Since its start in 2003, Song has proved critics, including Delta's CEO, wrong by surviving in the hostile industry.
By STEVE HUETTEL, Times Staff Writer
Published March 31, 2005
[Times photo: Ken Helle]
At Tampa International Airport on Wednesday, Joanne Smith, president of Delta's low-fare carrier Song, discusses the airline's unexpected success and what its future holds.
TAMPA - When Delta Air Lines launched an all-coach airline called Song in 2003, skeptics and competitors branded it a loser.
They laughed at the lime green squiggle painted on the planes. They scoffed at Delta's claim that Song could operate at costs low enough to take on Southwest Airlines and JetBlue Airways in Florida, one of the most competitive markets anywhere.
Delta chief executive Gerald Grinstein even took pot shots at the carrier, joking that the airline should put "Swan" in front of its name.
But Song survived a top-to-bottom strategic review of Delta last year aimed at cutting costs. Grinstein warmed up to the carrier. Song will get 12 more planes this year and start flying from New York to the West Coast.
As the airline approaches its second birthday April 15, Song president Joanne Smith talked to the St. Petersburg Times on Wednesday about what the carrier has achieved and where it's going.
It must have given everyone at Song a warm feeling to get the CEO's endorsement last fall after his early skepticism.
It was extra warming because we really converted Jerry. The leadership team at Song and Delta remained confident we had a place. What the strategic review did was . . . reaffirm things we knew, that Song could be successful against low-cost competition.
Grinstein said Song made money in some months last year but wasn't profitable overall. How far are you from turning a profit?
On an annual basis you need to be profitable and that is our mission. We're on a very short track and timeline to do so. If fuel prices had (not increased), we would have been profitable in the next year. But the industry is having a tough time.
What advantages does Song bring to Delta? Is Song losing less money than regular "mainline" Delta flights would on the same routes?
Our operating costs continue to be lower than mainline Delta . . . simply by virtue of fact we have 199 seats on our 757. We get about an 18 percent cost advantage by flying one class (instead of first class and coach).
Delta also says Song has been a testing ground for new ideas. What are some examples of Song concepts that Delta has adopted?
We started doing 50-minute "turns" (loading and unloading planes at gates). Mainline has moved to do that in Atlanta. We started with mesh seatbacks, the seat pockets where you put the briefing cards. They help you clean up faster. Mainline is also going to leather seats. It's for ease of cleaning (and) durability and it's a nicer feel.
You just upgraded the seatback entertainment systems on Song. What's are some of the new features besides the previous 24 channels of TV?
We have now 1,600 songs where you can touch the screen and create your own playlist. You have 10 movies on demand for $5. It starts on demand when you want to start it. All director's cut, unedited current hits. In addition, you have 11 games to entertain the kids (for $5).
Is the primary goal to make money on the games or create a better coach product and sell more seats?
Clearly the goal is to liquidate the cost of that system over a period of time. But we will always make more money selling tickets. Customers make the decision (on an airline) based on price and schedule. Once everybody's equal on price and schedule, we think inflight entertainment systems will push that decision.
