Delta's Price-Cutting followed by Delta's Cost-Cutting

[bUU]

Delta Air Lines is planning to reduce the number of flight attendants on some flights and eliminate meals for flight crews, the Wall Street Journal reported on Monday, citing a company document.

 

Full story: http://news.airwise.com/story/view/1105349737.html

[Julees]

It's about time that an airline slash their prices. I just wonder if it will really mean any savings for the consumer.

 

Julees!

[Guest nhrich]

It's about time that an airline slash their prices. I just wonder if it will really mean any savings for the consumer.

 

Julees!

From the fares that I've looked at so far, it only appears to affect last minute travel and the silly Saturday night stay requirement. No change for the typical leisure traveler.

 

IMHO, this will just get them to Chapter 11 faster...if you're losing money why would you cut your revenue? Guess they'll make it up with volume :D

 

Rich

[hdawson]

Julees. Not sure I understand. The trouble that most majors are going through are because of prices too low. Can't meet their costs. Often the train is more expensive and sometime busses too. Gee, I saw coast to coast fares recently as low as $87 each way. Now if you're from a small and underserved city I realize the fares are higher. Small cities are just not profitable to serve. Try an alternate airport if within a reasonable distance.

[Globaliser]

I just wonder if it will really mean any savings for the consumer.

Yup, it'll save you having to see or talk to any flight attendants, save you having to be welcomed on board or farewelled at the end of the flight, save you having to be brought anything like a pillow or a blanket, save you having to eat or drink anything on board, etc ...

[bUU]

Actually, the reduction could very-well be directly related to reduction of food service. Many of the low-cost carriers fly with one less crew member per typical 737 flight than the legacy carriers, solely because of food service, not because of any other requirement.

[OrangeAndBlue]

hdawson - The real issue with the Big Six 6 is not that the fares are too low. They are led by incompetent management who tried to wait out Southwest and Jet Blue. They figured that they would make their money from the business travelers and kept the old hub and spoke system. They kept up complicated fare structures and even more plane types and configurations. They took a simple product, flying you from Point A and Point B and made it complicated.

 

Look at the change that has happened in the past couple of months with American West. Since they restructured their business model, business is booming and profits are rolling in. The executives at the Big Six need to learn how to run an airline and get out of the old way of doing business.

 

Paul

 

p.s. Sorry but this is one of my few "hot" button issues. I did significant work on my Master's Thesis on Southwest and their business model and compared it against their competitors. It just burns me up that we, the taxpayer, has to bail out an industry where incompetence is king and they employees get screwed. How much of a % pay decrease did the CEO's and other executives take after asking their employees to?

[hdawson]

Paul. Can't argue with most you say. Management should never be held captive by labor unions demanding higher and higher salaries. Pilots making up to $250,000 for so little time actually working is bad management. When costs surpass the revenue, there is a serious problem. Can't delay buying fuel or paying airport leases. The working class can only do well when business does well and the legacy airlines are not doing well. Wasn't it only 2 or 3 yrs ago that Delta pilots demanded through DALPA a 34% increase? And didn't they finally in Nov give back a 32.8% cut in pay? How many legacy airlines have made a profitable since 9-11? Southwest, JetBlue and AirTran have made a profit every year.

[bUU]

I think fiscal responsibility is a pipe-dream, though, Paul. It seems clear to me now that US Airways will bleed off little bits of its liabilities, one by one (like pensions), until all that is left is assets, and THEN they'll liquidate, so the creditors get the most money back, at the expense of the American taxpayer.