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11-20-2002 Delta Aims Low to Soar High / Airline challenges cheaper carriers Florida-bound New Yorkers will find new choices next year in cheap airline flights as Delta Airlines tries to win business back from the discounters by starting another cut-rate carrier of its own. Delta's long-expected announcement yesterday of the new low-cost, low-fare airline offering cheap flights said it would begin operating in the spring, at first serving routes between Boston and Kennedy Airport to the Florida cities of Fort Lauderdale and Orlando and later expanding. Can't find what you need? Try a Google Web Search in the box below!
The new airline offering cheap flights, whose name wasn't announced, will fly Boeing 757s - 36 by the end of next year - configured with 199 all-coach seats. The announcement reflects a changing airline industry where many business flyers as well as leisure flyers are demanding cheap airfares without giving up good service. Still, analysts say making the new operation work won't be easy. Replacing six-year-old Delta Express, the carrier's current low-cost cheap flights effort, the new operation will employ a simpler airfares structure, selling one-way, non-refundable tickets, ranging from $79 to $299 and will offer 14-day, seven-day and three-day advance purchase discounts, with no Saturday night stays required. The new airline will compete directly with Queens-based JetBlue Airways, most of whose route system is based at Kennedy and whose schedule includes as many as 16 round-trips cheap flights daily to Fort Lauderdale and nine daily to Orlando. "They have fired a cannonball across JetBlue's bow," said analyst Henry Harteveldt of the consulting firm Forrester Research's San Francisco office. "They're saying,'You've gotten big enough and we're not going to cede any more of our market to you.'" Low-cost, cheap flights airlines like Southwest, Air Tran and JetBlue have in recent years siphoned steadily increasing numbers of passengers away from traditional carriers such as Delta, American and United, compounding the effects of the recession that began in 2001 and the chilling effect on air travel of last year's Sept. 11 terror attacks. Delta lost more than $900 million in the first three quarters of this year. "We have previously noted that cheap flights carriers represent a real threat," Leo F. Mullin, Delta's chairman and chief executive, said in a statement. "Delta intends, through the actions announced today, to meet the low-fare carriers head on - first, to halt their progress and then to regain competitive share." JetBlue spokesman Gareth Jones responded, "It's a cliche, but imitation is the sincerest form of flattery." Industry analysts, who say Delta Express was largely a failure because its cheap flights costs weren't low enough, say the new operation might have a better chance because its planes will seat more passengers with no more crew than Express' 119-seat Boeing 737s. Delta plans also to keep costs down by selling most tickets directly to customers on the Internet. Can't find what you need? Try a Google Web Search in the box below!
Dan Kasper, an airline economist for the consulting firm LECG LLC in Cambridge Mass., says that by avoiding Delta's crowded hubs, such as Atlanta, the new operation's aircraft can be turned around in shorter times and, therefore, used more efficiently. Also in Delta's favor is a largely non-union workforce - except for pilots. David Stamey, a longtime airline executive now running a consulting business in Winchester, Va., says the people staffing the new operation will need retraining and a different mindset to provide courteous service for cheap flights at low prices. "They've got to redefine value," he said, "to their own people and to the public who's going to ride them. Southwest does that every day and so does JetBlue." He and Stamey noted that Delta Express and similar efforts by United, US Airways and Continental all have failed. "It's pretty clear that major airlines can offer cheap flights and get people to fly on them," said Kasper. "The challenge is can they make money at those airfares and it's rarely been met.".... Compare cheap flights from airlines here /cheap airfares home |