Song update

[FDJ2]

Song's Unit Costs Tracking Lower Than Expected, Reid Says
Aviation Daily11/03/2003


Delta's Song operation posted better-than-expected unit costs in its first six months of operation, and bookings are strong, according to Delta President Fred Reid, who predicted that the low-fare unit would grow even further in the near future.


Executives in recent months reported only that Song's load factors topped 70% during the summer and traffic was strong. Reid, however, told The DAILY in Washington that Song's cost per available seat mile is "tracking" at 22% below mainline Delta's 757 operation, better than the 21% executives projected. "It has a good shot of rising to a 24% CASM difference with the mainline," he said. Because Song hasn't completed a full-year cycle of operations, it is hard to discuss and compare other operating statistics, he noted, especially for an operation that serves cities with high seasonality. As a result, "nothing you can say about load factors or RASM is going to be representative and has no relevance whatsoever," Reid said. Delta has high hopes for Song in the winter because it serves many warm-weather cities in Florida.


Reid is "grateful and excited about the level to which Delta employees have embraced Song." He compared the addition of Song to a family having a "beautiful baby sister," and everyone "is nurturing her and wants her to grow." Overall, Reid said the "cost position is great, and the revenue is as expected." He acknowledged that Song "underperformed" in September's load factor, but winter and holiday bookings are "great."


He confirmed that Song last week started testing its new inflight entertainment (IFE) system on one 757 on one route (DAILY, Oct. 2). Song will test the system for about a month and decide next month on a full-rollout timetable. "You've got to fly these things around," Reid said. "There's always some stuff to learn, and these things always have some minor unexpected glitches." He said the test system is working, and Song's executives believe the brand will get a significant boost when the IFE is available on every plane next year.


Looking ahead, Reid told The DAILY there is "significant possibility" of expanding Song "in the relatively near future." The carrier has not made any final decisions, however. If Song does expand, Reid said, that doesn't mean Delta will lose focus on mainline growth. In fact, he said the mainline operation is still "the nuclear core of Delta and will remain that way."

 

[crashpad]

On a recent layover in Atlanta, I looked out the window and saw an old Delta MD-80 in the climb after take-off. Immediately on it's tail was a sleek Airtran B717 and it looked like it was in hot pursuit. I thought; 'What an ironic metaphor of the present state of the industry.'

 

[Redtails]

That's great news. Now, is it true you have to pay a dollar for a bag of chips on Song? Additionally, will the entertainment system be for free or will Song charge for that, too?

 

[NYRANGERS]

That's great news. Now, is it true you have to pay a dollar for a bag of chips on Song? Additionally, will the entertainment system be for free or will Song charge for that, too?

I think the standard drink and snack are free and so is the IFE. I think there will be a charge for movies. There is quite an impressive menu. I have only read good things about the food, the only complaint I have seen are the prices, but even those complaints are rare.

The IFE is up and running on the JFK-MCO legs (one 757). If you go to flyertalk.com you can see a picture of the IFE, looks pretty good with a big screen. A friend of mine is a flight attendent for Song (rumor is they dropped the "talent" label). She had an opportunity to check out the IFE. TV, games (interactive with other pax), movies (I think come next month), gate information, music, touch screen technology, a type of moving map and some other features I can't quite remember.

All in all sounds impressive. As far as it has been reported, Song IFE is FAR superior to others. Now, if they would have just tried to phase these advancements into Delta.........oh well.

 

[FDJ2]

On a recent layover in Atlanta, I looked out the window and saw an old Delta MD-80 in the climb after take-off. Immediately on it's tail was a sleek Airtran B717 and it looked like it was in hot pursuit. I thought; 'What an ironic metaphor of the present state of the industry.'

Yeah, the tried and true Mad Dog, a seasoned player in the industry with wide acceptance by many airlines, a proven product and the young brash, 717 still trying to find a home in more than just Airtran and some airline in China. Only time will tell, whether the 717 will end up a flash in the pan, or a widely accepted aircraft with more than just a couple of airlines.

 

[atldc9]

I wish they would have put the md-88's wing on the 717, and the fuel capacity, and maybe a stretch version, oh, well.

I can't find the source offhand, but I remember hearing the DC-9 series was the most successful airplane line ever, in terms of numbers built, even more then the 737. Anyone know if this is true?

 

[General Lee]

I fly the Song flights quite often and people like the Song airplanes and the product. I haven't flown the bird or planes with the IFE yet, but I have heard that the people like it. The food purchased on Song has been well received, and I think Delta likes it because it is a slight money maker for them. From what I have heard through the grapevine is that we will add 10-15 more 757s to Song (from mainline....) next year, and someone actualy said that they might eventually start flying from the West Coast to Hawaii----which would be nice since we now have only 1 764 from LAX to HNL a day (but added CVG and ATL recently).

Bye Bye--General Lee

 

[MedFlyer]

Welcome back, General.

Anyone think an increase in Song flying could lead to a recall a little bit sooner? Song planes spend more time in the air than regular mainline 757's which means more hours of flying time. Even if the mainline fleet doesn't grow (and it probably won't much in the next two years), more Song planes flying more hours should mean more pilots.

I think DL has kind of botched the IFE implementation. The original marketing said it would launch in October. Here we are in November and still no IFE except on one test plane. DL is now saying the whole fleet may not be completed until some time in Spring (read: next summer). You could have some disappointed passengers expecting IFE and not getting it or getting it on one flight but not on another. The only "good news" I guess is that DL hasn't marketed Song much, so most people getting on the plane have no idea what they're getting...Song, mainline DL, Delta Express (RIP), Delta Connection!!!!!!

One note, the 2nd LAX-HNL is on the schedules to come back in March.

 

[General Lee]

Medflyer,

Thanks, good to be back---I was beginning to get the "Shakes" from not being on this forum in awhile. I hope more recalls will result from increased utilization of the Song aircraft, but I don't know. I guess we will have to see what Dalpa agrees to with the company. You have to remember that Dalpa doesn't HAVE TO do anything with the company, but probably will help them out in some way. I think they increased utilization can only help the furloughs situation---either by leading to a sooner recall or by not allowing more additional people to be added to the list. I hope the recalls come, and I think with the company wanting more 70 seaters, another possible codeshare, and some pay relief-------some sort of help will be on the way. Also, our economy seems to be getting better and AA is adding 43 flights back to DFW, which shows some airlines are adding back some capacity to fight the LCCs---which can only help the furloughs.

As far as the Song 757s and the IFE, I guess they want to make sure that it is a good product. I think the one 757 with it is doing MCO-JFK turns, and hopefully people enjoy it. When the whole Song fleet is eventually outfitted with the final product----it should help retain some passengers.

And, I hope we do add back another 764 from HNL to LAX. How many people live between the two cities? And we can't fill 2 764s a day? Come on! I think the Spring and Summer next year will be good for all of us, though.

Bye Bye--General Lee

 

[Vortilon]

Flew on SONG the other week and it was a really nice experience . I tried some of the food (Asian Chicken Salad) and it was very good and priced the same as I'd have to pay at the airport for anything ($7.00). I was very satisfied and everyone in the crew was really nice. I think with the video screens its going to be a real winner.

Even as it is now, its 1000% better than the old Delta Express product.

All I could think, though, is "why can't we just make Delta nicer?"

 

[Palerider957]

Welcome back General:

There is a whole threat about wondering where you've been on the Majors listing! The place wasn't the same without you.

 

[FLB717]

Genaral or someone,
Just tell me how you can add 20 or so seats and drop prices by 30-40% and only drop FA pay and make money. No BS please give me numbers. RASM CSM etc.

 

[General Lee]

FLB717,

Well, the planes also fly more per day--up two or so hours---which can increase revenue brought in. They also dropped one flight attendant per airplane. IF you think cutting $25 an hour off of the Captain's paycheck and $15 off the FO's is going to make it turn more of a profit, then you are listening too close to management. Also, Delta is not only a domestic airline---it does make a lot of money to Europe and the Carribean. How do I know? Well, our VP of Flt Ops said we left money on the table last Summer. Maybe that is why we are adding AMS and FCO from CVG in May....

Bye Bye--General Lee

 

[46Driver]

I've been wondering this ever since I heard all of the good things about Song: the seats, the hand-picked flight attendants, better food, private movies in your seats - what is the purpose of flying Delta mainline anywhere when Delta's own LCC gives you better service? This is not meant to be flamebait - just a question.

 

[MedFlyer]

I've been wondering this ever since I heard all of the good things about Song: the seats, the hand-picked flight attendants, better food, private movies in your seats - what is the purpose of flying Delta mainline anywhere when Delta's own LCC gives you better service? This is not meant to be flamebait - just a question.

You make a good point and it's a good question that DL management doesn't seem to have an answer to.

Obviously, DL is putting all these amenities in to compete with JBLU. Since JBLU only competes on a very small part of the DL network, DL only feels it is necessary to compete on a small part of the route system. JBLU's not coming to places like MOB,TYS or LIT anytime soon.

There's also the cost issue. I'd imagine it would be pretty expensive for DL to overhaul the entire mainline fleet with new leather seats, PTV's and yank out a row or two to provide extra legroom that Song has. It's also not practical to put all this effort into some of the fleet. Is it really cost effective to put PTV's and leather seats on 20 yr old 762's or 15+ yr old leased 732's?? Probably not.

DL has said they will use Song as a platform to test out new concepts which can be transferred over to mainline. I'd like to see DL at least put the PTV's and leather seats in all the 738's, 757's, 763's, 764's and 777's. Unfortunately, I don't think DL's current management is all the interested in customer service unless they are absolutely forced (ie JetBlue), so it will likely be a long time before mainline DL sees any noticeable improvement.

 

[FLB717]

General,
Ok, let me ask again and restate. Numbers are what I want not Joe Leonard or Fred Reid etc. said this or that. CSM and RSM that sort of thing, if no one knows ok just tell me. As far as any pilot taking a paycut when the company is making money I do not and would not agree with that. I did not say you should take a cut but rather with added seats and ticket prices cut with only a modest decrease in FA pay how does a 757 go from loosing money at Mainline and making it at Mainline Light. Two extra hours a day increases utization (sp?) but fixed hour cost will remain rather nuetral. Just looking for enlightnment.

 

[MedFlyer]

FLB717,

The only number I've heard for Song was CASM which was supposedly running at about 7.3 cents. That's pretty good and definitely more competitive with the low-fare carriers than regular mainline. One reason for Song's lower CASM is simply longer stage lengths. All Song flights are pretty long...no short little hops. Compared to mainline 757's that often do short little jaunts like CVG-BWI, ATL-RDU, ATL-JAX,etc.

I haven't seen any RASM numbers broken out, but I assume they would be pretty low.

 

[Dizel8]

Song was created to prevent jetBlue, and to a lesser extent Airtran, from gaining marketshare. While you could argue either for or againts whether it is working, the truth is hard to get. DAL mainline has one of the highest CASM at present, yet Song supposedly is around 7 cents. I believe that is 3 or 4 cents less than mainline. That may be true, but I wonder.

DAL never did release the numbers for Express and they probably never will for Song, that is unless they spin it off. DAL did maintain that Express was profitable, even after jetBlue showed up. If that was the case, why the need to create Song?

One would hope, that DAL incorporates the efficiencies and ameneities from Song into mainline, but even the General is doubtful. That leads me to be believe, that ML will maintain the status quo. I find this interesting, since, if Song is indeed profitable, why not offer these amenities to all coach passengers flying on DAL. Could it be, that Song is not profitable and that the cost of retrofitting a/c's would be a further drain to the bottomline.

jetBlue and Song are charging roughly the same fares. That would put both companies about equal when it comes to RASM, further we know that jetBlue has a CASM of about 6. Song would have to have about the same CASM as jetBlue to be profitable, but with mainline above ten, that is hard to fathom.

Delta may be offsetting losses on Song with gains from other routes, where they do not face LCC competition and perhaps consider that the most prudent option. Who knows, that may indeed make great business sense. They will however face continued pressure, particularily now, that Airtran has their eyes set on expanding further into DAL markets with the 737's. Already we have seen drastic lower fares in the ATL-LAX market, who knows where AAI is going next and how DAL will and can respond?

 

[Networ-King]

DAL mainline has one of the highest CASM at present, yet Song supposedly is around 7 cents. [/B]

Sorry to burst your bubble, but Delta Mainline's CASM at last check was between 8 and 9 cents. UAL and AMR's CASM is still higher then that even WITH all their consessions.

Why Song and not Delta Express? Because of the old equipment vs. Jetblue's and Southwest's new equipment. More seats in a 757 as well......dunno.....seems to be working though.

 

[General Lee]

Dizel8,

I flew Delta Express for 1 year and was told the main reason we created it was to combat Southwest's entrance into FLA. The 737-200s were old and not comfortable on BOS---PBI 3 hour flights. The flight were ALWAYS full, but people did complain about the 737. Song is now trying to combat Jetblue and all of their TVs etc, and Delta is actually trying to provide more room and interesting Food Choices for purchase. They probably should have done this a long time ago, but Delta seems to be a follower sometimes. The 757 is a lot more efficient than the 737---it can fly higher and faster (often we would fly under them and ask ATC where they were going---and ATC would say, "Follow your company--cleared direct Hobbie--to FLL), and can cary 199 cold people down to warmer FLA. With 50 min turn times, the planes will be used more, and more pilots will be needed to fly them---or atleast the same amount if our cap is increased slightly. I have heard that we may add 10-15 more 757s to the Song fleet next year, and even someone said that they may be used eventually to fly to Hawaii from the West Coast. I don't know if any of that is really true, but it sounds good.

Bye Bye--General Lee