3/09/2005

Delta Cutting Costs

Delta Airlines announced it will stop selling food on its flights and give passengers a choice of snacks instead, in order to help reduce costs. Delta will also be eliminating the pillows available on the flight in order to save even more money.

A Delta senior vice president said these latest changes might offend travelers from the glamorous days of air travel, but most travelers today are value seekers. Efficiency and value to the customers are two major ways airlines are surviving. In order for Delta to stay afloat they are cutting some of their variable costs and increasing what the customer is demanding, efficiency. Do you think these new managerial decisions will help or hurt Delta in the long run?

7 comments:

BOB said...

These decisions may help Delta in the short-run, but I believe the lack of customer service may actually come back to hurt them in the long-run. How much do those small pillows cost anyways?

Harry said...

Well I think that it depends what kind of flight you are on. If you are on just a short flight say from Salt Lake to California it might not be affected. On the other hand if you are going from Salt Lake to New York, then yes you will want to be a little more comfortable with options. I think that in the long run this will really hurt Delta. There seems to be no customer service.

Rex said...

I do not think it will hurt them in either the long or short-run. As Keston stated, most travelers today are value seekers. If having a pillow is a large concern, then they will bring their own. The thing that will hurt the company is if they cut back on their customer service.

homer said...

I don't think Delta has much of a choice. They are struggling to stay alive and "today" is a much bigger concern than "tomorrow" at this point.

Ann said...

I think that Delta Airlines needs to do something to reduce its cost. The airline industry is a tough industry to be in and airlines have to be creative to make money. I do think that Delta has to be careful about what is cuts, because if other airlines decide keep these services people will choose airlines over Delta.

sandy said...

I agree with Rex. Most travelers are value shoppers. However, people who have to travel for business usually don't have to worry about the cost of airplane tickets and will probably push to use another airline if they're currently using Delta. If you don't have to worry about the cost of a ticket, then meals and pillows suddenly become more important. I'm thinkg maybe Delta is cutting the mentioned expenses as a a result in a change of their market target.

Dr. Tufte said...

-1 on Ann's comment for grammatical problems.

I think this is a sign that Delta is waking up to customer realites. When was the last time you made a reservatin for a flight based on a pillow or a meal?

I think th airlines have a big psychological problem with the product they are selling. They are in the business of transporting people from one place to another. That is always a business that is profitable when it is new, and which has zero profits when it matures (think about all the taxi drivers you know who are getting rich). The airlines have used their regulatory cover to hang on to stuff like this long after people started caring about it.