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Chicago Style
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Delta trims quarter of Song flights during Sept.
Analysts worry about strength of carrier
The Associated Press
Published on: 06/15/04
Delta Air Lines will cut a fourth of flights on its low-cost Song carrier this September, raising questions about how well the budget airline is doing.
Delta officials say the cutback is just temporary, with the full 144 daily flights returning in October.
"September is a particularly low travel time for all carriers," said Song spokeswoman Katie Connell.
Song, launched last April to give Delta an answer to low-fare alternatives such as JetBlue Airways and AirTran, relies on leisure travel, which drops off at the end of summer, Connell said.
Analysts conceded that Song will have a more cyclical passenger load than Delta because it doesn't have a core of business fliers. But they warned the cutback in daily flights hints that Song isn't as strong as Delta hoped.
"Traditionally it has not been successful for a major airline to operate a low-cost carrier within the bigger company," said Joel Denney, an airline analyst for Piper Jaffray & Co. in Minneapolis.
Delta, the nation's third-largest airline, lost $1.3 billion last year and has been looking for Song to help return it to profitability. But in the first quarter of this year, Delta posted a $387 million loss.
Song uses Delta pilots and provides such perks as leather seats and in-flight entertainment. It cuts costs with shorter aircraft turnaround times at airports. Connell said Delta remains upbeat about the budget line's chances.
http://www.ajc.com/business/content/business/delta/0604/15song.html
Analysts worry about strength of carrier
The Associated Press
Published on: 06/15/04
Delta Air Lines will cut a fourth of flights on its low-cost Song carrier this September, raising questions about how well the budget airline is doing.
Delta officials say the cutback is just temporary, with the full 144 daily flights returning in October.
"September is a particularly low travel time for all carriers," said Song spokeswoman Katie Connell.
Song, launched last April to give Delta an answer to low-fare alternatives such as JetBlue Airways and AirTran, relies on leisure travel, which drops off at the end of summer, Connell said.
Analysts conceded that Song will have a more cyclical passenger load than Delta because it doesn't have a core of business fliers. But they warned the cutback in daily flights hints that Song isn't as strong as Delta hoped.
"Traditionally it has not been successful for a major airline to operate a low-cost carrier within the bigger company," said Joel Denney, an airline analyst for Piper Jaffray & Co. in Minneapolis.
Delta, the nation's third-largest airline, lost $1.3 billion last year and has been looking for Song to help return it to profitability. But in the first quarter of this year, Delta posted a $387 million loss.
Song uses Delta pilots and provides such perks as leather seats and in-flight entertainment. It cuts costs with shorter aircraft turnaround times at airports. Connell said Delta remains upbeat about the budget line's chances.
http://www.ajc.com/business/content/business/delta/0604/15song.html
