AirTran's going to SFO

[AFcitrus]

Yesterday AirTran announced further expansion the west. San Fran is the next city to get low air fares to the east coast. Check out the story at www.airtran.com.

Service starts in November and will be expanded in January.

Cheers!

 

[Bill Nelson]

If service starts in Nov. then the first flight ought to depart by Jan. with all of the delays at SFO. That is why the original LCC stopped going there.

All in fun. Congrats on the expansion.

 

[General Lee]

In all fairness, Ryan is really going there. Yes, you will get some new 737-700's someday soon--and then you actually will fly there. Will this bite into Delta's profits on the SFO routes? Probably. I hope it spurs them into more competition, and increasing the utilization of the planes. The more you fly the planes throughout the day, the easier it is to pay off the fixed costs and hopefully make some profits.........Look at what Jetblue did for our ATL-LA Basin flights(and Airtran I guess too)--we will have 22 flights a day to the Basin (15 to LAX, 5 to SNA, and 2 to ONT). The fares have probably gone down, but the passengers probably like the flexibility. But, you are probably right about this---the days of $1500 one way walk up fares are gone.......But not management bonuses.....?

Bye Bye--General Lee

 

[FLB717]

Yes and CL65-700's fly to places MD-88's once did. But the really cool part is we get our routes back Thier (Ryan) contract expires march of 2005 at the latest. Not keen on it, Id rather we flew it to start but that is better than loosing a route. i wonder if we will see Song on that route?

General,
Did you hear Delta is bying Hooters Air..Its going to be called Thong..

 

[General Lee]

FLB717,

You are so correct. (Actually, the CR7's go where the MD-90's flew out of DFW--not MD88's really---hey, there is a difference, kinda) And you have the same "problem" in ATL--with Airwhisky. I know, it really isn't a problem for you guys because you want to expand to other places......

As far as where Song will eventually fly, I don't know but there is PLENTY of speculation. Some people think that Song will take over mainline (and with a 7.0 CASM--it just might). I still think Song will get all 120 of our 757s and fly point to point on mainly leisure routes or high density routes. We will still get 120 more 737-800s and eventually some sort of 100 seater---and I believe those will feed CVG and ATL, along with 1000 RJs. We will still have a large INTL presence at ATL, CVG, and JFK--so we will have to still feed those places. All of those RJs and 738s etc will unload in ATL and onto 767-400's to large FLA cities. (The 767-400s will also go to HNL, LAX, LAS, and SFO probably) Seasonal service will still continue, with Summer nonstops on the 767 to ANC for example. It probably won't look the same, and SONG will be larger in years to come probably. It will be interesting.

Bye Bye--General Lee

 

[Ty Webb]

Sorry, General, but we're gonna have to take you to task for this one. We are paying Ryan to perfom the flights for us (in our paint scheme, no less) until the 737's we have ordered get here. To infer otherwise is a little ridiculous, considering the fact that fully 49% of "Delta" flying is done by other companies- Skywest, Chatauqua, ASA, Comair, etc.


Look at what Jetblue did for our ATL-LA Basin flights(and Airtran I guess too)--we will have 22 flights a day to the Basin (15 to LAX, 5 to SNA, and 2 to ONT).

Yeah, but until they can make money doing it, it's like the old joke- they're losingmoney onevery flight, but they're making it up in quantity.

 

[Hugh Jorgan]

"busting" a gut over that one...

General,
Did you hear Delta is bying Hooters Air..Its going to be called Thong..

GOOD ONE!

 

[FLB717]

General,

SONG 7cents CSM? YGBSM!

Ive got to hear this, how is that possible

Pilots = DAL Pay
Mech = DAL Pay
F/A's = (-) DAL Pay
Fuel Burn = Same
Maint = Same
Entertainmet Package ?1 million per A/C
DAL 757 (est 160 seat x 300 oneway) = 48,000
Song 757 (same really) (199 seat x 170) = 33,830

Smoking Crack at Work with Permission = Pricless

 

[General Lee]

FLB717,

That is correct---and was stated by good ole Fred Reid, our President, in the ATL roadshow two weeks ago. You have to rememeber that Song uses a lot of other parts from mainline Delta to help with its efficiencies--like Delta Technology and other subsidiaries. The only expensive part is the pilots--and it looks like that won't change much. The Delta mainline CASM was better than NW, and at least 1 full point better than AA and UAL. The Song employees are the same as most LCC's in terms of wages, except the pilots. With 199 seats on the 757s, is there some way you couldn't see a 7.0? Song uses Delta's fuel hedging and other programs. And, as we all know, Song will get bigger and help Delta.


Hugh,

I used that "Thong " joke on here a while back-----due to the fact that we fly a lot to south Florida.


Ty,

Maybe you don't read the press a lot but the trends have shown that this summer was a good one for most airlines. Here you go:

Reuters
U.S. airlines monthly data shows encouraging signs
Thursday August 21, 5:18 pm ET


CHICAGO, Aug 21 (Reuters) - Large U.S. airlines in July had some of the most encouraging signs on revenue in months, although the typically slower fall travel season still casts uncertainty over the industry, analysts said.
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"All else equal, July data represents the first encouraging revenue performance since last December and presumably this time around will not be followed by a war," J.P. Morgan analyst Jamie Baker said in a note released on Wednesday.

The July figures represent the first instance of domestic fares rising since March 2001 and the results are likely to drive modest positive estimate revisions, despite last week's blackout and softening August domestic traffic, Baker said.

"Make no mistake -- these are strong results and even we are impressed," Baker said, adding that domestic traffic appeared to start dipping in late July year-over-year from flattish trends.

The American Stock Exchange airline index (AMEX:^XAL - News) rose about 2.3 percent on Thursday. The index is up about 88 percent since the end of March when shares were hammered by the Iraq war.

The Air Transport Association, an industry trade group, told analysts that unit revenue for U.S. airlines rose 8.1 percent systemwide in July from a year earlier. Unit revenue is a key industry measure of the money an airline generates by flying one seat one mile.

Domestic unit revenue rose 10.2 percent in July from a year earlier, continuing a sequential improvement in year-over-year monthly figures that started in May, analysts said. Latin America flying was next, then trans-Atlantic and Pacific.

Analysts said they would watch closely to see if airlines restore too much capacity before the system can absorb it and how airlines handle the return of government security fees in October that were suspended in June because of the Iraq war.

Airlines raised most fares by $10 per round-trip when the security fee of about the same amount was suspended, which helped support domestic yield recovery, Credit Suisse First Boston analyst Jim Higgins said in a note Wednesday.

Labor cost cuts at large airlines and a rebound in the U.S. economy should support airline stocks, Deutsche Bank Securities analyst Susan Donofrio said in a note. Donofrio has said most of what could go wrong in the industry may already have.

"(Airline share) prices look right, but the timing may be early," Blaylock & Partners analyst Ray Neidl said in a note. "The industry is heading into the slower fall season and September, post Labor Day, remains uncertain."



Uncertainty is clear, but we all know that the Fall is tough. For the Summer though, our yeilds were up, and we even had an operational profit for June. I am sure we will see the same for July and probably AUG. Now, I am not saying that the Sept-OCT time range will be easy for any of us, especially since it is always slower than Summer with pax going back to school etc. But, after the Fall, things will get better. You are correct that the fares have been lowered on those flights, but they have still been full and we already drove Jetblue out of the LA--ATL market (ok, we got them to ditch 2 out of the 3 flights). And, I know all about Ryan and your deal with them---I was only playing with AF Citrus' words. In reality, you are not flying those routes, and we are not flying the DCI routes.


Bye Bye--General Lee

 

[~~~^~~~]

Will this bight into Delta's profits on the SFO routes? Probably. I hope it spurs them into more competition, and increasing the utilization of the planes. The more you fly the planes throughout the day, the easier it is to pay off the fixed costs and hopefully make some profits.........Look at what Jetblue did for our ATL-LA Basin flights(and Airtran I guess too)--we will have 22 flights a day to the Basin (15 to LAX, 5 to SNA, and 2 to ONT). The fares have probably gone down, but the passengers probably like the flexibility. But, you are probably right about this---the days of $1500 one way walk up fares are gone.......Bye Bye--General Lee

Fred Reid talked a lot about this route. At one time it had a 100% profit margin. Delta took in $2.00 for every $1.00 in expenses to operate the flight. Now it has dropped to barely profitable. Sure everyone loves it, but something has to make a profit. AI's single flight out to SFO is enough to make Delta have to match fares. The minute it happens, zip, there goes another profitable route.

I've thought Bloomington was a cash cow route because of State Farm and other large, wealthy, Companies in the area that have a lot of corporate travel.

I'm very pleased with the value of my AI stock, but I'm more concerned about the health of Delta. We have got to get mainline on track - Thong might be just the ticket - but we are going to have to get some of Skywest's FA's!

 

[FL717]

I'm very pleased with the value of my AI stock, but I'm more concerned about the health of Delta. We have got to get mainline on track - Thong might be just the ticket - but we are going to have to get some of Skywest's FA's!

You are absolutely... 100% correct. YOU should be running Delta. Delta is making a huge mistake by runnimg at a loss, rather than focus on making a profitable operation.

Airtran had a net profit of $50 + million last quarter. Subtract the government giveback and the real number is $20 + million.

Here are the facts of whats really going on:

AirTran can continue to expand and be profitable at the current airfares.. fares that we set due to us being the low cost carrier.

Delta cannot by and large be a profitable entity at the current fares.

Delta could raise their fares "somewhat" in order to at least be a truely profitable operation, even if only by several dollars.

However... Delta refuses to raise their fares by even $5.00 a ticket because if they do, we also can raise our fares $5.00.. thus make even more of a profit. Delta would rather operate at a loss, attempt more strategic wrangling, in an attempt to stymie AirTran, crush the competition... rather than focus on their own profit mending. All in an attempt to be the dominant ball buster.

AirTran and Southwest have both grown in BWI, yet both charge what they need to remain profitable, yet staying away from the "I'm gonna rule the world mentality".. and guess what - both airlines are profitable there.

Legacy carriers over history have never shown that ability... at least not in the long term.

Those are the cold hard facts... and I think its pathetic.

 

[Ty Webb]

Originally posted by ~~~^~~~
AI's single flight out to SFO is enough to make Delta have to match fares. The minute it happens, zip, there goes another profitable route.


It doesn't need to be that way, though. We can only fit so many people on our airplanes, and there are people that will never fly on AirTran, just as there are people who will never fly on Delta (and I don't just mean the people who have matching Glad Heavy Duty Yard Bags for luggage!); I have said before- Delta needs to focus on being Delta instead of cutting off their nose to spite their face.

Those dinosaur tactics haven't worked against AirTran yet, and we continnue to make money, while they continue to lose money trying to protect "their" marketshare.

Instead of making a better product- they have gutted it, and as AirTran improves their quality and Delta cuts back, the difference beecomes smaller and smaller.

I would have liked to see them respond by bettering the Delta product, and making fares more reasonable across the board . . . . I guess that's what they're trying to do with Song, but it doesn;t bode well for mainline, with 49% DCI and Song, mainline Delta will likely be reduced to heavy transcon and int'l. The pilot group was wise not to take the bait . . .

 

[General Lee]

Here we go again. Pilots determining marketing strategies. That is what we pay the VP's to do--and they get huge bonuses on top of that. I am sure Airtran will go after a lot of our routes, and eventually we will have to lower a lot more fares. But, the difference between our airlines is what will attract the passengers. Our Song product will probably grow, and that will be a better product (with the entertainment systems in each seat etc, and the food...) than the Airtran product. We have a large Codeshare with NW and CO that will bring in an extra $200 million a year in revenue. We have an INTL side that brings a lot of connecting passengers--from Tokyo (on 777's starting in JAN) to Moscow--Airtran does not. We will have 1000 total RJs that will connect smaller towns with ATL and CVG--and fill our planes to SFO and LAX etc. If we utilize our planes more (like they say Song is doing, which may occur at mainline too--50 min turns etc...) we can deal with the lower fares because we can fly the planes more, which allows for more revenue and ability to pay off the fixed costs each day sooner. We are the only Major that is really trying to address the LCC's, and in the process we are currently creating one that will bite into their markets too hopefully. I don't look down at Airtran, and I know that they and Jetblue are good competitors, but I don't like it when people try to get on the gang wagon and try to jump all over the best performing Major out there. We had a very good Summer (operating profits for June, and probably July and AUG)--and we are preparing for a slower Fall--along with everyone else.

As far as more of Song and the Skywest flight attendants---we will probably see more of Song (especially if the CASM really is 7.0), and our cute and young flight attendants have been furloughed. And Fins, you never did respond to my remark about Fred Reid's supposed Chart at that meeting describing the CASM comparison between Delta and AA/UA.... Did he tell you that it included your inefficient RJ's at Comair and ASA???? Hmmmmm.

Bye Bye--General Lee

 

[FL717]

Here we go again. Pilots determining marketing strategies. That is what we pay the VP's to do--and they get huge bonuses on top of that.

I'm sorry. I thought this was a forum for all of us to post airline related topics. I must have stumbled on the "Executives Only" or "General Lee Only" forum.


Our Song product will probably grow, and that will be a better product (with the entertainment systems in each seat etc, and the food...) than the Airtran product. We have a large Codeshare with NW and CO that will bring in an extra $200 million a year in revenue. We have an INTL side that brings a lot of connecting passengers--from Tokyo (on 777's starting in JAN) to Moscow--Airtran does not.

My point exactly. All of these things Delta has created... and yet they still got to try and squeeze AirTran... the company that is what 1/100th the size and scope.


We will have 1000 total RJs that will connect smaller towns with ATL and CVG--and fill our planes to SFO and LAX etc. If we utilize our planes more (like they say Song is doing, which may occur at mainline too--50 min turns etc...) we can deal with the lower fares because we can fly the planes more, which allows for more revenue and ability to pay off the fixed costs each day sooner.

AirTran management disagrees with that assessment.. and thus far AirTran management have proven correct.


We are the only Major that is really trying to address the LCC's, and in the process we are currently creating one that will bite into their markets too hopefully.


"Address the LCC's" .... [translation] = stamp them out.

Exactly what my original post stated... just not in the politically correct "Delta Marketing Stategy" terms you chose to quote.

 

[Heavy Set]

FL717,

What do you expect Delta to do - roll over and die?

Why should Delta cede any more market share? It will adapt and modify its marketing mix and better utilize its assets (i.e., fleet, strategic alliances, expansive route structure and frequent flyer program). This LCC situation will actually help Delta become a more efficient and cost-conscious airline - one that can compete more effectively against AirTran, JetBlue and Southwest. Meanwhile, the other majors operate without a plan of attack and continue to focus on cost-cutting. Song could eventually operate 100+ 757s (with a product that low-fare customers enjoy - not just a cattle car) throughout the system - directly competing with your product. Delta will become a more formidable airline in the future because of AirTran, Jetblue and Southwest. Delta is adapting to the market much faster than the other majors - and for that it should be applauded...

Just my $.02

 

[Ty Webb]

Delta's strategy, to date, has not been effective. It is pretty much the 1970's -1980's era strategy of taking huge losses to keep market share . . . hoping that the competition will go under. It doesn;t work when the competiton, despite your best efforts, is still making money, and you are losing money.

While it has resulted in huge losses for Delta, AirTran has been growing at an annual rate of over 25%, and out of Delta's "Fortress Hub".

The point I am trying to make is that what you guys are doing isn't working. If that is pilots "playing management", then so be it. I was in the business world before I logged my first paid hour as a Commercial Pilot, and flying airplanes didn't cause me to somehow part with the knowledge I acquired while not serving as a yoke and throttle operator. . . . and I am a Y&T Operator by choice, so don;t anyone get their pantaloons in an uproar- it's just a joke, fercryinoutloud.

Song will not succeed as a LCC per se, what it will do is get the "camel's nose under the tent" to force changes company-wide. That is why the pilots union is not going along, and, as I said before, i think that is smart, because "as goes Song, will go mainline".

And the RJ's? You can keep 'em. They can;t compete against the 717. The costs are identical, but with less revenue, smaller cabin, single-class seating, and, let;s face it, less service. How is 1 F/A for 50 pax on a short flight going to compete with 3 F/A's for 117?
Do you guys even have booze on those RJ's? All I seem to get is water or lemonade . . . . . maybe the FA's are holding out on me.

At least on our flights, I can change my shirt and enjoy some of that AirTran hospitality on my way home!

 

[FL717]

FL717,

What do you expect Delta to do - roll over and die?

Why should Delta cede any more market share? It will adapt and modify its marketing mix and better utilize its assets (i.e., fleet, strategic alliances, expansive route structure and frequent flyer program). This LCC situation will actually help Delta become a more efficient and cost-conscious airline - one that can compete more effectively against AirTran, JetBlue and Southwest. Meanwhile, the other majors operate without a plan of attack and continue to focus on cost-cutting. Song could eventually operate 100+ 757s (with a product that low-fare customers enjoy - not just a cattle car) throughout the system - directly competing with your product. Delta will become a more formidable airline in the future because of AirTran, Jetblue and Southwest. Delta is adapting to the market much faster than the other majors - and for that it should be applauded...

Just my $.02

I understand and appreciate your $.02. Mine is worth about half of that.

I don't expect Delta to roll over and die. I also want to add the following. Several years ago Continental was the airline that I wanted to work for. I felt they were the "best" out there. They have/are recovering very nicely... though I don't seem to find many of their pilots here. After selecting and going to AirTran because I thought they would be best poised for what is happening now, I have come to know and respect Delta. If there was a carrier that I would put at the top... it is Delta. You all are a great group... and I mean that.... General Lee and FlyDeltasJets... that means you guys.

I just think that your management could do better.. and quicker than they are doing. Go be #1. The market is ripe and ready for some innovation and you all are best poised for it as far as majors go... in my opinion. I do agree with your assessment that "if" all comes to fruition.. Delta will be a different animal... and one that can possibly co-exist with many others.

AirTran's success has been "somewhat" proportionately relative to Delta's success. That is changing.. for now.

 

[General Lee]

Ty,

Man, you are sooo cocky. It kills me. You really know it all, don't you? Everybody stand up and give this guy a hand!!! He thinks he knows it all. You say that Airtran has been expanding at a rate of 25% per year at our FORTRESS hub, right? With what gates? Wrong. You have expanded 100% at Flint. Yippie. And we will be getting some 100 seaters to combat your 717's--except our RJs will still compete with you on the Flint-ATL runs... And I love the point you try to make saying "what we are doing isn't working." Hey, we had a profitable summer operationally. We made money in June. What is hurting us is our debt load, and that will take a while to fix, and we know that. We are the only Major to think outside the box and actually do something about you and the other LCC's---we created a brand that will combat Jetblue primarily and you a little on the East Coast flying. No one else has even tried something to fight you, and we still have a premium product in mainline, even though the flight attendants are a little older. We have a better frequent flyer program with NW/CO onboard. That is the truth. You need to quit being so jealous. You hate it when you see those DL 777's, don't you? You do, I knew it. Ok bud, time for you to simmer down. I like your ANALYSIS of Song. You don't think it will work as a LCC.......Hmmmmm. Well, we better shut it down now. Let's lay off everybody becasue TY says it WILL FAIL. What? The loads are better than expected---77% in July---and is expected to get better in the cold winter and when the entertainment systems actually are put in eventually. Your 717's competing up and down the east coast will not compare----no entertainment except your inflight magazine. Some of the Song procedures may eventually go over to mainline, but not everything. So, you had business experience before you started flying right? Managing a Quiznos doesn't count. I think the mangagement at our Airline knows a little bit more than you do, even if they are taking huge bonuses. But, you know better. What a joke. I am glad you can see into the future. Airtran will be the only airline left except the new Braniff flying old DC-9s between Houston and Hartford. Whatever man, I have to get some sleep---except I have laughed so much I don't think I can do it. Good night buddy.

Bye Bye--General Lee

 

[Ty Webb]

No, General Ree, man with hole in pants feel cocky all day. No hole in my pants; I just call 'em like I see 'em.

You say that Airtran has been expanding at a rate of 25% per year at our FORTRESS hub, right? With what gates?

Well, Chief, those are the growth numbers. When I started here about 21 months ago, we had 360 flights a day . . . now we have 500 . . . so, you do the math. Sure, some are point-to-point, and some are out of BWI, but you know what? The point isn;t how many gates or flights at ATL, it is how many flights we have added that compete against you . . . if we don't go through ATL, it's even better! Lower cost, direct flights, less delays . . . . Duh! Geez, I wish all the "Directs" we have added went through ATL . . . . not!


And we will be getting some 100 seaters to combat your 717's-

OK . . . . bring 'em on. What do you really think they will do that the 7-0 seaters and the MD80's and the B737's can;t do? Give you the expense of a whole 'nother training program, another trainign event, and another aircraft type to add to your mess? Have at it. Put your name in for it.


Quit being so jealous. You hate it when you see those DL 777's, don't you? You do, I knew it.

Uh, what is this? Nursery school. Yeah, I salivate when I see some crusty old dude taxiing at about 4 KTS down "L", flatulating uncontrollably, while the FO nervously scans the seniority list, hoping like hell that it's not his turn to put on the orange apron and go "defend the profession" . Yeah, I'm jealous as hell. Where do i sign up?

Ok bud, time for you to simmer down. I like your ANALYSIS of Song. You don't think it will work.......Hmmmmm. Well, we better shut it down now. Let's lay off everybody becasue TY says it WILL FAIL. What? The loads are better than expected---77% in July---and is expected to get better in the cold winter and when the entertainment systems actually are put in eventually.

That's nice. Loads are one side of the equation . . . but this is a business, not a charity. Yeah, I know, Mama Delta won't tell us how much this venture has lost so far . . ."Let's put some lipstick on this pig" . . . . . .



Your 717's competing up and down the east coast will not compare----no entertainment except your inflight magazine.

You just don;t get it, do you? Paying passengers aren;t finding what you guys are offering worth it these days. Entertainment is a plus for long haul, not short haul.

So, you had business experience before you started flying right? Managing a Quiznos doesn't count.

Ho, ho, that's pretty funny. I'll give you that.

I actually have quite abit of real business experinece- I know the difference between an Income Statement and a Balance Sheet, I'll tell you that.

I think the mangagement at our Airline knows a little bit more than you do,

Well, that trul;y remains to be seen. So far, I could probably do better throwing darts at a board. . . . no sh!t.


Airtran will be the only airline left except the new Braniff flying old DC-9s between Houston and Hartford.


Magic 8 Ball says "Ask me again later".

 

[Heavy Set]

Hey Ty,

Given your unbelievable financial and managerial prowess, you should absolutely run for governor of California!!!! Maybe Ryan will start Sacramento service to Atlanta and you could commute...

FL717,

I appreciate your comments. I do not work for Delta - I just enjoy reading General Lee's posts - that guy knows his stuff and he has ball$.........