1) Delta(Song) is trying to compete with other low-cost airlines and the major airlines. However, it is suffering from high cost problem. As mentioned in the case, Song is running at about 15% higher than its competitor Jet Blue. Another problem is low revenue. Song targeted Women and leisure travellers, the ticket price of it should be lower comparing to other airlines facing businessmen, and it leads to a lower profit margin. Low profit margin and high cost make the financial problem together.
It is highly competitive in the high-class airline segment and low-cost environment, so the management has tried to avoid too much competition and focus on new segments. Theoretically, I think it is a good strategy. However, it turns out to a unstatisfactory result. One of the reason is that the promotion is not good enough. Although Song has spent $12 million on promotion and advertising, it does not help Song to build up a clear image. Travelling public are confused about which type of airline Song is.
3) Song is sharing pilots with its parent company, Delta Airlines. On the other hand, Song hire flight attandents itself. In the recruitment, one-third of the applicants are interviewed and 70% of interviewees are hired. The percentage may be too high, the quality of the flight attendents hired are not promising. Also, the training period is only three days, the training session may not be enough for raw recurits.
4) The major problems of Song are: financial problem( high cost and low revenue), image problem( advertising) and human resource problem. To fix these problems, the followings are some possible solutions.