Delta to launch no-frills carrier
Delta Air Lines is launching a no-frills carrier to fly between the North East US and Florida.
The new airline, due to launch in Spring 2003, will have a separate name, branding and its own 199-seat 757 aircraft. The aircraft are currently operated by Delta Express, which was launched in 1996 as the carrier’s first response to no-frills competition, and will now be phased out.
The airline will start by taking over Delta Express routes between New York JFK, Boston, Fort Lauderdale, and Orlando. Delta says one-way fares will be between $79 and $299. A spokesperson for Delta said they expected the new carrier to co-brand with a food and beverage company to sell refreshments onboard.
The new airline is Delta’s attempt to regain market share taken by no-frills carriers like JetBlue. Delta chairman and chief executive, Leo Mullin said: “Delta intends, through the actions announced today, to meet the low-fare carriers head on – first to halt their progress and then to regain competitive share.”
Delta anticipates its no-frills subsidiary will operate with 20 percent lower costs per seat mile than the conventional carrier. A major cost saving will be distribution – the carrier expects to sell 70 percent of all tickets directly from the airline’s website and call centre, a figure that most no-frills carriers in Europe have now achieved.
A further cost saving will come from a faster turn-around time, one seating class, requiring fewer cabin crew, and one aircraft type, enabling lower maintenance costs.
The new carrier will be headed by John Selvaggio, Delta’s current head of low fares strategy, and use Delta’s existing operations, fleet, technology and staff. The name and product details of the airline should be announced in the first quarter of 2003.
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