Delta Air to Unveil Plans For a Low-Cost

[Indapool]

Grabbed this off of PPRUNE
Anyone else hearing this?



posted 15th November 2002 05:37
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Delta to Launch Air Sunshine II
Delta Air to Unveil Plans
For a Low-Cost Carrier

By MARTHA BRANNIGAN and NICOLE HARRIS
Staff Reporters of THE WALL STREET JOURNAL


ATLANTA -- Delta Air Lines, heading into territory where other major carriers have failed, is expected to unveil its plans for a low-cost carrier next week, relying in part on efficient scheduling of jets and crews.

The nation's No. 3 carrier plans to use a fleet of Boeing Co. 757s -- narrow-body jets with more than 180 seats -- providing substantial capacity to compete against low-cost foes like JetBlue Airways, Southwest Airlines and AirTran Airways, according to people familiar with the effort.

These individuals say the new airline-within-an-airline will include a snappy new name -- to try to upstage JetBlue, the new darling of the low-cost sector -- but with an emphasis that Delta's operating expertise stands behind it.

Efforts to operate low-cost carriers within major airlines, including Delta's 1996 launch of Delta Express, have fallen short of expectations. Continental, for example, closed its Continental Lite operation, which muddled its marketing by mixing mainline and discount flights on the same routes.

Yet Delta, faced with nimble, low-cost competitors like AirTran, a unit of AirTran Holdings Inc., and JetBlue in a majority of its markets, sees little choice but to try again. A Delta spokesman declined to comment on the much-guarded plan.

Delta expects low-cost competition to grow to between 30% and 40% of the industry's domestic capacity by the end of the decade from roughly 22% now, and wants to ensure it participates in that growth.

Low-cost carriers such as Southwest and AirTran are among the few making a profit since last year's terror attacks weakened demand. "The low-fare guys are stealing market share, they're bringing down prices and they can make money at those prices," said Ray Neidl, an analyst with Blaylock & Partners LP in New York.

Delta's new venture is expected to serve more markets than Delta Express, which it will succeed next year. It hopes to get more hours of flying out of the unit's aircraft by scheduling planes point-to-point, and avoiding congested hubs.

The project envisions scheduling flight attendants for longer work days than they typically average, thus boosting productivity. It isn't clear whether the airline will ask its pilots to help it cut costs. Karen Miller, a spokeswoman for the Air Line Pilots Association, which represents Delta pilots, said Thursday: "They haven't asked for any concessions."

 

[fr8doggydog]

Aside from using 757s vs. 737s, can someone please explain to me how this differs from the creation of Delta Express ? If memory serves, DLX was started as this "airline within an airline" to go specifically against SWA, AirTran and all the other LCCs predominantly in the NE. Why not just replace the 737s with 757s for Express ? It's got to be confusing to the general public.

 

[CCDiscoB]

Because Delta will save a lot more money folding Express, and opening a new company. Tax write-offs. Why do you think your favorite night club keeps changing names every two years.

 

[BLUE BAYOU]

Continental Lite, Metrojet, United Shuttle, Delta Express were the majors' answer to the SWA, AirTran, and JetBlues. My belief is Delta's new LCC will come to fruition but how long will it last? I've seen a sizable amount of discussion on this matter, but I think we're hiding the root cause of the majors' disdain. The industry was already in an emergency descent early last year before Sept. 11. It is easy to blame the decline on either the economy, 9/11, or these budget carriers. But folks, the days of true first class travel or last minute business trips paying full fare are fading fast. We're seeing a change in the industry and it is in part due to the travelling public (the consumer). As fast as Walmart has gained its market share, the LCCs are doing the same by offering cheap seats. This has taken hold in Europe with the likes of Easyjet and Ryanair, and definetly has its place here in the USA. If the majors are to contend with these LCCs, they must bring their CASM (Cost per Available Seat Mile) down to the level of the LCCs. I'm rather skeptical about Delta's LCC chances. I understand that they'll be able to obtain FAs at a low rate and high productivity. I'm not certain they can do the same with the pilots. Furthermore, in JFKs market, jetBlue is a darling. They've got live TVs, 162 leather seats, and an expanding consumer following. If anything, Delta's LCC will only get spillover traffic from this carrier.

 

[Ty Webb]

Because Delta will save a lot more money folding Express, and opening a new company. Tax write-offs. Why do you think your favorite night club keeps changing names every two years.

Tax "write-offs" are really misunderstood. The only thing that a write-off does is offset profits.

Delta has no profits right now to "write-off" anything against. The last thing that they need are more losses, which is what write-offs are.

I don't think this thing will succeed, simply because it would be too painful to change Delta's corporate culture. Mullin's background is regulated industries like utilities and banking- hardly the scrappy innovator required to pull this thing off.

AirTran succeeds because we have shrewd airline management and pilots who have been through tremendous ups and downs. Most of the pilots here have had seniority numbers at three, four, five or more different carriers, and have become convinced that the best way to look out for the pilot group is by making sure the company is profitable, and doing our part to make that happen . . . this is the reverse of the major airlines, whose pilots believe that the way to be compensated fairly is to put financial penalties on the company to protect "their" flying . . .

I think Delta ought to focus on being Delta- delivering a quality product, with a frequent schedule throughout a nationwide network, insyead of losing hundreds of millions trying to protect "market share" which really translates into fighting scrappy carriers for the bottom-paying passenger.


Sheesh!

 

[rjcap]

Delta has zero chance of beating Southwest at its game.

Southwest wrote the book on the LCC and has been rewriting it for 30 years. Now all of sudden Delta is going to jump in to the LCC game and be competitive ???

Delta already has its LCC - DCI.

 

[Jeff G]

Delta has zero chance of beating Southwest at its game.

The question is: can Delta beat JetBlue at its own game? They'll try to go against the smallest carrier first. It's possible that Delta's LCC will be bigger than all of JetBlue. They'll try to dump capacity first. This will get real interesting.

Southwest wrote the book on the LCC and has been rewriting it for 30 years. Now all of sudden Delta is going to jump in to the LCC game and be competitive ???

No, that was Delta Express. It didn't work. Southwest is too big to kill that way, with an airline-within-an-airline.

Delta already has its LCC - DCI.

DCI is not low cost, not even close. CASM for RJ's is far higher than for larger airplanes. You could pay the pilots nothing to fly RJ's, but you just don't have the seats to spread fixed costs around.

 

[rjcap]

No, that was Delta Express. It didn't work. Southwest is too big to kill that way, with an airline-within-an-airline.

So Delta Express was in existence before Southwest ????

You lost me here.

 

[rjcap]

What he is saying is that Deta Express was designed to go after SWA and failed

Great ! So what is different this time.

 

[rjcap]

Jeff G,

DCI is not low cost, not even close. CASM for RJ's is far higher than for larger airplanes. You could pay the pilots nothing to fly RJ's, but you just don't have the seats to spread fixed costs around.

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

 

[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

 

[Old Crow]

Not to be negative or pessimistic, but... "Young and Bouncy"? I think the days of Southwest style hiring are gone. If you offer someone minimum wage to work for anyone, you're going to get a minimum wage profile person. A person who has a GED or only highschool education could care less for Delta. They just want that check on Friday. Travel benefits...? What good are they when you work all the time and even more so, you can't afford to eat when you get there on that 19,000 salary.

Bottom line as always, "You get what you pay for."

 

[canyonblue]

I think the days of Southwest style hiring are gone.

I believe we still do "Southwest style hiring". But then again were still Southwest!

 

[acarpe3448]

Since being furloughed from Delta I am pretty far out of the loop, so I do not hear much gossip at all. I think that Delta Management must have grander ideas for this new LCC than just a NE-Florida-Midwest shuttle. With the 757 being used I think that you will see Delta using the new LCC all over the country, including the long haul coast to coast stuff. I sure hope that the new LCC is not going to be used to just replace current mainline flights, but to increase mainline flying. I think we have lost enough to DCI and it frightens me to think about what will happen when Force De Majure is declared over! A huge part of DCI's growth will have to be given up, because you know that the Delta Pilot's are going to ensure that planned percentages are upheld. If we do see some growth from this new LCC, I hope that some of our pilots, all of our pilots, are able to be recalled! Don't get me wrong, I appreciate the fact that I have my $10 an hour job Managing a Mail box Etc, but I prefer to get back to work at Delta ASAP! Happy Holidays to all of you!

 

[General Lee]

First of all---"young and bouncy" is what I am like----I'm in my mid-thirties and I love my job. Good enough? Thanks.

Canyonblue,

Well, Southwest has been having problems with those famous 15 minute turns latley, huh? Security checks really screw up that process. Your whole game plan had to be changed, and a lot of frequency was dropped because you couldn't have service from LAX to OAK every 15 minutes. All I know is that we have been practicing on 757's in LAS some new quick boarding techniques, with dual PAX entry---front left and aft left entry. They want to clean and turn the planes in 30 minutes, which can be done when Flight attendants and pilots (??) help clean the plane. (hey, the pay is still really good for the pilots.....) Anyways, the game has
changed for everyone, even Southwest, which hasn't been in the top 5 for on time arrivals lately. And, our frequent flyer program is a hell of a lot better------Hawaii and Athens are some good choices, along with all of the Skyteam destinations. People will see the difference. When prices are equal, then other things start to matter---like frequent flyer miles (for the business guy) and airport lounges (especially with the possible new codeshare).

RJCAP,

I am not trying to be the "all knowing Delta pilot" so stop putting yourself down. You really don't know much about the Delta Express outfit, unless you flew it? I did. We had a good operation--with the wrong airplane. The 737-200 was slow, and a gas guzzler, and had no entertainment. But, the planes were always packed---with load factors in the 90's. A 757 will be stuffed also, but it will make more money for Delta--and have a movie to distract people that they are stuffed in there like sardines. We turned those 737-200's in 30 min every turn, but never used the planes after 12 am. The 757's might be flying allnighters thru LAS----which helps pay the daily lease rate and hence makes more money for Delta. The pay difference between 737 and 757 pilot maybe $30 an hour, and 1 passenger could easily pay the difference for both pilots. (the 757 will carry 79 more passengers) Anyways....the operation will be packed like the old Express, but make more money, which is good. Time to go now.

Bye Bye---General Lee

 

[Sierra-Hotel]

General Lee

Please don't bash my airline! Okay we haven't made the top 5 in OTP in the last couple mos......I like to think of SWA as a lean mean fighting machine. When it gets indegestion (security delays) that we get hiccups (delays). I think we stopped doing 15 min turns when I started here 2 years ago.....In any case we routinely do 25-35 min turns. As for you claims that our passengers will be flocking to Delta.....I find that laughable. I see the same passengers week to week. They enjoy flying our airline because of the price and quality of service we give here at SWA. As one passenger stated to me "I don't care if your late,but at least the employees at SW treat me with respect". We've done a lot in the last couple months to further streamline our operations and hopefully we will reclaim our #1 rank. You posted that now the pilots and F/As will now be helping out to clean up the cabin......I'm sorry to tell you but the flight crew here at WN have been doing that for the last 31 years. I'm really not trying to flame you,but I find that other airline employees tend to be very critical of SWA and their employees because we actually get along with each other and do whatever it takes to get the job done. Maybe if USAir,United,American,and Delta fostered that type of thinking they would not be in the dire financial straits they find themselves today.

 

[General Lee]

Oppsahh,

You are a really funny person. Why would you leave at 3am on one of our planes? You don't seem to understand, do you? Nope. Hello? The airplanes would be flying ALL DAY, and into the night? I guess you have never seen airline schedules out of LAS at night, huh? After flying two or three cross countries in one day, the plane arrives in LAS---full of gamblers---at around midnight from MIA or MCO (which Amwest and National did bringing in lots of pax) and then leave at around 1am---going East again---with plenty of broke gamblers----arriving early morning and allowing the plane to fly to Florida or where ever.
Do you understand now? I hope so. Can you turn a 757 in 30 min? I bet they will try----and who says we cannot do well as a LCC? Delta Express did fine---90 percent load factors, it's just we couldn't profit becasue our planes was too small and old---which sucked fuel. The 757 carriers more people and is fuel efficient---and can have movies to entertain people. What kind of people would fly for 19K a year? Ever been on a commuter or regional jet? Those flight attendants are usually happy to have a job and usually not old and mean like some of the mainline flight attendants (not all of them). How much do you think Jetblue Flight Attendants start at? I'll tell you---$16K a year and not many benefits-----and they live in $$ NYC. They seem to be doing well over there. Delta couldn't find hospitable people to work on the LCC? You are wrong, and now you know it. The job market is wide open, and they will interview to find fun people. Our President Fred Reid said he believes the LCC market will reach 1/3 of PAX flying within 5 years---and we have to do something to try to get a piece of that---and we will because we have a lot more assets than most majors, and we have more money to try.
I flew Delta Express---and it felt like a different airline---but the flight attendant, mechanics, everyone else other than the pilots were paid mainline rates. Now, it will be different---the planes will have more seats and more fuel efficient---and it will work.

Oppsahf, am I jealous? Heck no---I fly heavy 767-300's into Bermuda and make a great wage. I wouldn't trade what I do with anyone-----got it?

Sierra Hotel,

Can I bash your airline? Well, you bash mine. Great, you have repeat customers, yippy---so do we. I see the same passengers also all the time when I go to Nassau and San Juan---places Southwest probably won't go. A lot of our passengers love our frequent flyer program because it allows them to go to fun places like Rome and St. Thomas. We carry a lot more passengers than both you and Jetblue, and alot of our losses right now are one time charges (accounting practices), and when the economy comes back---and it will----people will realize that flying from BWI to LAX on your 737-700 isn't very comfortable---even with super friendly flight attendants---and go for our mainline product, which is more comfortable. Delta is losing money, but we have plenty to burn, and things are starting to turn around. (Fares are creeping up, especially for the holidays)
Ever been to ATL?---oops you don't go there. ATL is always packed, and they do a great job moving airliners there. Laugh away all you want Sierra Hotel, but when you see the LCC 757 at LAS or MCO or see one of our 767-300's or 400's, Caution Wake turbulence----it might be bumpy!

Bye Bye-----General Lee

 

[Sierra-Hotel]

I just hope DL mgmt knows how saturated the Las Vegas market is. SW and HP have that market sewn up.......if you think Delta's new LCC is gonna have a chance there,go talk to the N7 employees. I know we are considered to be the "red headed stepchild" of the industry,but you know what.....we don't care! On of the problems of today is that some airlines promise more than they can deliver....at SWA we promise:smiles,seats,snacks,and a safe arrival to your destination,and for the most part we deliver on that promise. Honestly I hope whatever you folks do works.....but I just want to point out the message Delta gave to their employees:Layoff 2,500 F/As but are hiring off the street for F/A spots at their new LCC. That's the reason why employee morale is so low at these companies.....I don't have to worry about that here, I have all the trust in the world in Herb,Colleen,and Jim's ablity to make decisions that will benifit this company without screwing over the employee group. In any case I just wanna remind you,General Lee:Each and Every airline that has made it a point to go after SWA has parked their airplanes in the desert.....even Delta Express. Just food for thought.

 

[Jeff G]

The airplanes would be flying ALL DAY, and into the night? I guess you have never seen airline schedules out of LAS at night, huh? After flying two or three cross countries in one day, the plane arrives in LAS---full of gamblers---at around midnight from MIA or MCO (which Amwest and National did bringing in lots of pax) and then leave at around 1am---going East again---with plenty of broke gamblers----arriving early morning and allowing the plane to fly to Florida or where ever.

This is exactly how redeyes work. JetBlue has been doing this almost from the get-go. But that's only one or two planes. What will you do with the other 25 or so that will be sitting around all night?

Do you understand now? I hope so. Can you turn a 757 in 30 min? I bet they will try----and who says we cannot do well as a LCC?

I'd like to see you turn a full 200-seat single-aisle airplane in 30 minutes. We can't get times much under 40 minutes at busy stations, with 162 seats and two boarding doors. Throw in a dozen wheelchairs and you're really in trouble. You'll probably end up seeing consistent 45 minute turns. If you get your times much under that, we'll be happy to steal your methods.

LUV can turn airplanes faster in part because of no assigned seating and in part because of low load factors (average in the 60's) on smaller airplanes (122 or 137 seats). It doesn't go as fast if you have full, larger airplanes.

How much do you think Jetblue Flight Attendants start at? I'll tell you---$16K a year and not many benefits-----and they live in $$ NYC. They seem to be doing well over there.

Well, no, I told you. JetBlue doesn't pay bottom basement wages. A first year line holder earns an average of about $2600/mo, and you can be a line holder in less than six months. That's not bad even by mainline standards. They're getting a raise, too, so it may actually be higher now. They don't have a pension, it's true, but they do have a 401(k) (so no pension underfunding issues) and profit sharing (13.5% of pay last year). BTW, many of our FA's commute so not everyone puts up with "$$ NYC". (Free unlimited flight bennies, too.) We also have the best FA jumpseat policy in the business. (We carry a whole lot of Delta FA's because they often can't fly on their own airline, or, gasp, prefer not to ). So, rumors to the contrary, we're not starving anyone.

But it's not the pay, it's the attitude. We hire for attitude, and so will you. You're going to attempt to have two different cultures at Delta. I hope it works for you, but that's a lot harder than starting from scratch.

 

[General Lee]

Ok, here I go again.

Sierra Hotel,

Do you know why Delta Express parked planes after 9-11? Because of Southwest? Get over yourself!! It was because that was where our bottom junior 400 guys sat---in the FO seat on Express 737's. When we had to furlough, we could not selectively choose who was to go. We had to park the planes because we didn't have any FO's to fly them. Get it? Delta Express was beating Southwest and Metrojet---we had more passengers than you did up and down the East Coast----yes we did--I saw the numbers. Our load factor on Express was the best in our system-------over 90%. I flew it, and we were always packed---and we flew to some cities that Southwest did not go---like EWR, BOS, BDL---and we will continue with the 757's and this time have a chance at a profit---and who will challenge us on those routes? Jetblue? The challenge us at JFK to Florida---but we still pack our planes because we have 19 767-300's fly in each day from Europe, and they help feed our flights from JFK to Florida. My brother just flew on Jetblue from SYR-JFK (He said he liked the experience) and connected on Delta to Amsterdam. He said there was a group tour of 70 old folks also connecting on Delta to Rome. All I have to say is Thanks!!!!!!

Jeff G,
Again I thank you for the above. Until you guys do international, I believe it will happen more often. So, a lot of your folks commute free to JFK. Hmmmm. They better on $2600 a month wages in NY. I thought all of your seats are full. It might get tough to commute eventually, and then they might not be as happy. Yes, there is a lot of grief by some of the unfortunate flight attendants who might get furloughed, but they had a chance to get a union, and they did not. Delta tries to make the ATL based flight attendants happy by giving them better trips out of ATL, and over 10,000 are based there, so if you make them happy---no union. You can gauruntee though that they will be interviewing, even furloughed FA's, and that if they aren't happy looking etc, they won't go there. You are right about loading a 757 in 30 mins would be tough, especially with wheel chairs etc.
But, we easily did it on the 737-200, and all we can do is try----and people have said that they are experimenting with new boarding procedures---stuff that United did on the Shuttle---that might expedite the process. And, the 757 is a fast plane, and will make up the difference in the air, trust me. (all we have to do is state the arrival time and add 20 min each time---easily making it on time---if we determine the route will take 3hrs---make it 3hrs 20 min in the schedule---then we have extra time---also to get food for the pilots..)

Would LAS be a challenge? Probably, but maybe not. All of national's gates are at our terminal in LAS. America West and Southwest have established themselves there, but so did National. But National never had deep pockets and didn't have International feed. Southwest and National shared markets in Reno, Chicago Midway, LAX, SEA, and that is it. Delta's LCC would
hit East Coast cities that Southwest has not touched---BOS, JFK,
PHL, MIA and FLL, PBI, etc. nonstop from LAS. Sure America West goes to some of them, but ther is room for a couple carriers on each, and National flew 7 million people in 3 years---which could be done again. Also, las Vegas has 22,000 hotel rooms available each night---and that will never change. And, there wouldn't just be 2 allnighters from Vegas a night Jeff G, there could be other city pairings for allnighters----like SNA to JFK, or OAK to FLL---who knows? Not you.

We have some smart guys running this airline. Even though I wish they treated the labor a little better sometimes, I think they have the resources, along with McKinsie Consulting, to figure out a good strategy. You guys will just have to wonder what will happen, and I don't think they are doing this in the blind. Think about it! They are paid in Delta stock, they don't go for risky stuff unless they know what will happen.

Bye Bye---General Lee

 

[General Lee]

Oppsahh,

You are nuts! Do you see what you are saying? After 9-11 ther was a large scare at Delta, as well as other airlines probably, and they decided to start furloughing. They decided on 400 for the initial number. How would they reassign pilots? How? Other planes were still flying with their original pilots. And how long would it take to train 400 pilots? Figured it out yet genius? They had to furlough via senority-------and Express paid the least (better than your 5 year FO's at SW), so they were gone. The November 1st, 2001 furlough had the bottom 400. See? Are you there yet? We parked 25 737-200's. (most are back now going to CVG eventually) Got it?

Also, when you said Southwest would be doing the allnighters also if profitable. Well, we used to fly a lot of allnighter out of LAS each night-----to MSY, BOS, JFK, MCO (I flew a 767-300 allnighter from LAS-MCO once), TPA, CVG, DFW, and ATL. We probably will do it again with a lower cost structure at the LCC. Businessmen like allnighters so they can get a jump on business or get some sleep. And, it helps paying off our daily lease rate on each aircraft.

Also, I was wrong about BDL---Southwest does go there, sorry.

Delta's new LCC may surprise everyone, and maybe it will fit right in there and take a large chunk of the Low Cost market. We have to try, and we have smart guys working on it, and we have the ability to do it. We'll see how it works, but don't count us out already.

Bye Bye--General Lee