Delta Air to Unveil Plans For a Low-Cost

[cl65@350]

any delta guys want to comment on this LCC...we have the comments from LCC guys...what about a real delta pilot???

from what i hear (and i am honest when i say it is 3rd to 4th hand rumor) comes from a friend at DAL...the 757's around 30-50 of them will be retrofitted to 180-195 seats...that means NO first class but SWA style legroom and maybe new seats...the galleys will be taken out to allow for more room...coat closets etc...i think the rumor is they will provide inflight entertainment LIKE jetblue...pilots will be delta pilots at regular astronomical wages BUT that could change as quickly as it did for UAL...flight attendants will be mostly newhires at typical LCC start up wages..so young f/a's most likely...not 50K a year plus senior ones...the kicker is 40% more UTILIZATION per a/c per DAY...HOW? i have no idea, but it has to do with point to point SWA style flying....2 boarding doors maybe...also probably some stategic flying through LAS to pick up some all nighters...or start out on the east coast in the morning...end up west coast at night and fly the all nighter to east coast to start all over again...LIKE AWA has been doing for years. granted very LOW yield but coupled with productivity MAYBE it could work...

ALSO...i would like to know if any of you have actual data showing DLX posting profit/loss to offset mainline...i was under the impression that the financials of DLX are strictly confidential and hidden in the mainline balance sheet so there is no way to see IF DLX has been profitable or NOT...

by doing this the competition wouldn't know if they were coming or going...even if they can break even with fuel hungry 737 200's and 50K a year plus F/A's, mechanics, etc...there could be a market for this new LCC...737 200 burns a TON of gas with only 119 pax...757 burns relatively much less gas and can carry another 60-80 pax LONG distances...to me...and i am no math wizard...the amount of revenue added with increased capacity AND productivitywould EASILY offset the pilots making over 200K to fly it!

unfortunately, as popular as jetblue is in JFK...as stated in an earlier post....passengers have shown that they care more for price, then service...if the same product can be purchased for less money i don't think that pax these days will chose one carrier over the other for emotional reasons...you may be the darling of the industry today and the heel tomorrow...just the way it goes...it is up to management to keep up with the trends and adjust business to current trends...the trend now is...go to computer...type..www.travelocity.com...click A to B and look for the lowest ticket....that probably will change when the economy gets back to normal but for now, as evidenced by airfares at historic lows, that is the way it is....and btw...when travelocity comes up with the cheapest fare it could read ANY airline not just a LCC! okay i am getting typers cramp here!

oh well...i guess NONE of us will know how this thing will work for years to come...and all of our opinions are FREE...sometimes you get what you pay for!!!!!

 

[King Nothing]

humm,

"any delta guys want to comment on this LCC...we have the comments from LCC guys...what about a real delta pilot???"

No Delta pilot visits this board, they haven't a clue what's going on in the industry! Do you honestly think main line Delta pilot's are going to operate like the SWA, JetBlue, and AirTran pilots...there too used to dragged thier feet, inputting data into the computer slow, waiting for the numbers ect. I just don't see it happening.

KN

 

[Jeff G]

Great ! So what is different this time.

The difference is that Southwest isn't the target this time.

 

[Jeff G]

Well maybe its not low cost but it sure generates positive cash flow. Just look around. DCI is growing like a weed.

DCI is doing fine, but it's not a LCC. Everyone talks about how well RJ's could do against a LCC like Southwest, but the RJ carrier would be murdered. Wrong niche. You need great revenues to make an RJ profitable, but your average LCC would undercut you and have you for lunch.

 

[Old Crow]

If only DCI could fly B717's. I know the Delta boys won't let that fly, but maybe they should at least consider the fact that they have enough guys furloughed to fill the seats and the increased profitability of Delta would keep them from taking pay cuts in the near future.
I'm sure Joe Leonard dreads the day that DCI can fly 100 seat a/c.

 

[rjcap]

Jeff G,

Everyone talks about how well RJ's could do against a LCC like Southwest, but the RJ carrier would be murdered.

So basically the higher CASM of the CRJ puts us at a disadvantage to a larger ( 737) aircraft. Thats easy to fix. Throw us a few 717's and then tell me if we (DCI) are not a low cost carrier.

Also,

Do any of you reallly think you can hire FA's at $19.00/hr gate agents, rampers etc. at lower wages and get the same caliber of people at something like a Southwest or the newer Jetblue ?

If you think so come on down to Atlanta and let me walk you around C terminal !!! Its an absolute goat f--k.

 

[Jeff G]

Jeff G,



So basically the higher CASM of the CRJ puts us at a disadvantage to a larger ( 737) aircraft. Thats easy to fix. Throw us a few 717's and then tell me if we (DCI) are not a low cost carrier.

If you were operating much larger equipment, and kept your costs down, you would then be a LCC. But RJ's won't cut it in that arena. RJ's are not LCC killers. If Delta would let you, you could indeed become a LCC powerhouse, but that'll never happen.

Do any of you reallly think you can hire FA's at $19.00/hr gate agents, rampers etc. at lower wages and get the same caliber of people at something like a Southwest or the newer Jetblue ?

Maybe. But it'll take more than the usual care in selection. You can find good people everywhere, but you have to treat them right to keep them. Despite rumors to the contrary, LUV and JBLU don't pay bargain basement wages. They do get much better than average productivity, though. That's what really makes the cost difference.

 

[General Lee]

RJ CAP,

First of all, you are jealous, and do not want the LCC to work. It is obvious. You want the status quo------you have no idea what you are talking about. The LCC will work for several reasons. First, the airplane---the 757. It has more seats and you can spread the costs out more, it is also more fuel efficient and burns the same amount of gas as a 737-200 but with 79 more seats (More than your CRJ70). Second, the labor difference. Everyone except the pilots will be on a lower pay scale, and be new and bouncy. The Flt attend will start at around 19K a year, new gate agents, new rampers, all nonunion. Only the pilots and mechanics will be the same, and the mechanics are also nonunion. Lower cost structures will prevail---maybe even with the pilots eventually, but they will still be well paid. All of the new employees will have half of the benefits also, which will lower cost for mother Delta. (except pilots---thanks to CONTRACT) Third is the route structure. The routes will not go through the hubs---mainly point to point---I have heard possibly routes like FLL--OAK,
and MCO--SNA (Orange County) and a lot into LAS. These route will help siphon off passengers from big cities who want low fares, and allow the hubs aircraft to be filled by passengers getting off RJ's or other mainline planes from cities not served by the LCC, and therefore getting larger fares from people who live in smaller cities----like Peoria or Des Moines. The 757's would fly a lot----the hour usage would be a lot greater than current usage--with LAS allnighters probably filling in the night hours. Eventually other aircraft maybe used ---like Airbus A319's. Our President---Fred Reid---supposedly is favoring Airbus aircraft, and he has said that he expects 1/3 of all passenger flying someday to be on Low Cost Carriers. (Obviously not all cities can have LCC service) A new aircraft, like the A319, would also have new cheaper pay rates due to the fact that it is not in our current contract. By the way, the 737-200's are not going away, most are going to CVG to fly mainline routes with about 100-110 seats, and will eventually be traded in when we get a new 90-100 seat aircraft to fly out of our smaller hubs like CVG, DFW, and SLC----and WE, not YOU, will fly those new aircraft.

So, how are we going to do against Southwest or Jetblue? I think very well. We have a better frequent flyer program, we are going to offer free movies on the 757's (not LiveTV--oh well), and we will fly to some cities that Southwest does not fly---like New York and Boston. If we go to LAS, we will fly nonstop to places National used to fly----cities that Southwest do not serve also, like JFK, MIA, and PHL. And Jetblue is constricted to the amount of growing they can do because they only get 1 airbus per month, and in a couple years---when their maintenence and lease payments finally start rolling in, maybe you will see fares rise. That's all for now!!!

Bye Bye---General Lee

 

[canyonblue]

and in a couple years---when their maintenence and lease payments finally start rolling in, maybe you will see fares rise.

I have to answer for Jetblue because it seems no one believes a Jetblue pilot when they say "IT'S AN URBAN LEGEND" They do PAY. Don't believe EVERYTHING someone tells you. I have a few friends furloughed from Delta and I hope that something can reverse course, I just don't think this will do it. Southwest (and Jetblue) BEGAN operations as the underdog and employees work harder and more productive because it is what we had to do to survive. You can't teach someone to operate a totally different way now that you want them to compete. It starts at the beginning with the people you hire, and I believe Southwest has the hardest working personnal in the industry. I never saw ramp personnal RUN to meet an early plane until I started at SWA. 25 minute turns will do that to ya.

 

[rjcap]

Gen Lee,

First of all, you are jealous, and do not want the LCC to work.

Wrong pal. My view is Leo has drummed up the old Delta Express business plan with a fresh coat of paint. He is not addressing the larger problem of bloated operating costs at mainline.

you have no idea what you are talking about

I'm sorry. I forgot you are an almighty Delta pilot and know everything since the beginning of time.

QUOTE]Everyone except the pilots will be on a lower pay scale, and be new and bouncy[/QUOTE]

Your in for a reality check pal. Wait till you see what bounces through the door at $19/hr.



Gen Lee, time will tell if this things sinks or swims. Don't be surprised if Jet Blue and Southwest fight back when Delta starts this new LCC. If you think fairs are low now wait until the competition heats up.

That 757 has alot of seats to fill up. How low will the fares have to go to accomplish this on a consistent basis???



Later