DL's JFK expansion

[737 Pylt]

Delta To Announce More JFK Service; Execs Focused On Revenue
By Steven Lott
06/16/2006 07:51:11 AM

Delta next week plans to unveil a new round of New York Kennedy international expansion plans, The DAILY has learned, partly because of strong results from new flights started this summer.

The carrier earlier this year started an aggressive push to operate the largest international hub at JFK with flights to more than 30 destinations in Canada, Europe, Latin America and the Caribbean. Many of the new routes were launched in the past six weeks. Chief Operating Officer Jim Whitehurst told The DAILY in New York that Delta's planners generally hoped that about 80% of the new routes would be a success, but he said the new services are "exceeding that goal by a fair margin." He added that bookings for the rest of the summer are "well beyond" expectations, giving the carrier enough confidence to add more JFK service. "We're not done yet," Whitehurst said.

The new unannounced service is expected to start in the fall or winter, and it's not clear which aircraft will be used. Whitehurst was in New York to kick off a marketing campaign promoting the airline's refreshed BusinessElite class. The actual seat has the same frame, but the airline has increased the recline and added new leather covers and cushioning. The airline also is installing an upgraded inflight entertainment system. Whitehurst admits the carrier shouldn't have removed amenities from passengers in recent years and is now moving quickly to improve the international product.

The first four reconfigured Boeing 767-300ERs are flying on international routes -- including 11 new transatlantic routes launched since March -- with four more 767-300ERs scheduled for completion by monthend. Delta's remaining 67 international-configured -300ERs, -400ERs and 777-200ERs will be retrofitted by April 2007.

The new product is part of a large campaign to boost Delta's revenues, which are lagging compared with those of other major carriers. This summer, Whitehurst is focused on "revenue, revenue, revenue," he said. Delta's unit revenue adjusted for stage length has "underperformed" the industry by a double-digit margin. In 2004, Delta's adjusted RASM was 13 points below the industry average, but Whitehurst said the carrier closed the gap to seven points in April. The carrier's internal goal is to close the gap to six points, but Whitehurst believes it will beat that target.

Delta is also leading the way to higher fares. Late Wednesday, Delta raised most of its domestic business fares by $50 one way and its SimpliFare cap to $699. "While passenger volumes at these levels are comparatively modest, they do represent the most inelastic end of the demand spectrum," said JP Morgan analyst Jamie Baker.

At the industry level, he estimates the business fares generate 6%-8% of domestic revenue, implying perhaps as much as a 0.5% domestic revenue increase as a result, if other airlines match.


Domestic

SMF (738)

ONT (738)

SJC (738)

PDX (738)

PHX (738)

SRQ (M88)

DEN (E70)

BHM (CRJ)

JAN (CRJ)

MCI (CRJ)

HNL (764)


International

YVR (738)

POS (738)

CUR (738)
*Weekends Only*

BGI (757):
*Weekends Only*

LGW (763)

GLA (763)

VIE (763):

LIM (757): LA Route

PEK(772):

 

[Frequency]

Man looks like they are making pretty agressive counter-attack against Jetblue.

---------------------

http://www.usatoday.com/money/biztravel/2006-06-19-delta-usat_x.htm

Delta plans long-haul luxury flights
Updated 6/19/2006 10:57 AM

By Marilyn Adams, USA TODAY
Delta Air Lines in August will launch a high-end transcontinental service, heating up competition for perk-loving long-haul fliers.
The No. 3 airline, which is in bankruptcy reorganization, plans to renovate 100 of its 477 full-size jets for long-haul routes, with two cabins and digital TV and music throughout the plane. The planes, all Boeing 757s or 737s, will be equipped with 24 channels of live TV, interactive video games and MP3 audio programming offering more than 1,600 songs. First class will have leather seats.
The first of the upgraded planes will appear on transcontinental flights. Within two years, the renovated planes will be available on all Delta domestic routes longer than 1,750 miles.
"Customer expectations on longer-haul flights have increased, and Delta is upgrading its long-haul product to meet that need," Delta spokeswoman Chris Kelly said. Delta wouldn't say which route will get the upgraded planes first.
The new transcontinental service is part of Delta's efforts in bankruptcy to not only cut costs but also boost revenue.
Delta's fares on the spiffed-up planes have not been announced. But rival United Airlines has shown that luxury can command a high price on transcontinental routes. On Friday, United was selling a short-notice, coast-to-coast round-trip first-class ticket on its "Premium Service," or P.S., for $4,631.
No. 2 United's P.S. operates Boeing 757s between New York John F. Kennedy airport and both Los Angeles and San Francisco. United says P.S., which offers lie-flat seats in first class and personal DVD players, has drawn first-class and business-class passengers from competitors on those routes. As with the Delta initiative, United began P.S. while still under bankruptcy protection in October 2004.
About half the Delta planes being renovated had been flying for Song, Delta's low-fare, single-class service launched in 2003. Song lost money and was discontinued May 1.
On transcontinental routes now, Delta operates a mixture of Song planes, which have the new in-flight entertainment system, and other long-haul jets that don't have it.
Washington, D.C.-based airline consultant Jon Ash says Delta's move makes sense. "The economics of Song never worked," Ash says.
Delta officials said its new transcontinental service will serve both Kennedy and LaGuardia airports in New York, as well as Boston, Atlanta and Cincinnati in the East; Los Angeles, San Francisco and Seattle on the West Coast.
Atlanta-based Delta, which sought Chapter 11 bankruptcy protection in September, has posted net losses totaling $14 billion since the beginning of 2001.
Posted 6/19/2006 12:49 AM ET

 

[BLUE BAYOU]

Song was created to outperform and "put it" to Jetblue. Well, even with a better product, IFE wise at least, it still failed to make a single dollar for Delta. Now, it looks as if there will be some overlap in the transcons and maybe even some Carribean flights. Additionally, there will be flights to Upstate New York on Mesa aircraft. Let me see here, American Eagle quit flying those routes to upstate a while back because they couldn't make money against 156 seaters. So far, it looks like Delta's "put it to Jetblue" phase isn't gone yet; because you know they will succeed, just like Song was touted to do.

 

[zkmayo]

DALs transcon plans out of JFK look more to compete with UAL's PS service. No doubt, they will still be competing with JB on some routes to CA. Regardless, if they are converting some 199 seat 757s to 2 class service and making changes to the 738s as well, that will take some capacity which makes for more pricing power for all the airlines. Thats good news for all.