Delta to Suspend Some Song Flights???

[Bat]

Any insight from Delta insiders? Is Song losing money or are they cutting back on over 25% to just stop making so much money on a great idea?



Delta to Suspend Some Song Flights - WSJ

[size=-1]By REUTERS[/size]

Published: June 15, 2004



Filed at 4:46 a.m. ET

NEW YORK (Reuters) - Delta Air Lines (DAL.N), struggling to cut costs and avert filing for bankruptcy protection, plans to suspend nearly one third of the flights at its low-fare carrier Song in September, The Wall Street Journal reported on Tuesday.

The airline will drop 41 of Song's 140 daily flights in September, the newspaper said.

 

[FracCapt]

I've been on Song several times going to/from work, and they are almost always full....but one of the Captains told me that the word in Atlanta is that Song is losing money due to the extremely low fares they charge to be competitive.

 

[ATL2CDG]

Any insight from Delta insiders? Is Song losing money or are they cutting back on over 25% to just stop making so much money on a great idea?



Delta to Suspend Some Song Flights - WSJ

[size=-1]By REUTERS[/size]
http://graphics7.nytimes.com/images/misc/spacer.gif
Published: June 15, 2004



Filed at 4:46 a.m. ET

NEW YORK (Reuters) - Delta Air Lines (DAL.N), struggling to cut costs and avert filing for bankruptcy protection, plans to suspend nearly one third of the flights at its low-fare carrier Song in September, The Wall Street Journal reported on Tuesday.

The airline will drop 41 of Song's 140 daily flights in September, the newspaper said.

You've gotta love how people quote only what they want you to see...

http://biz.yahoo.com/rc/040615/airlines_delta_1.html

Delta expects to resume Song's full flight schedule of 144 daily flights in October, spokeswoman Katie Connell said.

"Since September is notoriously a very low travel period for all carriers -- and in particular Song as it serves primarily the leisure markets -- we proactively reduced the schedule for September by about 25 percent," Connell said.

She said Delta will also reduce its mainline flight schedule in September.

 

[Bat]

That wasn't the point. Cutting back that much on a schedule doesn't point to profit. What has happened to all of the expansion that Delta was going to do with Song? We know that it was stopped with the CEO change and that the Delta's look at Song and that business plan is supposed to be done this summer. Are they trying to cut the schedule to profitability? I don't think that will help.

I do hope that Delta does well this summer and fall, as well as the other "Legacy" carriers that are in dire straights. It isn't in anyone's interest for them to go into Chapter 11. How good the business model for Song was thought through is the question that isn't answered but it doesn't seem to be doing what Leo thought it would do. If that model can be changed to make profitable, more power to them.

 

[captainv]

Bat,

Unless Delta starts breaking out costs (doubtful), none of us really knows how Song is doing. The Delta guys could give you an educated guess, but it's still just a guess.

Grinstein has said publicly he's not crazy about Song or RJs. I've heard he wants to stop feeding hubs with RJs. As an RJ driver, I'm all for it. I spend more time in ATL and JFK than CVG lately, and i'd much prefer to go make the company a bunch of money by flying point to point.

Unless you can find hard financial numbers on Song, this is destined to be a rhetorical discussion. From your posts, it sounds like you already have a strong opinion. Why not tell us what you think Song needs to do to be profitable?

 

[Bat]

CaptainV,


First, I agree that this is largely a rhetorical discussion. I don't, however have a strong opinion about Song. I have just heard a fairly consistent story from talking to their flight attendants commuting. I certainly realize that is not a very reliable source, hence the request for more information from this board.

I am not sure what will make a difference for Song. It does seem that they are robbing Peter to pay Paul with the concept, but if it will work for them to compete with the LCC that seem to be threatening from all sides, then more power to them. They don't seem to have gotten their FA's to buy into the story yet. Most that I have talked to felt like they were threatened to take the job or when they were furloughed from mainline, they couldn't even compete for the jobs. That doesn't seem to be the way to get people to put their best foot forward and that will hurt their profitability. I will certainly admit that is why the cutting back of flights does not surprise me. It sounds like they will pull the jets back to main line in the long run, but that is pure speculation.

 

[Publishers]

How

Other than smoke and mirrors, how can Song be any different than the mother carrier itself. The LCC's have a whole different company model, structure, and cost quotiant. Song, regardless of how you internally allocate the costs still has to be folded into the overall structure which is costly, inefficient, and burdensome.

 

[captainv]

Bat,

Sorry, didn't mean to jump on you.

I've never ridden on Song myself, although i sure wouldn't mind it for the in-flight entertainment.

I'm not surprised by the attitudes you've been hearing. The flight attendants have had their pay cut, have had many bases closed, and - although the alternative was "if you don't like it, don't let the door hit you in the a$$ on the way out" - they've been asked to sing, crack jokes, and make nice. No wonder they're not glowing with pride at the brilliance of their management.

But then, it's not like they're the only employee group to go through such a thing. Plenty of pilots and FAs are going through the same thing, if they're not on the street, but that doesn't determine whether or not their respective carriers are now getting better or worse.

Take Indy Air for example. I'm sure most of the employees are little nervous about them going it alone. but then maybe half of them are totally excited and fully behind it, and are convinced the RJ does have the economics to pull it off. Either way, attitudes don't matter. The market will pick the winners.

i think we can all agree that Song is lower cost that mainline. everyone gets paid less, except the pilots. the fares are also less than mainline. so, are they profitable? depends on a lot of things, most of which you and i can't access. lower fares mean they need higher loads, but lower costs lower the bar a little. even if they are losing money, maybe they're losing quite a bit less than if mainline was still flying the route. perhaps it's better to lose a bit of money, than to lose a customer to the competition altogether.

out of NYC at least, i would think they'd have to be doing OK. Jetblue only serves JFK, and i just can't see someone who lives much closer to EWR or LGA driving extra miles to JFK just to experience Jetblue, if Song offers competitive fares out of a more convenient airport.

will Song work? certainly history would indicate no, but that doesn't mean it's impossible. it's going to take a few more years to find out....

 

[Dizel8]

"everyone gets paid less, except the pilots"

I know the FA's get less, but who else gets less. The agents, the rampers, the mechanics?
I though most services for Song was done by DAL personnel?

 

[Bat]

Dizel8,

I think that you are correct. I have been told that everyone is normal mainline Delta except the FA's. That is one of the reasons that they are so unhappy. Perhaps General Lee can correct the conversation...

 

[350DRIVER]

Grinstein is no moron and he will do what is in the best interest of this company(hopefully), with or without Song. I love how people jump all over this without knowing any hard facts and financial data. He needs to stop the outsourcing of mainline flying to the regionals, which he will. Mainline flying must be done by mainline equipment and by DAL crews if Delta is to avoid going into BK. You will see many changes implemented in the very near future, count on it....


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