DL expands SEA further with SEA-SFO flights

[Kev3188]

Caught in their hubris, Kev? Is that your game plan? Is that really the strategy you would like to propose? What hubris would you like to share with AS so they catch DL in it? You’ve gotta have a little trash on DL that you can sell for 30 pieces of silver.

Who said anything about that being my "game plan?"

Hey, you asked me to weigh in, so I did. I'm just exchanging ideas.

 

Of course the PNW is home to some of the largest US based multinational corporations and the largest are indeed based in SEA, not PDX, Kev. As one of the smaller cities on the west coast, PDX might be a nice play to live but when people want to do business, they have to leave town.

Nike, Adidas (US), and Intel might disagree with that...



 

AS superior service? Not according to the DOT that shows that DL has a better on-time ratio, better baggage handling, and better oversale management.

...But "yes" according to your former employer. If you were still an "actual DL employee," you'd know that meeting/beating AS' "standards" (for lack of a better term) is one of the more emphasized target goals. After all, it's the Eskimo, not the Widget that leads the JD Power race...

 

[WorldTraveler]

The fact that PDX does have a few jobs shows that DL's original Pacific strategy at PDX did have validity. SEA is still a far larger market and it also has a large AS hub, which is why DL enhanced the DL-AS partnership... to use AS' hub to feed DL's int'l flights.

Since AS decided they wanted to also sell their seats to every other carrier and also enter DL's key markets, DL clearly has decided they are willing to build their own hub at SEA.

Yes, AS is a top-ranked company. But DL is able to pull down just as many accolades as AS does and more significantly DL has a global presence, not just a domestic PNW network. Even if AS wins a few, DL's broader network will give it an advantage over AS.

That's not just theory, Kev. It's reality and it is evident in data that shows that DL can attract revenue as good as if not superior to what AS gets, even in top AS markets.

DL's LAX-SEA buildout clearly showed that the AS' brand loyalty isn't as rock solid as you and others would like to believe which is precisely why DL is adding flights to SEA and will continue to do so.

The last premium service regional niche carrier was based in MKE, no? And they crumbled amidst competition from larger low fare and global US carriers.

 

[700UW]

Really?  Well I guess the real experts know what they are talking about:
 
http://theweek.com/article/index/248547/why-delta-is-the-least-respected-brand-in-america
 

People's hate for Delta is well-documented online, on websites (NeverFlyDelta, DeltaReallySucks, and HateDelta are the first three that come up in Google), Facebook pages, and numerous comment threads on Yelp. Most complaints seem to focus on flight delays, poor service, and high luggage fees, but those are the same complaints that have been directed at the airline industry at large for years.

 
http://crankyflier.com/2011/04/28/why-dont-people-hate-alaska-airlines/
 

On the surface, Alaska Airlines seems like a company that Americans would love to hate, yet exactly the opposite is true. People love Alaska, and it’s no accident. Let me explain.

 
For the year 2012 AS carried 11,831,682 passengers and DL carried 3,849,741 passengers out of SEA and Horizon even carried more passengers than DL with a total of 4,690,353 on Horizon.
 
AS is ranked 1, Horizon 2 and Delta 3, for market share of passengers.
 
http://www.portseattle.org/About/Publications/Statistics/Airport-Statistics/Pages/default.aspx

 

[WorldTraveler]

of course you will find people who will complain about any organization, including the IAM and people who want to complain about a company will go to the places where they have the opportunity to complain.

The US DOT has been keeping statistics on the US airline industry for decades. According to them, DL's performance statistics are neck in neck with AS and in some cases stronger.

Even the JD Powers survey that Kev cites shows that DL is the closest network carrier threat that AS has.

DL didn't get its 112% domestic revenue advantage by providing average service.

Grasp the concept that DL really does provide quality services that passengers are willing to pay a premium for and then you will understand why DL is not afraid to build up SEA, a market in which AS has indeed raised the quality of service above the national average.

DL's size and global reach will always provide an advantage even given the service levels. Size is very much a determining factor of success in the airline industry and DL has that advantage. It is that size advantage that AA/US is claiming as the biggest motivation for its merger. It either is real for DL over AS as much as it is in AA/US or it doesn't exist at all.

 

[Kev3188]

The fact that PDX does have a few jobs shows that DL's original Pacific strategy at PDX did have validity.

I'd say it still does. TATL? We'll see, I guess.

SEA is still a far larger market and it also has a large AS hub, which is why DL enhanced the DL-AS partnership... to use AS' hub to feed DL's int'l flights.

I'm pretty sure no ones arguing against that.

Since AS decided they wanted to also sell their seats to every other carrier and also enter DL's key markets, DL clearly has decided they are willing to build their own hub at SEA.

Exactly. And like I said, they've carved out enough space for themselves that they don't have to subjugate themselves to anyone just 'cause they're bigger. Maybe that's "codewhoring," or maybe that's not putting all your eggs in one basket.

The last premium service regional niche carrier was based in MKE, no? And they crumbled amidst competition from larger low fare and global US carriers.

You're not actually making a direct comparison between YX and AS are you?

Are you saying that this fight will be the end for AS?

of course you will find people who will complain about any organization,

...And people that will go to any length to defend the same...

Even the JD Powers survey that Kev cites shows that DL is the closest network carrier threat that AS has.

In this case, "close" doesn't count, and that's why there is a constant focus on winning the award. JMHO, but based on my experiences/observations, no one in the C-suite gives an F about BTN-style awards other than the nice messaging opportunity it might create. The JD Power award is what they want- period- and right now the Eskimo is winning.

Grasp

There's that word again...

Did it ever occur to you that people here actually do "grasp" things, but simply don't see it the same way you might?

Disagreeing with your way of think =/= stupidity.

#maintain perspective

 

[737823]

JD Power award means nothing, sure it is nice to go around saying the company received all these great awards but the fact is JD Power, SkyTrax, Travel+Leisure, etc bring subjective biases and are often inconsistent in the way they award rankings. AS may have great customer service but the fact is most of the passengers have zero to minimal contact with AS personnel on the ground. Their in-flight service is nothing special either, seats are uncomfortable, no IFE (except digeplayers), or other amenities DL offers. I am always skeptical of awards from JD Power McGraw-Hill Co and their objectivity. Nonetheless, I do know this is one of DLs internal goals but the fact is the service they currently offer exceeds others in their peer group. Do you really believe passengers say "oh gee let's book DL they won some arbitrary JD Power award", especially the HVCs DL is actively pursuing?

Josh

 

[Kev3188]

 

JD Power award means nothing, sure it is nice to go around saying the company received all these great awards but the fact is JD Power, SkyTrax, Travel+Leisure, etc bring subjective biases and are often inconsistent in the way they award rankings.

I agree. That said, to say so at work is considered heresy.
 

I am always skeptical of awards from JD Power McGraw-Hill Co and their objectivity.

Hey look! A dirt clod-sized piece of common ground for the two of us.
 

Do you really believe passengers say "oh gee let's book DL they won some arbitrary JD Power award", especially the HVCs DL is actively pursuing?

Josh

Not for a second. HVC's have one set of criteria, and price sensitive pax have another. I'd be willing to bet winning a JD Power award never makes either's list(s)...

 

[WorldTraveler]

thanks for your focus on the discussion and your key points.

No one is equating YX' end to AS but the airline industry is a network business. AA/US' merger is based on that reality. WN wants into the top NE markets because it needs to compete with the big 3.

WN like AS has a low fare strategy that is built on low costs. But the legacy airlines do have an advantage when and where they can successfully compete against the LFCs because the network/legacy carriers have more network breadth and can well compete with the LFCs if they decide they have to.

DL in ATL and US in PHL showed that LFCs do lose advantage against a network carrier that is determined to maintain its presence in its key markets.

AS will likely always be bigger in SEA but we are moving into the era where network carriers will build mini-hubs and focus cities where they strategically need to do so.

Again, you and others fail to appreciate that DL just completed the most aggressive buildup in key industry markets with the LGA buildup. No other carrier had operated to nearly all of the top markets from LGA but DL made it a strategy to do that and added service to every network airline hub that has service to LGA.
DL's core hubs are all performing well and DL has the strategic advantage in all of them.

ATL alone probably generates $1B in profits per year based on the size of the hub and DL's overall margins. DL has said that margins for ATL have improved as WN has cut several cities and has raised fares because of its higher cost structure.

DL has enormous capability to develop key "corner" markets including BOS, MIA, LAX, and SEA which won't serve the same function as the big interior hubs but which have valuable local markets and also serve as great launching points for int'l operations.

No one is expecting AS' defeat but those who think that DL will walk away wounded will likely be mistaken.

The most likely scenario is that AS and DL go their own ways after the contract allows them to do so but DL will have enough of a domestic hub operation at SEA to support its int'l operation and SEA will have more competition that it has had.

You can't argue that reports like JD Power and BTN are worthless and then say that DL is handedly beat by AS. The same biases pop up here and elsewhere which is why you have to look at real revenue, which I often bring to this board.

The real metric is the revenue that is generated and the resulting profitability and by those measures DL is more than capable of doing what it needs to do in the PNW which probably will include PDX-Europe and Asia as well as from SEA.

 

[Kev3188]

 

No one is equating YX' end to AS but the airline industry is a network business. AA/US' merger is based on that reality. WN wants into the top NE markets because it needs to compete with the big 3.

Pretty sure you just did.

Also pretty sure that while I might not call AS a "network carrier" in the same context as, say, AA/US/DL, they are a totally P2P carrier, either. I'd say it's hybrid. Whatever you want to call it, they're making it work, and work well.

Again, you and others fail to appreciate that DL just completed the most aggressive buildup in key industry markets with the LGA buildup.

You're going to need to either retract that statement, or show explicitly where I've said such a thing about the LGA operation for DL.

 

[WorldTraveler]

I didn't say that YX is the prototype for how AS will turn out.

I did say that YX found it very hard to compete against much larger carriers - both on the LFC end as well as larger network carriers.

I also didn't say anything about you not understanding what DL has done in LGA.

What I did say is that DL's successes at LGA in going up against dozens of top markets for nearly every airline in the US at the same time and now generating hefty profits because of that leaves them with a great deal of capacity to take on other competitive markets. What they face in SEA is a fraction of the size of what they did at LGA. And DL already plans to use a fair amount of that capacity at SEA to support its int'l operation. DL has very little capacity at risk in its SEA expansion compared to what it did at LGA or compared to its total network.

 

[Kev3188]

I also didn't say anything about you not understanding what DL has done in LGA.

What I did say...

Was this...
 

Again, you and others fail to appreciate that DL just completed the most aggressive buildup in key industry markets with the LGA buildup.

Oh okay, 'cause that's totally different.

So are we gonna get into a fun morning of parsing language? You can save us all a boatload of bandwidth, and just politely offer a full retraction.

For the record, I understand, appreciate, and even...grasp... what's going on in NYC for DL- and that includes LGA.

 

[WorldTraveler]

Kev,
I'm not saying you don't understand what DL did at LGA.

I am saying that you might not realize how much bandwidth DL now has to pursue other strategic interests in the key "corner" markets of the country now that they are generating healthy revenues and profits from their core interior hubs plus NYC.

Again, do you realize that more than $10B per year goes thru ATL per year and that even at DL's overall profit margin, that hub alone is likely generating $1 billion per year in profits?

WN is pulling back, fares are going up, and DL has the ability to invest those profits elsewhere on its network.

that is just ATL. NYC is handedly profitable as DL wins more and more corporate business. DTW and MSP are stable and serving regions of the country where DL has a strategic advantage.
DOT data shows that DL's European and Asian operations are profitable on a year round basis, something no other US airline has done.

Add in that DL's CASM is the lowest among the network carriers and no other airline is as strategically well-positioned to work on the key strategic objectives which DL has... and have noted to include a stronger presence in the west (of which the AS issue is only resulting in DL achieving that goal faster), a stronger position in Latin America including from MIA which is the key gateway to the region, and the south central/southwest part of the US where DL is weak but where the Love Field growth will help to strengthen DL's position in that region.

This is all very well thought out and is being well executed, just as DL did in getting to this point.

 

[Kev3188]

(sigh)
 
Hey, remember last night when E mentioned the whole "I'm smarter than you" thing?
 
Yeah...

 

[737823]

Can either of you comment on DLs redeye services from SLC on Sunday? They added sections to BDL, BOS, FLL, MIA, and possibly others as a one time service. Several markets also saw one off 763s that day too. I assume it was successful and with the type of revenue the Sunday after Thanksgiving produces (#1 revenue day of the year) easily pays for the repositioning costs and extra OT.

Josh

 

[WorldTraveler]

DL has previously said that because the weekend after THX falls in December, it would push revenue into December, possibly weakening Nov somewhat.

DL has said that Dec looked solidly profitable at the investor's conference several weeks ago.

It is easy in that environment to add extra capacity at a time of the year when leisure travel is premium-priced.

It's not a question of being smarter, Kev. It's about having the information and being able to understand what it says.
There is more than enough publicly available information to be able to get a pretty good idea about how various parts of an airline operate.