Flying Freddie
Bitchin' Blue
- Joined
- Dec 30, 2002
- Posts
- 345
Reuters
UPDATE - Delta to add New York service, takes on JetBlue
Wednesday January 28, 5:35 pm ET
By Meredith Grossman Dubner
(Adds analyst, CEO comments, closing share price)
CHICAGO, Jan 28 (Reuters) - Delta Air Lines Inc. (NYSE
AL - News) on Wednesday said it will increase flights and add eight new destinations at New York's John F. Kennedy airport, as it takes on JetBlue Airways Corp. (NasdaqNM:JBLU - News) in its latest battle against a low-cost carrier.
The No. 3 U.S. airline said it will bring 10 parked aircraft back into service and recall about 200 flight attendants and 100 airport employees for the JFK expansion.
It also plans to invest more than $300 million in improving its JFK terminal over the next six years.
"I fully expect that JetBlue will continue to grow," Delta's chief marketing officer, Vicki Escarra, said in an interview with Reuters.
"When you look at the fact that (low-cost carriers) are growing 25 percent faster than mainline carriers and have cost structures that allow them to grow faster ... they are a force to be reckoned with."
JetBlue, based in New York and the biggest carrier at JFK, continues to expand its popular service featuring live TV and leather seats. Last week, it said it filed with the U.S. Department of Transportation for 10 slots to begin service from New York's LaGuardia airport this spring.
Delta, which already operates 25 mainline and 14 Song flights out of LaGuardia, has competed aggressively with low- cost carriers, particularly with AirTran Airways Inc. (NYSE:AAI - News), which has taken on Delta in its hometown of Atlanta.
Delta has some of the highest costs in the industry and launched a low-fare subsidiary, Song, last year to compete with lower-cost rivals. It currently runs 17 Song flights and 27 mainline flights a day from JFK.
Delta's new chief executive, Gerald Grinstein, has launched a full-scale review of its business, saying the company still faces many challenges in 2004. The carrier is also in the midst of contract talks with its pilots union to reduce costs.
BANKRUPTCY NOT A FIRST CHOICE
Speaking to business leaders at the Buckhead Coalition in Atlanta on Wednesday, Grinstein reiterated the need to reduce pilot costs.
In response to questions from reporters, Grinstein denied Delta had planted the idea of a possible bankruptcy, as a Wall Street analyst had suggested, during the company's quarterly conference call two weeks ago when he discussed the urgent need to reduce pilot costs.
"Bankruptcy is not a first choice in any experience I have ... my goal is to avoid that," Grinstein said on Wednesday.
Blaylock & Partners analyst Ray Neidl said Delta has to lower costs further before adding too much new capacity.
"With its low cost structure, JetBlue can probably make a profit in those markets. Delta, with its high cost structure, may not be able to make a profit (at JFK)," Neidl said.
Escarra said most of the airline's 9 percent capacity increase this year will be focused on New York and Atlanta.
Delta will start two flights each from JFK to Denver and San Juan, Puerto Rico, in April, to Santo Domingo, Dominican Republic, in June, and to San Diego in July.
Song will start two flights from JFK to Fort Myers, Florida, in May.
Delta will also add one flight on each of three existing routes from JFK to Los Angeles, Seattle and Las Vegas, and two flights on its existing service to San Francisco, by September.
In addition, Delta will start new commuter service to Charleston, South Carolina, Savannah, Georgia and Greensboro, North Carolina and increase frequencies to some other Midwest cities. The regional flights will be operated by Chautauqua Airlines under the Delta Connection brand.
Delta also said it will improve air conditioning and baggage systems and will add directional signage and more visible Delta branding in JFK terminals No. 2 and No. 3.
Delta shares closed down 70 cents, or 5.7 percent, at $11.54 on the New York Stock Exchange (News - Websites) . (Additional reporting by Paul Simao in Atlanta)
UPDATE - Delta to add New York service, takes on JetBlue
Wednesday January 28, 5:35 pm ET
By Meredith Grossman Dubner
(Adds analyst, CEO comments, closing share price)
CHICAGO, Jan 28 (Reuters) - Delta Air Lines Inc. (NYSE
AL - News) on Wednesday said it will increase flights and add eight new destinations at New York's John F. Kennedy airport, as it takes on JetBlue Airways Corp. (NasdaqNM:JBLU - News) in its latest battle against a low-cost carrier.The No. 3 U.S. airline said it will bring 10 parked aircraft back into service and recall about 200 flight attendants and 100 airport employees for the JFK expansion.
It also plans to invest more than $300 million in improving its JFK terminal over the next six years.
"I fully expect that JetBlue will continue to grow," Delta's chief marketing officer, Vicki Escarra, said in an interview with Reuters.
"When you look at the fact that (low-cost carriers) are growing 25 percent faster than mainline carriers and have cost structures that allow them to grow faster ... they are a force to be reckoned with."
JetBlue, based in New York and the biggest carrier at JFK, continues to expand its popular service featuring live TV and leather seats. Last week, it said it filed with the U.S. Department of Transportation for 10 slots to begin service from New York's LaGuardia airport this spring.
Delta, which already operates 25 mainline and 14 Song flights out of LaGuardia, has competed aggressively with low- cost carriers, particularly with AirTran Airways Inc. (NYSE:AAI - News), which has taken on Delta in its hometown of Atlanta.
Delta has some of the highest costs in the industry and launched a low-fare subsidiary, Song, last year to compete with lower-cost rivals. It currently runs 17 Song flights and 27 mainline flights a day from JFK.
Delta's new chief executive, Gerald Grinstein, has launched a full-scale review of its business, saying the company still faces many challenges in 2004. The carrier is also in the midst of contract talks with its pilots union to reduce costs.
BANKRUPTCY NOT A FIRST CHOICE
Speaking to business leaders at the Buckhead Coalition in Atlanta on Wednesday, Grinstein reiterated the need to reduce pilot costs.
In response to questions from reporters, Grinstein denied Delta had planted the idea of a possible bankruptcy, as a Wall Street analyst had suggested, during the company's quarterly conference call two weeks ago when he discussed the urgent need to reduce pilot costs.
"Bankruptcy is not a first choice in any experience I have ... my goal is to avoid that," Grinstein said on Wednesday.
Blaylock & Partners analyst Ray Neidl said Delta has to lower costs further before adding too much new capacity.
"With its low cost structure, JetBlue can probably make a profit in those markets. Delta, with its high cost structure, may not be able to make a profit (at JFK)," Neidl said.
Escarra said most of the airline's 9 percent capacity increase this year will be focused on New York and Atlanta.
Delta will start two flights each from JFK to Denver and San Juan, Puerto Rico, in April, to Santo Domingo, Dominican Republic, in June, and to San Diego in July.
Song will start two flights from JFK to Fort Myers, Florida, in May.
Delta will also add one flight on each of three existing routes from JFK to Los Angeles, Seattle and Las Vegas, and two flights on its existing service to San Francisco, by September.
In addition, Delta will start new commuter service to Charleston, South Carolina, Savannah, Georgia and Greensboro, North Carolina and increase frequencies to some other Midwest cities. The regional flights will be operated by Chautauqua Airlines under the Delta Connection brand.
Delta also said it will improve air conditioning and baggage systems and will add directional signage and more visible Delta branding in JFK terminals No. 2 and No. 3.
Delta shares closed down 70 cents, or 5.7 percent, at $11.54 on the New York Stock Exchange (News - Websites) . (Additional reporting by Paul Simao in Atlanta)
