DELTA fact or fiction.

[~~~^~~~]

PilotOnThe Rise:

The replies in this thread are correct. Mergers do not make sense to reduce capacitity because other airlines will fill the void. Airlines are operating with 80+ percent load factors. There is not excess capacity.

Merger could mean growth, if done correctly.

Age 65 effects you much more than mergers.

 

[contrail67]

Exactly.

 

[Truckdriver]

PilotOnThe Rise:

Merger could mean growth, if done correctly.

Age 65 effects you much more than mergers.

IF mergers happen now, the age 65 thing really comes into play. It just appears to me that a perfect storm is coming together for more furloughs due to the age 65 rule, slowing economy, and potential mergers. I think we will now see furloughs in a merger because there will be no retirements to offset capacity cuts. If we can continue the ER/777 growth for the next couple of years we may be ok even in the event of a merger. In any case the next year or two just got alot more interesting and risky for the junior folks.

 

[General Lee]

Are those retirements from the 60 rule, or 65 rule?

It can't be from the 65 rule, it was just enacted. Those were from the age 60 rule. Again, we are hiring due to expansion, not retirements.


Bye Bye--General Lee

 

[General Lee]

IF mergers happen now, the age 65 thing really comes into play. It just appears to me that a perfect storm is coming together for more furloughs due to the age 65 rule, slowing economy, and potential mergers. I think we will now see furloughs in a merger because there will be no retirements to offset capacity cuts. If we can continue the ER/777 growth for the next couple of years we may be ok even in the event of a merger. In any case the next year or two just got alot more interesting and risky for the junior folks.

What capacity cuts? If any major cuts capacity, then a LCC will fill the void, and become larger. That would be feeding your competitor. For a merger to make sense, it would have to be almost seemless, like the USAir and AWA merger(operationally, not seniority wise). No hubs were closed, and no additional pilots were furloughed. If you are talking about NWA and Delta, there would probably have to be fences created, like only NWA pilots flying their 744s for 5 years etc. At the same time, only NWA pilots can fly their DC9s, and if they are parked, those pilots go to Compass. Fences can work both ways. Also, there is no guarantee that there will be any mergers this year. High oil may force some smaller LCCs to look at each other, but most of the legacies can weather this storm if they have strong INTL routes that help back up the softer domestic side.


Bye Bye--General Lee

 

[General Lee]

Out of curiosity, what effect will mergers have on hiring? Will it slow, but not stop hiring, or will it result in furloughs? I've seen a few comments, from people, anticipating massive furloughs in 2008-2009, due to mergers. I think something needs to be done, to raise fares, but if merging, thus mass furloughs, is the answer, that isn't the answer I'd be looking for.

At Delta, age 65 will cause stagnation, but down the road. We are currently hiring for expansion reasons. We had 2300 pilots retire early for pension reasons prior to our BK. Most were early retirements, with some being only 50 years old. We are currently planning on getting 9 MD90s next year, 7 737-700s, and 4 777LRs. 4 more 777LRs are scheduled for 09, with rumors saying we will have 20 or more total within the next 3-5 years. 737-700s will supposedly number close to 25 in the next few years too, with 50-75 MD90s available on the market also. Why would we get used MD90s? They are nicer than the MD88s, we already have an MD90 Simulator, and our mechanics know how to fix them already. Many airlines in Asia and the Country of Saudi Arabia are getting rid of their MD90s in favor of new A320s. That's great, we'll take them. Rumor has it the ones we are currently looking at cost around $9 million each, including the engines. That is a lot cheaper than a new CR9 that costs $20 million or so. A lot of the newhires are going to NYC on the 767ER because we are adding a lot of new cities (to the large assortment of current routes to Europe) from JFK, including Amman, Cairo, London Heathrow, Paris Orly, Dakar, Lagos, Nairobi, Cape Town, Malaga, Lyon, Tel Aviv, and Edinborough. We just started new 738 service from NYC to Panama City(Panama),Guatemala City, Liberia (Costa Rica), San Salvador, Port of Spain, San Jose (Costa Rica on a 757), along with Bogota on a 757 also. From Atlanta we start Stockholm (76ER), St Kitts (73N), and Cali and Medalin in Colombia. Lots of new flying and associated hiring that comes with it.

Bye Bye--General Lee


Bye Bye--General Lee

 

[Kenney G]

What capacity cuts? If any major cuts capacity, then a LCC will fill the void, and become larger. That would be feeding your competitor.


Then why are all the majors reducing domestic capacity next year?

 

[contrail67]

Looks to me that the reduction is at the regional level.

 

[Old School]

5% Domestic Capacity Reduction discussed in numerous articles but Intl Expansion should offset this.

 

[John Pennekamp]

Looks to me that the reduction is at the regional level.

That's because Prater's "Takin' it back"!

 

[Sedona16]

Regarding furloughs I would say it depends. Mergers have been talked about for a long time now. I think they will happen in the next 18 to 24 months or less. Whether there are furloughs for a given merger depends primarily on route overlap proximity of hubs/focus cities, and what kinds of route/asset sales occur. For example a Delta/United merger has a much higher chance of creating furloughs than Delta/NWA. This is due to route overlap and proximity of hubs (ie DEN/SLC). A Delta/NWA merger has relatively little overlap and the route network could be tweaked with minor reductions. One other factor is strategic growth plans going forward. If the new combined airline has plans to open up new territory this obviously works to the benefit of the pilots of those two airlines producing growth while reducing the chances for furloughs.

 

[bleagle]

What capacity cuts? If any major cuts capacity, then a LCC will fill the void, and become larger. That would be feeding your competitor. For a merger to make sense, it would have to be almost seemless, like the USAir and AWA merger(operationally, not seniority wise). No hubs were closed, and no additional pilots were furloughed. If you are talking about NWA and Delta, there would probably have to be fences created, like only NWA pilots flying their 744s for 5 years etc. At the same time, only NWA pilots can fly their DC9s, and if they are parked, those pilots go to Compass. Fences can work both ways. Also, there is no guarantee that there will be any mergers this year. High oil may force some smaller LCCs to look at each other, but most of the legacies can weather this storm if they have strong INTL routes that help back up the softer domestic side.


Bye Bye--General Lee

General,

Great is your faith in the legacy international market. But on March 30, 2008 and continuing in the not so distant future... heavy foreign domestic/INTERNATIONAL competition to our airline industry will be a reality. You talk about DAL but last I checked VA, BMI, RYAN air, Lufthansa, emirates etc... are planning to make their presence known in these United States .... and some of these airlines DO NOT have to worry about high oil prices...

In terms of gaining market control in an extreme competitive industry, mergers do make sense...

... how will OPEN SKIES, AGE 65, and flat domestic markets affect legacies like DAL and even LCC's?

 

[Kenney G]

Looks to me that the reduction is at the regional level.

It is still brand flying. If delta or anyone else reduces domestic then someone else will fill the void.

 

[Linedriver]

G.L.

Since growth is of a 'give-and-take' design, do you foresee the possiblity of furloughs if some of these recently opened, or yet to be opened, international routes are unprofitable, and have to be closed down?

 

[FDJ2]

You talk about DAL but last I checked VA, BMI, RYAN air, Lufthansa, emirates etc... are planning to make their presence known in these United States .... and some of these airlines DO NOT have to worry about high oil prices...

Do they burn a different kind of fuel?

 

[bleagle]

Do they burn a different kind of fuel?

Burn the same fuel.... But companies like EMIRATES don't burn the same MONEY for fuel. I think they pay like .30/gallon. While we pay 2.00 and higher for fuel...

 

[ip241au]

Open Skies will have an impact just as NAFTA. South of the border drivers moving cargo throughout the US. Imagine a pilot from say (insert country) flying a widebody to the US, then picking up passengers in NYC and flying them on to LA? He might be quite underpaid in our terms, but in his country he may be a king earning a lot of loot.

 

[~~~^~~~]

Don't worry. Convert our pay to Euros and see the result.

We ARE the low cost foriegn competition.

 

[PCL_128]

Don't worry. Convert our pay to Euros and see the result.

We ARE the low cost foriegn competition.

True, but compares to pilots in many other countries, we are far more expensive. Pilots in Russia are dirt poor and many of them work second jobs to get by. Some countries south of our borders pay their pilots well, but others pay them much worse than us. It's a mixed bag. If true open skies were to become a reality, it would certainly be something to worry about.

 

[FDJ2]

Burn the same fuel.... But companies like EMIRATES don't burn the same MONEY for fuel. I think they pay like .30/gallon. While we pay 2.00 and higher for fuel...

Really, so when they buy their fuel in JFK they only pay the fuelers there 30 cents a gallon? Do they pay the equivalent of 30 cents a gallon at Heathrow also?