Delta is experimenting with an improved coach product that includes leather seating, more legroom, snacks, and complimentary newspapers and coffee in the morning and cocktails in the afternoon.

They’re trying out the concept on the Atlanta-Houston and Atlanta-Kansas City routes where they go head to head with Airtran and are using planes that used to fly on the DC-New York-Boston shuttle routes, so no retrofitting is necessary.

Delta is clearly feeling squeezed by Airtran and feels the need to offer a differentiated product. This is an inexpensive, easy way to do it. And they’re even offering 2000 bonus miles for booking these flights, so they’re trying to leverage their frequent flyer program as well.

Airtran is giving American Airlines fits as well.