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?

1 comment:

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.