It
is the industry norm for a legacy carrier to offer service to most popular destinations; Delta reducing routes
to a similar schedule as the low-cost airlines is not an option in this
multi-billion dollar industry. In order to gain market share from low-cost
airlines, Delta must offer a better product in terms of service. Many customers
will pay a premium if the level of service provided is higher than the
low-cost, no-frills alternative.
Delta can use its advantage in the amount of
capital over the smaller, low-cost airlines by investing in more comfortable
seats, better facilities, and an increase in customer service personnel. If
Delta is able to pull customers from Southwest and other low-cost competitors,
the competitors' margins may drop to unacceptable levels and they may pull out
of a market-leaving Delta to reap the benefits of its legacy status. While many
people travel on price alone, if Delta can gain brand allegiance among legacy
carriers, it will benefit the whole Delta system.
No comments:
Post a Comment