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Delta to reduce availability of lower cost international business fares

Delta to reduce availability of lower cost international business fares

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Old Mar 5, 14, 7:11 am
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Delta to reduce availability of lower cost international business fares

I mentioned this in another thread on another subject and thought those who would be interested would miss it.

Delta will be reducing international business seating. Coach will be increased to increase load factors. Lower cost business fares will be truncated.

"Having said that, what we're doing has been going through an analysis to say, "Okay, well, given that there are really three fare classes, all which
have different levels of discounts in first class cabin." So J, D, Z for us, and I don't know what it is for other carriers, but those are the three cabins
we have in there. What is cost that's spilling at the low-end even on the peak days and then turning those into more coach seats, and I think that's where we've come
out with two configuration changes to our international wide-body fleet. One of which we're in the middle of which is, in densifying the subfleet
to the 767s to go from 36 to 22 upfront, and adding about 20 coach in that transaction. And then taking 7 out of the triple 7s, and adding 30 coach to those airplanes to try and push the load factor up. But really, to try and truncate the sign wave of the demand, and also to truncate the lowest business fares, which, quite honestly, are not that profitable for us."

Glen Hauenstein - Delta Chief Revenue Officer 12/11/13 @ Analysts Meeting NYC
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Old Mar 5, 14, 7:18 am
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Originally Posted by TripleD View Post
One of which we're in the middle of which is, in densifying the subfleet to the 767s to go from 36 to 22 upfront, and adding about 20 coach in that transaction. And then taking 7 out of the triple 7s, and adding 30 coach to those airplanes to try and push the load factor up.
Why don't you try to cram 10 across in the 777...
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Old Mar 5, 14, 7:20 am
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More coach seats for those esteemed HVCs!??!?!!
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Old Mar 5, 14, 8:14 am
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Yup, this is already in progress with the 777s J seats being reduced. DL wants to sell 8k+ tpac and tatl BE tickets, and apparently thinks they can. At the same time they drive the price up, they are also limiting the mileage earn to 75k a ticket, and then hosing pax who sit in the back with reduced mile earn.

I honestly am not sure how this all makes sense. Do they really think pax are going to pick a DL BE seat for that much money when other airlines have much lower fares just because DL inflates fares by pulling seats? Or are they only interested in corporations who have contract/discount rates for those J seats?
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Old Mar 5, 14, 8:16 am
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This is what happens when you go from 5 or 6 airlines to 3.

Thanks DOJ and all the politicians that influenced it. You lack of spine in fighting the AA/US merger is noted.
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Old Mar 5, 14, 8:17 am
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This makes perfect sense.

I've always wondered why they didn't do this before. Pack them in so that they make the revenue they need, and then open up the extra seats last minute for mileage redemptions.

Of course, if UA is $2.5k and DL is $5k, that's an easy choice, assuming I'm not on one of those 2-4-2 planes.
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Old Mar 5, 14, 8:18 am
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Originally Posted by hillrider View Post
This is what happens when you go from 5 or 6 airlines to 3.

Thanks DOJ and all the politicians that influenced it. You lack of spine in fighting the AA/US merger is noted.
Same tired argument relentlessly repeated here. Through mergers or bankruptcy, the number of airlines was going to decrease..

Consolidation was necessary.
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Old Mar 5, 14, 8:22 am
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Originally Posted by rylan View Post
Yup, this is already in progress with the 777s J seats being reduced. DL wants to sell 8k+ tpac and tatl BE tickets, and apparently thinks they can. At the same time they drive the price up, they are also limiting the mileage earn to 75k a ticket, and then hosing pax who sit in the back with reduced mile earn.

I honestly am not sure how this all makes sense. Do they really think pax are going to pick a DL BE seat for that much money when other airlines have much lower fares just because DL inflates fares by pulling seats? Or are they only interested in corporations who have contract/discount rates for those J seats?
So Delta is going to charge the same or higher fare for J as CX and KE?

Originally Posted by phenobarbital View Post
Same tired argument relentlessly repeated here. Through mergers or bankruptcy, the number of airlines was going to decrease..
Consolidation was necessary.
Look at that. A DL-apologist showed up.
Consolidation is NOT necessary. Look at Europe where they have 4 TIMES AS MANY AIRLINES! Not to mention the competition the numerous HighSpeed Rail operators provide.

Europe: 57 airlines!
http://en.wikipedia.org/wiki/List_of...ines_in_Europe
North America: 15 airlines.
http://en.wikipedia.org/wiki/List_of..._North_America
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Old Mar 5, 14, 8:29 am
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Originally Posted by hillrider View Post
This is what happens when you go from 5 or 6 airlines to 3.

Thanks DOJ and all the politicians that influenced it. You lack of spine in fighting the AA/US merger is noted.
I don't think the DOJ and politicians were the driving force; they were just along for the ride.

I recently had the good luck to have natural gas brought to my house. The local gas utility gave a community presentation. When asked why there was a not insubstantial hook-up fee, the rep. answered "we are a regulated monopoly". "we have to account for every penny and we cannot spread the cost in our general rates".

I think perhaps Americans need to learn the hard way that there are some industries that need to be regulated.
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Old Mar 5, 14, 8:33 am
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I wonder how this impacts the TATL JV with AF and KL. Will they also be eliminating these discounted airfares, reconfiguring their planes, etc.?
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Old Mar 5, 14, 8:49 am
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Originally Posted by phenobarbital View Post
Consolidation was necessary.
For stockholders, perhaps.

I keep hearing that, until recently, the airline industry as a whole never earned a return on its invested capital, lost untold billions of dollars, etc. This I don't doubt.

Yet during this time, planes kept being purchased, fleets grew, passengers carried and miles flown increased, safety improved, and certain carriers were consistently profitable. New carriers were started, and there was never a shortage of investment capital. Admittedly these folks threw good money after bad, but that's their problem.

Now, I have tremendous sympathy for the airline employees who bore the brunt of the cost cutting in recent years. Except for that, where was this pressing need for consolidation, except to give speculators a chance to double their money on short term airline stock plays?
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Old Mar 5, 14, 8:58 am
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Originally Posted by hillrider View Post
This is what happens when you go from 5 or 6 airlines to 3.

Thanks DOJ and all the politicians that influenced it. You lack of spine in fighting the AA/US merger is noted.
Indeed. Nothing tired about the facts of the matter.

The government has granted so many waivers and favors to the industry and its preferred cartel kingpins that consumers are in an unnecessarily worse position than would otherwise be the case in the here and now.
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Old Mar 5, 14, 9:03 am
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Originally Posted by hazelrah View Post
I don't think the DOJ and politicians were the driving force; they were just along for the ride.

I recently had the good luck to have natural gas brought to my house. The local gas utility gave a community presentation. When asked why there was a not insubstantial hook-up fee, the rep. answered "we are a regulated monopoly". "we have to account for every penny and we cannot spread the cost in our general rates".

I think perhaps Americans need to learn the hard way that there are some industries that need to be regulated.
THIS
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Old Mar 5, 14, 9:20 am
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Originally Posted by phenobarbital View Post
... Consolidation was necessary.
Originally Posted by DLdweeb View Post
For stockholders, perhaps.

I keep hearing that, until recently, the airline industry as a whole never earned a return on its invested capital, lost untold billions of dollars, etc. This I don't doubt. ...

probably not the first time this has been mentioned on FT, but there's an old saying that it's actually really easy to make $1 billion in the airline industry ... just start with $2 billion
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Old Mar 5, 14, 9:46 am
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I wish they would offer a real premium economy cabin with domestic F style seats. There just has to be a way to be profitable in between luxury and total discomfort (and EC does not cut it on long hauls).
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