Airbubba
15th Nov 2002, 04:37
Delta Air to Unveil Plans
For a Low-Cost Carrier
By MARTHA BRANNIGAN and NICOLE HARRIS
Staff Reporters of THE WALL STREET JOURNAL
ATLANTA -- Delta Air Lines, heading into territory where other major carriers have failed, is expected to unveil its plans for a low-cost carrier next week, relying in part on efficient scheduling of jets and crews.
The nation's No. 3 carrier plans to use a fleet of Boeing Co. 757s -- narrow-body jets with more than 180 seats -- providing substantial capacity to compete against low-cost foes like JetBlue Airways, Southwest Airlines and AirTran Airways, according to people familiar with the effort.
These individuals say the new airline-within-an-airline will include a snappy new name -- to try to upstage JetBlue, the new darling of the low-cost sector -- but with an emphasis that Delta's operating expertise stands behind it.
Efforts to operate low-cost carriers within major airlines, including Delta's 1996 launch of Delta Express, have fallen short of expectations. Continental, for example, closed its Continental Lite operation, which muddled its marketing by mixing mainline and discount flights on the same routes.
Yet Delta, faced with nimble, low-cost competitors like AirTran, a unit of AirTran Holdings Inc., and JetBlue in a majority of its markets, sees little choice but to try again. A Delta spokesman declined to comment on the much-guarded plan.
Delta expects low-cost competition to grow to between 30% and 40% of the industry's domestic capacity by the end of the decade from roughly 22% now, and wants to ensure it participates in that growth.
Low-cost carriers such as Southwest and AirTran are among the few making a profit since last year's terror attacks weakened demand. "The low-fare guys are stealing market share, they're bringing down prices and they can make money at those prices," said Ray Neidl, an analyst with Blaylock & Partners LP in New York.
Delta's new venture is expected to serve more markets than Delta Express, which it will succeed next year. It hopes to get more hours of flying out of the unit's aircraft by scheduling planes point-to-point, and avoiding congested hubs.
The project envisions scheduling flight attendants for longer work days than they typically average, thus boosting productivity. It isn't clear whether the airline will ask its pilots to help it cut costs. Karen Miller, a spokeswoman for the Air Line Pilots Association, which represents Delta pilots, said Thursday: "They haven't asked for any concessions."
For a Low-Cost Carrier
By MARTHA BRANNIGAN and NICOLE HARRIS
Staff Reporters of THE WALL STREET JOURNAL
ATLANTA -- Delta Air Lines, heading into territory where other major carriers have failed, is expected to unveil its plans for a low-cost carrier next week, relying in part on efficient scheduling of jets and crews.
The nation's No. 3 carrier plans to use a fleet of Boeing Co. 757s -- narrow-body jets with more than 180 seats -- providing substantial capacity to compete against low-cost foes like JetBlue Airways, Southwest Airlines and AirTran Airways, according to people familiar with the effort.
These individuals say the new airline-within-an-airline will include a snappy new name -- to try to upstage JetBlue, the new darling of the low-cost sector -- but with an emphasis that Delta's operating expertise stands behind it.
Efforts to operate low-cost carriers within major airlines, including Delta's 1996 launch of Delta Express, have fallen short of expectations. Continental, for example, closed its Continental Lite operation, which muddled its marketing by mixing mainline and discount flights on the same routes.
Yet Delta, faced with nimble, low-cost competitors like AirTran, a unit of AirTran Holdings Inc., and JetBlue in a majority of its markets, sees little choice but to try again. A Delta spokesman declined to comment on the much-guarded plan.
Delta expects low-cost competition to grow to between 30% and 40% of the industry's domestic capacity by the end of the decade from roughly 22% now, and wants to ensure it participates in that growth.
Low-cost carriers such as Southwest and AirTran are among the few making a profit since last year's terror attacks weakened demand. "The low-fare guys are stealing market share, they're bringing down prices and they can make money at those prices," said Ray Neidl, an analyst with Blaylock & Partners LP in New York.
Delta's new venture is expected to serve more markets than Delta Express, which it will succeed next year. It hopes to get more hours of flying out of the unit's aircraft by scheduling planes point-to-point, and avoiding congested hubs.
The project envisions scheduling flight attendants for longer work days than they typically average, thus boosting productivity. It isn't clear whether the airline will ask its pilots to help it cut costs. Karen Miller, a spokeswoman for the Air Line Pilots Association, which represents Delta pilots, said Thursday: "They haven't asked for any concessions."