New SONG expansion

[MedFlyer]

Here we go again, the expert RJ pilot who knows everything about Song. We don't have the room(gates) at EWR, we can't expand there.

Delta Express had 15 daily flights from EWR at its peak, but somehow Song couldn't expand when it was only operating 2 flights to MCO. If DL management wanted to expand Song service at EWR, the gate space is there. They chose not to because Song couldn't compete at EWR.

Can you really say Jetblue is profitable? How about they don't lose as much as the others, including us? That's better.

The last press release I read said JetBlue had 17 consecutive quarters of profitability including the 1st quarter of 2005. So yes, I can really say that JetBlue is profitable. I can't say the same about Song, because DL management won't publish any Song numbers. What are they hiding?

I said in my last post that I THINK Song is doing well by my own accounts, and that Grinstein said he uses Song as a tool against Jetblue. He said that, and he knows a lot more than you or I about what is going on.

Bye Bye--General Lee

Grinstein says a lot of stuff. He also told you that he doesn't like RJ's on long flights (remember that?), but guess what? DL keeps putting RJ's on long flights. Earlier this month, Comair started flying SAT-MCO...1,036 miles.

Since you are so fond of Grinstein quotes, here's another one for you:

"However, as (Delta chief executive officer Gerald) Grinstein paraphrased Vince Lombardi in a recent interview - 'sometimes the clock just runs out.'"

 

[General Lee]

He also said we could sell DCI and still get good use out of it. We don't have to own it I remember him saying.

How many flights did Delta Express have again out of EWR at it's peak? Are you sure about 15 a day? I flew there for a year and don't remember that many. Maybe you were there, counting them from the observatory deck. We also dropped IAD, but nobody was really fighting us there at that point. We obviously dropped EWR because we couldn't do much there to expand it anymore. We were stuck with a certain number of possible departures. Besides, we have a CRJ or CR7 blocking the gate most of the time, taking disgruntled businessmen to CVG. You should know that.

Grinstein said Song was profitable in the press, so I would have to believe that there is some truth there. Also, he is expanding it, rather than shutting it down I believe, and that would INDICATE that Song is on the right path. As far as our profitability, we have already cut $3.5 billion a year from the budget, and we are going for $5 billion a year. With your pay freeze, we might save $5.1 billion. Both of our main creditors--AMEX and GE, are "impressed" and have relaxed our terms, partially to help for higher gas bills. At the same time, we have increased fares somewhat to cover most of the higher fuel costs, but $60 a barrel isn't good for anyone.

Got any quotes from Fred Butrell? Where are those Comair E170s?


Bye Bye--General Lee

 

[Smoking Man]

So, where oh where would you be starting new service? Probably not ATL anytime soon, until maybe you get some E190s. I saw you started new Ponce flights, even though the times are gawd awful. Any idea of another "focus city?" It will be interesting to see where your E190s and buses go after the introduction of the E190 fleet. Let's just hope you guys have the ballz someday to get your E190 pay increased. $89 an hour for 12 year Captain pay really isn't that good for a 100 seat aircraft.


Bye Bye--General Lee

Note: The $89 an hour is only for the first 70 hours, anything above is paid at 150%.


If I had to guess about where the 190 is going I would place $$, on cities like RIC, CHS, etc, you know cities where a large portion of the flying is on crj/emb-145 aircraft and the airport is largely served by delta/u.s. airways. I wonder if the customers will notice the larger airplane (compared to crj service) that you can stand up in, and you don't have to walk out on the ramp in the WX to get in. Not to mention the extras, TV/ XM soon etc etc. I am suspect that the pay will change after the aircraft gets some time on the property.

 

[General Lee]

Note: The $89 an hour is only for the first 70 hours, anything above is paid at 150%. If I had to guess about where the 190 is going I would place $$, on cities like RIC, CHS, etc, you know cities where a large portion of the flying is on crj/emb-145 aircraft and the airport is largely served by delta/u.s. airways. I wonder if the customers will notice the larger airplane (compared to crj service) that you can stand up in, and you don't have to walk out on the ramp in the WX to get in. Not to mention the extras, TV/ XM soon etc etc. I am suspect that the pay will change after the aircraft gets some time on the property.

Everyone hopes so. Remember also that even the extra pay after 70 hours doesn't help much when you live in NYC or the surroundings. Honestly, we hope you guys change your rates eventually.


Bye Bye--General Lee

 

[Smoking Man]

I think that 90% of the pilots at JFK commute.

 

[FNG320]

Grinstein said SONG was profitable in the press, so I would have to believe that there is some truth there. Also, he is expanding it, rather than shutting it down I believe, and that would INDICATE that Song is on the right path.
Bye Bye--General Lee

General,
I have read the same press releases. Problems is, they have always said SONG was profitable. But that is SONG itself, without the overhead that goes with operating an airline. These include the cost of gates, reservations, maintenance, payments on jets, etc. It is just for the cost of pilots, flight attendants, some cusotmer service/gates agents and fuel. Mother Delta is providing a lot to SONG. IF you were to break out SONG's portion of all of the above from Delta's total bill, SONG would be losing money. Maybe not as much as mainline, but still losing money. But by "leaving out some cost" that is how he can say SONG is making money.

Yes, expanding. But Song is feeding mostly of on itself by replacing mainline fights with SONG. The end result is it should be a reduction in losses, but not increased profit.

It is amazing how SONG parallels just about every city pair that JetBlue has. There are few if any where SONG does not parallel JetBlue. Remember the west coast flights still parallel JetBlues (SFO=OAK, LAX=LGB, etc).

I guess you can say Plagiarism is the greatest form of flattery. SONG is just a XEROX copy of JetBlue, but it came from a color copier missing some colors.


Just my opinion.....

FNG

 

[banger]

We just announced a $220 million JFK construction job. Would that indicate that we are just peeing in the wind there?


What I've heard is the port of NYC sued DAL to correct and upgrade the terminal to keep it up to standards they had agreed upon. DAL didn't want to spend the $220 mil but was forced to.

 

[FNG320]

We just announced a $220 million JFK construction job. Would that indicate that we are just peeing in the wind there?


What I've heard is the port of NYC sued DAL to correct and upgrade the terminal to keep it up to standards they had agreed upon. DAL didn't want to spend the $220 mil but was forced to.

Ouch! That'l leave a mark! But if you haven't been in Terminal 2 and 3 lately, they are really run down (old, dirty, torn carpet, missing tiles, cracks in the floors and walls, wall paper falling down, ceiling leaks in heavy rain, etc. They both defintley need some TLC. It does look like they have done nothing to maintian the property in years!


Just my opinion...

FNG

 

[GogglesPisano]

Ouch! That'l leave a mark! But if you haven't been in Terminal 2 and 3 lately, they are really run down (old, dirty, torn carpet, missing tiles, cracks in the floors and walls, wall paper falling down, ceiling leaks in heavy rain, etc. They both defintley need some TLC. It does look like they have done nothing to maintian the property in years!


Just my opinion...

FNG

Terminal 3 will always be the old Pan Am Worldport in my eyes. Ahh, the good old days.

 

[Noserider76]

It is amazing how SONG parallels just about every city pair that JetBlue has. There are few if any where SONG does not parallel JetBlue. Remember the west coast flights still parallel JetBlues (SFO=OAK, LAX=LGB, etc).
FNG

Not this crap again. Jet Blue cherry picked routes Delta has been flying for years. If you are going to attack someones routes with an ultra low-paid work force you sure better expect a competitve response. All the west coast flights were flown by Delta long before Jet Blue was even an idea.

 

[IB6 UB9]

Ultra low paid?

 

[Noserider76]

Ultra low paid?

Relative to the pay scales in effect at most majors when your company was formed - yes.

 

[jbucpt]

Relative to the pay scales in effect at most majors when your company was formed - yes.

yes, but we were given a 30% raise late 2001. 1 1/2 years after conception. (same time your industry leading contract was in effect).

in regards to Song. Song is delta's biggest money loser. the reason delta is expanding Song and not Mainline (i.e. bdl to sfo) is due to lower loses.

why are they expanding Song? probably the same reason the idiots running the company have every last paper clip borrowed against to keep the company running. the true question is, who will give them D.I.P. financing with everything already borrowed against, when they go chapter 11??

general, please give me YOUR SPIN.....

 

[thruthemurk]

Note: The $89 an hour is only for the first 70 hours, anything above is paid at 150%.

Let's keep it real here. The highest paid 190 Captain at Jetblue will be $72.32/hr(2nd year), soon to be $73.93/hr(3rd year). Hours above 70 will be paid at $108.48 and $110.90 respectively.

This would make the TRUE blended payrate for an 82 hour month $77.61(2nd year) and $79.34(3rd year).

12 year payscale is irrelevant and only serves to skew the reality.

 

[Heavy Set]

General,
I have read the same press releases. Problems is, they have always said SONG was profitable. But that is SONG itself, without the overhead that goes with operating an airline. These include the cost of gates, reservations, maintenance, payments on jets, etc. It is just for the cost of pilots, flight attendants, some cusotmer service/gates agents and fuel. Mother Delta is providing a lot to SONG. IF you were to break out SONG's portion of all of the above from Delta's total bill, SONG would be losing money. Maybe not as much as mainline, but still losing money. But by "leaving out some cost" that is how he can say SONG is making money.

Yes, expanding. But Song is feeding mostly of on itself by replacing mainline fights with SONG. The end result is it should be a reduction in losses, but not increased profit.

It is amazing how SONG parallels just about every city pair that JetBlue has. There are few if any where SONG does not parallel JetBlue. Remember the west coast flights still parallel JetBlues (SFO=OAK, LAX=LGB, etc).

I guess you can say Plagiarism is the greatest form of flattery. SONG is just a XEROX copy of JetBlue, but it came from a color copier missing some colors.


Just my opinion.....

FNG

SONG is not just a XEROX copy of JetBlue - it is, in my opinion, a much better product. The leather seats are nicer, the food is much better (I got tired of the blue M&Ms and chips after 2-3 hours) and the entertainment system blows JetBlue's away (I like the radio option in addition to the TV and movies)... SONG has improved greatly on the JetBlue product - I have flown on both and I would take SONG in a heartbeat if given the choice. Didn't Readers Digest just vote SONG the best LCC experience (can't remember the award) or something like that? JetBlue was not rated number one in that survey - and that's not just my opinion...

To address your assertion that SONG has not been profitable, Grinstein will be in very big trouble if SONG is/was not profitable when he publicly made that statement. The SEC would be breathing down his neck if he stated one thing and then "misled" investors. Grinstein is smart and he would not do anything to jeopardize Delta or his position - right? Therefore, if he makes public statements like that, I would assume they are "roughly" correct - if not, he could be prosecuted (in the post-Enron business environment). True, you can't break out the numbers from Delta's general numbers, but a public statement like that would indicate that the results (at the time) were positive.

I would think that news that SONG is replacing mainline flights would be disturbing to the JetBlue folks. SONG is a very competitive product and competintg against SONG could lead to lower margins for JetBlue if the price difference is insignificant. Why? Delta/SONG offers a better product, a better frequent flier program and international connections which makes the SONG product very competitive. I easily prefer SONG to the regular Delta service and interior - I would prefer to fly SONG all of the time if given the chance. Add to that comparable SONG fares on the same routes and the JetBlue "advantage" starts to vaporize on shared routes.

Everyone knows that international flights are the money-makers, and Delta (like CO, AA, and UAL) is doing reasonably well on its international flights and this can partially subsidize SONG's expansion. JetBlue does not have that option and must compete against Flyi, AirTran, SWA, Spirit, Frontier and now US/AWA for low-margin passenger dollars. As SONG expands with its better product and maintains competitive fares, JetBlue will feel the competition in its shared markets. I doubt JetBlue is making big money on the IAD-Florida routes with Flyi charging ridiculously low fares on each and every flight. Meanwhile, SWA will be adding hundreds of low-fare 737-700s, AirTran will be adding more 737-700s (up to 100 I believe), Flyi will be adding Airbuses, Spirit will add more A321s and A319s to the Florida-Northeast Corridor and the newly-energized USairways (if the AWA deal comes to fruition with additional equity) will be engaging JetBlue more directly - JetBlue can look forward to a lot more low-fare competition in the future.

In the meanwhile, if fuel costs ever do come down, Delta/SONG should be in better shape after the massive cost cutting and restructuring that help to reduce its operating costs (and provide for a better margin - excluding the fuel costs). Thank God for the E190 and its low-paid pilots for expansion away from Delta/SONG and other LCC markets.

 

[B6Driver]

The fact that you're not flying anymore by your own account tells a lot about how well Delta's doing. The consecutive BILLION dollar quarterly losses are another tell tale sign of your company’s foresight. Song seems to be a good start for turning Delta around but there’s a long way to go so please don’t go declaring victory just yet until the real battle is done like the clown of a President that currently leads our country; quite poorly might I add.

1284 postings on this MB may tell why you're still not working also.

 

[Heavy Set]

The fact that you're not flying anymore by your own account tells a lot about how well Delta's doing. The consecutive BILLION dollar quarterly losses are another tell tale sign of your company’s foresight. Song seems to be a good start for turning Delta around but there’s a long way to go so please don’t go declaring victory just yet until the real battle is done like the clown of a President that currently leads our country; quite poorly might I add.

1284 postings on this MB may tell why you're still not working also.

First of all, its nice to see that you would kick a fellow pilot when he's down - that's very classy of you. Second, my profile is out of date and I have a flying job - thanks for caring....

Delta, like all of the airlines with the exception of SWA to some degree, has been hurting due to high fuel costs - no surprise there. Delta also has more aircraft than JetBlue and its exposure to rising fuel costs is MUCH GREATER. Plus, Delta hasn't felt the full benefit of restructuring changes (cost cutting) yet - and when the full impact is felt the breakeven load factor will decline as operating costs are reduced to more competitive levels.

Additionally, it is very ADVANTAGEOUS for Delta to take large restructuring charges now while the situation is difficult because Delta won't have to take these "paper" non-recurring restructuring charges later as results eventually improve (hopefully as fuel costs decrease). Better to take a black eye now during this tough operating period... A lot of these "billion dollar losses" are paper-losses (e.g., the loss in value of ASA and Comair) - not cash losses but PAPER LOSSES. Nonetheless, stock analysts have a field-day and predict gloom and doom. But how is ASA/Comair's reduced valuation actually hurting Delta's day-to-day operations? It ain't - but Delta would have to take that write-down at some point and it would prefer to do it in a difficult operating environment like we see today when it is more "excusable." Sure, Delta is not doing so well operationally thanks to super-high fuel costs, but most other major airlines are not doing that well either - including Continental, UAL and Northwest... If fuel costs were in the $30-40 range, Delta's losses would be much lower (perhaps it would even make a small profit after the big restructuring and cost-cutting initiatives). Nobody ever acknowledges that...

I am not a Delta employee and I have no stake in this game (I do have a few good friends who fly for Delta, however). I just prefer the SONG product to the JetBlue product when given the choice.

 

[Smoking Man]

Let's keep it real here. The highest paid 190 Captain at Jetblue will be $72.32/hr(2nd year), soon to be $73.93/hr(3rd year). Hours above 70 will be paid at $108.48 and $110.90 respectively.

This would make the TRUE blended payrate for an 82 hour month $77.61(2nd year) and $79.34(3rd year).

12 year payscale is irrelevant and only serves to skew the reality.

I was responding to the generals post of the twelve year pay, I am quite aware of what my pay rate will be when I go to the 190.

 

[B6Driver]

Glad to see you're flying again, really sux getting furloughed. I didn't like it much myself.
Have a good night.

 

[banger]

To address your assertion that SONG has not been profitable, Grinstein will be in very big trouble if SONG is/was not profitable when he publicly made that statement. The SEC would be breathing down his neck if he stated one thing and then "misled" investors. Grinstein is smart and he would not do anything to jeopardize Delta or his position - right? Therefore, if he makes public statements like that, I would assume they are "roughly" correct - if not, he could be prosecuted (in the post-Enron business environment).

Heavy Set
Maybe I missed something but I never saw where Grinstein said Song was "profitable" He only says it is "successful" which by definition could mean many things. Song could be losing gobs of $$ yet as a competetive weapon be viewed as very successful by hurting the competition. I know we are playing with words here but thats what they do on Wall Street and the SEC.

 

[On Your Six]

To address your assertion that SONG has not been profitable, Grinstein will be in very big trouble if SONG is/was not profitable when he publicly made that statement. The SEC would be breathing down his neck if he stated one thing and then "misled" investors. Grinstein is smart and he would not do anything to jeopardize Delta or his position - right? Therefore, if he makes public statements like that, I would assume they are "roughly" correct - if not, he could be prosecuted (in the post-Enron business environment).

Heavy Set
Maybe I missed something but I never saw where Grinstein said Song was "profitable" He only says it is "successful" which by definition could mean many things. Song could be losing gobs of $$ yet as a competetive weapon be viewed as very successful by hurting the competition. I know we are playing with words here but thats what they do on Wall Street and the SEC.

Banger,

I've seen the statement made by Grinstein and I think he said it was profitable - it was part of a press release. I haven't seen it lately but I will look for it. Needlesstosay, executives have to be very careful nowadays with any statements because, if they aren't, they can have SEC problems or even get sued by investors for misleading information. I'll look for that press release.

OYS

 

[MedFlyer]

Grinstein is smart and he would not do anything to jeopardize Delta or his position - right? Therefore, if he makes public statements like that, I would assume they are "roughly" correct - if not, he could be prosecuted (in the post-Enron business environment).

It would be nearly impossible to prosecute Grinstein for his statements about Song. Since Song doesn't really exist in the eyes of the SEC or the DOT, it would be pretty hard to pin Grinstein down. DL can make up whatever numbers they want for Song...they can say it makes money or they say it loses money. DL can manipulate the numbers however they like, since there is no oversight into the accounting for Song.

SONG is a very competitive product and competintg against SONG could lead to lower margins for JetBlue if the price difference is insignificant. Why? Delta/SONG offers a better product, a better frequent flier program and international connections which makes the SONG product very competitive.

Song is abandoning JFK-RSW...the only competition they had was JetBlue. Now, WN is invading RSW....apparently they aren't afraid of Song or Delta either.

As for those international connections, Song is actually hurting DL on many of the JFK routes. Imagine you are an elite customer who purchases a business class ticket ($3,000+) from NCE to LAX connecting via JFK. You get DL's BusinessElite service on the NCE-JFK flight, but then you connect to a Song flight that has no premium cabin. You get sandwiched in with Ma and Pa who fly once a year and bought their tickets for $99 each. In fact, DL agents are required to WARN customers that are purchasing international tickets that connect to Song, that they are connecting to a single class product with no premium cabin.

As SONG expands with its better product and maintains competitive fares, JetBlue will feel the competition in its shared markets. I doubt JetBlue is making big money on the IAD-Florida routes with Flyi charging ridiculously low fares on each and every flight. Meanwhile, SWA will be adding hundreds of low-fare 737-700s, AirTran will be adding more 737-700s (up to 100 I believe), Flyi will be adding Airbuses, Spirit will add more A321s and A319s to the Florida-Northeast Corridor and the newly-energized USairways (if the AWA deal comes to fruition with additional equity) will be engaging JetBlue more directly - JetBlue can look forward to a lot more low-fare competition in the future.

Sure JetBlue will feel pressure from other LCC's, but so will Song/DL. If JetBlue feels pressure from LCC's, imagine how much pressure DL is feeling. Don't forget that DL still derives 79% of its revenue from DOMESTIC flights. International flights won't save DL...btw Airtran was just approved to launch ATL-CUN flights.

Remember that JetBlue has costs that are lower than Southwest, Airtran and FlyI. Most of the new flights that LCC's are launching are aimed at DL...not JetBlue. Southwest just announced RSW service....guess who is the largest carrier at RSW right now? Delta. Airtran has recently launched ATL-IND, ATL-CLT, ATL-SRQ and ATL-RIC. Who do you think those were aimed at? Delta.

Song is certainly a better product than DL mainline, but viewing it as some kind of savior for DL is a joke.

As an aside, DL will be permanently reducing frequencies on the recently launched Song transcons. LAX-JFK loses two flights, SFO-JFK loses two flights and SEA-JFK loses one flight. Maybe too much capacity or maybe poor advanced bookings?