DL focus city under attack

[lowecur]

DL has 100,000 fewer passengers at FLL in first 11 months of 03. The big beneficiaries have been B6 with an additional 363,378 pax from 02, and AA with an additional 215,148. These numbers are from the Sun Sentinel business section this morning.

This is not a good sign for DL or Song. B6 obviously has become the dominant player on the NY to FLL route. AA also has done a great job. Arpey & Co. are turning the corner, as they are once again becoming a feared player in the domestic market.

 

[formerdal]

lowercur,

How do we know who the dominant carrier is unless we have the current total pax for the year. Can you post those??

And do passsengers only travel to NY from FLL? I think there might be some other destinations.

Could all be true but based on the info you provided your making alot of assumptions.

 

[lowecur]

lowercur,

How do we know who the dominant carrier is unless we have the current total pax for the year. Can you post those??

And do passsengers only travel to NY from FLL? I think there might be some other destinations.

Could all be true but based on the info you provided your making alot of assumptions.

I think some B6 people might be able to better inform you. B6's only other destinations are Long Beach, Washington, and more recently Boston. Assumptions are based on the loss of 100,000 by DL, in a year that is considered to be much better than 2002. Draw your own conclusions.

 

[MedFlyer]

From the FLL airport site, here are the airlines stats for Jan-Oct 2003.

http://www.fll.net/avi03900.htm

By these stats, DL isn't doing particularly well. You would think that with Song's launch in FLL back in June that DL's numbers would be a little better. Things might improve for DL some as Song gets fully up to speed, but overall Song doesn't seem to be doing a great job protecting marketshare.

Surprisingly, WN's FLL numbers for 2003 aren't so great either.

 

[General Lee]

Medflyer and Co,

I am not really that surprised because we rolled out a totally different brand in Song that was not well known in the beginning. We pretty much took the "Delta" name off of many routes into FLL, and then added a new one, "Song", which many people did not recognize. With the coming of Winter and the nicer weather down South, I think those numbers will absolutely increase starting in DEC, and with the addition of the IFE by FEB to the whole fleet----more passenger retention will occur. It takes a while to get a new brand name going, and Jetblue was not a "hit" overnight either. I don't think our managment thought we would be full from day one on a new brand named airline.

Bye Bye--General Lee

 

[lowecur]

general

Boston should be an excellent measuring stick for Song in the next 6 months. B6 has not begun service yet, and Neeleman is claiming tremendous bookings. They have added extra flights to FLL and MCO, and the first flight hasn't even taken off yet. It maybe that those tight fisted Irishman just want to kick the tires, or they may be retaliating for years of high fares from DL.

 

[General Lee]

I have seen high loads from BOS, and our fares are probably a little lower than B6, so we shall see. We will offer better IFE and a better frequent flyer porgram. But, some may want to try B6, and that is fine. The world isn't falling apart Lowecur, and we are having better loads now than we did before the Iraq War---so things are getting better.

Bye Bye--General Lee

 

[lowecur]

general

You could be right, as both DL and B6 might be picking off pax from Manchester and Providence ala WN. No need to drive so far.

 

[FDJ2]

Just something to consider, DAL reduced its system wide ASMs by approximately 6% between 2002 and 2003. With a 6% reduction in available seat miles system wide, a reduction of 2.6% in total numbers of passengers flown out of FLL is no surprise. DAL agressively down gauge throughout 2003 and reduced frequency, I'm not at all surprised by a reduction in total number of passengers flown.

 

[lowecur]

fdj2

Just something to consider, DAL reduced its system wide ASMs by approximately 6% between 2002 and 2003. With a 6% reduction in available seat miles system wide, a reduction of 2.6% in total numbers of passengers flown out of FLL is no surprise. DAL agressively down gauge throughout 2003 and reduced frequency, I'm not at all surprised by a reduction in total number of passengers flown.

I'd be surprised and I'd be concerned. I doubt a reduction of systemwide ASM's applied to FLL. This is a focus city they want to protect, and I have my doubts ASM's have been reduced from 2002 to 03 in FLL. I read where 25% of DL's revenue comes from Florida, so I have my doubts they did any cutting here in FLL.

I see WN has lost 3.5% markeshare in FLL as well. I'm still holding to my prediction that WN's stock will be single digit by June.

 

[General Lee]

DL did drop quite a few cities and flights per day when they switched from Delta Express to Song. For example, Long Island McArthur service was dropped, and the number of flights to places like Hartford and IAD were reduced in frequency. But, the upside was bigger planes with more seats, but 1 Song 757 has 199 seats total, and the Express 737s had 119 seats---so a loss of two Express flights and a gain of one Song flight would result in less seats total. A lot of people believe that one reason we lost so much money last year (2003) was because we parked too many planes and didn't bring them back when things were good last Summer. (but, the resulting Fall season would have probably negated those profits) Let's just hope for a better 2004. IF you look at the ATL--FLA service in our new timetable, you will have no doubt that we are not reducing any frequency there, like the 14 daily widebodies between ATL and FLL.

Bye Bye--General Lee

 

[FDJ2]

Re: fdj2

I doubt a reduction of systemwide ASM's applied to FLL.

I'm sure the reduction in ASMs included FLL. RJs have replaced 737 service between FLL and MCO, a few trips per day like FLL-ISP and FLL-BOS have also been dropped and Song has only been flying half the year with all 36 Song aircraft not up and running until the end of the year, I don't find a 2.6% reduction at all surprising. While I don't believe that FLL had as much of a reduction in ASMs as perhaps other cities, FLL didn't escape those reductions entirely either. It would be interesting to see if the DAL load factors out of FLL have dropped.

 

[lowecur]

Re: fdj2

It would be interesting to see if the DAL load factors out of FLL have dropped.

No way to prove any of this, so speculation is all that remains.

I have my doubts that DAL LF's have dropped substantially if at all. DL seems to be doing well into their Hubs due to the connections. Marketshare is only challenged by AA, and I believe they have picked up their increased marketshare in FLL on the direct flights to ORD, STL, San Juan, and NYC. I think the AA 757 flights to ORD have probably taken a chunk out of WN into MDW, and siphoned off some business from DL to NYC.

The quiet company is Spirit. They have done very well.

 

[MedFlyer]

Let me take a look at the ol' timetables:

October 2002 from FLL to:
ATL 6x764, 3x 763, 1x762 1x752, 1xMD88 = 3022 seats daily
BOS 4x732 = 476
CVG 1x752, 2xMD88,1xCRJ = 516
DFW 1x763, 2x MD90 = 556
BDL 3x732 = 357
ISP 1x732 = 119
EWR 2x 732 = 238
LGA 1x763,1x752,1xMD88 = 580
JFK 6x732 = 714
MCO 4xCRJ = 200
TLH 2xCRJ = 100
TPA 1x752 = 182 (this flight continued on to LAX)

Total daily seats for FLL = 7060

October 2003 from FLL to:
ATL 6x764, 4x763 = 2746
BOS 3x752 = 597
CVG 2xMD88,1xCRJ = 334
CMH 1xERJ,1xER3 = 87
DFW 2x738 = 296
BDL 2x752 = 398
LAS 1x752 = 199
LAX 1x752 = 199
BNA 1xER3 = 37
EWR 2x752 = 398
LGA 4x752 = 796
JFK 5x752 = 995
MCO 3xER3,1xCRJ = 161
RDU 2xER3 = 74
TLH 1xER3, 1xCRJ = 87
DCA 1xCRJ =50

Total daily seats for FLL = 7454

I'm too lazy to multiply all the distances by the number of seats to calculate the actual ASM's, but just by eyeballing I would say that ASM's were higher in Oct 03 than Oct 02.

To be fair however, during the first six months at FLL there was no Song service. Plus some of the RJ routes (BNA,RDU) weren't launched until later in the year. So it is very likely that DL's ASMs at FLL in the first half of 03 were lower than 02 which could explain much of the drop.

Looking at these numbers, it is clear that DL has reduced capacity from FLL to the hubs while increasing capacity on the point-to-point Song and Delta Connection routes. The upside to this strategy is that you can more cost efficiently compete with the LCC's by taking passengers directly to where they want to go.

The downside to this strategy is that you can weaken your hubs by reducing connecting opportunities and drawing traffic away. For example, DL cut capacity on the DFW-FLL route, reducing it to only 2x daily flights. Folks in FLL don't really care about the loss to DFW as DL gave them nonstop flights to LAS and LAX...two high demand routes. However, folks in LBB that connect in DFW going to FLL are impacted. LBB has four flights to DFW but now only two of those connect to FLL. By chopping that third flight to FLL, DL has weakened themselves in a market like LBB.

Trying to be both a point-to-point carrier and a hub and spoke carrier is going to be very tough for DL. ATL won't likely be hurt by the point to point flying as it is too much of a mega-hub and has strong O+D traffic. However, CVG, DFW and SLC could be seriously injured if Song expands too much.

 

[General Lee]

Medflyer,

That was great that you looked up all of that info. As you can see they have added some nonstops to FLL that were not there before---like LAX and LAS. Those nonstops are for those people that do not want to pay a lot and want to go nonstop. That is good to allow them to get on those planes. That leaves room for more expensive fares from people who are connecting in ATL or CVG on RJs from smaller cities with no LCC service. Those nonstops actually help get those cheap people from the big cities out to FLL and leave the hub seats open for more expensive fares. That is the plan. As far as DFW is concerned, you are right that people in LBB are affected, but they still have a choice---morning or evening it looks like--and they can always try AA if they don't like it. I don't know what to think about our strategy at DFW, but it looks like they will offer connections there, but fewer in number and enough to allow connections on lots of RJs. There are some West and East Coast connections available there, but it seems like they are using it as a midwest hub with RJs mainly. Also, I don't think Song will expand to the other hubs--because that would confuse the passengers----mainline vs Song... I think Song will stick to point to point---and there are plenty of other routes they can fly. The only real "Hub" that Song flies to is JFK (besides one daily flight from ATL-JFK), and that is just part of the "three airport experience" in NYC---a better choice for every passenger.

Bye Bye--General Lee

 

[FDJ2]

To be fair however, during the first six months at FLL there was no Song service. Plus some of the RJ routes (BNA,RDU) weren't launched until later in the year. So it is very likely that DL's ASMs at FLL in the first half of 03 were lower than 02 which could explain much of the drop. [/B]

MedFlyer, that's some great research. However, those are snap shots in time and don't tell the whole story throughout the year as you pointed out above. Looking at available seats on one particular day does not necessarily represent how many seats were available throughout the year. I think you're right about the first six months of 2003. DAL was aggressive in cutting back capacity starting with the lead up to the Iraq War and they were slow in bringing back capacity after the war. DAL management even admitted they cut too much capacity and left some money on the table this last summer. The plan dejure is to increase capacity 8-10% in 2004.