Problem is it's not just Neeleman saying this. Joe Leonard (AirTran) says the same thing. Former and current execs at US Airways have also pointed the finger at Delta noting that its plan to return to profitability revolved around their demise and DL was willing to burn a lot of money to get them there. At varying times, you could find execs around the industry who pointed to Delta's route planning decisions as the most irrational in the industry. It's a Delta thing - I just wouldn't understand, I guess. :blink:
B6 Continues to Blame DL for Over-Capacity
- Thread starter Ch. 12
- Start date
LGA Fleet Service
Veteran
I don't think pre B6 Delta ever ran 16 daily JFK-FLL segments did they?
At one point not too long ago B6 was doing just that,and if that isnt overcapacity I don't know what is.
I love to read articles with Dave decrying 'irrational competition' while he's offering $25 jaunts to Boston on his E-180's...
P)
At one point not too long ago B6 was doing just that,and if that isnt overcapacity I don't know what is.
I love to read articles with Dave decrying 'irrational competition' while he's offering $25 jaunts to Boston on his E-180's...
P)If the planes are full and the plan is to actually make money then, no, it's not overcapacity. Have you seen their load factor? Did you realize that B6 gets a fare premium over other carriers from NYC to Florida? That's been my point all along. B6 has been deploying planes to turn a profit. DL seems to be deploying planes simply to go after B6 w/o any rational way to make money on those flights. That's the difference.
As for the JFK-BOS flights, those are promotional fares. Everyone does it (though $25 does does seem kinda Independence Air-like). If those fares are still there in six months, you'll have a valid point.
As for the JFK-BOS flights, those are promotional fares. Everyone does it (though $25 does does seem kinda Independence Air-like). If those fares are still there in six months, you'll have a valid point.
The $25 fares are long gone. They were promotional for the first month or so and there weren't many at that price.
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
Uh, I'd think twice before taking last week's "schedule cutbacks" too seriously.
DL has already admitted that there was an error in what they filed last week, and a lot of people are scrambling to figure out just what exactly they've cut and what is staying in place.
At least one of the analysts has sent out a partial retraction on their research notes from last week. ATW and the newspapers aren't bound by the same disclosure rules...
- Thread Starter
- #21
You constantly spout things but never have any data to back it up. Like I said and you have ignored...DL has always had a large presence from NYC (i.e. LGA in addition to JFK flights) to Florida. Sure they may have added some capacity after B6 came along but DL's minor additions don't add up to B6's major additions. I would argue that B6 came along with the biz plan of knocking off DL and US which both had prominent NYC-FL routes prior to B6 starting. Another point you make but don't substantiate is this revenue premium. You are an amazing informant if you know the route-by-route unit revenues of all carriers. You would have to know that in order to make the statement that B6 takes a premium. Now I'm only going to assume that you fudged that a little to try to prove your point (as you have been doing with unsubstantiated assertions in all of your posts) but I will say...yes...I agree that B6 would make more on only non-stops than other carriers flying non-stops plus connections (US through CLT or DL through ATL). But on the non-stops...I don't buy it.
As far as DL trying to knock off US? Well let's just say there are/were two prominent east coast carriers and they were US and DL. They competed and that is that. People also argue that WN and UA have tried to topple US and it is quite obvious that B6 is going solely after DL. But that is fine, right? Irrational network decisions? Again...where? Look at AMR going back into DAL with non-connecting service or throwing 56 seat Fokkers into the market to run out competition. Please stop with the unsubstantiated speculation and try to see things objectively instead of with a tint of (jet)blue. I know that jetBlue is just a victim of vicious DL
and that they (jetBlue) will take no responsibility in the over-capacity issue. It's just amazing to me how ignorant some pretend to be about the roots of the current industry situation. I am glad that you can fool yourself out of any responsibility, though.Ch 12,
I'm sorry. I guess I missed your volumes of data somewhere in these postings, as well. No data?
-32% seat reduction. (recent announcement - which Former ModerAAtor says may be subject to change)
-Approximately 15% capacity increase per 757. (Song introduction)
-Added flights.
-Easily researchable citations of comments by Joe Leonard, David Neeleman and current & former heads of US Airways. (If you want to, take the time to google these things. I don't)
-The Akron fight w/ AirTran (lots of news articles about this)
-AA at Long Beach
In addition, you correctly cite the current situation w/ AA at DAL.
All of these are specific citations to back up the points I have been making, which has also been stated simply in several posts. Again, "overcapacity" or "excessive" capacity comes when an airline loads flights onto a route with no rational plan to actually turn a profit on those flights. What was Delta's rational plan for making money w/ Song? How many industry analysts thought it had a credible chance to make money? Given B6's high LF and profitability until the most recent quarter (both easily looked up if you don't believe me), what further data do you need to show that it actually filled planes and turned a profit and therefore was not "excessive."
As for the revenue premium in the NYC to Florida markets, that's something that's also been written about, based on past DOT filings. I'm sorry that I don't carry this data around with me. Average fares for the market are probably not as easy to look up as the other information, but it's not impossible.
I'm sorry. I guess I missed your volumes of data somewhere in these postings, as well. No data?
-32% seat reduction. (recent announcement - which Former ModerAAtor says may be subject to change)
-Approximately 15% capacity increase per 757. (Song introduction)
-Added flights.
-Easily researchable citations of comments by Joe Leonard, David Neeleman and current & former heads of US Airways. (If you want to, take the time to google these things. I don't)
-The Akron fight w/ AirTran (lots of news articles about this)
-AA at Long Beach
In addition, you correctly cite the current situation w/ AA at DAL.
All of these are specific citations to back up the points I have been making, which has also been stated simply in several posts. Again, "overcapacity" or "excessive" capacity comes when an airline loads flights onto a route with no rational plan to actually turn a profit on those flights. What was Delta's rational plan for making money w/ Song? How many industry analysts thought it had a credible chance to make money? Given B6's high LF and profitability until the most recent quarter (both easily looked up if you don't believe me), what further data do you need to show that it actually filled planes and turned a profit and therefore was not "excessive."
As for the revenue premium in the NYC to Florida markets, that's something that's also been written about, based on past DOT filings. I'm sorry that I don't carry this data around with me. Average fares for the market are probably not as easy to look up as the other information, but it's not impossible.
"Always" is stretching it. For most of commercial aviation history there were two big players in the NY-FL market: Eastern and National.
Delta wasn't even in the market at all until they swallowed Northeast, which at the time (early 70s) was a poor third in the market.
GroundedBoricua
Senior
- May 29, 2004
- 300
- 0
Your right now DL taking a swing at CO with new transatlantic flights. My thinking is that they need those 757 to go across the pond with their new destinations. They problably thinking if CO does it, we can to. CO takes thier 757-200 to almost every major city on the west coast of Europe. A plus for B6 is that SONGs planes are all 757's so DL will sent them on another journey to see if they can turn a profit, taking them away from NYC-FLA routes.
- Thread Starter
- #25
Huh? DL expanding to locations not served by CO and CO then rushing to announce service to same locations only weeks or months afterwards? Looks the other way around to me. And are you telling me that DL should only fly its current markets (since the do SOOO well for them) and shouldn't be allowed to serve unserved markets?
As far as the 757's overseas...don't look for it anytime soon. DL has plenty of 76's that are being used domestically and those will be pulled to overseas flights long before 75's. And I wouldn't look for DL to tear down 75's from NYC.
FlyingTitan-
Song was an experiment. The idea was to try a different brand approach with different service and entertainment. It is much easier (and cheaper) to spin off another entity and experiment on a small portion of routes. Companies across numerous industries do this and it isn't really that uncommon from a marketing perspective. I applaud DL and UA who had enough sense to see the WN's and B6's and F9's of the world and to try to see what aspects of those models worked. Song ended up being a success b/c popular portions of the product will be on DL mainline before you know it. It would have been an expensive gamble to try Song-type service on all flights when the jury was still our regarding which services the consumer liked best. It's better than being US and saying that the industry will change so why change the airline. At least DL and UA tried to get a leap forward while other legacies felt that their glorious pasts would resurface someday.
- Thread Starter
- #26
What you continually fail to mention is that regardless of the exact percentage, DL ALWAYS pulls down cap for the summer to FLA...as do many other carriers. Neelman has just been using an annual systematic pull-down to get press and try to signal to DL that he hopes the cuts are permanent.
How can you compete against one product with a different one? A similar product was needed -as I mentioned earlier- and that was the 75's. And again...not much of an addition compared to B6's. Compare adding 11+ A320's a day to a market compared to a 15% addition in seats thanks to removing FC. Even if DL added some flights...please stop blaming them for creating a capacity problem. B6 contributed 10 fold more than DL or any other carrier to the problem in NYC to Florida.
Yes...they are poor victims, I know. I read about it often. Problem is that you are taking their statements as gospel so of course FL and B6 will never be responsible for anything that goes wrong in the industry. Try researching Neeleman's recent articles where he states that Virgin America should not start up b/c a new carrier will only add to the excess capacity issue. Doesn't that seem like an ironic statement?
Yes...FL is a constant victim. As a carrier that sends its corporate profits through Florida, they are argueing to GA that they should receive aid since DL has. However they are not willing to share the revenue guarantees with other carriers. FL will make money in CAK no matter how few pax they carry b/c they have guarantees so you tell me who is trying to flood the market to bury the other carrier. DL only has about 200 seats in the market compared to well over 500 by FL. I'm sorry...who is flooding a market intentionally?
I agree with you here. AA clearly tried to hoard all possible slots once B6 started moving into LGB. B6 also clearly tried to hoard all possible slots before anyone could get any.
Overall...B6 has been VERY agressive and is in no way a victim. They have also added capacity at a much faster pace than any other carriers (with the exception of WN, possibly?) during a period of extremely excessive capacity. While DL and other legacies have merely realigned existing assets (look at aircraft deliveries), B6 has agressively grown during a horendous period for growth in the industry. I've gotta stick with my assertions that B6 is not a victim and that B6 has actually helped propogate the current situation more than any other carrier (again...other than maybe WN.)
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
Ch. 12,
You’re doing a fabulous job w/ this post. I commend you.
DL was flying L1011s from NYC to Florida before Neeleman ever got out of diapers. DL flew a rational schedule but never had more than a half dozen flights to any city. B6 is the irrational competitor that has dumped hundreds of flights into the NYC – Florida market and insisted on going after all three NYC airports. DL and any rational airline is going to protect its market. And JFK has long been considered the same market as LGA – it just traditionally served largely different destinations. Prior to low fares, most of the NYC-Florida traffic could be carried to/from LGA. DL’s presence in NYC increased dramatically with the Pan Am acquisition in 1991. Song was as much of an effort to fill out DL’s domestic system. It has competed very effectively against AA and UA in the transcons and DL has a solid schedule in those markets for the 1st time.
As for who is trying to knock who off, DL managed to take an ownership position of the east coast after Eastern’s demise. USAirways’ problems provided the opportunity to extend that position into mid-Atlantic and NE markets and they have met w/ at least some measure of success. Any company that doesn’t look for opportunities to seize market share from its competitors won’t last. Yes, it has to be done profitably but DL’s NYC operation is a relatively small part of the company when compared with its hub operations.
It’s always irrational to fly capacity when a carrier starts losing money. Most analysts expected that what is happening at B6 would happen by now because of B6’s accounting processes for maintenance. B6 only compounded the problem by failing to hedge enough to matter. Throwing in a new aircraft doesn’t help either. You’ll quickly
No, DL won’t be deploying 757s on the Atlantic because most of its new routes are beyond what 757s can do. Eastern Europe is a big, fast growing market and no other carrier has even touched it. The fact that B6 is now looking at feeding int’l carriers says they recognize that flooding the domestic market w/ tons of seats is no longer a profitable business.
You’re doing a fabulous job w/ this post. I commend you.
DL was flying L1011s from NYC to Florida before Neeleman ever got out of diapers. DL flew a rational schedule but never had more than a half dozen flights to any city. B6 is the irrational competitor that has dumped hundreds of flights into the NYC – Florida market and insisted on going after all three NYC airports. DL and any rational airline is going to protect its market. And JFK has long been considered the same market as LGA – it just traditionally served largely different destinations. Prior to low fares, most of the NYC-Florida traffic could be carried to/from LGA. DL’s presence in NYC increased dramatically with the Pan Am acquisition in 1991. Song was as much of an effort to fill out DL’s domestic system. It has competed very effectively against AA and UA in the transcons and DL has a solid schedule in those markets for the 1st time.
As for who is trying to knock who off, DL managed to take an ownership position of the east coast after Eastern’s demise. USAirways’ problems provided the opportunity to extend that position into mid-Atlantic and NE markets and they have met w/ at least some measure of success. Any company that doesn’t look for opportunities to seize market share from its competitors won’t last. Yes, it has to be done profitably but DL’s NYC operation is a relatively small part of the company when compared with its hub operations.
It’s always irrational to fly capacity when a carrier starts losing money. Most analysts expected that what is happening at B6 would happen by now because of B6’s accounting processes for maintenance. B6 only compounded the problem by failing to hedge enough to matter. Throwing in a new aircraft doesn’t help either. You’ll quickly
No, DL won’t be deploying 757s on the Atlantic because most of its new routes are beyond what 757s can do. Eastern Europe is a big, fast growing market and no other carrier has even touched it. The fact that B6 is now looking at feeding int’l carriers says they recognize that flooding the domestic market w/ tons of seats is no longer a profitable business.
Another timely article.... From Today's NY Times.
During last year's third quarter, Delta's average ticket prices on seven heavily traveled routes were lower than JetBlue's prices, according to Back Aviation Solutions, a consulting firm. Still, on flights between South Florida and New York, JetBlue planes flew 86.6 percent full during the third quarter and Delta planes were 76.7 percent full.
"JetBlue is charging a premium to Delta and they're getting better load factors," said Michael Allen, a managing director at Back Aviation. "The indication would be they have a preferred product."
See Article
Ch 12,
Lots to address from your last post. I don't know if I'll have time to wade through it all, but here goes (probably not in order)...
On the issue of fare premiums...see above post w/ link to article from today's New York Times.
Delta's draw down percentages were pointed out by Jamie Baker, analyst for JP Morgan, not Neeleman.
The Akron situation. You say DL has about 200 seats/day while FL has about 500. I did a quick check of the DL online sked. It shows 810 total daily departure seats for DL from CAK, not 200. 390 of these seats go to ATL, there are also non-stops to CVG, MCO, and CLT. I don't have time to research, but IIRC, DL's numbers are actually DOWN considerably from when FL first launched service to CAK. The frequencies look about the same but I believe almost all of the flights that are now CRJs were MD-80s and represented a huge capacity flood for the market almost overnight. I remember just laughing and shaking my head when it happened. It looks like FL has held its capacity steady while DL has drawn all of its flights down to RJs. Perhaps DL realized that its initial reaction was just a money-losing case of overkill.
Again, it's not the number of flights, but whether there's actually a reasonable plan to make money with them - or if they just designed to beat up the competition with no regard to profits. At the risk of being repititous, I'll ask again, what's wrong with that standard for determining "excessive" capacity? Do you have a better definition?
US, DL, and AA all run hourly flights between DCA, LGA and BOS. That's dozens of flights every day! (Note I'm too lazy to do the math!
) None of us are saying that's overcapacity, because these flights can be profitable for each carrier, though maybe not for all. If B6 is filling 85% plus of its seats between NYC and Florida and turning a profit on these routes, how is that overcapacity?
Lots to address from your last post. I don't know if I'll have time to wade through it all, but here goes (probably not in order)...
On the issue of fare premiums...see above post w/ link to article from today's New York Times.
Delta's draw down percentages were pointed out by Jamie Baker, analyst for JP Morgan, not Neeleman.
The Akron situation. You say DL has about 200 seats/day while FL has about 500. I did a quick check of the DL online sked. It shows 810 total daily departure seats for DL from CAK, not 200. 390 of these seats go to ATL, there are also non-stops to CVG, MCO, and CLT. I don't have time to research, but IIRC, DL's numbers are actually DOWN considerably from when FL first launched service to CAK. The frequencies look about the same but I believe almost all of the flights that are now CRJs were MD-80s and represented a huge capacity flood for the market almost overnight. I remember just laughing and shaking my head when it happened. It looks like FL has held its capacity steady while DL has drawn all of its flights down to RJs. Perhaps DL realized that its initial reaction was just a money-losing case of overkill.
Again, it's not the number of flights, but whether there's actually a reasonable plan to make money with them - or if they just designed to beat up the competition with no regard to profits. At the risk of being repititous, I'll ask again, what's wrong with that standard for determining "excessive" capacity? Do you have a better definition?
US, DL, and AA all run hourly flights between DCA, LGA and BOS. That's dozens of flights every day! (Note I'm too lazy to do the math!
) None of us are saying that's overcapacity, because these flights can be profitable for each carrier, though maybe not for all. If B6 is filling 85% plus of its seats between NYC and Florida and turning a profit on these routes, how is that overcapacity?
markkus757
Veteran
- Jul 26, 2004
- 598
- 1
Everyone has also forgotten that DL "accidently" added a lot of new capacity on routes they did not previously serve out of DCA while US was struggling quite mightily during their second BK. It was all regional jets that they had available and they decided to take it out on US Airways. They have a little history there. Don't get me wrong, B6 has forced their way onto the scene. But, they added value prices to markets that were overpriced. Every LCC has had to do that at one point or another.
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