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Times Staff and Wire ReportsThe company is re-evaluating its low-fare airline. Meanwhile, a rival says it's coming to Tampa in April.
Launched in April as part of a plan to return Delta Air Lines to profitability, discount airline Song has put its cross-country expansion on hold while its struggling parent company seeks other ways to cut costs.
Delta confirmed Thursday that Song will pull out of Washington Dulles Airport in April.
The same month, Ted, the new low-fare carrier from United Airlines, will begin flights from Dulles to four destinations, including Tampa, United officials said.
At the same time, a third low-fare carrier, ATA Airlines, said it will add business class to its planes this summer. The action by ATA comes as low-fare carriers increasingly are embracing frills and features to grab bargain-seeking customers.
Since its launch last spring, Song has grown to 12 daily departures at Tampa International Airport. The all-coach carrier flies Delta's only service from Tampa to New York City, Los Angeles and Boston.
"I don't anticipate any changes, especially in markets where they compete with JetBlue," said Louis Miller, executive director at Tampa International. "They not going to give up Boston or New York."
Song, designed at a cost of $65-million to give Delta an answer to such low-fare alternatives as JetBlue Airways and AirTran, based its business on flights from the Northeast to Florida, but had been expected to add cross-country routes from New York.
Instead, Delta's new chief executive, Gerald Grinstein, is taking a second look at those expansion plans while the company continues to seek wage concessions in its ongoing talks with its pilots union. Company officials say the review of plans for Song is expected to be completed by June.
Song uses Delta pilots and provides such perks as leather seats and in-flight entertainment. It cuts costs with shorter aircraft turnaround times at airports.
Delta, which lost $1.3-billion last year, has laid off 16,000 employees since the 2001 terrorist attacks. Grinstein says wage cuts are necessary to help the airline return to profitability.
Delta, the nation's third-largest airline, expects to record a loss of up to $350-million in the first quarter of 2004, the company's chief financial officer, Michele Burns, said last month.
Song's president, John Selvaggio, said Delta had originally envisioned Song as a defensive measure to keep from losing passengers to other carriers. But he said it could be an offensive weapon as well, aimed at passengers who prefer direct flights to the connections that are the norm for travelers on Delta. Selvaggio said Delta will now examine its routes to determine whether to offer service on Song or Delta.
Delta announced Song would add two new daily flights from JFK to Fort Myers, but Song was not included in new plans for Delta's expanded West Coast service.
Low-fare airlines flew 24 percent of domestic passengers in 2003, according to the Department of Transportation, their greatest share ever. Some economists believe the discount carriers could easily grab 30 percent of the market within a few years.
Among the newcomers is Ted, which United, the nation's second-largest airline behind American, is using as a key component in its effort to emerge from Chapter 11 reorganization. Ted's flights initially will be focused on the West Coast and Florida, using Airbus A-320 jets configured in two classes of service, economy and the slightly plusher "Economy Plus."
United said Ted will fly from Dulles to Tampa, Orlando, Fort Lauderdale and Las Vegas. The April start in Dulles is much sooner than United had previously indicated. Officials had said that United would begin Ted flights from the airport late this year.
- Times staff writer Steve Huettel contributed to this report, which used information from the New York Times and Associated Press.