While details remain closely guarded as we go to
press, Delta management is currently presenting the
findings of its recent top-to-bottom assessment of
operations, and recommendations for moving forward, to
its board. With multiple initiatives on the table, the
board is expected to accept some of the
recommendations, and reject others. But in any case,
big changes are in the works, most of which should
roll out incrementally over the next year. (Our
contacts at Delta say that we should not expect a
single groundbreaking announcement; instead we can
expect a series of initiatives.) Here?s a roundup of
the speculation floating around:
* Delta will dump many of its less profitable
short haul routes, and concentrate on longer stage
routes where passengers are willing to pay a
premium?mostly transcon and international routes.
* Hub cutbacks at Salt Lake and Dallas seem more
likely than at Delta?s fortresses in ATL and
Cincinnati. (See below for more on Cincy)
* The SkyMiles program could be simplified and
streamlined. (THE TICKET will be all over this if it
happens, so stay tuned.)
* Delta will focus on making it?s in-flight
experience worth a premium (15% or more) by installing
all leather seats and upgrading inflight entertainment
Stay tuned for more news as it becomes available?we?ll
send out a NEWSBITE if the info warrants it.
TANTALIZING TIDBITS. Earlier this month, the The Wall
Street Journal published an excellent article on the
current situation at Delta, which included a few
delicious morsels. To wit:
* Delta CEO Gerald Grinstein (described as
?grandfatherly? in his demeanor) has thrilled
employees disillusioned with previous executive teams.
He has gutted the ranks of senior management and
according to the company cut 41% of aggregate
compensation for officers, thanks to the departure of
so many.
* At a farewell gathering for ex CEO Leo Mullin in
December, the carrier's then-president and chief
operating officer, Frederick Reid, who'd been passed
over for the top job, ended his remarks without
introducing Mr. Grinstein. "What? No introduction,
Fred? How's that for job security?" joked the new CEO,
evoking tense laughter, according to people present at
the event. Mr. Reid was gone three months later, and
now heads Virgin Group's effort to launch a new U.S.
discount airline. Mr. Reid declined to comment.
* CEO Grinstein hates the carrier's stale "luggage
tag" ad campaign plastered on billboards in key
markets. He dislikes an aircraft paint job introduced
just last year, though he says changing it again isn't
feasible. Delta's shift to lower-cost regional jets on
some flights of over two hours, such as between Dallas
and New York's JFK, is an "abuse" that customers
shouldn't have to put up with.
* At recent meetings, according to people present,
Mr. Grinstein has called Song and a previous
incarnation, Delta Express, "mistakes," joking that
he'd like to add "Swan" before Song's name.
PASSENGER PREFERRED. From the AJC: ?The ?Delta
Solution,? as Grinstein dubbed the new company
strategy, ?will transform our product, fleet, network
and cost structure into an airline that is designed to
carve out new and previously uncharted network airline
territory,? he said. ?Our goal is to reclaim our
passenger-preferred stature by exceeding customer
expectations with a revitalized, viable operation.??
"SIMPLIFARES" A HINT OF THE FUTURE? Delta has
announced that Cincinnati will be the focus of one of
the first planks of its new strategy, which seems to
be fare simplification. With Delta?s new ?SimpliFares?
passengers are guaranteed that they won?t pay more
that $499 one-way for ANY coach flight from Cincy.
(First class fares are capped at $599 each way.) Even
better, those onerous $100 change fees have been
reduced to $50. Delta says that with SimpliFares,
there are just two first class and six economy fares
on each flight (however, when we checked, all of
Delta?s ?old? fares were still listed alongside these
new ones, which are coded at ?BV? fares.) You can
choose refundable or non-refundable tickets and save
even more by purchasing tickets three, seven or 14
days in advance of travel. Roundtrip purchase is
required for some fares, but (YAY!) you never have to
stay over a Saturday night. Cincinnati has long been
held hostage to Delta?s legacy pricing shenanigans, so
this is certainly a move in the right direction; we
just wish it would do the same thing in ATL or
system-wide. No word yet on how SkyMiles members will
earn MQM?s on these new fares. More info here.
MORE NEW PLANES: AirTran is now flying three new
B-737?s and one 717 painted in the new livery.
Starting Sept 7, AirTran will dedicate 737?s only on
the ATL-SFO route, and by November, AirTran will no
longer use the wet-leased A-320?s from Ryan
International on any route.
AIRTRAN UPGRADE FEES TO RISE. Effective September 1,
AirTran will move to a three tier upgrade policy --
$35/$50/$70 -- $35 for most ATL routes, $50 for many
Florida routes that overfly ATL, and $70 for West
Coast routes?examples ? ATL-Orlando is $35, ATL-New
York LGA is $35, Dayton-Orlando is $50, and ATL-LAX or
SFO is $70.
FREE FLIGHTS FOR LIFE. Delta?s ex-CFO, Michele Burns,
who recently moved to Atlanta-based energy firm
Mirant, has worked out at deal where she, her partner,
and their children get free flights for life in
exchange for her consulting services. (The kids only
get the freebies until they are no longer dependents.)
Delta says that the granting of this benefit is
standard for departing execs.
DELTA BEEFS UP SKEDS: Delta?s three daily flights to
Naples FL will operate year round, instead of just
seasonally starting on Nov 15. Of course, the flights
are on ASA regional jets. You can also get full-size,
year-round jet flights on Delta or AirTran into nearby
Ft Myers.
HOLLYWOOD BOUND? Valley Girl? In January, Delta will
add a single daily B-757 nonstop between ATL and
Burbank, CA?just north of Tinseltown in the San
Fernando Valley.
DELTA AND FLY-I DUKE IT OUT. Interestingly, THE TICKET
received press releases from both Delta and Washington
DC-based Independence Air on the same day, at about
the same time, announcing new non-stop RJ flights (on
both carriers) between Knoxville and Orlando?at fares
as low as $69 each way, standard, or just $39 if
booked by Aug 27. Previously, those in Knoxville had
to shuttle through ATL or elsewhere to get to Orlando.
GOOD NEWS/BAD NEWS. Earlier this month, AirTran
offered a one-day sale for flights from ATL to all its
destinations. Fares were at rock-bottom levels for
trips through mid-November. (How about $89 one way for
ATL>SFO or LAX? Or ATL-New York for $59? Washington,
DC for $49?) And after it?s ?one day sale? AirTran
actually extended the sale to TWO days, which of
course means they did not sell enough seats. That?s
great news for bargain hunters, but bodes poorly for
airlines hoping to inch up fares in order to stay
afloat. While AirTran remains profitable, those
profits are razor thin.
AIRTRAN BEEFS UP SKEDS. Sticking to its word that it
would beef up schedules between current city pairs
instead of opening up new cities this year, the
carrier announced new daily nonstops between ATL and
Miami, Tampa, Ft. Lauderdale, West Palm Beach and
Grand Bahama Island. (On the downside, AirTran is
abandoning flights from ATL to Myrtle Beach,
Tallahassee and Greensboro starting after Sept 7,
citing weak profits. These were mostly JetConnect RJ
flights, which AirTran will be done with in Nov.)
SAARINEN LIVES. When TWA took a tumble, we were
worried about its one-time super cool 60?s-era
terminal at JFK?the one designed by Eero Saarinen to
look like a bird in flight. But this month, JetBlue
worked out a deal with the Port Authority to include a
renovation of the building as the centerpiece of a new
640,000 square foot, 26-gate terminal. JetBlue is now
carrying more passengers from JFK than any other
airline. (Now if Delta could just do something with
that awful old PAN AM terminal.
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