Chapter 1894：

"Since 2012, for more than three consecutive years, the average ticket price of a one-way flight between Detroit and Philadelphia has never been less than US$308. Sometimes, the price of a one-way flight between the two places is even more expensive, the highest ever. Reached $385.

However, airfare prices suddenly began to fall in early 2016. By the end of 2016, the average airfare price for a one-way flight between Detroit and Philadelphia had fallen to $183.

What caused the decline in ticket prices? "

Yang Cheng spread out her hand, "Oil price!"

Tyrael shook his head, "No, that's only one aspect, there are more important reasons~"

Yang Cheng frowned, puzzled, "What's the reason?"

"The most important factor is the emergence of a low-cost airline-Spirit Airlines!"

"Spirit aviation?" Yang Cheng muttered the name.

"Yes, last April, they opened a route from Philadelphia International Airport to Detroit.

At some point, the one-way fare of Spirit Airlines is less than $100. Can you imagine this concept?

It is precisely because of the admission of Spirit Airlines that all airlines that open Philadelphia to Detroit routes have to lower their average fares, including your Delta Air Lines and American Airlines, which dominates the Philadelphia airport seat.

After Spirit Airlines opened a round-trip route between Detroit and Philadelphia, the average one-way ticket price on the route dropped by more than half.

If it were not for these low-cost airlines, the passenger flow at Philadelphia International Airport would have dropped significantly. "

Yang Cheng suddenly understood what Tyrrell meant. Although the monopoly of the four major airlines directly pushed up the price of air tickets, it also indirectly affected the number of passengers. As the currency depreciated, it actually came from the perspective of the airport. Said that they are in a state of negative growth.

"In fact, there is also a low-cost airline, Frontier Airlines, which also opened flights from Philadelphia.

If it were not for low-cost airlines, consumers would definitely face a completely different air ticket pricing pattern from today. If air tickets continue to push up, I am afraid that many travelers will cancel their travel plans. "

Yang Cheng thought thoughtfully: After the wave of mergers and acquisitions, the number of major airlines in the United States has been reduced to four, which has significantly reduced competition in the aviation field.

Had it not been for the intervention of low-cost airlines to maintain market vitality by playing the role of lowering fares, I am afraid that the quagmire in Tyrael's mouth would form faster, right?

Moreover, the current low-cost airlines are different from the past. Don't think that it is really cheap if you call it cheap.

In fact, the basic services that should be provided to passengers are also provided by budget airlines. Of course, they also provide "luxury services", such as extra luggage or more space, but the price is very expensive.

Relying on this strategy, low-cost airlines successfully seized the market with low fares, which stimulated the new consumer demand of many temporary travelers. Low-cost airlines even succeeded in snatching part of the source of passengers from large airlines.

In fact, the success of low-cost airlines is nothing new.

As early as 1993, researchers from the Ministry of Transportation named a similar trend the "Southwest Effect." This name originated from Southwest Airlines. They grew rapidly in the 1990s because of the provision of basic cheap flights. Studies have shown that When Southwest Airlines provides consumers with direct flights, the average one-way fare between the two places will be US$45 lower than before. A living catfish is thrown into the stagnant water, turning the stagnant water into living water, which is the Southwest effect.

But now, there is more than one catfish on the market, and other low-cost airlines will also play a role in reducing fares.

The look in Tyrell's eyes changed again, and Yang Cheng asked directly, "Mr. Tyrell, do you want Delta to accelerate its penetration of Philadelphia Airport?"

Tyrael lifted his spirits. This was exactly what he wanted to say, but Yang Cheng didn't expect Yang Cheng to mention it first, just as he was in agreement.

"Yes, as one of the ten busiest international airports in the world, doesn't Delta want to take a piece of the cake?"

Yang Cheng opened his hands, "Of course I want to, but you have to know that once Delta Air Lines does this, it is going to war with American Airlines. Once the two of us go to war, the global aviation market will be affected, and the consequences will be impossible for me. I’m afraid I can’t afford to predict.”

"This is not what a good entrepreneur should have. You need courage, Mr. Yang~" Tyrell said bluntly.

Yang Cheng suddenly found it interesting. It has been a long time since no one talked to herself like this. "It's interesting, I have courage, I never lack it, but it doesn't mean I will act rashly.

Your position is too low, you may not understand my thoughts. "

Tyrael didn’t care about Yang Cheng’s evaluation of himself, and instead said, “If I were an employee of Delta, I would consider it from the overall perspective, but unfortunately I am not. I can only focus on Philadelphia Airport~”

Yang Cheng said again, "Did you know? If I were to make a list of the ten worst airports in the United States, Philadelphia International Airport would definitely be on the list.

With busy inbound and outbound flights, crowded people, chaotic management, and troublesome public security, I think you should solve your own management problems first, and then consider introducing Delta Airlines to compete, otherwise it will only make the airport more chaotic. "

What he said was the fact that the chaos at the Philadelphia airport was recognized and not to be fabricated.

This is also the reason why Delta Air Lines is unwilling to invest too much energy in Philadelphia. First, it grabs energy from American Airlines and costs a lot. If you have this time, you would rather dig a new airport from scratch.

And in accordance with the established strategy, Delta Air Lines will spend billions of dollars to upgrade the terminal building, technology, aircraft and flight experience it already owns to help strengthen its relationship with two passengers per year.

It can be said that Delta's strategy has gradually transitioned from an airline to a trustworthy brand with Yang Cheng's intervention.

Just as people first think of Apple when they buy a mobile phone, Delta's ultimate goal is to make passengers want to arrive at American Airlines as soon as they choose to travel!

In order to achieve this goal, Yang Cheng has reached an agreement with the board of directors and approved a US$12 billion allocation for the next three years to update and upgrade service facilities.

For example, one of the initiatives is to introduce high-speed Wi-Fi on airplanes. Now most Delta Air Lines airplanes have this kind of Wi-Fi, but the price in North America is $16 per day, or $599.99 for annual cards. The next thing Delta Air Lines has to do is to make Wi-Fi free and high-speed, which will take one to two years to gradually improve.

Of course, there are a number of measures including updating the aircraft. In addition, the company has realized that it may be troublesome to redeem airline reward points, so it plans to make it easier for passengers to use points to upgrade their positions. The realization of this function will make business travelers sticky. Higher because their employers only need to pay for basic economy class tickets.

Of course, Delta Airlines passengers can also choose to use points or cash to purchase tickets.

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