DL has been accused several times of offering seats at below their cost.
I don't have the numbers at hand, (nor the time to find the precise
numbers), but it's a given that Delta's per-seat-mile cost is higher
than JetBlue's,
So Delta either matches or beats JetBlue's fare. (Delta matches
AirTran, Southwest and many others all the time.)
This frequently is done in tandem with increasing capacity.
Whether the fare on that particular route is above or below the the
actual cost, it's the capacity that frequently closes out the
competitor.
Delta offers a deluge of seats for the same routing at the same fare.
Now if you were a casual Expedia.com customer (not someone on this
list) and this popped up:
Delta LAX-ATL $148 ("Delta, of course.")
JetBlue LAX-ATL $148 ("Who? Aren't they a start-up")
Who'd you choose?
(Mind you, rooting for the underdog airline is probably becoming a goal
in it self.)
I'd betcha that Delta has recently reduced their capacity on that run,
until AirTran starts to make some noise.
Just my comments and observations.
Matthew
http://www.redmac.ca - Getting Canadian's their Macintosh accessories
http://www.justaddanoccasion.com - Great gift ideas, featuring smoked
salmon
On Feb 11, 2004, at 8:45 PM, Kurt Reinbold wrote:
> how did DL subsidize their respective routes to compete against
> JetBlue?
> Could you provide financial data to support your statement?
>
> kr
>
> -----Original Message-----
> From: The Airline List [mailto:AIRLINE@xxxxxxxxxxxxxxxxx]On Behalf Of
> Matthew Montano
> Sent: Wednesday, February 11, 2004 9:23 PM
> To: AIRLINE@xxxxxxxxxxxxxxxxx
> Subject: Re: Media and investors see flaws in JetBlue strategy
>
>
> Not sure how this becomes a "showdown", and a "loss."
>
> JetBlue smartly moved into a market based on good intentions and
> assumptions.
>
> The assumptions turned out to be wrong (Delta, with their higher costs
> decided to subsidize the routes) so JetBlue cut their losses and left.
>
> It would of been a loss if they decided to stick around for longer.
> JetBlue has plenty other markets to tackle...
>
> Matthew
>
> http://www.redmac.ca - Getting Canadian's their Macintosh accessories
> http://www.justaddanoccasion.com - Great gift ideas, featuring smoked
> salmon
>
> Someone wrote:
>
>> B6 recently lost a showdown with Delta Air Lines when it tried to
>> expand
>> into the Atlanta - Los Angeles market.