So are the discount airlines going to kill Delta?

naunga

New Member
Found this on Flightinfo.com. I don't know how legit it is, but it was thought provoking nevertheless.

Delta Memo From Management.

What I find interesting is that they are basically saying that by slashing pilot pay Delta will be able to compete with SWA or AirTran.

The problem I see with this approach is that SWA and AirTran, while they do pay less than Delta, operate on a different business model than Delta does.

So, just cutting costs in terms of pilot wages is not going to immediately make Delta into a Southwest (i.e. profitable). The tragedy is that even though Southwest pays it's pilots less money they (I suspect) pay their executives less (compared to Delta) as well.

There are so many other things that would have to change in order to get Delta to run like a Southwest that I have to question to reasoning of cutting pilot pay.

In his letter the writer also seems to imply that Delta provides something to consumers that SWA and AirTran don't. Forgive my ignorance as a consumer, but how does that figure? When I fly I want the plane to safely take me from point A to point B, comfortably, depart and arrive at specified times, and at the lowest possible cost. I don't fly first class (unless I'm ungraded for free). I don't care if I'm on a region jet or a wide body. I just want a cheap seat on an aircraft going where I need to go. I really don't even care about a meal or even beverage service unless I'm going overseas or coast to coast. I mean no disrespect to any hardworking Delta pilot, but I would like to know what Delta can provide to me that Southwest and AirTran can't?

Going back to the original premise of this post, tell me how cutting pilot pay at Delta will encourage me to fly on Delta?
Will I be able to get a flight from Cleveland to Atlanta for under $250? Again I'm not one of those people who value first class. Personally I think it's a ripoff. Will Delta give me a free flight credit if I cancel my plans, like Southwest? Will Delta be putting larger seats in coach? That actually might get me on Delta. A $300 flight in a first class type seat. My guess is that by cutting pilot pay, all that will do is allow the CPA's in the company to make Delta look better on the books, but do nothing for making consumers think twice about spending their hard earned money on Southwest or AirTran. Again, this isn't meant to dis Delta, who by all rights is a fine company, but they operate on a model that is not acceptable to the general public in this age of The Wal-Mart Economy. People nowadays make less money than just a couple of years ago. People also have less vacation time, and vacations are starting to cost more and more. We consumers need to stretch every dollar as far as we can. You don't go to the store and buy brandname chedder cheese when the store brand tastes just as good and costs 50% less. You can't. I concede that some people buy a product only based on the brandname, but at some point people will abandon brand loyalty in order to get a better deal.

Believe me I can somewhat sympathize with your pain. I'm in IT, and just 5 years ago IT people were golden. Then IT really started to decline, and now we're not just facing pay cuts and no movement within the company, but we're actually facing the loss of our jobs to people overseas who will do them cheaper (albeit perhaps not better). And more freightening than that is that fact that should I loose my job, I go into a non-existent job market. So then my choice becomes re-tool or starve. I went from 15% raises a year for 3 years to 3% if I'm lucky, and so have my co-workers.

We're looking at an economy that has fundamentally changed. It no longer functions as it did a few years ago. Whether it's because of 9/11 or because of the natural evoluation of any large system, it's happening now. The problem is that management (in most cases) has not accepted or even recognized this change. So they continue to operate their business on models that just are becoming outdated, and it's the guy busting his ass from 9-5 to feed his family who suffers for their ignorance.

Let me close with this: I state right here and now, that I as a consumer do not support the idea of cutting pilots pay at Delta or any airline. The logic of, "everyone else is paying their pilots less than we are" is invalid. Those pilots at SWA were getting that pay from the get go. They understand that there are intangible benefits that they get by working for SWA. Delta, UA, AA, need to change the way that they do business period. Evolve or be doomed to extinction, but...if you don't care for your employees who will be there to share the vision of the new company.

So what do you think?

Naunga
 

pilot602

If specified, this will replace the title that
[ QUOTE ]
What I find interesting is that they are basically saying that by slashing pilot pay Delta will be able to compete with SWA or AirTran.

[/ QUOTE ]

Its all bullsh*t. I wouldn't be surprised if management floated that on purpose to start the "worry" machine.

Delta claiming that pilot pay is the thorn in their side and that it needs to be slahed to be competitive with LCCs is like Nordstroms saying they need to slash their pay to compete with Walmart.

The two don't "compete" they do the same thing but they are not competitors. The sooner these mainlines figure this out the better off they'll be.

Instead of denouncing what they pay their pilots they should be bragging and holding themselves out as the only airline financially sound enough to pay them "the highes wage in the industry."
 

naunga

New Member
I agree with everything that you stated.

But still I'm at a loss to figure out how Delta wouldn't be competing with SWA?

The Nordstroms vs. Wal-Mart comparison makes sense. Nordstroms offer a more specific range of products (i.e. designer names, etc). Whereas Wal-Mart sells what I would consider everyday items.

Look at it like this: I need a package of Hanes T-Shirts. Consider those T-Shirts are the equivalent to a ticket from CLE->ATL. Now I could go to J.C. Penny (major) and buy then or I could go to Wal-Mart (LCC). They're the same shirts, same packaging, but Wal-Mart's price is $2 lower. Why would I spend $2 extra dollars at J.C. Penny? What will J.C. Penny offer me.

I will say this, I shop at the more expensive grocery store when I got out shopping. I could go to another store and save signifantly on the same products, but I don't. The reason being that the more expensive store has those automated checkout lines. So I don't have to deal with a 16 y/o cashier chatting with the bag boy about the latest who he's going to prom with. So in that case, the more expensive store offers me something for the extra money I spend. I will also say that the difference in price is probably on par with $3 extra dollars per $100. So it's not huge.

Let me ask this another way, I can fly Delta from CAK->ATL for $170 before taxes, or I can fly AirTran from CAK->ATL for $125. What does Delta give me for my extra $45 dollars? That's a good sized chunk of change. That's a nice dinner with my wife at my destination. If I'm a family of four traveling to ATL for a vacation that's $180 that stay in my pocket, and maybe a day at Six Flags for the me, the wife, and the kids. That is why people are choosing to fly AirTran instead of Delta. So what is the value added by Delta that warrants that extra $45/per person (in this case)? Both flights are coach seats, both get me to me destination.

Again, not dis the pilots etc., and I'm sure that they see the folly in this, but management needs to open their eyes to it. It seems to me they can't seem to see past the end of their noses.

The consumers have spoken. They would rather keep the $45 than fly Delta. If Delta wants them back then they need to give them something for that $45.

That's the question.

Naunga
 

pilot602

If specified, this will replace the title that
A) Passengers don't sit in steerage ala SWA.
B) More non-stop flights.
C) More destinations = less times you have to change airlines to get where you want to go.

D) I don't know. And that's where Delta is going to have to figure things out.

But DL is not a LCC and they shouldn't be trying to pass themselves off as one. Find a way to justify the higher expense - more routes, more destinations, less connections, better service (there's a concept for ya) etc.
 

Derg

Cap, Roci
Staff member
Actually, it wasn't a Delta memo from management.

Supposedly a 737 check airman had written, but not signed the letter and then posted it on the "wailing wall" in Atlanta.

Kind of old news and most likely a 'plant'.

Stuff like this happens every time the company wants something.

Similar to 'plants' the company used talking about how bad AMR wanted the codeshare with CAL and NWA and if we didn't approve the codeshare, we were going to have to fight off AMR/CAL/NWA working together as one big behemoth.

Some pilots thought "Ooh! We can't have that now" and approved the codeshare. Meanwhile, none of my AMR croanies (both in the pilot ranks and in management) never paid the possibility of codesharing with CAL/NWA much attention.

Pilot costs only became the problem about one of Leo Mullin's handlers told him that his mantra of "Unions are the root of all evil, we need to be like SWA" was falling on deaf ears because SWA is perhaps a good example of a highly unionized carrier working relatively in concert with management.

UAL filed for BK and got their contract pulverized. AAA's retirement got ransacked by a BK judge and AMR more or less panicked and paid the ransome money to management who then pocketed fat bonuses and declared victory.

If management waves the 'bankruptcy' flag, their heavily leveraged debtors are going to balk and want their jets back, but if we play the 'eek! we're poor! give us some money back', people are going to say, "Well, why did you spend $100's of millions of dollars building a nest egg for upper managment?" Thus, things like this float around, got torn apart by union leadership as a 'plant', but surfaced a few months later on a external website.
 

MQAAord

Scheherazade
Staff member
Imagine for a moment:
You own a whole bunch of gas stations. 59 gas stations located only in the United States. Do you think your operating costs, business structure, etc are going to be the same as a person who owns oh, say, 200+ gas stations all around the world. No. It's different.

It's my personal opinion that the big guys need to work on their 'customer service' skills, and really get back in the business of providing the outstanding service to their passengers that they used to. Part of that is creating a better relationship between management and the front-line employees who make that customer service happen.

Labor-management relations aren't always full of 'luv' at the LCCs either. SWA and their F/As are in the heat of some nasty negotiations right now! Or how about working under a defined time contract, where when a set number of years are up, you may or may not be retained.
 

Derg

Cap, Roci
Staff member
I think JBLU has it's pilots and FA's on 'defined-time' contracts for 5 years. Which is scary because every time you call in sick, cancel a flight or have a wrestling match with maintenance over safety, it'll probably come back up in five years and they'll probably choose not to renew/extend your contract.
 

TheWife

New Member
I don't know if we have just been lucky but Delta has usually come up with the lowest price when we travel.
 

pilot602

If specified, this will replace the title that
That's the other thing people seem to not realize.

Many, many times SWA does NOT have the lowest price. I don't know how many times we flew TWA over SWA between PHX and STL. But because SWA aggressively markets those handful of $49 fares people assume they are cheaper than DL or AA or NWA, etc.

Perception is reality.
 

Derg

Cap, Roci
Staff member
[ QUOTE ]
I don't know if we have just been lucky but Delta has usually come up with the lowest price when we travel.

[/ QUOTE ]

That's what's hilarious. Management is too busy trying to cut fares to attract passengers whereas other carriers enjoy a price premium over our product?

Marketing's answer? Cut the fares lower to the point where people'll come in droves and then complain about the ability to raise fares and retain business fares.

Primarily because customer service and treatment of frequent business travelers has eroded -- primarily why JBLU is killing us in Florida.

SWA got into the market, but instead of competing, we pulled back service and lost the frequent fliers. Not to worry because it was mostly intra-Florida and they didn't do many long hauls on SWA.

Then comes the 737-700's, eek!

Then JBLU enters the market with long hauls up and down the east coast.

Did we compete? Kind of. We started "Song!" with 757's, mainline pilots and made all of our FA's mad by hiring brand new ones to run "Song". So far, it's just a one-class 757 with none of the promised personal television.

People realized that for just a few bucks more, you can get a television on an new Airbus 320 non-stop instead of riding from TPA to ATL on a packed 767 arriving in terminal A, and then onto JFK on a CL-65 departing out of Terminal C.

Ahh, blame it on the pilots!
Worked for Eastern, didn't it?
 

Dubbs42

New Member
That's perfectly on point, Doug! Why is it that management always has to concentrate on cutting prices as the primary options to continue to cheapen the whole flying experience. I still don't understand why there's got to be that bitter adversarial vibe between management and Pilots/FA's. Maybe they need more pilots like you in management positions?
 

av8rmsu

Well-Known Member
The Walmart v. Nordstrom arguement has nothing to do with airline travel.

Airlines provide a service, not a product.

I surf the net for the lowest fares because I am just a broke flight student. It all matters where I am going though. My parents live in N. Mississippi, so I fly NWA to Tupelo or to Memphis. Usually prices are about 230 roundtrip from Orlando. I am flying SWA to Jackson, MS during Thanksgiving...yeah I got a cheaper fare, but I am going to see my brother. Direct flight from MCO to JAN. Just more convenient.

LCC are exactly that...LOW COST. Thier overhead is low, so their fares are low.

Customer service is key to any airline. If you fly SWA...you are going to get hearded aboard. Fly DL, NWA, United...good customer service (usually).

The majors need to set themselves apart with added service and not compete against the LCCs. My dad flies about 40-45 weeks per year for business. Every once in a while he will fly a LCC, but he usually will fly a major for the added convenience of WorldClubs and free first class for frequent flyers. He is very tight with his money and his company's. He knows that DL, NWA, UA will take care of him if he has any problems with luggage, scheduling, etc...

It all boils down customer service.
 

A320_DUDE

Well-Known Member
[ QUOTE ]
The Walmart v. Nordstrom arguement has nothing to do with airline travel.

Airlines provide a service, not a product.

I surf the net for the lowest fares because I am just a broke flight student. It all matters where I am going though. My parents live in N. Mississippi, so I fly NWA to Tupelo or to Memphis. Usually prices are about 230 roundtrip from Orlando. I am flying SWA to Jackson, MS during Thanksgiving...yeah I got a cheaper fare, but I am going to see my brother. Direct flight from MCO to JAN. Just more convenient.

LCC are exactly that...LOW COST. Thier overhead is low, so their fares are low.

Customer service is key to any airline. If you fly SWA...you are going to get hearded aboard. Fly DL, NWA, United...good customer service (usually).

The majors need to set themselves apart with added service and not compete against the LCCs. My dad flies about 40-45 weeks per year for business. Every once in a while he will fly a LCC, but he usually will fly a major for the added convenience of WorldClubs and free first class for frequent flyers. He is very tight with his money and his company's. He knows that DL, NWA, UA will take care of him if he has any problems with luggage, scheduling, etc...

It all boils down customer service.

[/ QUOTE ]

Not to be harsh or anything but we do tend to give good customer service at JBLU and SWA. Also I don't think the LCCs are gonna kill anyone(okay maybe USAir) but we can all coexist IF (and this is a big IF!) we are left alone and not smothered by airlines such as Delta,AA and United. I have said this before and I'll say it again....we do not strike unless threatened. Push JBLU/SWA/F9/FL into a corner out there and it will be ugly!
 

Kristie

Mama Bear....
Staff member
[ QUOTE ]
I don't know if we have just been lucky but Delta has usually come up with the lowest price when we travel.


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yup, i think you've been lucky!! and mostly because your at a hub vs a non-hub... I can't seem to get an inexpensive flight on delta no matter where i want to go... I usually end up trying to non-rev on delta or buying a ticket on another carrier...Thing is - I dont like being in the 50 seater jets - they fly like props and make my stomach uneasy! so I'll take a 757 or 737 jet over a CRJ anyday!

[ QUOTE ]
Customer service is key to any airline. If you fly SWA...you are going to get hearded aboard. Fly DL, NWA, United...good customer service (usually).

[/ QUOTE ]

I totally agree! customer service is everything and DELTA is just not cutting it... I like SWA not so much because they have good route or their planes are ok.. but because their non-rev people treat me like gold... their revenue customer service does the same thing - but it makes a big difference in who you choose to do business with. my money goes to the guy that says "yea - we can do that and we can do it today for a price you can afford - plus, we'll guarantee that if its not to your satisfaction, we will fix it and do whatever it takes to make you a repeat customer"
 

MedFlyer

New Member
The bottomline is this: DL is at a huge cost disadvantage to the low-fare airlines ranging from 15-40%. The number one item that dictates people's travel choices is cost. In order for DL to stay alive, they would have to charge a 15-40% premium over the LCC's. However, regardless of how good DL's customer service, you aren't going to find a lot of people willing to pay that kind of premium. Therefore, DL loses and the lowfare carriers continue to eat DL alive.

Don't get me wrong, customer service is important and quite frankly DL's customer service is pretty poor. A large part of that is managements fault for cutting service to the bone (though cost cuts have to come from somewhere). However, I do blame some of the employees...many of whom should either quit or be fired for their poor attitudes and poor service. However, even if DL had the best service in the world, it wouldn't garner the kind of premimum needed to serve DL high cost hub and spoke, multi-type fleet and senior employee cost structure.
 

naunga

New Member
^^^I can argue that the airlines do provide a product. They provide a seat on a plane to a place, but that's neither here nor there.

You're right it all comes down to customer service, but as Kristie said Delta usually doesn't provide the best service. As a Delta customer from time to time I can agree with that.

Perfect example, my wife and I were on our honeymoon, tickets were bought months in advance. Two days before hand they reschedule our flight and we arrive hours later than expected, and our non-stop flight from CLE->MCO went to a 1 stop at CVG. Now granted the gate agent in CLE got us in first class from CVG->MCO, but the real issue came down to this. We were told about the change at the airport. No phone call, no email, a big fat nothing. Except a gate agent who was put in between a management decision and an upset customer on his honeymoon, who got up at 5 am in the freakin' morning to make a 9 AM flight that turned out to be a changed to a 1 pm flight with a connection. Hell my wife and I could've stayed in bed 3 more hours and...enjoyed the hotel room.

Then on the way home our flight (that was supposed to be non-stop remember) from MCO->CVG was late getting in, which meant we missed our flight from CVG->CLE. The only thing the gate agent could tell us is to RUN to the other terminal in Orlando and hope we get an AA flight from MCO->ORD. That sucked. We get to ORD and there are no flights to CLE that we can make and all AA does is say, "you're not our passenger. Go see Delta", we go see Delta and they say, "you're not our passenger go see AA". At which point I tell them I'm going to be Contiential's passenger if someone doesn't take care of us. Delta finally ponies up and get us a hotel for the night, and suprisingly puts us on a Contiential flight back to CLE the next morning...which again turned out to be a nightmare...and this was in July of '99.

The point was that all Delta had to do was a day before hand call me and say, "hey you're flight's been changed." Which would've meant my wife and I could've changed our plans accordingly. Then in ORD all the AA agent had to do was say, "gosh we're sorry you missed your connection, here's a voucher for the hotel." I won't even get into what Contenintal had to do. Never once in that entire trip was I made to feel that any of those airlines cared about me or my business.

Now maybe it's because I don't fly every other day, and in terms of revenue the vactioner just doesn't matter to the majors, but I can you this, I have on numerous occasions flown AirTran, and they have taken care of me from the ticket counter to the top of the jetway at my destination. They have never huffed, sighed, or been anything but polite and attentive. That's not something I can say about the majors I've flown on (in fact, on a business trip to DFW on AA, I was made to feel that it was my fault that the plane landed late and that my connection was clear across STL. Not the way to make passengers want to fly with you.

[ QUOTE ]
United...good customer service (usually).

[/ QUOTE ]
Mind you I don't run a business, but I have been on both sides of the customer service industry. No customer that ever dealt with me ever said, "Naunga...good customer service (usually)" I made sure that it was "Naunga good customer service all the time" Not an easy task, and very hard on a person's psyche, because at times you really, really want to tell those customers what you think of them and their problems, but that talk is for the breakroom not the desk. Any business the size of Delta, AA, or UAL, should be making every customer feel welcomed and appreciated. Good customer service shouldn't be something that you earn after you've paid for you're umpteenth ticket.

I'll argue that any business will take care of a regular, but it's how they treat the first time customer that wins repeat business from me anyway.

One final thought. The majors have to compete with the LCC's. Otherwise how do they get customers to change their loyalty? I do agree with you that they need to provide more value to their customers. Like I said, I'm not an Elite Uber Frequent Flier Guru, most people on the airlines aren't. Yet Delta from CAK->ATL wants an extra $45/ ticket from me over AirTran. What do I get for that extra $45? Why should I be flying Delta instead of AirTran? And how will cutting the pilots' pay encourage me to spend that extra money to fly Delta?

I know there isn't a true answer, but it is very interesting to read these responses.

Thanks.

Naunga
 

naunga

New Member
[ QUOTE ]
...you aren't going to find a lot of people willing to pay that kind of premium...

[/ QUOTE ]
Would you agree that people woud pay a premium price if they felt they got something for that extra money...aside from the "prestige" of flying Delta?

Perhaps that's it, perhaps 50 years ago or whatever, what airline you flew was a status symbol. Possible? Of course not really true anymore is it.

Naunga
 

stuckingfk

Well-Known Member
If the ticket is within 10-20 bucks of each other, I'll go with the airline I have more miles with. If not, the cheaper anyone can get me there the better.

On a side note, for any college students out there. Check out studentuniverse.com, I just found a $209 ticket to Las Vegas for Nov 13th-17th. That is half the price of any other ticket I found in this area.
 

shep

New Member
"yup, i think you've been lucky!! and mostly because your at a hub vs a non-hub."

This may be true if the hub has competition. Advantage of flying out of a hub town ... Lots of direct flights. Disadvantage ... Very expensive flights.
 

naunga

New Member
Agreed Delta is not a LCC (as clearly illustrated by my example from CAK->ATL).

Agreed a nicer passenger cabin is nice, but then again the times I've flown on Delta and AA, I've felt like I had been stuffed into a suitcase. The time I flew SWA, was extremely comfortable. Also the last time I've flew AA I didn't get the seat I had been assigned to, so no real benefit over SWA's open seating there, in fact it was a lot more of a hassle, than if I could've just take a seat that was vacant.

Agreed more non-stop flights is a great selling point, but then again, in my example both flights were non-stop. Yet Delta charged more. Why? (just keeping the discussion going).

Okay, so here's a funny question for you all...how many people think that Delta is brainstorming like this right now?

Oh, and you know what else is funny. If JetBlue flew from CAK->ATL, I'd be willing to pay the Delta fare to get a TV and a nice leather seat. That to me would be worth an extra $45/ticket.

Naunga.
 
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