Amid my Maddog excursion last week, I thought of an idea for a segment I call the “Nostalgia Corner.” Here, amidst an era of consolidation, we look into the past to reflect on failed carriers and their impact. Why, you may ask? Well, isn't it fun? Plus, it is wild to think how I will have to explain to my kids one day what U.S. Airways or Northwest meant to aviation, the same way I learned of Eastern and Pan Am from generations before me. Reminiscing is enjoyable and not harmful when done correctly. I often talk with coworkers about the AirTran days, or back when you were flying to Washington-Dulles, you could drive to your local small airport and hop on an Independence Air CRJ-200. Many of these airlines, which were hard not to like, failed when I was too young to understand how or why.
Song is Born
In the early 2000s, aviation (particularly in America) was a volatile industry. Air travel demand was still recovering from the economic aftermath of 9/11 at a time when fuel costs were soaring to unprecedented levels. To complicate matters more, two young New York businessmen launched an airline that would change the industry forever - JetBlue Airways. Founded in 1998 as NewAir, eventually rebranded as JetBlue, the New York City-based startup aimed to disrupt the leisure travel market with a mix of high-quality products and low fares.
JetBlue, being one of few airlines to turn a profit following 9/11, posed a serious threat to market share for large legacy carriers and their community of loyal travelers. Legacy carriers now had to respond. In a lot of ways, JetBlue had the advantage of building a competitive airline from scratch (for example, JetBlue got a killer deal on their initial order from Airbus) to match market voids, where other airlines were put in the difficult position of figuring out how to react with the constrained resources they had.
Legacy airlines quickly discovered that it would not be as simple as dropping airfares to match JetBlue, especially with the state of the economy then. Offering highly-discounted fares within their main product would be too complex a task. It would only create more problems than solve - business travelers paying a premium could not rightfully share the same product as a family heading to Florida for the most discounted fare. At the same time, emerging low-cost carriers posed too much of a risk to both short and long-term outlooks that the idea of their market entry could not be ignored. Legacy carriers needed their own answer to this rising market trend to retain market share. So, in the early 2000s, witty startup airlines emerged as low-cost subsidiaries of larger parent airlines. United launched TED, U.S. Airways launched MetroJet, and Delta launched Song.
At the time, Delta’s portfolio already included a low-cost subsidiary focused on leisure travel - Delta Express. Comprising a fleet of Boeing 737-200s, the carrier was not profitable, nor did they have ample resources to competitively challenge organic rising low-cost carriers, such as JetBlue and AirTran.
In 2003, Delta launched a new carrier with a revamped business model. Song aimed to combine a luxurious customer experience with highly competitive fares to match JetBlue's product. At its peak, Song operated a fleet of 46 colorfully-painted Boeing 757-200 aircraft that were all-economy configured, the highest capacity at the time in the low-cost market. In 2005, over 200 flights operated daily to 18 destinations (the total destinations served never surpassed 22), with a hub at New York-JFK and Orlando-MCO.
Business Model
Song did not stray from the standard low-cost carrier business model, operating a single fleet type and a no-frills product. To achieve organizational goals, Song required maximum efficiency to minimize costs. One problem their predecessor Delta Express had, with a fleet of Boeing 737-200s, was operational efficiency. Due to their higher operating cost compared to Song’s Boeing 757-200, yet with far fewer seats, the opportunity to build profit margins with Delta Express was limited.
Learning from their mistakes, Song needed to minimize unit cost while maximizing unit output - including increased fleet utilization and higher-density seating. Delta's ability to tap into company resources was critical, for example, sharing employees and using Delta's already established booking system. Song flights were even operated with a Delta flight number and crew, minimizing overhead costs. Without being able to share resources, Delta would have to sustain funding for two independent-operating airlines.
Do not forget, this was a time when most sales were made through travel agents. Song was one of the first airlines to predominantly push sales through the Internet. Back then, it took several minutes to log onto the internet (if you did not first throw your computer out the window). Without today’s social media outlets and breakthroughs in advertising, this presented a significant challenge.
But, by remaining firm and prioritizing sales through the Internet, the airline could better minimize the cost of physical resources such as outsourcing sales to agents, ticket machines, and call centers. Additionally, passengers booking with Song were able to earn towards Delta’s frequent flyer program, incentivizing travelers who have built up miles in the past to tack on to their total. This was a significant advantage Song had over JetBlue, as without a combined loyalty program, there was little financial incentive to compare customer fares to favor one brand over another.
Marketing
One of the first steps in marketing is defining your target audience, and Song was an aviation first. Industry research revealed that women book 75% of leisure trips and require different amenities than trips men book. Professional women, which Song termed the “Discount Divas,” were more attuned to the brand and experience of the product. Specifically, this target audience amounted to women between the ages of 35 and 54 with a modern sense of style, marking the first time women were targeted by airlines over men. Former President of Song, John Selvaggio, said about the decision in a discussion at the Harvard Business School:
“All airlines target the male business traveler, so we decided to go after the uncontested part of the market.”
Recognizing the need for an appealing brand and product, Song hired San Francisco-based consulting firm Landor Associates to build the brand from scratch and hired famous fashion designer Kate Spade to design employee uniforms. Due to solid publicity and their close relationship with Delta, the airline got off to a pretty hot start.
By not having to hire and train new flight crews or support staff, Song could better invest earned capital towards a strong marketing campaign. Known for being creative and humorous, their advertisements often did not indicate what exactly Song was, leaving many customers confused about what they were being offered. Remember, this was in the early 2000s when we could not simply look something up on Google - a fair amount of research and effort would be required to find out what Song was.
To compete with JetBlue’s interior, Delta offered a similar luxurious product. All 199 seats were leather and equipped with the best available in-flight entertainment in the country. Customers could browse through 24 satellite TV channels with the option to pay for movies and play interactive games against others on the same flight.
Song's luxurious interior (for the times).
Photo: Allen Yao via Airliners.net
And, of course, who could forget the airline’s iconic livery? The Boeing 757 is already a special aircraft in so many ways, making it the perfect fit for Song’s livery. A lime green stripe wrapped around the fuselage and continued to the tail, where you could finally locate the only Song branding (to be fair, some did have flysong.com on the fuselage somewhere, but I hardly count that towards their brand identity). It was indeed a sight to see airport terminals littered with Song tails, one after another.
If that was not cool enough, as an ode to Breast Cancer Awareness Foundation, Delta launched their partnership by painting one Song aircraft, N610DL, in their standard livery but in bright pink colors. It was such a hit that after Song was dissolved, the same aircraft wore a different Breast Cancer Awareness color scheme for Delta for years. Sadly, this airframe has long since been scrapped, but many other former Song aircraft remain in Delta's skies today.
N610DL at Tampa International Airport in July 2006.
Photo: Peter Kesternich via Jetphotos.net.
Other airlines, namely JetBlue and Southwest, were busy building almost a counter-culture to legacy air travel. The marketing concept amongst them was the same - avoid the big-bad-larger airlines for a more affordable and personable option (a concept JetBlue termed “Bluemanity”). Recognizing the importance of separating Song's identity from its parent company, the effort to build a similar culture with the airline's brand was a top priority.
Song also tapped into the pop culture of the times as the hit TV show The Apprentice featured a challenge where contestants were required to design a 30-second advertisement for the airline. Delta also launched “Song in the City,” a series of boutique stores with locations such as SoHo in New York City and another in Downtown Boston. There was almost a mystique to Song, likely because the exponential effort was invested into building the brand, so much so that sometimes they had to be reminded they were an airline. By the way, not to be overshadowed is a low-cost carrier's effort to remain synonymous with luxury travel - a concept all but lost today.
Downfall
Song did not fail due to lack of effort - in fact, despite heavy opposition from their workforce, Delta did everything it could to keep Song alive. Emerging from Delta’s bankruptcy filing in 2005, Song began rolling back its service to stop the collective bleeding. While schedule reductions were implemented across their network, they only resulted in many reduced frequencies. Song refused to concede any markets to the competition. Thus, all 18 destinations at the start of 2005 remained open until the airline ceased operations.
As is often the case, the final nail in the coffin for Song did come from within. Their employees, known to resent Song’s success, were upset that flight attendants wanting to switch carriers would lose their position of seniority, and unions increased pressure for the airline to be dissolved. Eventually, Delta succumbed, and on February 22, 2006, all remaining Song flights were removed from Delta’s booking system. Later, on April 30, 2006, Delta 2056 landed in Orlando from Las Vegas, marking the end of Song’s three-year tenure.
The decision to discontinue Song ultimately came down to Delta determining it was not the right environment to sustain separate brands in the same market. There was just too much competition and not enough demand. The airline industry was too volatile between the slowly recovering demand and rising fuel prices.
To say the competition was fierce is an understatement. JetBlue was only the driving force amongst other low-cost carriers such as Southwest, AirTran, and the startups launched by other legacy competitors. Ultimately, every one of these startups would also eventually dissolve into their parent airline. Some foreign carriers, such as Air Canada Rouge and Ryanair BUZZ, have successfully replicated this model. However, this dynamic has not returned to the American marketplace since the mid-2000s. For Delta, Song was a significant learning experience, as several elements discovered through their low-cost business venture remain in place today:
Zone boarding.
Reduced turnaround times.
Leather seats.
Designer employee uniforms.
Improved menu.
Internet-based sales focus.
Refocused marketing to create a more competitive brand with other domestic carriers.
Why Song?
Photo: Mark Abbot via JetPhotos.net.
Good question. Well, whenever one takes on a particular interest, that person can usually separate their most-liked to their least. Song was atop my list of favorite airlines - what was there not to like? One of my favorite aircraft combined with THE coolest livery (especially for a teenager) added a much-needed variety to the skies.
I was even able to fly Song for a family trip to Disney World in the winter of 2006, at what would have been around the time the decision to discontinue the brand was made. The flight was from Hartford to Orlando-MCO, and I was so excited that I took my model of the Breast Cancer Awareness plane with me in my backpack. Guess which plane took us to Florida that day? Yup! Most of Delta’s 11 current V.I.P. Boeing 757s are former Song aircraft. As a line service technician in Bedford, MA, I enjoyed working these aircraft frequently. It gave me such an incredible feeling as I would think about how the same plane flew for Song at one point - what a small world indeed.
It is intriguing to wonder if the story would have played out differently had these business ventures been launched under more favorable market conditions. In theory, Song was a phenomenal idea. Looking back, they were probably the most successful startup to compete with JetBlue, the critical factor being their higher density cabins (MetroJet used classic 737s, and TED, like JetBlue, was an all-Airbus fleet). Sadly, it became an example of the right idea at the wrong time. We will talk about the other launched low-cost carriers of the time, such as TED and MetroJet. With the emergence of ultra-low-cost airlines over the past decade, will any legacies consider their spinoff to compete? The answer is likely not, but it is fun to think about. Things change so fast in aviation that you never know what the future holds.