mooper

See upthread for full explanation. Short story: compare airline stocks and profits now versus those of, say 5-10 years ago. See anything different?

pbarnette

Considering that the bankruptcies of the past completely wiped out shareholder equity, I'd say $9 is quite a show of confidence. One should also note that DAL has outperformed UAL.

Considering that the prior state was bankruptcy and heavy and sustained losses, in what ways has consolidation not lived up to the "hype"? Certainly, anyone that thought the airlines would start to deliver huge gains is disappointed, but that doesn't mean the airlines haven't seen significant benefits.

hazelrah

Yes, there have been a couple of good years, but it is probably too early to declare victory. You seem to want to cherry-pick your time slice as well. 2001-to present was rife with tumult (9/11, Bankruptcy Merger, Great Recession). It is not a vallid comparison.

hazelrah

That's certainly interesting spin. Given that Delta share price on Oct. 28 2008 was 7.99, and today it is trending toward 8, I'm not sure how you got there.

http://news.delta.com/index.php?s=43&item=216

AA_EXP09

I found a low award YVR-TPA via MSP and got it for someone else.

MikeyZBT

Wow. You are the most unlucky traveler ever... or you are the worst travel planner of all time.

I've gotten many low awards (in business to Europe in the summer). You just have to plan in advance and be at least somewhat flexible.

And you are just plain wrong about the upgrades. They happen to everyone, a lot.

My Silver Medallion mother just got upgraded on DTW-FLL this past Sunday and then again on PBI-ATL this morning.

MikeyZBT

+1 ^^^ Great point.

mooper

No one is declaring victory. Forget about 2001-2004 if you'd like. 2004 and beyond saw extreme overcapacity, fares that couldn't be raised, and resulting losses and bankruptcies. It was the reduction of capacity (largely via mergers) and wise handling of fuel costs that was directly responsible for the turnaround that has led to recent industry profits. Think what you may of the stock price, but airlines are now profitable and much more stable than a few years ago. You disagree?

Perhaps you're forgetting the price was 0 (bankruptcy) not long before that? Years of losses and bankruptcy while there was overcapacity are now profits. Do you beg to differ?

pbarnette

Frankly, I think anything above $0 is a vote of confidence, given the track record of the airlines. You seem to be measuring DL's stock performance against that of a growth company in an industry where economic success has not proved so elusive. That isn't an appropriate comparison.

I'm sure there are some disappointed investors, but they shouldn't have invested in an airline in the first place. But if you look at the measures of how well DL is running their business, rather than measures of investor sentiment, it is pretty obvious that DL is better positioned and better run than either legacy DL or legacy NW (or really any pre-2008-ish legacy carrier) has been for at least 20 years. Of course, that is such an impossibly low bar to reach that it isn't saying much.

Dovster

If you truly believe that you have fallen for one of the most successful advertising gimmicks ever invented.

No airline, hotel chain, or car rental agency has a loyalty program. They are not interested in your loyalty (and certainly do not give you any in return). They are interested in your future purchases, not your past ones.

I am not condemning this. It is exactly how a business should work.

What any so-called "loyalty program" does is try to lock you in, so that your next purchase is more likely to go to the company which operates it instead of a competitor.

Let's assume that I want to fly TLV-LAS in Business Class next week. I am not going to get a non-stop flight from anyone, so I realize I am going to have to connect somewhere -- either in the States or Europe. This means that convenience is not much of a factor.

Three airlines offer me cheaper fares than Delta, so normally they would have first priority. Guess what? If I choose Delta I get the SkyMiles, which together with the ones I already have, will allow me to upgrade on a future flight.

More than that, I will go from Gold to Platinum status, meaning that I get other (smaller) benefits. Together, yes, they are worth the extra $300 to me so I select Delta for this itinerary.

I could probably get an equivalent deal from other airlines, but Delta (or at least SkyTeam) has a major marketing advantage because of my previous flights, status, and already-earned SkyMiles.

I am not, however, choosing this flight because of loyalty. Nor is Delta offering me these benefits out of loyalty. It is an excellent marketing program for Delta, it gives me somewhat of an advantage, and thus it is the best business deal for both sides.

That is the deciding factor -- not loyalty.

dcline414

Isn't that true of any loyalty program?

Perhaps the name is a misnomer, but your grocery store, coffee shop, dry cleaners, and anyone else that rewards repeat business is really only rewarding future purchases, clearly in an effort to influence your present buying decisions in their favor.

mikeef

Absolutely true of any loyalty program. I think Dovster's point is that the term "loyalty program" is a marketing feel-good term, but not really there to reward you for your past behavior.

Mike

Dovster

To a great degree, yes, it is true of any so-called loyalty program. The airlines, hotels, and car rental agencies, however, have carried it a step beyond. By estabiishing "elite" levels they are not only influencing your present buying decision but also your future ones.

With every purchase that you make, it becomes more difficult not to purchase from that company in the future.

dcline414

I see your point.

I believe a lot of retailers are adopting similar models as well, so they must be working as hoped. I know that Macys and Best Buy have "elite" tiers in their loyalty programs that give better coupons, fewer restrictions on sales, and better reward options. Actually, they quite similar to airline/hotel programs when you think about it. (Except retail programs are revenue-based, as opposed to rewarding how many steps you take inside their stores without regard to the amount of money you spend. )

Still, it is a double-edged sword. The airline potentially foregoes paid premium cabin sales if you have already used miles or SWUs to upgrade, plus I know I can drink my money's worth in the SC, which would cost me nothing if I were a DM. If I think about a non-tiered loyalty program for air travel (i.e. only one "attainable" elite level), I believe it would affect consumer behavior very little, especially the more frequent business travelers. Just think what the world would be like if there was no tier above FO!

Howste

sward
Noun:
1. An expanse of short grass.
2. The upper layer of soil, esp. when covered with grass.
Synonyms: lawn - turf - grass - green - greensward

Are they putting lawns in SkyClubs now?