additional southbound IAD capacity begun with Song in September?

They knew the 757 wasn't going to give them lower pilot costs, it was they needed the extra capacity to balance the pilot costs.

That's my point. Without lower pilot costs, especially with Delta's high-end pilot contract, Song's in trouble. Even with 757's, which don't seem to be working out as well as Uncle Leo thought.

Did Jetblue tell their ATL employees that it would be only temporary and they would get laid off because they're only flying to ATL to protect their slots? If not, that's a poor way to treat your employees.

This statement makes no sense whatever. JetBlue has not entered any market with the intention of *the market itself* being temporary. Some of the LGB *city-pairs* were known from the beginning to be place-holders to protect slots. But none of the markets themselves were 'placeholders.' SLC, LAS, OAK are all served nonstop from the East Coast.

That Atlanta didn't actually work out is a separate question. Also, were ATL employees given the choice of relocating? Given the way JetBlue is growing, the airline could probably easily provide them jobs elsewhere.

Jim

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