avek00

Sorry MUC Flyer, but Delta's financial performance vs. AA and UA tells a different story. Delta's current strategies have brought the company MUCH closer to profitability than the approaches taken by AMR and UAL.

If anything, IMHO, it's AMR and UAL that need to alter THEIR Y products to the current market realities...

jimrpa

I've been following this discussion with some interest, and I'm surprised nobody has brought up the following:
Many companies (mine included) have negotiated rates with several carriers. Every employee is REQUIRED to make all air reservations through the company-approved travel agent and website. Every employee is REQUIRED to select the lowest-cost airfare offered (there is room for the occasional exception which generally has to be approved at the corporate officer level). Now, admitedly, you can game the system to some extent, but the bottom line is: If DL is going from point A to point B for $X and someone else (say AirTran) is going from point A to point B for $X-$0.01 with a similar schedule, we are REQUIRED to select AirTran. No amount of arguing that DL offers more amenities and AirTran doesn't will get you onto DL. This also applies for those who try to argue that AA MRTC or UA E+ justify even a small premium for trans-con prices. To make it even worse, we must purchase all air travel on the company credit card and through the company travel agency, or else the expense is not reimbursed. This is done so the company can collect metrics to use in their negotiations with carriers.

What DL, UA, AA, and US SHOULD do is go to companies with very large travel expenditures (my company happens have one of the highest travel expenditures in the world), and negotiate EXCLUSIVE (or near-exclusive) rates. DL should say to us, we'll guarantee you the lowest available fare class for every flight you book, even if that fare class is sold out (i.e., even if they are out of T fares, as long as I'm trying to purchase a ticket that would otherwise meet the T fare restrictions, they'd sell me the ticket at the T fare price. Note that this still encourages people to plan in advance if they want lowest prices, but since some relatively inexpensive fares are theoretically available even close to flight time (K, Q), the company still gets a significant break on last-minute travel over walk-up Y.) In addition, we'll allow your medallions to upgrade on these fares. Finally, we'll give you a small number of "complimentary" Platinums and Golds each year to be distributed to executives and other senior staff members who may not travel frequently, but should receive some type of "VIP treatment". In return, you must guarantee us 95% or more of your total air travel dollars (to be verified by independent audit by the corporate travel agency). I'd be interested in hearing from those "in the biz" as to why this can't work? There must be some catch or else the airlines would already be doing it.

[This message has been edited by jimrpa (edited 08-08-2002).]

daved

My company has deals with 4 of the major US carriers for X percent discount on fares. X is usually around 20-25% if I remember correctly. All of our travel is booked through one location but we are free to recommend flights and carriers. If the difference in price and/or schedules is not too out of line, we get what we ask for.

Usually we fly out of LAX to DFW on AA, short notice coach was about $1500RT. Flying out of Long Beach (20 minutes south) the fare dropped to $300. In this case, the company would make us fly out of Long Beach.

Spot

The US Government uses negotiated rates that must be used with few exceptions. Under the contract, we may not use another carrier that offers the same fare, but we are allowed to utilize cheaper fares if they are available.

The big gotcha is that all of the Gov't fares are fully refundable/changeable...while most cheaper fares are non-reundable.

The GSA posts these negotiated fares on their website.


[This message has been edited by Spot (edited 08-08-2002).]

robnsfla

the u.s. airline industry is taking 2 distinct paths.......the one's that make money even in bad times..Southwest, Jetblue and Airtran and the ones that loose money and are titering on bankruptcy like UAL and UsAir.....Delta is trying to seperate themselves from traditional airlines and become more like the new breed...I do think the pilots should take a good pay cut because lately the passenger's on Delta have taken all the cuts...if Delta wants to be part of the new breed they must cut the pilot's salaries to really compete effectively...the premium traditional product will survive on long haul domestic and international routes and maybe come back one day on short haul domestic if and when yields/high end biz travel picks up.

CoMooter

Avec, you and I see many things in the same light when it comes to airline operations (or lack thereof), but you should know that DL owes it's better financial position as much to the freedom to engage in "strategies", as opposed to just the quality of the "strategies" enacted themselves.

I know far too many EX airline executives who have told me they knew exactly what the problem was, knew exactly how to fix it, but were prohibited by labor structures, rules and relations befitting the 1950's from engaging in it. Like them, I have little doubt executives at carriers like AA and UA know exactly what needs to be done...but can't act for reasons we all know.

DL's major blessing (and most Wall Street analysts share this view) is that they don't have quite as big of a 'gun' aimed at their head when they want to enact changes that need to be made.


[This message has been edited by CoMooter (edited 08-09-2002).]

mikey1003

Low fare my ...

Try living near CVG

B747-437B

From Delta Newsline :

anrkitec

OK, granted, I am not in the airline biz but that doesn't sound very good. Quite ominous in fact.