Customers flock to delta.com

[FDJ2]

Delta Customers Flock to delta.com Seeking SimpliFares
Wednesday January 12, 9:30 am ET delta.com ticket sales jump 60 percent first week

ATLANTA, Jan. 12 /PRNewswire-FirstCall/ -- Travelers are responding in record numbers to Delta's announcement of SimpliFares last week. The industry- changing simplified fare structure drew a 300 percent increase in single day traffic to the airline's website, delta.com, on Jan. 5, shattering all previous one-day sales records.

Immediately following Delta's national launch of SimpliFares, customers overwhelmingly responded by purchasing thousands of tickets online. In the first five days after the national launch, ticket sales on the airline's website increased 60 percent over the same period in 2004.

"Our customers are the ones who have made SimpliFares such a success," said Paul Matsen, Delta's chief marketing officer. "Delta is peeling back layers of fare complexity and replacing them with an easy-to-understand, everyday value-priced alternative. We want every customer to know they are getting real value for their money. This is a fundamental component if we are to regain our customers' trust."

Based on customer response, Delta achieved the following milestones:

• On Jan. 6, delta.com ticket sales doubled the amount sold on an average day;
• At peak volume, delta.com ticket sales totaled nearly $1 million per hour over a period of several hours; and
• Delta.com recorded more than $10 million in daily revenue for the first time since it began selling tickets in 1996

 

[MedFlyer]

On the upside, more people booking through delta.com means lower distribution costs for Delta. However, it's way too early to know if this is just a temporary spike (due to all the media attention) or if DL is seeing a permanent shift toward more delta.com bookings.

But the bigger question is whether DL is really getting more revenue from Simplifares? All these extra bookings don't mean anything if all DL is selling are dirt cheap $99 transcons. It's way too early to know the real revenue impacts.

 

[Ihaveflown]

Is Delta going to be able to handle such an influx of passengers? They are the worst at overbooking and bumping passengers from flights. I don't want to be negative about this new approach, however their history isn't so good in the customer service department.

 

[canyonblue]

ATLANTA, Jan. 12 /PRNewswire-FirstCall/

PRNewswire? And in other news Southwest was clocked doing 60 on taxiway lima.

 

[SWA GUY]

Not only was Southwest doing 60 on Lima, they just cut Airtran off.

 

[~~~^~~~]

Glad to hear customers are buying, I'm not. I went and priced a last minute flight to TYS from ATL and still got a quote that was far in excess of the Simplifares rate, around $750. So I fired up the trusty Beech and just flew myself up there. Problem solved and you can't beat the schedule.

 

[fletch717]

I did'nt realize cattle could move that fast!

 

[Stifler's Mom]

PRNewswire? And in other news Southwest was clocked doing 60 on taxiway lima.

Not only was Southwest doing 60 on Lima, they just cut Airtran off.

Ha Ha

 

[crashpad]

Looks like the CNN commercials for Delta disguised as news stories paid off.

 

[General Lee]

Nobody really knows if those computer hits were for $99 fares or $499 fares. The capped first class fares of $599 each way may be very popular also, and the path to becoming a medallion status flyer with great perks is now easier and rewards our best customers. That is why we have two daily 767-400s from ATL to HNL nonstop----not that those flights are money makers, rather to reward our best customers. (and to ship pineapples back to ATL from HNL on the return).



I hope it works too.


Bye Bye--General Lee

 

[xanderman]

You could have all the people in the USA book a flight on your airline but if your airline is not charging prices that reflect your operating cost then you are doing yourself a disservice. Either Delta (and AA/CO/NWA etc) will ask for more concessions or the prices will eventually have to come back up... Any guesses as to which the airline will ask for first?

Andy

 

[canyonblue]

Some, if not all, employee groups are going to subsidize those fares. Management is playing a pretty big game of chicken. I suspect they know who will bail them out if it fails, as the ATA pilot group is the only one around this industry that put their foot down and said no to their management.

 

[Bandit60]

I did'nt realize cattle could move that fast!

Love your avtar....Everything is ballbearings isnt it?

 

[General Lee]

Xanderman,


Maybe you haven't been paying attention, but Delta has trimmed its costs a lot. We, the pilots, gave up $1 billion a year for atleast 5 years. Everyone else has given atleast 10%, and that doesn't include huge benefit cuts including pension cuts for non-union people. We just retired over 900 senior Captains, without recalling as many, and the stews are getting hit also---with INTL ops losing atleast one stew per flight. Song has a different pay scale for everyone but the pilots---which saves them money in the long run. Gas prices are down from the all time high of $55 a barrel, but still are higher than normal. We have 20,000 less people working for us than pre-9-11. I think they have addressed the costs for now. The fare cuts were in the original plan---and that was addressed to the pilots prior to our last agreement.


Bye Bye--General Lee

 

[xanderman]

Xanderman,


Maybe you haven't been paying attention, but Delta has trimmed its costs a lot. We, the pilots, gave up $1 billion a year for atleast 5 years. Everyone else has given atleast 10%, and that doesn't include huge benefit cuts including pension cuts for non-union people. We just retired over 900 senior Captains, without recalling as many, and the stews are getting hit also---with INTL ops losing atleast one stew per flight. Song has a different pay scale for everyone but the pilots---which saves them money in the long run. Gas prices are down from the all time high of $55 a barrel, but still are higher than normal. We have 20,000 less people working for us than pre-9-11. I think they have addressed the costs for now. The fare cuts were in the original plan---and that was addressed to the pilots prior to our last agreement.


Bye Bye--General Lee

My hat is off to you and your pilot group for "taking one for the team" but let's not forget that operating margins in the airlines are traditionally thin. A tenth of a cent (CASM) can make it or break it when it comes to the competition. Are you implying that your costs are inline with AWA or JetBlue or SWA or AirTran? My point is with Delta's costs (even after the cuts) they cannot sustain this program. They will lose money. So, having said that, they will either ask for more concessions or find other ways to offset the cost of doing their business. If your company can do it, great! But I believe the reality is those fares will eventually come back up. JMHO.
Andy

 

[FDJ2]

My hat is off to you and your pilot group for "taking one for the team" but let's not forget that operating margins in the airlines are traditionally thin.

No doubt operating margins in the industry are traditionally thin. DAL's future success, like every other airlines, will depend on whether or not it has greater revenue then costs. DAL will announce its 2004 results next week, but from the 2003 end of year report we can see that DALs' total operating revenue were $13.3B whereas its total operating expenses were $14.1B. Obviously not a profitable year. But this is not 2003, DAL announced in November, after the pilot deal, that it is on track to reduce operating costs by $2.3B/year by the end of 2004. Will that reduction in operating costs be enough to make DAL profitable? Well time will tell. Simple math says yes, if all else is constant.

 

[canyonblue]

C'mon, half those web hits were from General Lee. 3,841 posts, I would expect he had the time.

 

[Caveman]

I think the Simplifares program will work. Most people are just looking for a reasonable fare without a lot of mumbo jumbo saturday overnight no changes crap built in. Charge a reasonable rate, make the customer understand that the ticket is flexible for a modest fee and assure him that he is getting the same deal as everyone else and most folks will pony up the dough.

The problem has been that the last minute flier has been subsidizing the guy going to Hawaii that bought his ticket last year for $80. Simplifares builds in a modest savings if you can plan your travel 3 weeks in advance but it doesn't shaft the business traveller that has to go to DSM tomorrow. That's all most folks are looking for: reasonable. They aren't all trying to get a $39 ticket to LAS.

 

[General Lee]

Canyonblue,


Thanks for caring. I do have the time when I am at home between trips, because I really enjoy this board. I probably respond more than once a few times a day. Yeah, I have a lot of posts, and I have enjoyed every one of them.


As far as simplefares, I also think it will work. When two guys sitting in coach compare ticket prices and one was $1200 and the other was $200, that really can pi$$ off a businessman concerned with costs. Now, the passengers will know that they won't be gouged and can get a ticket last minute for a more reasonable price. Airtran has been doing that all along with success, and now we will fill our planes with more mid level fares, instead of the extremes----too few $1200 ones and mostly $199 fares. That doesn't keep customer loyalty and could hurt us in the end.


Xanderman,

Our airline is not the average LCC, we actually have several types of airlines within one corporate structure. We have a very successful INTL portion, which doesn't compete with many airlines on certain routes---like to Moscow, or Barcelona, or Bogota. Those flights can have any type of fares and will probably stay successful. Then we have a domestic operation that has two parts--mainline and Song. Song was created to compete with Jetblue on the East Coast, and supposedly does well---according to our CEO. It has a simple cost structure that pays most of the employees (not the pilots) differently than most legacy carriers and more like LCCs. Our Mainline domestic operation is undergoing some change, and a lot of that is to combat the likes of Airtran and Southwest. We have all taken pay cuts and they will introduce a plan called Clockwork to get more efficiency out of our current fleet. There are also other things going on with this plan, and that was all known prior to going into pilot negotiations. Then we have an RJ network---Delta owns more RJs than anyone else. That portion of the corporation has it's own costs, and they report profits etc and assign aircraft to certain routes. Even though the CASM for most of the RJs is in the 15-17 cents range, they still report profits. With all of this together, we are called Delta Airlines----a lot different than Airtran or America West. We have a more complex company---and you can't expect us to have the same costs as you guys. We all have taken pay cut hits, and there may be more in the future---but everything does not rest on our domestic mainline operations----we have other parts to the whole pie. Have a good one.

Bye Bye--General Lee

 

[Russ]

All that done General and DAL is still losing money. Okay to be optimistic, just don't be myopic. There is still more pain to be absorbed by the work groups at DAL vis a vis pay and work rules before D returns to profitability.

I don't wish it upon you and your fellow employees but its a comin'
As goes DAL's and UAL's fate, goes mine, so I'm rooting for your return to profitability.