Originally Posted by
alfaromeo
Those numbers are not the relevant numbers. A carrier like Delta has a lot of core costs that are reflected in those numbers. For instance, we have to maintain the costs of a large international sales force that a carrier like Southwest doesn't have.
One relevant number is the incremental additional costs that are incurred when each carrier adds one more flight. In this area, Delta is more than competitive with Southwest.
The real relevant number is the incremental additional net revenue that adding one flight gives you. That is revenue added minus the cost incurred. Our overall RASM is higher than Southwest's, but that doesn't mean it would be so on each segment.
I do know that in Salt Lake, a market where we compete strongly with Southwest, we are doing better than they are. Certainly Delta management does not seem scared by Southwest today. They are a strong carrier and well run, but they are no longer able to walk into any market and push people around any more. They have to compete like the rest of us mere mortals.
Good post, you are correct. But this also explains why Delta does not really perceive narrowbody domestic flying as a core part of its business and why, economically, they are willing to outsource it.
It is fine if management wants to think this way, but as a
union we need to define "Delta flying" as broadly as we can and write our future scope like other multi employer agreements so that it spans multiple carriers and certificates.
I'd also hope that as we become the lastest "world's largest network airline" that we do not fall victim to losing our core competencies that put us here in the first place. Transcontinental flying may not be sexy in these days of ultra long haul lie flat 110,000 pounds of thrust per engine wonder machines, but we need it to pay the bills. Obviously we'd be more profitable if our costs matched Southwest's and we would not have to run from AirTran while throwing RJ's down to cover our retreat.