Delta's Song To Launch New Routes To West In Summer By Steven Lott 12/07/2004 08:27:13 AM Delta's Song division is finalizing a 2005 expansion plan that will see 12 more 199-seat 757s joining its fleet, likely helping to launch new transcontinental routes from New York Kennedy starting next summer. In one of her first interviews since taking over for former Song chief John Selvaggio in October, Acting Song President Joanne Smith told The DAILY that the carrier expects to unveil the new routes in February and start service in June. The carrier will add about one plane every two to three weeks starting this summer, with all of the additional aircraft flying on all the new routes by November. "The game plan is to use the Song product to compete vigorously in some of those tough competitive markets where there is a lot of demand and low-cost competition is fierce," Smith said. The 12 new planes will let Song add service to another four to six "high-density" markets. Two of the top transcontinental routes that may get Song service are Los Angeles and San Francisco, both of which are served from JFK by Delta's mainline product. Song already serves LAX from three Florida cities and the only other western city to see Song so far is Las Vegas. Song about a year ago was planning to roll out an aggressive expansion plan to the West, but the launch was put on hold after there was a change in leadership at the airline last winter (DAILY, Jan. 29). Delta CEO Jerry Grinstein for months noted his skepticism for Song inside the airline and out, but he wanted to see a full year's results before deciding Song's fate. Smith believes that Grinstein's September approval of Song's 2005 growth plan is an endorsement of the strategy and adds some credibility to their claims that the operation is achieving its goals (DAILY, Sept. 9). "What really convinced him is that the costs are coming in where they should be, the margins were improving and, more than anything else, was the strong customer response," Smith said. She believes that Grinstein was encouraged by the high marks passengers were giving the Song service, which many observers believe is better than the mainline product. Grinstein also could not turn his back on the tremendous financial investment that was made in Song. One of Grinstein's goals for the airline is to boost customer service and the inflight product. Just last week, Song unveiled its upgraded inflight entertainment system, which will be installed on all 36 planes by yearend. The upgraded Matsushita system offers 10 on-demand movies for a fee and digital music that allows passengers to create individualized play lists. The system also has 10 video games along with the live television. The 2005 growth plan is essentially the same one put on hold last year, Smith said, except with a "few tweaks," and Smith believes Grinstein's green light means Song will be around for years to come. Even though Delta eventually will close the cost gap between itself and low-cost carriers, Smith believes Song is still crucial to Delta's long-term strategy. "We believe that two brands are better than one," she said. Delta has been able to prove internally that it has gained incremental passengers thanks to a new brand. "Delta will eventually become a low-cost carrier but Song will continue to be a small part of Delta," she said. "There is no plan that says we are going grow to half the size of Delta." Smith predicts that Song will continue its role as a "test bed" for Delta for new products and processes as it slowly grows its own presence in key leisure markets. Smith acknowledged that yields at Song are weak, as they are for the whole industry, blaming fare wars and overcapacity this summer leading to weaker yields on many routes. "We're feeling pretty optimistic about 2005," she said. "Better awareness leads to stronger demand, which leads to higher yields." Meanwhile, Smith said "traffic is building in the face of added capacity." Roger EWROPS