DL expands SEA further with SEA-SFO flights

[737823]

Perhaps this has nothing to do with DL and more to do with their other plans? I see VX is adding another SFO-BOS flight perhaps that aircraft is coming from SJC. We all know you want to believe DL chased them off the route but I imagine their network planning looked at this with a broader perspective.

Josh

 

[WorldTraveler]

the West coast is getting more and more crowded. VX has pulled out of several other markets while DL has increased its presence there.

companies maximize profits. If DL strategically decided even before the whole AA/US asset divestiture that they needed to grow on the West coast where UA and AS have been the largest carriers and where VX has built a presence primarily in AA and UA strength markets, then it isn't too hard to follow the data trail that shows that VX is finding it harder and harder to generate sufficent returns in its core West coast markets.

Add in that VX says they want to do an IPO this year and they cannot afford to maintain a presence in markets where other carriers are growing and where VX' assets are tied up, preventing them from expanding in markets such as N. Texas where they have had considerable success in gaining share against AA.

Of course it isn't just about DL - but given the host of opportunities that are available to VX combined with the increased competition on the West coast, much of it in markets where DL has grown, it isn't a stretch at all to believe that VX is redeploying assets to where it can achieve its strategic and financial goals easier.

The same principle applies to WN who has opportunities available to it because of both the fall of the WA and the asset divestiture. DL has little to do directly with what WN is doing other than that DL benefits from WN's cuts in markets particularly in the southeast. And DL is able to grow in markets where WN pulls back, just as it is with VX. VX reduced capacity in BOS-LAX while DL has added.

 

[737823]

WT how many times has DL tried and failed at BOS-LAX? I recall they had the Song flights, went back to mainline til about 2008, then resumed seasonal flights starting in 2012. Point is they haven't been able to consistently operate the route. AA is the leader in the market, similarly hasn't been able to make RDU work on a daily year round basis. Same for MIA, they have what one flight that isn't well timed? Don't get me wrong I like DL but it's a bit of an exaggeration to say they are shaking things up on the west coast (ex-SEA).

Josh

 

[737823]

Deleted

 

[Kev3188]

another example of how DL's expansion on the West coast is having an effect on other carriers:

Is it, or is it more like this:
 
 

Perhaps this has nothing to do with DL and more to do with their other plans? I see VX is adding another SFO-BOS flight perhaps that aircraft is coming from SJC. We all know you want to believe DL chased them off the route but I imagine their network planning looked at this with a broader perspective.

Josh

Lots of things in play with VX right now. Maybe they've simply decided to not chase junk yield on this route?

OTOH, and not for nothing, DL has noted that LAX is the largest revenue market in the US. I woulda thought NYC, but here we are...

 

[eolesen]

Yes, it must be because of DL.

Never mind the fact that there were four carriers other than DL and VX in the market.

LAX	SJC	AA	201406	9506	171
LAX	SJC	AS	201406	6090	87
LAX	SJC	DL	201406	12600	180
LAX	SJC	UA	201406	2688	56
LAX	SJC	VX	201406	17238	111
LAX	SJC	WN	201406	39829	302

 

[WorldTraveler]

WT how many times has DL tried and failed at BOS-LAX? I recall they had the Song flights, went back to mainline til about 2008, then resumed seasonal flights starting in 2012. Point is they haven't been able to consistently operate the route. AA is the leader in the market, similarly hasn't been able to make RDU work on a daily year round basis. Same for MIA, they have what one flight that isn't well timed? Don't get me wrong I like DL but it's a bit of an exaggeration to say they are shaking things up on the west coast (ex-SEA).

Josh

 
Yes, I get that.
 
I do not like that DL cut its position at BOS...but as has been noted and which is undeniable, DL did it in order to build up NYC where they have been very successful.
 
I do not know where DL is going at BOS, but they have indicated they aren't going to allow B6 to grow into key DL markets without a challenge and DL will opportunistically grow into key BOS markets where they can.
 
Song itself did not achieve DL's objectives.... it was scrapped as a failure.  Let's be clear.
 
That doesn't mean that DL doesn't see value in BOS-LAX and they clearly do because they are back in the face of cuts by VX and UA. 
 
The actions of other carriers and DL's ability to grow when other carriers have to deal with other strategic issues provides opportunities for DL.
 

Is it, or is it more like this:
 
 

Lots of things in play with VX right now. Maybe they've simply decided to not chase junk yield on this route?

OTOH, and not for nothing, DL has noted that LAX is the largest revenue market in the US. I woulda thought NYC, but here we are...

 
Yes, lots of things are in play for VX.... and DL is pushing to achieve its own strategic objectives which also involve LAX which is one of VX' key markets.
 
No one is going to conclusively say that airline X did this to cause a change by airline Y... if you or others don't want to see a cause and effect, that is ok.
 

Yes, it must be because of DL.

Never mind the fact that there were four carriers other than DL and VX in the market.
 

LAX SJC AA 201406 9506 171
LAX SJC AS 201406 6090 87
LAX SJC DL 201406 12600 180
LAX SJC UA 201406 2688 56
LAX SJC VX 201406 17238 111
LAX SJC WN 201406 39829 302

 
and look at changes in revenue and capacity over the recent years and let us know where that is going.
 
still highlights that VX is finding it hard to compete in markets where everyone and their dog chooses to show up.   High profile industry markets have a way of drawing competition and that is precisely the type of markets that VX has long flown.

 

[eolesen]

No, VX is finding it hard to behave like a niche carrier when they don't actually have a niche.

I don't think it has as much to do with DL as you'd like to make it.

They've been in the LAX-SJC market for less than a year. SFO and SJC aren't the same demographic, so it's not surprising that they're having difficulty getting traction.

Then again, they need to free up aircraft for the new slots they've won. Something had to go.

 

[WorldTraveler]

generally I agree with that except that you can't call VX a niche carrier when they have built their business model from the beginning on competitng in top industry markets which have been largely directly competitive with AA and UA.  
 
Insomuch as DL has become the 3rd network carrier in some of those markets and is the one that is adding capacity, then it is about DL.  
 
The asset divestiture growth will take alot of resources including ramp up profitability and they can't afford to hold onto marginal and non-strategic markets.
 
To the extent that DL is the carrier that is most aggressively growing in LAX (and they are relative to AA, UA, B6, and AS), then DL is helping bring about the changes.  

 

[737823]

Yes, I get that.
 
I do not like that DL cut its position at BOS...but as has been noted and which is undeniable, DL did it in order to build up NYC where they have been very successful.
 
I do not know where DL is going at BOS, but they have indicated they aren't going to allow B6 to grow into key DL markets without a challenge and DL will opportunistically grow into key BOS markets where they can.
 
Song itself did not achieve DL's objectives.... it was scrapped as a failure.  Let's be clear.
 
That doesn't mean that DL doesn't see value in BOS-LAX and they clearly do because they are back in the face of cuts by VX and UA. 
 
The actions of other carriers and DL's ability to grow when other carriers have to deal with other strategic issues provides opportunities for DL.

WT, DL is smaller in BOS today than before the bankruptcy. Yes they have added some routes and it may be considered one of the larger stations outside the hubs but it still is smaller today than before. Do you think DL will have better success this time with two flights to LAX? Are they intended to feed connection to NRT/HND/SYD/etc?

Josh

 

[WorldTraveler]

DL and US both had a large presence from BOS to Florida and most of that has been abandoned.  
 
BOS-LAX average fares are low and AA has added capacity to the market after pulling it down over the past several years.
 
With 5 carriers flying BOS-LAX, it is crowded and it is hard to know who will blink.
 
DL has the strategic will and resources to develop its presence in key markets; they proved that with their NYC expansion.   They are doing it on the west coast.
 
I don't honestly know how high BOS is on the strategic priority list but it is a fairly high value market that is divided between the big 3.   DL is one of if not the largest longhaul int'l airline at BOS now but doesn't proportionately have the domestic size which means BOS is a large originating market for DL/Skyteam int'l ops.  
 
DL has a well-developed ability to operate routes during peak seasons for a market only to leave when the revenues are lower.  That strategy does add incremental revenue for DL during peak seasons (and is possible by having a portion of its fleet that can be used only during certain period of the year, so to speak).  That type of strategy can help weaken the dominant carriers in a market who have some of their revenue siphoned off during the peak periods when they need to be profitable to support their operations during offpeak periods.  
 
I would hope that if DL is starting BOS-LAX with two frequencies that they will be there after the summer but they have pulled it before.

 

[eolesen]

generally I agree with that except that you can't call VX a niche carrier when they have built their business model from the beginning on competitng in top industry markets which have been largely directly competitive with AA and UA.

They're still a niche carrier -- they've positioned themselves as an upscale experience, much in the same way Legend, Ultrair, McClains, MGM, and Midwest Express did in the past. Notice how many of them are still around...

 

[WorldTraveler]

Product definition may or may not make VX an upscale experience but their network has always been "in the face" of the biggest players in the industry....

The problem w/ niche anything is that it doesn't take long for someone else to decide they can match someone's concept.

Song was an attempt to copy many of the product elements that B6 had developed. The history of Song and Ted for that matter compared to many of those other niche airlines has shown that the basic elements of airline competitiveness - price and schedule - have a far larger effect than any product feature that a carrier can try to use.

 

[700UW]

Delta plans to turn Seattle into a hub, CFO says
 
 
Delta Air Lines CFO Paul Jacobson said, during a speech at the Raymond James Financial Institutional Investors Conference, that the carrier plans to turn Seattle, Wash., into a hub. Delta has created a vice president position for Seattle, and the carrier will fly to eight international destinations by the end of June.
 

 

[topDawg]

WT, DL is smaller in BOS today than before the bankruptcy. Yes they have added some routes and it may be considered one of the larger stations outside the hubs but it still is smaller today than before. Do you think DL will have better success this time with two flights to LAX? Are they intended to feed connection to NRT/HND/SYD/etc?

Josh

They ran it 1x daily last summer. 
It is going to burn money, but to get the big contracts in LA you have to fly to Boston. Same goes for the MIA flight. 
I fully expect to see IAD/IAH/ORD added in the future. (I also think SAT may come with 717s like AUS is.) 
 

 

Delta plans to turn Seattle into a hub, CFO says
 
 
Delta Air Lines CFO Paul Jacobson said, during a speech at the Raymond James Financial Institutional Investors Conference, that the carrier plans to turn Seattle, Wash., into a hub. Delta has created a vice president position for Seattle, and the carrier will fly to eight international destinations by the end of June.
 

 

I don't see it being a large hub, but they are already calling it a hub on the inside. LAX too. 
I think it hasn't become official because they don't want scare investors. We still live in a world where capacity additions are bad. 
 
Having said that, LAX already has more flights than CVG and SEA will likely be in the same boat in a few years.