Song update

[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

 

[Dizel8]

Cost Per Available Seat Mile

Airline 9/30/03 9/30/02 %Change

JetBlue 5.92 6.41 -7.6%
ATA 6.9 8.39 -17.8%
Southwest 7.51 7.34 2.3%
America West7.57 7.75 -2.3%
AirTran 8.11 8.21 -1.2%
Frontier 8.32 7.86 5.9%
Continental 9.01 8.9 1.2%
Alaska 9.24 9.48 -2.5%
Northwest 9.34 9.24 1.1%
American 9.49 10.38 -8.6%
WestJet 9.5 9.5 0.0%
United 9.67 10.9 -11.3%
Delta 10.21 9.81 4.1%
US Airways 10.98 10.95 0.3%

Perhaps my mistake, I was looking at this chart with supposedly shows numbers for 3rd quarter. It sure seems to back up my what I said, but I would like to see the real numbers, perhaps you can point me in the right direction?

 

[FDJ2]

Cost Per Available Seat Mile

Airline 9/30/03 9/30/02 %Change

JetBlue 5.92 6.41 -7.6%
ATA 6.9 8.39 -17.8%
Southwest 7.51 7.34 2.3%
America West7.57 7.75 -2.3%
AirTran 8.11 8.21 -1.2%
Frontier 8.32 7.86 5.9%
Continental 9.01 8.9 1.2%
Alaska 9.24 9.48 -2.5%
Northwest 9.34 9.24 1.1%
American 9.49 10.38 -8.6%
WestJet 9.5 9.5 0.0%
United 9.67 10.9 -11.3%
Delta 10.21 9.81 4.1%
US Airways 10.98 10.95 0.3%

Perhaps my mistake, I was looking at this chart with supposedly shows numbers for 3rd quarter. It sure seems to back up my what I said, but I would like to see the real numbers, perhaps you can point me in the right direction?

What you don't see in that chart is that DAL now also incorporates ASA/CMR CASM into the mix. No other airline does that. That supposedly increases CASM by about .5 cents. Additionally, DAL has reduced capacity year over year, which adds costs. Those aircraft parked in the desert still need to be paid for, as does the rest of DAL's infrastructure. As DAL increases its capacity, you'll see the CASM drop.

 

[Dizel8]

I was not aware of that, but that would put it at 9.72. Still the second highest currrently. As far as airplanes in the desert, that holds true for quite a few of the airlines listed, certainly AMR and UAL have a/c's parked.

Also, one must wonder how the CASM for Song is calculated. Is lease payments, fuel, gates, ramp etc. figured in or do those fall on mainline to pay? In other words, what is the "around 7 cents" number based on?

Again, the question, what is the cost for Song. While "blurbs", such as "better than expected, on track etc" sounds good, and despite the contrary thoughts, I hope we all prosper, it does not
put a true number to Song.

We are all just chesspieces in the game, but that does mean we cannot speculate on the players.