The passing of the full service airline

[Guest GDR]

Delta wings it with new Song

David Armstrong, Chronicle Staff Writer Sunday, April 20, 2003

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The nation's money-losing airlines are playing the blues right now, but if Song, the new low-fare carrier launched with much ballyhoo this week by Delta Air Lines, makes a go of it, some airlines could be singing a different tune in the months ahead.

United Airlines, striving to emerge from Chapter 11 bankruptcy protection, could benefit from Delta's experience with Song. Hammered by the Sept. 11 terrorist attacks, the poor economy, the war in Iraq, low-fare carriers and fears of severe acute respiratory syndrome, United has suffered along with much of the airline industry. Its parent company, UAL Corp. in Chicago, has lost $7 billion since mid-2000.

In an attempt to revive its lagging fortunes, United, the world's second- largest airline and the dominant carrier at San Francisco International Airport, plans to start a low-cost carrier to compete with smaller, more- nimble airlines such as Southwest and JetBlue. If Song is successful, it could be a harbinger of success for United, which flopped with its low-cost Shuttle by United, grounded in 2001.

It'll be different this time, United spokesman Chris Brathwaite said.

"One of the benefits of having had the Shuttle is we know what didn't work, " Brathwaite said. "Our costs with the Shuttle weren't sustainable. We were selling our product for more than the competition we were up against.

"We have competition from low-cost carriers on three-fourths of our routes, " Brathwaite said. "In addition to low fares, we will be able to offer leisure travelers and price-conscious business travelers something other low-fare carriers can't: a lot of connectivity, and not just in the United States but internationally on our global network."

Lower salaries, quicker turnaround time on planes and greater productivity will allow United to charge less this time, he said. Code-named Starfish -- a name that probably will change -- the service probably will begin in the fourth quarter of this year, United has said, and will be rolled out widely nationwide.

Delta began Song on Tuesday with one flight from New York to West Palm Beach, Fla. After adding other busy New York-Florida routes, Delta will expand Song to the Fort Lauderdale-Las Vegas route as part of an overall plan to use 36 aircraft on 144 routes by November, according to Song's president, John Selvaggio.

Delta has spent $65 million to begin Song, which will use new Boeing 757 planes with first-class seats ripped out to allow the aircraft to carry more passengers and offer one class of service.

Song's one-way fares on the New York-West Palm Beach route range from $73 to $282. By comparison, JetBlue, Delta's major competitor on the popular New York-Florida route, charges $84 to $229.

Delta, a largely nonunion company, will pay its unionized pilots the same wages to fly Song planes as it does pilots on its long-established routes, which will keep some labor costs high. But the company says other employees will get lower pay.

Delta also hopes to improve productivity with quick turnaround times for planes and to achieve economies of scale by flying larger planes than those it has used on Delta Express, a 7-year-old, low-cost carrier that will be phased out.

ATTEMPT TO FINESSE RIVALS

Delta, the nation's third-largest airline, lost $1.3 billion last year and dropped an additional $466 million in the first quarter of this year. . It is turning to Song in an attempt to keep passengers away from low-fare rivals.

Based in Atlanta, the carrier took a public relations hit when Chairman Leo Mullin got a $1.4 million bonus on top of his $795,000 salary despite the airline's poor performance.

Delta seems to be trying to meld the shtick of Southwest by coaching flight attendants on how to tell jokes and the style of JetBlue by installing seat- back television screens. Elaborate music programs and live TV are promised but will not be available until next year.

JetBlue spokesman Gareth Edmondson-Jones said Delta's delay in rolling out high-tech amenities lends sour notes to Song's act. As for United, he said, "They haven't released plans yet. Let's see what they do."

In any event, Edmondson-Jones said, United and Delta will be hard-pressed to lower costs enough to compete with Southwest and JetBlue, which is not unionized. He also questioned whether the mainline legacy carriers can change their corporate cultures enough to get the stylish, low-cost carrier idea right.

"The carrier within a carrier idea has a zero success rate," he said. "It's never worked."

Airline industry experts disagree on the viability of the low-cost carrier within a carrier concept, especially for United.

Although it is designed to compete with the airlines such as Southwest, JetBlue and Air Trans, United will have to be careful not to let the new carrier compete with itself, said Standard & Poor's airline analyst Philip Baggaley.

"UAL seems to be ready to deploy the new carrier more widely than the Shuttle, which flew on the West Coast," Baggaley said. "They'll have to establish a separate identity and not direct consumers to it from elsewhere in their system where they plan to raise fares."

Chris McGinnis, an Atlanta travel consultant with the TravelSkills Group, said the time may finally be right for a low-cost carrier run by a major network airline, especially if it uses less-congested and less-expensive secondary airports, as Song is doing.

SKIPPING THE HUB

"Song is designed to get people from New York to Florida, and it's flying point to point, not going through the Delta hub in Atlanta," McGinnis said. "I don't know United's plan, but if it follows Song, United might use a smaller airport such as Oakland instead of San Francisco."

This would make good sense logistically, he said.

"The United Shuttle and Delta Express were launched in the late '90s, when airport congestion was so intense," he said. "Now we have a 20 percent reduction in the number of planes out there. It's an easier environment to operate in, especially at smaller airports."

Major employee wage and benefit concessions and changed work rules could help United to make a go of it now, too. United's pilots will triple their monthly hours in the cockpit to 95 hours, the company has said, and employees of the low-cost carrier will be paid less than workers at the main company -- even though United's major unions have already agreed to pay cuts that range up to 30 percent.

That will help keep operating costs down, something the major airlines absolutely must do, McGinnis said. "They're desperate. Desperation is going to make it work."

David Stempler, head of the Air Travelers Association, said United should probably forget about a separate low-cost carrier with its attendant re- branding. Naming, starting and promoting a new service, then establishing it in the mind of the traveling public take time and money that an ailing airline can ill-afford, he said.

"They could put a discount airline on the back of their airplanes," Stempler said. "Offer a very low fare and very minimal service. You get a soda and a bag of peanuts, and that's it, but it's cheap."

United and Delta could combine their low fares with advantages their size affords them over smaller competitors, Stempler said. Global networks, many direct flights, relatively generous frequent-flier programs and code-sharing agreements that allow passengers to book on partner airlines all give the big carriers an edge, he said.

"It's always good to have the airlines fight for our business. In the short run, passengers will benefit from these experiments," he said.

[Guest henry richards]

Hello,

Does anyone know where I could find the air reg that pertains to airline ops that states something along the lines of: "if you work 7 consecutive days then in the next 7 days you need three consecutive days off."
I know it is in the CARS somewhere, but can't find it right now! I did have a printed copy of that car, but can't remember which one it is!

Thanx,
Henry

[Guest Jammed Balls]

Henry... kinda off topic for this thread but here is your info.

CARS 604.32 Requirements for Time Free from Duty


A private operator shall provide each flight crew member with the following time free from duty:

a. at least one period of 36 consecutive hours within each 7 consecutive days; or

b. at least one period of 3 consecutive calendar days within each 17 consecutive days.

[Guest Jammed Balls]

Henry... kinda off topic for this thread but here is your info.

CARS 604.32 Requirements for Time Free from Duty

http://www.tc.gc.ca/aviation/regserv/carac/cars/cars/604e.htm (note the link window won't allow this long a url, so here it is in the raw)


A private operator shall provide each flight crew member with the following time free from duty:

a. at least one period of 36 consecutive hours within each 7 consecutive days; or

b. at least one period of 3 consecutive calendar days within each 17 consecutive days.

Cheers
JB

[Guest Miller]

Here is the link for the commercial operators ...

http://www.tc.gc.ca/aviation/REGSERV/CARAC/CARS/cars/700e.htm#700_19

[Guest CleardecksforACTION!]

To paraphrase; one must have a period free from duty of 36 hours in EACH consecutive seven day period OR, three consecutive days free from duty in EACH seventeen day period ( one or the other). So if one has three consecutive days off,one could work for fourteen straight days without having to meet the 36 hour criteria.