Forbes Article on Trainer

[WorldTraveler]

DL Express ended years before DL filed for BK. to even argue that it was part of the reason for DL's BK is beyond ludicrous.

DL pulled more MAINLINE capacity from Florida than it did when it ended Song. Song was a lower cost producer than mainline was.
the problem post 9/11 was dramatically reduced yields THROUGHOUT the US airline industry and high costs for airlines.

again, whether you want to believe it or not, Song was a minor part of DL's strategy and DL continues to operate all of the routes Song operated from JFK and LGA.

again, your little sideshow about Song which you clearly have inaccurate information is to try to find something to find fault about with Delta as if that will provide "ammunition" to say something negative about the refinery.

neither you or the author have anywhere close to accurate information about whether the refinery is accurate - and you know what, DL is not and will not provide enough information to know how much of the impact to its fuel costs are due to hedges or the refinery.

since the VS acquisition and JV is only a year old, the fact that DL is already seeing several hundred million dollars per year in improved revenues says their investment was very much worth it.

and the slot swap was nothing but complete ignorance on the part of Parker regarding the value of the LGA swaps which they virtually gave to DL and DL turned it into a gold mine

 

[topDawg]

 
DL grew into its strong position in NY due to the slot deal with US.  Not due to DL Express/Song.  To try to spin otherwise is outright lying.  Ofcourse somebody who had a career that spanned 2 decades in aviation should grasp that.
 

 
Since now you're an expert in both labor relations and crude oil/refineries/petrochemicals, why don't you tell us:
1.  how long strike(s) have to go on for jet fuel prices to jump
2.  what price does crude oil have to be at so that carriers that don't own a refinery start to lose money

This is somewhat true. 
 
song did way more damage than good. Example, Delta was a very weak player in the NYC-LA market.....Song some how made that worse and Delta is still trying to rebound from it. 
 
DLX was also something that helped drive Delta into BK. (along with many other things, over paying for OH and EV, Over paying for the PA assets......I mean basically everything Leo and Ron did cost Delta more money then it made.) 
 
 
having said that, Delta's organic growth at JFK was remarkable. Becoming the dominate airline at JFK and to do so with T2/3 was something Glen and his team should be very proud of. They got a big mess but corrected it quickly. 
 

 
We'll have to disagree on Song and the US-DL slot swap.
 
All you have to look at is how jetBlue grew despite of Song.
The way I see it:  DL Express + DL Song = major contributor to DL chapter 11 filing
To say anything positive about the Song concept/experience is just flat out wrong.
 
With respect to the DL-US slot swap, IMHO it was for DL probably a better deal, a better value than what DL got via their stake in VS. 

I agree with all of this. 

 

[FrugalFlyerv2.0]

DL Express ended years before DL filed for BK. to even argue that it was part of the reason for DL's BK is beyond ludicrous.

again, your little sideshow about Song which you clearly have inaccurate information is to try to find something to find fault about with Delta as if that will provide "ammunition" to say something negative about the refinery.

neither you or the author have anywhere close to accurate information about whether the refinery is accurate - and you know what, DL is not and will not provide enough information to know how much of the impact to its fuel costs are due to hedges or the refinery.

since the VS acquisition and JV is only a year old, the fact that DL is already seeing several hundred million dollars per year in improved revenues says their investment was very much worth it.

and the slot swap was nothing but complete ignorance on the part of Parker regarding the value of the LGA swaps which they virtually gave to DL and DL turned it into a gold mine

 
True, DL Express operated from ~mid-1990s to ~2003, but didn't DL Song basically replace it when it was launched in 2003?
 
I'm not searching to find something wrong with DL.  I have no problems admitting that it is a good airline.  However, to say that Song was all a part of a successful strategy to make DL what it is in NY city today - that's revisionist history and you know it!  I mean come on, DL itself admitted that only recently it became profitable in New York.  So what took it so long?  Or was that a part of the grand plan too?
 
If DL does not provide enough information about its refinery, isn't it then amazing of how a certain  DL cheerleader pontificates constantly aobut how brilliant of a move it was to purchase it ... ... ...
 
I'm not dissing the VS purchase, just calling it what it really is - a purchase of LHR slots.  The fact that those slots came with baggage that is VS is irrelevant for now.  And surprisingly I agree with your assessment of Parker in the US-DL slot swap.

 

[topDawg]

 
True, DL Express operated from ~mid-1990s to ~2003, but didn't DL Song basically replace it when it was launched in 2003?
 
I'm not searching to find something wrong with DL.  I have no problems admitting that it is a good airline.  However, to say that Song was all a part of a successful strategy to make DL what it is in NY city today - that's revisionist history and you know it!  I mean come on, DL itself admitted that only recently it became profitable in New York.  So what took it so long?  Or was that a part of the grand plan too?
 
If DL does not provide enough information about its refinery, isn't it then amazing of how a certain  DL cheerleader pontificates constantly aobut how brilliant of a move it was to purchase it ... ... ...
 
I'm not dissing the VS purchase, just calling it what it really is - a purchase of LHR slots.  The fact that those slots came with baggage that is VS is irrelevant for now.  And surprisingly I agree with your assessment of Parker in the US-DL slot swap.

exactly. Song was a turd. DLX was also a turd

 

[WorldTraveler]

dawg,
Delta Express has nothing to do with regional carriers. DLX was a 737-200 operation that was focused on low cost, low frills transportation to Florida and it served many more cities than Song did.

Song was focused almost entirely on NYC and BOS. DL had already decided that it did not intend to compete in many Florida markets such as the Midwest nonstop to Florida which DLX served but Song did not.

again, the reason why both strategies didn't work was because they were focused on share protection of specific markets to the exclusion of gaining a viable overall strategy for the city. The reason why DL is doing as well in the NYC-Florida markets today including LGA-MIA where DL grew to average fare parity with AA and has a 40% share of the local market is because LGA-MIA is part of DL's overall strategy for NYC and not just a response to try to protect market share with low fares.

you are wrong about Song and the transcons also. the reason why DL struggled in the transcons is because DL did not offer a competitive product until a couple years ago when DL FINALLY started using int'l configured aircraft which was the norm that AA and UA had established in the market years before.

DL operated a couple of int'l configured transcon flights after the Pan Am acquisition but didn't have a decent schedule. They added plenty of flights with Song but no premium cabin.

the first time that DL's performance on the JFK transcons started to improve was when DL added frequency on par with AA and UA AND ALSO used int'l configured aircraft.
CO got by with domestic aircraft and UA still predominantly uses domestic aircraft from EWR. Same is true for BOS and IAD. The JFK transcons are premium configured markets even if the fares are not proportionately higher. The reason why DL is succeeding is because they are using competitive aircraft with competitive schedules in those transcon markets and also have a robust overall NYC schedule.

You also are wrong about VS. DL didn't buy slots. It would bought equity with multiple seats on the board and a joint venture which has helped both DL and VS - and, according to AA's execs, has hurt AA's performance at LHR.

 

[FWAAA]

The reason why DL is doing as well in the NYC-Florida markets today including LGA-MIA where DL grew to average fare parity with AA and has a 40% share of the local market is because LGA-MIA is part of DL's overall strategy for NYC and not just a response to try to protect market share with low fares.

How can you tell that WT is making things up? He's typing words to be posted on airlineforums.com, that's how.

As of 1Q2014, DL had 29.4% of the local market between LGA and MIA, not 40%.

Your post said "LGA-MIA," but in case you meant to say "NYC-MIA," you'd still be wrong, as DL has 32.0% of the JFK-MIA local market, not 40%.

Perhaps you have more current data that shows a 40% local share?

 

[WorldTraveler]

date for the 3rd quarter of 2014 is available and on a combined basis, DL's share of the LGA/JFK - MIA market was 38.1%. If you get heart burn out of rounding 38.1% to 40%, I'll be happy to stand corrected.

but are you honestly defending that even 29.4% is an acceptable share percentage for DL to have gained in a market which it only started serving with the slot deal - using the slots that Parker gave DL?

 

[Glenn Quagmire]

How can you tell that WT is making things up? He's typing words to be posted on airlineforums.com, that's how. As of 1Q2014, DL had 29.4% of the local market between LGA and MIA, not 40%.Your post said "LGA-MIA," but in case you meant to say "NYC-MIA," you'd still be wrong, as DL has 32.0% of the JFK-MIA local market, not 40%.Perhaps you have more current data that shows a 40% local share?

"I am credible because I have accurately spoken to one issue after another in the industry. No one on here or any other aviation chat site has even come close." - Forum Joke

 

[WorldTraveler]

yes, it is a joke because you don't want to acknowledge that someone else is right.

tell me how many people said that WN would pull down ATL, years before they actually did?

tell me how many people said that AA would face lower yields that AA mgmt. has acknowledged they underestimated?


feel free to call it a joke... yet the facts are very much real and you have been consistently on the wrong side of understanding what is going on in the industry - but the good news is that you have lots of company being an ignorant fool.

 

[robbedagain]

or may be bec that someone who is always right has to be right all the time no matter what   regardless of what other true data has been put out...

 

[topDawg]

dawg,
Delta Express has nothing to do with regional carriers. DLX was a 737-200 operation that was focused on low cost, low frills transportation to Florida and it served many more cities than Song did.
 

Um....I don't believe I said DLX was a regional carrier. 
I said song, DLX, and over paying for Comair and ASA were a key part to Delta's BK. 
 
Judging by your post, You had something to do with song didn't you? Its the only way I can see anyone thinking it was more than a complete failure. 

 

[robbedagain]

I can still remember my days in BOS when my dad would say DL Express and Song were not real good    he always maintained that Airline within an Airline is not a good bright idea    Even Metro Jet was similar

 

[WorldTraveler]

Um....I don't believe I said DLX was a regional carrier. 
I said song, DLX, and over paying for Comair and ASA were a key part to Delta's BK. 
 
Judging by your post, You had something to do with song didn't you? Its the only way I can see anyone thinking it was more than a complete failure.

no, what DL paid for ASA and Comair had nothing to do with DL's BK.

DL like every other airline that filed for BK did so based on OPERATIONAL costs, not capital costs.

I happen to have a lot of knowledge about DL's performance in the eastern US before and after BK. You have yet to acknowledge that the real reason for DL's leisure based strategy failing is because of a collapse in yields post 9/11 alongside DL's high operational costs. It doesn't matter what carrier DL had used, the results required removing capacity and operating at a lower cost base.

the reason why airline within airline strategies haven't worked is because all airlines recognized that the mainline airline in entirety has to be competitive with low fare carriers and not just a subset of markets. The European carriers and AC will come to the same conclusion but they don't have other options at this point so they will use what they have to do to kick the can down the road for a few years.

 

[FrugalFlyerv2.0]

DL like every other airline that filed for BK did so based on OPERATIONAL costs, not capital costs.

You have yet to acknowledge that the real reason for DL's leisure based strategy failing is because of a collapse in yields post 9/11 alongside DL's high operational costs.

So are you finally admitting that Song (and DL Express) were a failure?

the reason why airline within airline strategies haven't worked is because all airlines recognized that the mainline airline in entirety has to be competitive with low fare carriers and not just a subset of markets. The European carriers and AC will come to the same conclusion but they don't have other options at this point so they will use what they have to do to kick the can down the road for a few years.

It's a little more complicated than that. In Europe, the LCCs such as FR and U2 are more of an ultraLCC along the likes of Spirit, very bare bones (IMHO B6 and WN could be considered luxury when compared to FR and U2). The legacy Euro carriers (LH, AF/KL, IAG) have the benefit of owning separate small(er) carriers which have not been integrated into the parent carrier and they will (ab)use them to defend against FR and U2. So if you have such a tool at your disposal, why not use it? And as a last resort, there is always the possibility of a gov bailout. Ofcourse you will point out that it is against EU legislation, but the reality is different - just look at how many times AZ has been bailed out. LH, IAG, AF/KL have not been to the taxpayers trough yet.
With respect to AC, they've been through chpt. 11 once (companies creditors arrangement act) & sold off most of the assets. However, they still have the option to go through another re-organization and possibly get some gov assistance too. Throw in the bad blood between employees that still linger from the CP acquisition and well AC management can still easily manipulate employees into concessions resulting in wonderful projects like Rouge ... ... ...

 

[WorldTraveler]

you don't need to tell me about what Easy Jet offers. I just got off of a flight within them in the past few weeks and know exactly what they offer.

and the whole point of airline within strategies is to try to preserve and defend markets which the mainline carrier believes are strategically important and in some cases connect passengers to the mainline carrier's system.

Every one of the European legacies uses their airline within airline strategies in the same way that DLX or Song was used by DL or Ted was used by UA or Metrojet was used by US. All have and had different product strategies with some level of network and product connectivity to the mainline.

EU law does not permit public bailouts of airlines. Canada has similar Chapter 11 BK to the US, as does Japan.

speaking of CP, wasn't AA involved in that airline? was that a, uh, strategic failure?

let's be clear, though. You are looking for anything you can to find reason to argue that DL's fuel strategy is a failure.

Given that crude oil continues its march upward - you knew it would given that the big oil companies are now reporting losses or much lower earnings - all of those hedges and DL's refinery will look a whole lot better than the situation will be for the few airlines that chose not to hedge and whose mgmt. accurately noted that they couldn't buy long term fuel contracts at prices which are now history.