Comments on: Beware of the Fallacy of the Larger Route Map http://www.onlinetravelreview.com/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/ Airline News and Commentary Fri, 09 Jan 2009 22:48:28 +0000 http://wordpress.org/?v=2.6.5 By: onlinetravelreview http://www.onlinetravelreview.com/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5312 onlinetravelreview Fri, 18 Apr 2008 15:19:19 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5312 There's an ad in today's NY Times (i'm sure it's running elsewhere) with Delta touting its now-huge route map as a major benefit for travelers. I hope people see through the ridiculousness for the reasons IAH-PHX and I have pointed out -- through the SkyTeam alliance, all of these routes were possible before the merger. Ugh. There’s an ad in today’s NY Times (i’m sure it’s running elsewhere) with Delta touting its now-huge route map as a major benefit for travelers. I hope people see through the ridiculousness for the reasons IAH-PHX and I have pointed out — through the SkyTeam alliance, all of these routes were possible before the merger. Ugh.

]]> By: iahphx http://www.onlinetravelreview.com/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5315 iahphx Fri, 18 Apr 2008 03:05:26 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5315 You left out the number 1 reason mergers fail: costs are higher than revenues! Like you, I'm very concerned that there's little revenue synergy here -- I guess it's supposed to be those famous "Corporate Accounts" who will now flock to Delta because they're bigger. Count me as skeptical -- especially since, as you say, Delta already "flies" these routes as code shares (perhaps some corporate deals are restricted to Delta-metal only?) Meanwhile, Delta is willing to make all sorts of payouts to make people (mostly employees) happy. Does that seem like a good idea in the current environment? I'd also note that Delta has no reservations about making ridiculous pie-in-the-sky projections to Wall St. to justify their actions. They made preposterous valuation estimates to fend off US Airways' acquisition. Rejecting that deal cost their creditors about $7 billion, and counting. Would YOU trust them now? You left out the number 1 reason mergers fail: costs are higher than revenues!

Like you, I’m very concerned that there’s little revenue synergy here — I guess it’s supposed to be those famous “Corporate Accounts” who will now flock to Delta because they’re bigger. Count me as skeptical — especially since, as you say, Delta already “flies” these routes as code shares (perhaps some corporate deals are restricted to Delta-metal only?)

Meanwhile, Delta is willing to make all sorts of payouts to make people (mostly employees) happy. Does that seem like a good idea in the current environment?

I’d also note that Delta has no reservations about making ridiculous pie-in-the-sky projections to Wall St. to justify their actions. They made preposterous valuation estimates to fend off US Airways’ acquisition. Rejecting that deal cost their creditors about $7 billion, and counting. Would YOU trust them now?

]]> By: onlinetravelreview http://www.onlinetravelreview.com/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5314 onlinetravelreview Wed, 16 Apr 2008 15:38:10 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5314 Actually, a really good point, Avi. Much of their domestic capacity is run by regional affiliates (even if they have a stake in the regional carriers.) Only goes to show the incredible complexity of all of this. As I saw someone say in one of the articles about the merger - this is like two drunks trying to hold each other up. Actually, a really good point, Avi. Much of their domestic capacity is run by regional affiliates (even if they have a stake in the regional carriers.) Only goes to show the incredible complexity of all of this. As I saw someone say in one of the articles about the merger - this is like two drunks trying to hold each other up.

]]> By: Avi Greengart http://www.onlinetravelreview.com/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5313 Avi Greengart Wed, 16 Apr 2008 15:35:03 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/04/16/beware-of-the-fallacy-of-the-larger-route-map/#comment-5313 Aside from hubs, route maps are fairly fluid anyway, aren't they? I've noticed that a lot of 2 - 3 hour routes that carriers used to fly are being moved to tiny jets flown by affiliates (New York to Kansas City, for example, not just New York to Buffalo). Then the carriers move their small jets that used to serve those markets to 4 - 5 hour routes. Then they move their bigger jets that used to service those routes to international routes where they can sell the first class seats instead of giving them away to their frequent fliers. Aside from hubs, route maps are fairly fluid anyway, aren’t they? I’ve noticed that a lot of 2 - 3 hour routes that carriers used to fly are being moved to tiny jets flown by affiliates (New York to Kansas City, for example, not just New York to Buffalo). Then the carriers move their small jets that used to serve those markets to 4 - 5 hour routes. Then they move their bigger jets that used to service those routes to international routes where they can sell the first class seats instead of giving them away to their frequent fliers.

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