NYRANGERS
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- Jun 13, 2002
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Hot Flash - February 3, 2003
Delta's "Song"
Leading Lots of Folks In The Wrong Direction
Except, Maybe, Delta
Delta's Song: The exception that has nothing to do with the rule.
The cackle among much of the media today is that "legacy carriers" are dead, and the alleged hordes of low-fare, point-to-point carriers are taking over.
That thought process has given rise to United's alleged plan to start a "low cost carrier" within itself, the result being a dual identity airline with Jekyll & Hyde service products. Now that Delta's doing the Song deal, it's a near certainly that it will embolden the top folks at United and their Rasputin outside advisors to go full-throttle with their low-fare surrogate. And possibly down the tube, unfortunately.
Different Strokes For Different Airline Systems. We covered this before. (Go There) Song is just a hyper-thyroid version of Delta Express. And Delta Express was established to carry a demonstrable, and identifiable segment of Delta's existing traffic base - i.e., fare sensitive Florida traffic. It's like shifting the low fare coach seats to another airplane, running the traffic nonstop and thereby making better use of hub assets at ATL and CVG.
We'd point out again that Delta established Delta Express with little or no gurgling about "beating Southwest." It was designed to enhance Delta's traffic flows, not burn down Southwest headquarters in Dallas. And regardless of what the media attributes to this "new" Delta entity, its immediate and primary traffic is already in place. It doesn't need to "take on" or "fight" jetBlue or Southwest. In short, Song makes sense for Delta's existing traffic base. Unlike MetroJet or Continental Lite, it doesn't compete with its mainline.
Getting Past The Name. The only thing that everybody seems to agree on is the name. Song - it's weird. Reminds one of a Chinese dynasty. Or something on the showroom floor at the local Hyundai dealer. But it does fit in with other recently-established airlines - Tango, Buzz, Go, Jazz, and now Song. Put them together and it sounds like the music format of a very confused New Age radio station. What's the next new airline gonna be? Waltz? Disco? Lambada? Cotton-Eyed Joe?
Separating Markets, Not Confusing Them. Name identity aside, in a very real sense, Song/Delta Express represents a very old and very sound marketing idea - separate your consumer segments without confusing your customers. American did it in the 1950s with its "Royal Coachman" service. It wasn't anything "royal" but, boy, it sure was "coach" - they crammed 80 seats on some DC-6s and launched them on multi-stop late night transcons. The original National Airlines did it, too, with "nickel flights" - clapped-out Constellations flying in the wee hours with fares five cents higher than the bus to Florida. (Probably with the same ambiance, too.) The objective then was the same as Delta's today.
Pied-Pipering United. But much of the mainline media does not understand the fundamental differences between what Delta is doing, and what United is thinking about inflicting on itself. Delta has the route system and Florida market presence to make this separation of its existing markets work, United does not. United certainly does not have any material parts of its route system where point-to-point service can work on a large scale - as proven by the first 12 months of the United Shuttle. But it could be a real disaster if they attempt a hub-and-spoke system using two product identities.
Nevertheless, the Delta Song program will likely only encourage United to go ahead with its low-fare experiment. In a sense, that could make United, not jetBlue, Song's first competitive victim - without even directly competing with it.
Final Point: Song Could Be A Winner. Looking to the future of this entity, we first have to get past a blizzard of real sappy PR stuff, like this ditty, right off the Song website:
"Just as a song is the harmonious composition of distinct yet related elements, our Song will be in harmony with each individual's self-expression."
Oh, pluh-leez. It's an airline, not a 60's San Francisco love-in. At a $99 fare, what's to self-express, already? The customer wants a seat to West Palm, not psycho-analysis. So, the first suggestion: give second thoughts to the ad agency who dreams up this goo.
Now, the second suggestion: ignore the folks who're saying Song won't work. Given the way the carrier and its direction are structured, the concern expressed by some analysts might better be applied in the direction of jetBlue, which is a fine airline, but may be severely challenged by this Delta product.
Cutting through the obvious comments about how Song will have higher labor costs than jetBlue and Southwest, the fact is that the Florida market is ultimately finite, and the battlefield outcome will be determined by levels of brand loyalty. At risk of annoying the peanut gallery of rearview-mirror analysts who are cooing around low-fare start-ups like they once did around dot coms, here's a prediction: Song apparently has the management, the product, and the structure to more than compete. If it's done right, and if it's done with lights-out customer service (frills do no equate to good service, by the way - employees do) the entire low-fare Florida market could be in for a real competitive battle.
In short, the name doesn't matter. Song could get the fat lady singing for some of its competitors.
Low-cost airlines included.
© 2003 The Boyd Group/ASRC, Inc.
Delta's "Song"
Leading Lots of Folks In The Wrong Direction
Except, Maybe, Delta
Delta's Song: The exception that has nothing to do with the rule.
The cackle among much of the media today is that "legacy carriers" are dead, and the alleged hordes of low-fare, point-to-point carriers are taking over.
That thought process has given rise to United's alleged plan to start a "low cost carrier" within itself, the result being a dual identity airline with Jekyll & Hyde service products. Now that Delta's doing the Song deal, it's a near certainly that it will embolden the top folks at United and their Rasputin outside advisors to go full-throttle with their low-fare surrogate. And possibly down the tube, unfortunately.
Different Strokes For Different Airline Systems. We covered this before. (Go There) Song is just a hyper-thyroid version of Delta Express. And Delta Express was established to carry a demonstrable, and identifiable segment of Delta's existing traffic base - i.e., fare sensitive Florida traffic. It's like shifting the low fare coach seats to another airplane, running the traffic nonstop and thereby making better use of hub assets at ATL and CVG.
We'd point out again that Delta established Delta Express with little or no gurgling about "beating Southwest." It was designed to enhance Delta's traffic flows, not burn down Southwest headquarters in Dallas. And regardless of what the media attributes to this "new" Delta entity, its immediate and primary traffic is already in place. It doesn't need to "take on" or "fight" jetBlue or Southwest. In short, Song makes sense for Delta's existing traffic base. Unlike MetroJet or Continental Lite, it doesn't compete with its mainline.
Getting Past The Name. The only thing that everybody seems to agree on is the name. Song - it's weird. Reminds one of a Chinese dynasty. Or something on the showroom floor at the local Hyundai dealer. But it does fit in with other recently-established airlines - Tango, Buzz, Go, Jazz, and now Song. Put them together and it sounds like the music format of a very confused New Age radio station. What's the next new airline gonna be? Waltz? Disco? Lambada? Cotton-Eyed Joe?
Separating Markets, Not Confusing Them. Name identity aside, in a very real sense, Song/Delta Express represents a very old and very sound marketing idea - separate your consumer segments without confusing your customers. American did it in the 1950s with its "Royal Coachman" service. It wasn't anything "royal" but, boy, it sure was "coach" - they crammed 80 seats on some DC-6s and launched them on multi-stop late night transcons. The original National Airlines did it, too, with "nickel flights" - clapped-out Constellations flying in the wee hours with fares five cents higher than the bus to Florida. (Probably with the same ambiance, too.) The objective then was the same as Delta's today.
Pied-Pipering United. But much of the mainline media does not understand the fundamental differences between what Delta is doing, and what United is thinking about inflicting on itself. Delta has the route system and Florida market presence to make this separation of its existing markets work, United does not. United certainly does not have any material parts of its route system where point-to-point service can work on a large scale - as proven by the first 12 months of the United Shuttle. But it could be a real disaster if they attempt a hub-and-spoke system using two product identities.
Nevertheless, the Delta Song program will likely only encourage United to go ahead with its low-fare experiment. In a sense, that could make United, not jetBlue, Song's first competitive victim - without even directly competing with it.
Final Point: Song Could Be A Winner. Looking to the future of this entity, we first have to get past a blizzard of real sappy PR stuff, like this ditty, right off the Song website:
"Just as a song is the harmonious composition of distinct yet related elements, our Song will be in harmony with each individual's self-expression."
Oh, pluh-leez. It's an airline, not a 60's San Francisco love-in. At a $99 fare, what's to self-express, already? The customer wants a seat to West Palm, not psycho-analysis. So, the first suggestion: give second thoughts to the ad agency who dreams up this goo.
Now, the second suggestion: ignore the folks who're saying Song won't work. Given the way the carrier and its direction are structured, the concern expressed by some analysts might better be applied in the direction of jetBlue, which is a fine airline, but may be severely challenged by this Delta product.
Cutting through the obvious comments about how Song will have higher labor costs than jetBlue and Southwest, the fact is that the Florida market is ultimately finite, and the battlefield outcome will be determined by levels of brand loyalty. At risk of annoying the peanut gallery of rearview-mirror analysts who are cooing around low-fare start-ups like they once did around dot coms, here's a prediction: Song apparently has the management, the product, and the structure to more than compete. If it's done right, and if it's done with lights-out customer service (frills do no equate to good service, by the way - employees do) the entire low-fare Florida market could be in for a real competitive battle.
In short, the name doesn't matter. Song could get the fat lady singing for some of its competitors.
Low-cost airlines included.
© 2003 The Boyd Group/ASRC, Inc.
