New Routes for Delta

[s80dude]

Sounds like Delta is really making the international push.

And going for the premium transcon market as well....

http://www.usatoday.com/money/biztravel/20...at_x.htm?csp=34

http://biz.yahoo.com/pz/060619/100884.html

 

[whlinder]

It doesn't sound like a real premium product, just SONG with an F cabin.

 

[Ch. 12]

It doesn't sound like a real premium product, just SONG with an F cabin.

I'd say that outside of anyone but B6, it is premium.

 

[flyhigh]

...it may not be at the level of the PS service UA offers, but given the entertainment package and how well Song was perceived by customers (consistently ranked higher than competitors, including JetBlue) it will certainly work to Delta's advantage.

 

[whlinder]

I'd say that outside of anyone but B6, it is premium.

Give me Economy Plus anyday.

FL has XM radio. Some airlines (I know YX & AS off the top of my head) offer rental hand-held devices (Digeplayers). How many customers who provide a decent yield don't have their own entertainment (laptop, IPod, etc)? It isn't that much of a competitive advantage. Will it generate premium revenue?

Does jetBlue command fare premiums?

 

[JFK777]

Delta is replacing its one-stop 767 service to Mumbai, India with nonstop 777 service from JFK. Accra, Ghana will also be served 4 times weekly from JFK. India nonstop for the first time was done in the fall by CAL from Newark and AA fron ORD to Dehli. This is Mumbai's first nonstop, what will soon turn into a tiddle wave. Air India has ordered 777-200LR & -300ER's which will soon replace their 747 via Europe to USA. Jet Airways is coming to the USA, I don't know when and where to, but it has 10 777-300ER on order coming to India soon.

My question when I first heard Delta was going nonstop to Mumbai is, where are the planes coming from? Delta has 8 777's, Atlanta to Tokyo daily; then Atl-TelAviv daily; then, in the fall, Atlanta to South Africa daily, & finally Jfk to Mumbai, India. Are there some spare 777 Delta has some where? This schedule could be served with 8 777, BARELY. Any incite will be appreciated by JFK777.

 

[Ch. 12]

Give me Economy Plus anyday.

FL has XM radio. Some airlines (I know YX & AS off the top of my head) offer rental hand-held devices (Digeplayers). How many customers who provide a decent yield don't have their own entertainment (laptop, IPod, etc)? It isn't that much of a competitive advantage. Will it generate premium revenue?

Does jetBlue command fare premiums?

"Premium" references the service/amenities...fares will still have to be competitive. DL looks to be trying to use service-level as another factor in the consumer's decision-making process.

FL has CM...other have rentals. How is offering live TV/music/movies for the ticket price not a step up (i.e. "premium") in service?

Will it generate a revenue premium? No...not on a unit-basis...but it is a way that DL is looking to differentiate the product and attract pax whom value these amenities. Overall revenue growth is what is sought...not a premium yield.

 

[whlinder]

Sure it differentiates the product (a little bit), but is that overall revenue growth going to exceed the costs of installing and operating all those TVs?

I'm just skeptical that the benefits will exceed the costs.

 

[Ch. 12]

Sure it differentiates the product (a little bit), but is that overall revenue growth going to exceed the costs of installing and operating all those TVs?

I'm just skeptical that the benefits will exceed the costs.

Agree 100%. With flights already pretty full, it seems to be a difficult task trying to squeeze a few more in. The installation won't be much of an issue for now b/c these are largely ex-Song aircraft and are already equipped. In fact, that is what DL promised to do when re-absorbing Song into the mainline system. However...the maintenance is the issue. Broken technology is detrimental so DL will have to work (and pay$$) to keep everything functioning.

Only time will tell. I DO see this as a "premium" product compared to most others but I'm not sure about the payoff. It is a cultural shift from "cut costs at all costs" mentality of the legacies to "add costs to get pax". We'll see what happens.

 

[flyhigh]

...the fact that planes are full is what should help drive this to success. From a revenue management standpoint, it's much easier to drive revenue up in this environment than in a softer one. Demand is outstripping supply. When you run above 80% you're typically spilling a lot of customers. Given that, there is likely some unmet demand, at least on Delta's part. That demand may be currently paying more to fly another carrier. By adding the entertainment systems, they should be able to help drive business toward Delta.

 

[WorldTraveler]

Most of the IFE enhancements/transcon first class won’t be in before the fall so the issue is not how full flights are today, it’s how full they will be in a least peak period. When the industry hits a downturn, that higher quality product could well make a difference in DL’s ability to compete in these markets. Having all these bells and whistles probably doesn’t translate into higher revenues for business passengers but it does for many economy passengers. If all other things are equal, at least a few passengers are likely to pick DL because of a better in-flight product. Keep in mind that B6 and PS don’t fly to many of the largest airports; DL is putting this on a fleet that will serve most flights over 1750 miles so just about any DL passenger that flies transcon will get this product – a much bigger number than any other carrier.

There is a pragmatic approach to this as well. DL had a contract for IFE on the Song aircraft. They would have to reject the contract and rip the current system out in front of a lot of customers that became very accustomed to the product. It made far more sense to add the product to a few more aircraft and give DL a competitive edge over every other legacy airline.

As for the 777s for the new India flights, DL can easily run this schedule and what they have with their current 8 aircraft. It is possible that JNB could be downgraded to a 767 by next summer which would allow for an additional new market. And JNB could also be an early candidate for a 777-200LR which DL is rumored to be buying.

 

[flyhigh]

...with all due respect World, adding the IFE had nothing to do with any contracts, but instead is the result of research and analysis conducted when Grinstein took over and set up teams to change the company. The three teams were cost, network & product. If the goal were to downgrade the product, ripping it out along with the contract would be no problem, especially now. Additionally, there are some benefits to DL dumping the product for the manufacturer...it's a mutually beneficial situation. Lastly, the reason it's only going on the longer range flight has more to do with the aircraft. The 1,750 is more about M80's inability to take on the IFE systems...

 

[s80dude]

JFK-ACC should be interesting. I came back from ACC on North American last year. It's essentially a charter and a very cramped 767, with 8 across seating and the plane was FULL!

Hope that route works for them.

Regarding India, I wonder if they will use FN's that were previously on the CDG-Mumbai route, or if they will offer it JFK based F/A's. IIRC, Chennai based crews were used on that service so I assume they will be let go, as that route is being axed.

 

[WorldTraveler]

flyhigh,
I don't disagree with the reasons you and Delta cite for doing the upgrade and agree w/ the MD80 issue (plus you add alot more planes and costs) but I do think the existing contract for Song IFE was an issue. Are you saying DL is using a different vendor now?

 

[deltaflyboy]

Regarding India, I wonder if they will use FN's that were previously on the CDG-Mumbai route, or if they will offer it JFK based F/A's. IIRC, Chennai based crews were used on that service so I assume they will be let go, as that route is being axed.

The new routes will be staffed by NYC based Flight Attendants...have not heard what is happening the with Indian based F/A's...