Bastian: Delta expected to profitable in NYC for the first time in Delta's history

[FWAAA]

Looks like a long period of "investment" in an important region:

But now that Delta will be profitable in New York for the first time in the airlines history, it was time to hold up my end of the bargain.

http://takingoff.delta.com/post/101705754610/edrunsthenycmarathon

So Delta will finally be profitable in NYC for the first time in "the airline's history?" Delta's been around for more than 85 years and is just now expecting its first profitable year in NYC. Hmmmm.

 

[eolesen]

Good for Ed on running the marathon and for picking a worthy cause to raise funds for.
 
Now, it's time to queue up 2,573 words on why AA and UA are still worse than DL...

 

[southwind]

What an evil company...........the nerve of them, trying to make a profit!

 

[WorldTraveler]

and it also doesn't explain why other cAArriers have cut service to NYC if they are profitable.

DL vacillated for years after the Pan Am acquisition trying to figure out what to do with NYC.

It was clear from CO at EWR that it is possible to be profitable in NYC if average fares are high enough.

DL's strategy was to slowly but continually add capacity to NYC such that it would gain the size to command revenue premiums and that has happened.

Given that DL has overtaken B6 at JFK who isn't growing as much and DL's actual capacity and RASM growth from NYC is higher than other carriers, DL has clearly reached the point where it has done what obviously other carriers have not done on the NY side of NYC.

and let's also be clear that the difference between DL in NYC and other cAArriers in other parts of the world is that DL like every other carrier has had a certain amount invested already. DL has added capacity as the market has absorbed what it added. Walking away would result in giving up significant presence in markets that have formed the backbone of that carrier from NYC. One cAArrier took that approach while another decided to stick it out and pick up AAs the other shrunk. NYC has been a gAAme of AAttrition more than anything else.

 

[FrugalFlyerv2.0]

DL's strategy was to slowly but continually add capacity to NYC such that it would gain the size to command revenue premiums and that has happened.
 

 
So how did Song fit into this premium revenue strategy?

 

[topDawg]

 
So how did Song fit into this premium revenue strategy?

Delta did it.....thats how. Duh. 

 

[WorldTraveler]

So how did Song fit into this premium revenue strategy?

Song was supposed to be a JetBlue competitive product on growth hormones - 757s vs 320s.

not surprisingly, B6's growth at JFK and across its system trails DL just as DL trailed other carriers in NYC (esp. CO) who offer a full palate of products instead of just a one size fits all strategy.

markets like JFK-LAX which was flown by Song don't work as all coach. DL figured it out and eventually developed a product that serves a much larger market group of market segments. B6 is doing the same thing with Mint.

 

[eolesen]

In other words, Song was a failure.

It certainly didn't slow down Jetblue, and you would think that DL would have learned from their previous airline within an airline failures before committing the money necessary to position Sammy the Sperm as a different product from Mother Delta....

 

[boston]

The green ameba, direct out of the Song/Delta Flight Attendants mouth.
 
And what's this Delta is just becoming profitable in New York. Their World Wide Rep, needs to be informed that misrepresentation ruins credibility, if they have any.

 

[WorldTraveler]

In other words, Song was a failure.

It certainly didn't slow down Jetblue, and you would think that DL would have learned from their previous airline within an airline failures before committing the money necessary to position Sammy the Sperm as a different product from Mother Delta....

in terms of profitability, yes, and so was DL Express, Ted, Metrojet, and several other airline within airline strategies.

Song was an upscale product compared to DL Express so DL used two different airline within airline strategies.

but the end result is that the best way to compete is to have one product and to deploy it to the greatest extent possible in as many markets as possible.

the reason why DL is succeeding in NYC is because it has achieved the size in NYC necessary to challenge UA's dominance of the market - DL is now the largest domestic airline from NYC while UA is still larger on an int'l basis - but DL has also managed to become the largest airline at both LGA and JFK where no airline at least since deregulation has had as high of a percentage of passengers or revenue at both airports. Given that LGA and JFK, not EWR, are the preferred airports for NYC short-haul and long-haul travel), DL has gained what it needed to be where it needed to do it - just as DL is the largest carrier at each of its interior US hubs.

DL's size and market offering relative to both AA and B6 both at LGA and JFK are the reason why DL is profitable and likely where no one else has been for years.

so, marketing and product differentiation really doesn't matter near as much as size and the ability to serve as many it not more markets than the competition.