A New Delta "Lite"???

MetroSheriff

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Anyone with any further info???



Delta: New low-cost `product' in development
Another airline might be planned


New York Times News Service
Published August 9, 2002

Delta Air Lines said on Thursday that it was developing a new product to compete with low-cost carriers, and in particular with AirTran Airways, which has been gnawing away at Delta's market share on the East Coast.

Delta declined to say what the product was, but several people close to the company said Delta could be starting another low-cost airline, even though it already runs the stagnant Delta Express.

The company said in a statement that a team was being assembled to develop a product that "meets customer demand for low-price service and builds on Delta's strengths to compete more aggressively with low-cost carriers."

A spokeswoman for Delta said the plan would be rolled out gradually over the next several months, but it would not be fully in place until next year.

Last month, Delta, based in Atlanta, reported a second-quarter loss of $186 million. By contrast, AirTran, based in Orlando, had a profit of $5.1 million.

Delta announced on Thursday that John Selvaggio, 55, Delta's senior vice president for airport customer service, would head the new operation.

In the mid-1990s, Selvaggio served as chief executive of Midway Airlines, a regional carrier that moved from Chicago to Raleigh, N.C., under his tenure. Midway filed for bankruptcy protection after Sept. 11, then shut down last month after announcing that it would begin operating as a US Airways Express carrier starting in October.

Delta does not release financial numbers for Delta Express, which it started in 1996 as a no-frills airline to compete with low-cost carriers. People in the industry, however, generally view it as a failure. The operation was scaled back 50 percent after Sept. 11 and now serves 14 airports on the East Coast.

Glenn D. Engel, an analyst at Goldman Sachs, said Delta Express has stumbled for several reasons. It has costly labor agreements with its unions, Engel said, limiting its ability to keep costs low. Last June, the pilots' union at Delta approved a contract that gave Delta Express pilots raises of nearly 63 percent over five years.

In addition, Engel said, the decrease in passengers after Sept. 11 reduced the usefulness of Delta Express in helping to pull traffic away from AirTran, both to itself and to the mainline carrier.

If Delta does start another low-cost airline, Engel said, it will probably have "the same handicaps as Delta Express."

Some analysts also say that travel patterns have changed and that full-service carriers like Delta should give up on competing head-to-head with low-cost carriers. Delta and its siblings, analysts said, should focus on giving premium service to business passengers and on developing international routes.

Delta has also been talking with Continental Airlines and Northwest Airlines to form a code-share alliance, which would counter a tentative agreement on a similar alliance between United Airlines and US Airways.

But Delta's talks are in the early stages, and there is no promise of success, according to several people close to the company.

In a code-share alliance, airlines can book passengers onto each other's flights, which essentially extends each carrier's route system. Continental and Northwest already have such a partnership. The Department of Transportation is reviewing the one proposed by United and US Airways.


Copyright © 2002, Chicago Tribune
 

NYRANGERS

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That is about all that is out there, as far as I have read. Its been printed that they want to use some 757's for the "new" express. It has also been said that Delta may open a 737-200 category in CVG. I doesn't seem to be much of a novel idea, but who knows. Anyting to get 867 Delta pilots back into a Delta cockpit is good.
 

Tim47SIP

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High pay!

The only problem is the mainline contract cost associated with this type of operation. It would have to be a seperate airline not affected by the high mainline pay and retirement requirements. Those furloughed guys should get first dabs, but my guess is that they will be working for a lot less than they were. Delta almost has to mimic SW and AT work and pay systems to make it work. The Delta mainline guys are going to have to give Delta management the leeway to do it. I guess since ALPA has changed it's wording on alter ego airlines (it's OK now as long as it is under ALPA) as seen in the Mid Atlantic fiasco, Delta should be able to pull this off with or without the mainline guys approval. This will definitely be interesting to watch as things unfold. Any thoughts?;)
 

NYRANGERS

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Re: High pay!

Tim47SIP said:
The only problem is the mainline contract cost associated with this type of operation. It would have to be a seperate airline not affected by the high mainline pay and retirement requirements. Those furloughed guys should get first dabs, but my guess is that they will be working for a lot less than they were. Delta almost has to mimic SW and AT work and pay systems to make it work. The Delta mainline guys are going to have to give Delta management the leeway to do it. I guess since ALPA has changed it's wording on alter ego airlines (it's OK now as long as it is under ALPA) as seen in the Mid Atlantic fiasco, Delta should be able to pull this off with or without the mainline guys approval. This will definitely be interesting to watch as things unfold. Any thoughts?;)
Why is it that you and many others on this forum seem to revel in the idea of Delta pilots loosing jobs or not getting the compensation they earned?

It might not be a bad gig, to make a little less and start competing with some of the low cost carriers.
 

Tim47SIP

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NYRANGERS

"Why is it that you and many others on this forum seem to revel in the idea of Delta pilots loosing jobs or not getting the compensation they earned? "

Dood, did I miss something? I thought that I was pretty specific. I have no want or joy to see any mainline guy furloughed, period! Nor do I think that you should not be paid what you negotiated. I was just stating an opinion of how the system would have to work. I too think it would be great to get you guys back on the payroll. The reason that I made the comment that I did was because of Delta Express. They originaly had a lower pay but were on the same seniority list. And of course, when the contract was approved, the pay was scheduled to increase rapidly (a 60+% increase if I remember right). This simply cant happen again if Delta tries to start another type of Express operation. I was simply wondering how Delta management might get this low cost carrier while dealing with Delta Mainline. It almost has to be a seperate airline not on the Delta mainline seniority list for Delta management to pull this off. Maybe you could provide some input on the subject. :confused:
 

checkessential

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I can only hope this is not another way to bust up what was and still is the best airline out there. Delta does not carry low-cost fliers. They never have. Nor do I wish to deal with passengers who expect first class for their 89.00 one-way fare. Why dump all the resources into lowering standards? SOS........
 

corky

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Delta has asked Boeing to increase the gross of the 717 from 121 to 128k. I don't know if that has anything to do with this
 

FlyDeltasJets

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Corky,

That is very interesting! How did you get this info, and do you have any more?!

I know we are looking at a 100-seat airplane, but have heard the the 717 was no longer in consideration. It appears from your post that maybe it is again. I'd love to hear more.

Feel free to PM me if you wish.
 

MetroSheriff

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Not to imply I am in the know, but I could swear that I read sometime back that Delta had opted "against" the 717. The result was Boeing offering them out at substantially lower prices. I thought that Leo decided that the Boeing didn't fit the strategic plans for Delta's future.

Not to imply that things couldn't change....
 

FlyDeltasJets

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Metrom
I had heard the same thing, which is why I was interested in Corky's post. I do know that Delta is actively pursuing a 100-seater (for mainline). Perhaps their rejection of the 717 was temporary posturing in an attempt to get boeing to lower the price.

Who knows? That's what makes rumors fun!
 

chperplt

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If I remember correctly from previous posts, doesn't Corky work for Boeing?
 

asarjfo

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Everyone is quick to say a low cost Delta will not survive because of pilot pay rates.

Let us not forget that the Delta gate agents and ground support employees don't take a pay cut when they work express flights in MCO and express cities. Don't get me wrong, I am not sticking up for DAL pilots high pay rates....but I do not think it is fair to ask only one employee group to work for a lower rate while everyone else is paid the same.

Though I do not know the exact numbers, I can assure you the Delta gate agents make FAR MORE than SW and Air Tran counterparts.

Just my .02 :D
 

corky

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I do work for Boeing in the aero dept. We were asked to do an increase gross study because delta wants to go ffrom CVG to SEA. we're right up against our 6% growth margin limit and don't know if it can be pulled it off.

I know the airplane is performing tremendously for Airtran. It has exceeded all its performance guarnatees.

I never thought Delta would consider another Douglas born product after the MD90 (MD911) snafu, but the 717 is a different bird. We learned our lesson. I hope for Long Beach's sake, Delta buys it. Otherwise I give the program another 2 years. Maybe American Eagle will be recalling me by then......YIKES!!!
 

dogg

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I thought that Delta already had a Delta Lite. Isn't it called ComAir/ASA. Why not combine those two and call them Delta Express. Get rid of all of the turbo props and go all CRJ with 70 and 90 seaters. You already have a ready supply of cheap pilots working on a separate certificate. That should satisfy the delta guys and it might just work. Could possibly satisfy all that scope stuff going on as well.
 

MetroSheriff

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dogg said:
I thought that Delta already had a Delta Lite. Isn't it called ComAir/ASA. Why not combine those two and call them Delta Express. Get rid of all of the turbo props and go all CRJ with 70 and 90 seaters. You already have a ready supply of cheap pilots working on a separate certificate. That should satisfy the delta guys and it might just work. Could possibly satisfy all that scope stuff going on as well.
I think the idea is to get the furloughed Delta pilots back to work, not to see how low we can place the bar of compensation for management's benefit.
 

bssthound

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WELL put, Lawman!!
 

dogg

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Metro; put down the crack pipe dude.

No one on the mgmt side at DAL cares even a tiny bit about putting Delta pilots back to work. For them the best deal is to get an airtran look alike going with regional pay scales and charge the pax the same price and make more money because everyone working the flights are on D scale wages. Dude they can park 100% of the mainline narrow bodies (737 and dc9), trash the mainline contract and do all that flying with 70 to 90 seat narrow bodies staffed with ComAir/ ASA folks and focus big Delta on wide body or long haul. They would be rolling in cash. End of Story
 

MetroSheriff

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dogg said:
Metro; put down the crack pipe dude.

No one on the mgmt side at DAL cares even a tiny bit about putting Delta pilots back to work. For them the best deal is to get an airtran look alike going with regional pay scales and charge the pax the same price and make more money because everyone working the flights are on D scale wages. Dude they can park 100% of the mainline narrow bodies (737 and dc9), trash the mainline contract and do all that flying with 70 to 90 seat narrow bodies staffed with ComAir/ ASA folks and focus big Delta on wide body or long haul. They would be rolling in cash. End of Story


Dogg,

I agree that management is not real concerned with the the pilots, or when they will be recalled. It is unfortunate that management cares so little for those who made the company sucessful in the first place.

Other than that, your post doesn't make a lot of sense. Is that your strategic outlook for Delta's future?

Or were you just babbling....uhhh Dude?:rolleyes:
 

BigFlyr

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I dont know if Delta has any airplanes parked in the desert other than 727s and 1011s... but if they do, it would be in their interest to get these airplanes flying again along with the pilots that are on furlough. The management at Delta just might be making a plan to get everyone back to work and make some money also. A paid-for 737-200 can still be very competative against very expensive 70-90 seat RJs... Don't you think?;)
 
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