Even more SONG news!!! Yippee

[General Lee]

Reuters
Song beating cost estimates, eyes more planes
Thursday November 6, 5:15 pm ET
By Julie MacIntosh


NEW YORK, Nov 6 (Reuters) - Song, Delta Air Lines' (NYSEAL - News) lower-cost subsidiary, is beating unit cost projections and expects to announce plans to take more aircraft from its parent within weeks, Song's president said on Thursday.
Song, launched as a unit of Atlanta-based Delta in April, encountered skepticism from analysts and investors who wondered whether it could stay aloft while operating under Delta's heavy cost structure.

John Selvaggio, Song's president, said in an interview that Song's unit costs still begin with a "7" -- as in seven cents per available seat mile -- but include "very significant overhead from Delta."

Delta's pilot union is reviewing this week the airline's proposal for an unspecified amount of cuts that would reduce Delta's industry-leading pilot costs.

Any cuts on behalf of Delta pilots would ring true for Song's as well because its pilots operate under the same contract. But Selvaggio said Song gets better use of pilots than its parent because Song pilots fly more hours.

Nearly all U.S. airlines, still staggering from two years of sharp financial losses and depressed travel demand, have made cost-cutting their mantra in order to stay solvent.

Song's unit costs are coming in under plan, and Selvaggio said the carrier, which has a fleet of 36 199-seat Boeing 757s, is gearing up to take on more airplanes.

A spokesman for Song said it would use reconfigured 757s from Delta's current fleet for the foreseeable future.

Boeing Co. (NYSE:BA - News), which builds the 757, said last month that it would halt production of the model late next year.

PUTTING DOWN ROOTS

Selvaggio, an industry veteran who also worked for American Airlines and US Airways, said he is excited for Song to help "a business that was kind of going straight south get rocked a little."

But Song faces steep competition in that arena from JetBlue Airways (NasdaqNM:JBLU - News), a pioneer in airline service, which has built up a strong presence in the New York, Florida and California markets.

Some Wall Street analysts called JetBlue's recent decision to exit the competitive Atlanta market a coup for Delta, but Selvaggio hesitated at that assessment.

"I think it was a strategic blunder for them in the first place," he said. "They recognized it and they redeployed."

Gareth Edmondson-Jones, a JetBlue spokesman, said the airline pulled out of Atlanta because the routes did not do as well as forecast.

"We looked at the numbers," Edmondson-Jones said. "It didn't work, so we'd prefer to put the planes where we'd make more money."

JetBlue's decision to change venues led it to Boston where the New York-based carrier plans to launch service to five destinations in January.

Delta is one of the biggest players at Boston's Logan International Airport, and Song operates flights to a handful of cities from Boston.

"Boston has always been a strong market for Delta," Selvaggio said. "I think there will be more in Boston."



There you go. Your Song fix for the day!!! Also, we do not have "Song pilots"---they are Delta pilots flying Song rotations in the middle of their normal 4 day trips. Every 757/767 base (except INTL--ER) has trips with Song rotations inside them. As far as being more productive compared to mainline flights---the turn times are faster---that is it.

Bye Bye--General Lee

 

[General Lee]

Here's another one today also:




Dow Jones Business News
Delta's Song Fills 70% Of Seats Through Experimentation
Thursday November 6, 5:53 pm ET
By Elizabeth Souder, Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--Delta Air Lines Inc. (NYSEAL - News)'s new low-cost airline, Song, is filling around 70% of its seats seven months after it launched operations, marketing the brand as a more feminine form of leisure travel.
The marketing of the new airline lives up to one of the mandates that Delta gave Song: to experiment.

"We're the low-cost carrier, and we're also the incubator," said Song Chief Executive John Selvaggio in an interview with Dow Jones.

On Thursday, Song opened a store in New York's Soho neighborhood to market its product: low-cost air travel to sunny destinations aboard brightly-colored planes full of high-tech gadgets.

With flight attendants wearing Kate Spade outfits and selling mini spa kits, as well as yogurt, bagels and fruity cocktails, Song is hoping to appeal to female travelers. Selvaggio said women make most of the travel decisions for U.S. households.

"We could have easily been another sardine-can low-cost-carrier, shuttling customers around," Selvaggio said. But he thought giving Song a distinct image was important to attracting passengers. "I'm certain we're stimulating demand," he said.

So far, customers are biting, though Selvaggio said Song hasn't tallied the number of female passengers compared with male passengers. He said the airline's load factor is around 70%, close to Delta's 72.9% in October.

Selvaggio said he expects Song to contribute around 10% of Delta's total revenue this year. That contribution could rise to around 20% in a few years, he said. In 2002, Delta's total revenue was $13.3 billion.

Song began operations in April, and has since expanded, flying 36 Boeing 757 199-seat airplanes to 13 destinations. Song is taking over routes flown by Delta Express, Delta's previous attempt to create a low-cost leisure airline.

Like Delta Express, Song flies leisure passengers from large cities in the Northeast to popular, sunny locations in Florida and California. And like Delta Express, Song's routes do not overlap Delta routes. Song flies point-to-point routes, while Delta focuses on its hub-and-spoke system.

But Song flies larger planes than Delta Express, offering Song more revenue potential on it routes, but less flexibility in choosing routes that aren't the most popular. Song flies 757s once operated by Delta, but redesigned in Song's signature lime green.

And unlike Delta Express, Song is experimenting with fitting its planes with digital entertainment systems that offer television stations, music and video on demand, and eventually may include Internet access.

Similarities With JetBlue

The entertainment system and unique marketing approach are much like those of JetBlue Airways Corp. (NasdaqNM:JBLU - News) , one of Song's chief rivals. JetBlue and Song compete head-to-head on many routes, though Song operates out of all three major New York-area airports, with JetBlue limited to John F. Kennedy airport.

But while JetBlue is moving toward service with smaller planes on less-popular routes for both business and pleasure, Song's Selvaggio said his focus is the most popular leisure routes, leaving smaller routes to Delta. Selvaggio said the idea to fly international routes has come up, but he would have to find very popular tourist destinations, and such a move would be far down the road.

Song also is trying out ways to boost productivity of its employees and equipment. The airline has cut the amount of time between landing a plane, getting passengers off, boarding new passengers and taking off to 45 minutes from the 50 minutes the airline had first budgeted. Selvaggio said that means Song can fly 20% more flights, often staffed with the same employees.

Song hired many of its employees from Delta's ranks, and offers the same salary scale as the main airline. But to keep costs lower than the main airline, Song allows its employees to work more overtime. Another cost advantage compared with the main airline is that Song's employees, on average, have fewer years of experience than Delta employees.

Selvaggio said Delta is watching his experiments to find ideas that could by used for the entire company.

Delta isn't the only airline keeping an eye on Song. Other major carriers are tracking Song's success as they consider whether to build their own low-cost airlines.

UAL Corp.'s United Airlines announced in September it will start a low-cost airline to halt the slide of market share in Denver toward rival low- cost carriers.

And AMR Corp. (NYSE:AMR - News) Chief Executive Gerard Arpey said Thursday he's watching experiments by both carriers to see if such an approach might work for American Airlines.

"You have to make sure when you pursue such a thing that what you are creating is truly low-cost" rather than just low-fare, Arpey said at a meeting with analysts.

-By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; [email protected]



Two articles in the same day.......Enjoy!
Maybe this will answer some of Dizel8's questions.


Bye Bye--General Lee

 

[Neubyfly]

Probably why AMR is thinking about this

Dow Jones Business News
AMR CEO: Co Mulls Building Its Own Low-Cost Carrier

Thursday November 6, 10:17 am ET
By Elizabeth Souder, Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--AMR Corp. (NYSE:AMR - News) Chief Executive Gerard Arpey said the airline is going on the offensive against low-cost carriers by changing its route schedule, and is even considering building its own low-cost carrier.
"We of course will be competitive, and we must rely on the depth and breadth of our network. And we're through retreating," Arpey said at an analyst meeting Thursday.

This week, American changed some of its route schedule as the airline cut some flights in St. Louis. Arpey said the cuts allowed American to offer more frequency at hubs like Dallas and Chicago, which are more important to the carrier. Higher frequency at those cities should help American attract more business travelers, he said.

Arpey said the world's largest carrier had spread itself too thin before Sept. 11. By concentrating more resources on top hubs, the Fort Worth, Texas, airline can also increase productivity by flying the plane longer each day. In that way, American plans to increase its capacity next year despite a decrease in its fleet size, Arpey said.

He said the schedule change was prompted in part by the threat from growing low-cost carriers.

"Part of the decision about St. Louis was the anticipation that we are going to face threats," Arpey said.

He said American plans to also grab its "fair share" of leisure traffic, and the airline is considering building its own low-cost carrier.

He said American is watching the low-cost airlines that competitors Delta Air Lines Inc. (NYSE AL - News) and UAL Corp. are creating. If they work, American may consider building one of its own.

"You have to make sure when you pursue such a thing that what you are creating is truly low-cost" rather than just low-fare, he said.

But Arpey said his first priority is to reach his cost-cutting goals for the main airline.

"Thus far, what we've been focusing on, rightly or wrongly, is fixing the 750- jet airline problem, rather than starting a new airline," he said.

 

[fredflyer]

Yeah, I bet it will be different when Song starts to pay for its airplanes.

 

[SpeedBird]

fredflyer:

ROTFLMAO.......that was priceless!!

 

[General Lee]

Yeah, that was funny....? What? Oh yeah, Jetblue hasn't paid for their planes yet, that's right. Or was it their unbelievable maintence deal that is non existent? Whatever. Everybody there is still in love with their managment because they are upgrading so fast---why should they ever want a union??? Someday they will understand. Enjoy!

Bye Bye--General Lee

 

[SpeedBird]

Fredflyer:

Your original rendition was funnier. You should have let ride as is (or was).

GL:

Let's see....70% LF on a 189-seat airplane (B757) comes out to 132 passengers. 85% LF on a 156-seat airplane (A320) also comes out to 132 passengers.

Why don't we call it a draw!

 

[fredflyer]

Speed,
I guess posting is like taking a test, you should always go with your first choice. Oh well, I don't think GL would have found the humor in either statement.

 

[General Lee]

Speedbird,

Why don't you give us some time to get our brand name out---how long did it take you to become a known brand? How long did it take you to do well? Or did you start off with great loads? I remember seeing you down at the Ft. Lauderdale beach Resort back in 1999 and you guys didn't look so happy or optimistic--but now, after a couple years, you are doing well. Song has been around for 7 months. We have our first Winter season coming up, and there will be more passengers trying it to get out of the cold. We are slowly installing our IFE system, which will EVENTUALLY help retain passengers. Then Spring Break will come, and we will---along with you guys---do even better. Then, after we have atleast 1 year under our belt--see how we compare to you guys. Most people 5 months ago had never even heard of Song---but by next Spring--maybe a lot more will---and out of ALL THREE NYC AIRPORTS!!!! Ah yeah!

Bye Bye---General Lee

 

[FDJ2]

Fredflyer:

Your original rendition was funnier. You should have let ride as is (or was).

GL:

Let's see....70% LF on a 189-seat airplane (B757) comes out to 132 passengers. 85% LF on a 156-seat airplane (A320) also comes out to 132 passengers.

Why don't we call it a draw!

Song 757s have 199 seats, for an average of approximately 140 passengers per flight. Considering the rapid expansion from 0 to 36 aircraft in only about 6 mos., that's not bad. Particularly since a great deal of capacity was added in September and October. Apparently the inflight entertainment system with its 24 free channels of satelite TV, internet connection, inflight juke box and pay per view movies is working great and will be installed in all the aircraft by early 2004. The inflight meal options are also bringing in some extra revenue. Management seems to be pleased with the performance of the product and will add an additional 10-15 aircraft to Song next year. Of the total DAL fleet of 121 B757s, 77 are owned and only 44 leased.

 

[SpeedBird]

General & FDJ:

I guess my posts are not coming across in the spirit they are intended. I'm just having a little fun with all the song news. I'm glad to see that you have a lot of enthusiasm for Delta's new product. I think it should be embraced by you and other Delta employees since it's apparently off to a good start. I'm sure over time you'll tweak the overall product and make it even better than it is today. JetBlue has done the same thing over the last 3-4 years. That is the hallmark of top-notch operations that maintain positions of leadership in their industries.

As I posted on another thread whatever success Song is having, it is not coming at the expense of jetBlue's operating results. There is plenty of business for both airlines to do well and grow over the long-term.

Please don't think that I'm trying to pick on your upstart operation. Frankly, I'm just not that obsessed with this whole comparison for it to become a personal crusade, if you know what I mean.

I will say this however, that I would be more impressed with Song's performance if Delta & Song management separated out its operating and financial numbers, rather than "hiding" it in the overall numbers of both DCI & mainline. It makes me somewhat supicious that they are trying to hide something, not to mention that it takes away from the credibility that comes from letting the numbers speak for the operation, not some press release spun from public relations.

 

[General Lee]

Speedbird,

I know, and I am making fun of all of the news too. (note the "yippee" on the end of the thread title) As far as the "actual" numbers---that is up to Leo to give.

Bye Bye--General Lee

 

[Beer&Brauts]

marketing the brand as a more feminine form of leisure travel.

If this is the case, why do they have giant green sperm painted on their airplanes?

 

[General Lee]

Jealous?

 

[Skank]

Herr General, Actually most of us have already spent our time in ALPA hell. Please don't tell us that ALPA is in our future again. I don't think we will be able to stand it.

 

[General Lee]

Skank,

You don't have to have ALPA----look at the Southwest guys. What i was pointing out is that there is a great reason none of you complain right now---and that is fast upgrades--which brings more cash to you. When and if that stops---or if competition from Southwest and others starts to affect your bottom line---managment might do things that "pisses you off." Then you will see the light again---and maybe form a union to protect your interests. You can't say it will NEVER happen. A handshake from the CEO only goes so far---to think otherwise is naive.


Bye Bye--General Lee

 

[Skank]

I am a bit wet behind the ears, but I never got the flu from Carty.

 

[Ty Webb]

Well, I shook Steven Wolf's hand once, and ended up missing my wristwatch and a couple of rings. . . .

Heh Heh.