Apparently, Delta has lost $900k based on flights in and out of COU over the last year or so. However, they have reported an 89% load factor. So is this DL's fault or a bum market.
That being said, AA has announced dailys to ORD and DFW (with a 2 year $2MM fund guarantee should they lose money).
It looks as though DL was pissed about AA's guarantee and took their ball home. Last week COU offered a $3MM fund to DL which was refused.
Now I'm going to have to contemplate changing to AA or driving 2hrs to STL for service. ugh...
Don't worry, AA will pull out too once the cap&trade taxes get slapped on carbon emissions in a year or two and it becomes too expensive to operate a plane.
I lived in COU for years and never used the airport...always drove to MCI or STL. When I have had to go back for work a couple times the schedule never worked out or the connections were so screwy (especially during the Great Lakes years)
The schedule was great with the MEM and ATL options until they dropped the 6am MEM flight. I believe this was miss management by the city with some spitefulness from DL.
I have been in and out of COU almost every other week for the past year and not once did I see more than 1 to 2 empty seats. What has hurt me the most is the reduction in flights out of MEM that resulted in having to take the midday ATL flight and generally adding a day of travel to my work week.
Honestly, just frustrating. I was really enjoying leaving my house 45min before a flight. And no, that's not an exaggeration. Less than 40 would be cutting it too close.
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Stinks for ppl who use this regional airport but I tend to side with DL and have mild confidence that they're making a wise business decision. Sometimes it's not as simple as increasing the price to compensate for the $900K loss on this route. Especially with AA flying in and out. how many HVC's use the COU airport? I would imagine not very many.. So i'm sure most of the pax out of are casual travelers flying on sLUT fares that make up the 89% load.
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Quote:
Originally Posted by rylan
Don't worry, AA will pull out too once the cap&trade taxes get slapped on carbon emissions in a year or two and it becomes too expensive to operate a plane.
Is that down to COU? Or the Administration in charge (or re-elected by some) for that matter.
Quote:
Originally Posted by Junior Varsity
The schedule was great with the MEM and ATL options until they dropped the 6am MEM flight. I believe this was miss management by the city with some spitefulness from DL.
I have been in and out of COU almost every other week for the past year and not once did I see more than 1 to 2 empty seats. What has hurt me the most is the reduction in flights out of MEM that resulted in having to take the midday ATL flight and generally adding a day of travel to my work week.
Honestly, just frustrating. I was really enjoying leaving my house 45min before a flight. And no, that's not an exaggeration. Less than 40 would be cutting it too close.
but DL can do no wrong, DL never acts out of spitefulness . Generally its a crap city that gets it is what I was told . See CVG and MEM. So DL loyalists here will tell you, if you got wronged, you probably deserved it.
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Quote:
Originally Posted by mridley2
Stinks for ppl who use this regional airport but I tend to side with DL and have mild confidence that they're making a wise business decision. Sometimes it's not as simple as increasing the price to compensate for the $900K loss on this route. Especially with AA flying in and out. how many HVC's use the COU airport? I would imagine not very many.. So i'm sure most of the pax out of are casual travelers flying on sLUT fares that make up the 89% load.
How many HVC's do actually exist in a regular commuter city?
COU like MEM may not have many HVC's but folks like us who travel every week.
Well, I can tell you this regarding HVCs; There are many, many DM/PM/GMs on every flight. Funny story, I was on a DL 319 out of STL a few weeks ago and there were 4 people in front who normally fly out of COU and none of us knew each other before the flight.
While I'm sure just an anomaly, it was interesting that 25% of FC had to book out of STL because the COU flight was sold out or the connection time didn't work. FYI, it was 50-50 on that. There is actually a lot of business that takes place in Mid MO. We have the State Capital, University of MO (plus two other +8k student colleges), MBS, and a newly opened IBM facility.
I'm just saying, this seems more like spite than anything. The local gov't had been asking DL to bring in larger planes CR7/9 or a 319. They even invested in updating the runway. This was a main factor for AA to come in. Earlier this year DL stated that COU was profitable for them, so I believe this was a mix of spite/ not a big enough fish.
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Quote:
Originally Posted by Junior Varsity
I'm just saying, this seems more like spite than anything. The local gov't had been asking DL to bring in larger planes CR7/9 or a 319. They even invested in updating the runway. This was a main factor for AA to come in. Earlier this year DL stated that COU was profitable for them, so I believe this was a mix of spite/ not a big enough fish.
That is just the definition DL isnt it?
Spiting customers is a way forward for them in smaller cities of late.
Yesterday's announcement is hugely disappointing. For years I was gold on AA flying a mix out of COU and the transitioned TWA hub in STL. Following their departure from the COU market, and their gradual downsizing of STL from hub to focus city to bare bones, I began flying Delta, and have been Platinum for several years now. I LOVE their service out of COU. The convenience, easy check in and security, dependability, and free parking rock. Like others have noted, the flights are almost always nearly full, and often even over-sold. I still fly out of STL or occasionally MCI when the fares or schedules can't justify otherwise, but I went back and looked, and I'll have 14 COU originating trips before the year is out. I dread the thought of having to drive to STL for every flight, but not sure I'm ready to switch my allegiance over to AA, especially after they already ditched COU once, and decimated their schedule in and out of STL. Hopefully, Delta will reconsider, but if not, hopefully AA will at least offer some type of elite status matching program to the Delta FFs left stranded...
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For a small city, I was always surprised at the low fares to/from COU. COU was often priced similarly to STL. It seems to me that a $3 million fund guarantee over 2 years would make up for a $900k/year loss unless that $900k was including a fund guarantee.
Of course, the one time I had a very good reason to fly to COU (the Alabama-Mizzou game), fares into STL were less than half of what they were into COU.
I'm just saying, this seems more like spite than anything. The local gov't had been asking DL to bring in larger planes CR7/9 or a 319. They even invested in updating the runway. This was a main factor for AA to come in. Earlier this year DL stated that COU was profitable for them, so I believe this was a mix of spite/ not a big enough fish.
You may believe whatever you wish. While I do not like some of the business changes made by Mr. Anderson and company, I must admit he is an executive whom is sharply focused on operating a profitable business. I would tend to believe this was a business decision.
Let's look at it this way. Delta was running two (or three?) flights a day out of COU. They say they are losing $900K/year. AA is starting up three flights a day. This will obviously increase the losses, due to decreased loads and probably decreased yields as well. Is $3 million over two years enough to overcome the existing deficit plus the increased deficit after AA begins operations? Quite possibly it is not.
I'm sure the loss of MEM as a connecting hub has hurt the business case for COU service as well. That was a well located hub for your service, and the CRJ flights were shorter and therefore less expensive to operate.
This is one of the perils of subsidizing service out of a small market. Our wonderful HSV airport bribed AirTran into Huntsville a few years back. (And AirTran just closed the station in August.) Delta was (and still is) the largest carrier at HSV. At that time, we had Delta service to LGA, CVG, MEM, MCO, DTW, and ATL if I remember correctly. Now we have ATL and DTW, and even DTW has reduced frequencies. Obviously we lost CVG, MEM, and MCO due to dehubbing. LGA - who knows, but I would believe the business case just wasn't there.
I do feel your pain. But I don't think Delta is acting out of spite. They are very focused on the bottom line.
David
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Quote:
Originally Posted by DiverDave
You may believe whatever you wish. While I do not like some of the business changes made by Mr. Anderson and company, I must admit he is an executive whom is sharply focused on operating a profitable business. I would tend to believe this was a business decision.
Let's look at it this way. Delta was running two (or three?) flights a day out of COU. They say they are losing $900K/year. AA is starting up three flights a day. This will obviously increase the losses, due to decreased loads and probably decreased yields as well. Is $3 million over two years enough to overcome the existing deficit plus the increased deficit after AA begins operations? Quite possibly it is not.
I'm sure the loss of MEM as a connecting hub has hurt the business case for COU service as well. That was a well located hub for your service, and the CRJ flights were shorter and therefore less expensive to operate.
This is one of the perils of subsidizing service out of a small market. Our wonderful HSV airport bribed AirTran into Huntsville a few years back. (And AirTran just closed the station in August.) Delta was (and still is) the largest carrier at HSV. At that time, we had Delta service to LGA, CVG, MEM, MCO, DTW, and ATL if I remember correctly. Now we have ATL and DTW, and even DTW has reduced frequencies. Obviously we lost CVG, MEM, and MCO due to dehubbing. LGA - who knows, but I would believe the business case just wasn't there.
I do feel your pain. But I don't think Delta is acting out of spite. They are very focused on the bottom line.
David
DL has been operating on the concept of standardizing the Hubs and leaving them to larger cities. I do not see how operating a jet once or twice a day, feeding into their preferred hub at ATL would not have been profitable.
DL is playing a very dangerous game here, with flushing small-medium cities down the bog. Some very big name road warrior shops who do make up a very strong part of the business, let their resources stay in smaller cities for ease of life etc. If small cities get dropped, (DL gets shafted rightly so, by these shops), big name shops will start to team up with other airlines out there which will start to show in the bottom line.
2 shops that I am aware of are getting ready to drop DL rightly by mid 2013, and I cannot see why it should be any different.
These shops are much bigger in value than DL as well.
Also, its not like connecting at ATL with 45 mins in hand is an easy task as well.
It seems to me that a $3 million fund guarantee over 2 years would make up for a $900k/year loss unless that $900k was including a fund guarantee.
DL had no subsidy at all from the town. Previously, DL (or the predecessor NW) received federal EIS subsidies, but DL decided to forego those subsidies because those involve competitive bidding. The article in today's paper is the first public revelation that DL has been losing money on COU.
That said, AA negotiated a revenue guarantee that applies on a per-flight basis and the $3 million fund will make up for revenue shortfalls. The guarantee isn't a net profit guarantee.
Sounds like DL should have applied for EIS subsidies or should have asked COU for a revenue guarantee earlier. If you don't ask small towns for money, they probably won't just give it to you unsolicited.
If the newspaper is to be believed, the town offered DL a revenue guarantee at the last minute and DL told them "no." And announced that its money-losing service will end.
AA negotiated a similar revenue guarantee with Manhattan, Kansas, three years ago and collected some of the guarantee money at first but only a portion of it. The revenue guarantee then expired after 24 months and since then AA has expanded service without any subsidy. That's obviously the hope of the business and government leaders in COU (and, no doubt, AA's desire).
. Generally its a crap city that gets it is what I was told 
While I do not like some of the business changes made by Mr. Anderson and company, I must admit he is an executive whom is sharply focused on operating a profitable business. I would tend to believe this was a business decision.
