Anderson sets the table for job cuts at Delta

[Frank Lorenzo]

Delta CEO gives bleak assessment of demand

ATLANTA (AP) -- The chief executive officer of Delta Air Lines Inc. gave a bleak assessment Thursday of demand for air travel amid the enormous financial strain that many Americans have been under in recent months.

In a recorded message to employees, CEO Richard Anderson did not specifically say the world's biggest carrier plans to cut more jobs or capacity than previously announced, though he did suggest the erosion in demand that the airline has seen has been very difficult.
"Passengers, our customers, are not buying tickets at rates they were buying tickets a year ago," Anderson said. "Obviously, we wish we didn't have to decrease our capacity, but we cannot fly our airplanes around at low load factors."
Atlanta-based Delta has previously said it expected about 2,000 employees to accept the company's latest round of severance offers that were made due to its plans to reduce systemwide capacity in 2009 by 6 percent to 8 percent. The window for employees to accept the severance offers closed at midnight Wednesday.
Anderson did not say in his message late Thursday how many employees accepted the offers or how many jobs the company would ultimately cut.
He did say that Delta would work through the numbers and look at who has chosen to take the packages and align that with the airline's needs.
Anderson said Delta needs to right-size the airline based on customer demand.
"The economy is very difficult," Anderson said. "It seems every day we read about companies announcing layoffs by the thousands."
He said customers are tightening their belts, not spending as much on vacations. As a result, Anderson said Delta will need to react quickly.
"A strong, durable airline is truly the only job security for all of us," Anderson said.
The voluntary severance payout offers were made to a majority of the 75,000 employees at Delta and Northwest's mainline operations.
The program is similar to one earlier in 2008 that Delta used to trim about 4,000 jobs. Northwest Airlines previously trimmed jobs of its own before being acquired by Delta on Oct. 29.
Delta and Northwest's mainline operations include 75,000 employees. The entire company, including regional subsidiaries Comair, Mesaba and Compass, has about 85,000 employees. The 12,000 pilots of Delta and Northwest, as well as certain management and administrative employees, are not eligible for the voluntary severance programs.

_____________________________________________________________

OK, so every last detail of my prediction wasn't spot-on, but the "big picture" was - Anderson would use the economy as an excuse to lay off employees and renege on his promise not to lay off workers "as a result of the merger."

Frank wrote on 4-14-08:

Quote:
Originally Posted by ACL65PILOT
Furlough protection—with certain exceptions, no pilot may be furloughed as a result of the merger for a period from merger announcement until 24 months after the close of the merger.

Any idiot knows that "furlough protection" isn't worth the paper it is printed on.

Furloughs will start right away, and the moron pilots that supported this deal will start whining. DAL managment will retort "sorry, it's not from our merger, it's due to high oil and this terrible economy."

Pilots are such suckers.

That's why guys like me keep collecting bonuses in the 8 figure range every quarter.

 

[hockeypilot44]

Pilots are morons. We are extremely short-sighted and selfish. When something bad happens to our fellow pilots at another airline, we just turn our backs. After all, if an airline goes out of business, my airline will expand and I will get more seniority. Who cares if a pilot with 20 years in this industry has to go work for Compass for $23/hour? I got mine. They takes us down one at a time. We have no unity, and no back-bone. I am embarrassed to tell people I am a pilot.

 

[Cobraair75drvr]

_____________________________________________________________
Frank,

Of course your prediction was spot on. You wrote the book and trained Anderson in union (specifically pilots) castration. Anderson just perfected your technique by using a downhome, hoakey demeanor. Moak thinks they like and respect him and would not lie. Truthfully, it is a brilliant game plan. If you listen to the RDs it is all about how different Dal is, they work with mgmt in a professional/mutual respectfully ways, such as their lack of grievances vs former NWA. You know the " DELTA DIFFERENCE". These dalpa yahoos don't know whats about to hit them. Steenland is on the board, Anderson is CEO along with plenty more of the Minnesota nice crowd we have dealt with for years. If I was looking at this from the outside it would be hilarious to watch. I do feel that ACL, Fins and a few others are begining to see the light. You and your type are not our friends and should not be trusted or respected.












OK, so every last detail of my prediction wasn't spot-on, but the "big picture" was - Anderson would use the economy as an excuse to lay off employees and renege on his promise not to lay off workers "as a result of the merger."

Frank wrote on 4-14-08:

Quote:
Originally Posted by ACL65PILOT
Furlough protection—with certain exceptions, no pilot may be furloughed as a result of the merger for a period from merger announcement until 24 months after the close of the merger.

Any idiot knows that "furlough protection" isn't worth the paper it is printed on.

Furloughs will start right away, and the moron pilots that supported this deal will start whining. DAL managment will retort "sorry, it's not from our merger, it's due to high oil and this terrible economy."

Pilots are such suckers.

That's why guys like me keep collecting bonuses in the 8 figure range every quarter.[/quote]

 

[Voice Of Reason]

Delta CEO gives bleak assessment of demand

ATLANTA (AP) -- The chief executive officer of Delta Air Lines Inc. gave a bleak assessment Thursday of demand for air travel amid the enormous financial strain that many Americans have been under in recent months.

Since the other parallel thread has been hijacked, I'll post here:

Compare this from two WEEKS ago (below) to above article Frank posted:
------------
Delta posts $1.4 billion loss, expects 2009 profit

By LIZ FEDOR, Star Tribune
January 27, 2009
Delta Air Lines, which reported a fourth-quarter loss of $1.4 billion on Tuesday, expects to make money in 2009 despite a global economic recession that has kept many would-be travelers grounded.
Delta CEO Richard Anderson said that the carrier will be "solidly profitable" this year because of lower fuel costs, reductions in Delta's flying operations and about $500 million in financial benefits from the merger with Northwest Airlines.
The year won't start off well though: The carrier said it will have a "sizable loss" in the first quarter, when demand historically slackens.
Delta shares plunged 20 percent Tuesday, closing at $7.93.
Despite oil prices remaining low, Delta will have higher fuel costs at the start of this year because of hedges put in place when fuel prices skyrocketed last year. In retrospect, Anderson said, the hedging became "an expensive insurance policy."
After oil hit $147 a barrel last July, Anderson said, "no one could have predicted that oil would fall so precipitously." Crude oil settled at $41.58 a barrel on Tuesday on the New York Mercantile Exchange.
For 2009, the Atlanta-based airline is sticking to its December projection that it will reduce domestic capacity by 8 to 10 percent and trim international operations by 3 to 5 percent.
"We're seeing softness throughout the domestic economy" in the form of fewer bookings, said Ed Bastian, Delta's president and CEO of Delta's Northwest subsidiary. Among the combined carrier's seven hubs, Bastian said that Delta is seeing the greatest decreases in Detroit and Cincinnati. The Minneapolis-St. Paul hub is "staying relatively healthy," he said.

February and March bookings are down, and the London-New York JFK route has been hit particularly hard. Consumers, wary about spending, often are booking their trips nearer to departure. Delta executive Glen Hauenstein, who oversees ticket pricing and flight scheduling, said people are "hesitant to make investments in their future, whether or not they're looking at stock portfolios, washers and dryers or airline tickets."
Delta, which acquired Northwest at the end of October, released quarterly results that included Northwest's financial performance. Based on those combined figures, operating revenue was $7.8 billion, or flat, on a base of flight operations that were 4 percent smaller.
Operating expenses increased 23 percent to $9.5 billion. The lion's share of Delta's quarterly loss was associated with a noncash charge for employee stock awards that amounted to more than $900 million. Delta also recorded a $91 million loss on out-of-period fuel hedges.
Bill Hochmuth, a senior research analyst at Thrivent Investment Management in Minneapolis, said he was "a little surprised" by Delta's stock slide Tuesday. Hochmuth, who deals with fixed-income investments, said that Wall Street investors may have viewed Delta's revenue picture as weaker than they expected. Unit revenue is expected to be down 4 percent this year.
But Delta anticipates a 6 to 8 percent full-year operating profit margin.
Steve Loucks of Eden Prairie-based Travel Leaders, which has about 500 travel agencies across the United States, said his company had a 20 percent decline in airline bookings during the fourth quarter.
Loucks anticipates another tough year in 2009, but he said there's been one bright spot:
"Because of the extreme weather we've had, we've seen an uptick in business during the last month." The brutal cold in many regions of the United States motivated many consumers to take advantage of discounts being offered by airlines, hotels and other travel-related companies, Loucks said.
He expects the discounting to continue to encourage jittery consumers who still have jobs to spend money on travel. Business travelers also are taking advantage of deals and booking well in advance to get cheaper air fares.
"It is serving as a stimulus to our travel industry," Loucks said. "We aren't going to get a government bailout. It's welcome when suppliers are willing to price their services at an attractive price."

Liz Fedor • 612-673-7709


© 2009 Star Tribune. All rights reserved.
-----------------------

 

[Tejas-Jet]

--->Any idiot knows that "furlough protection" isn't worth the paper it is printed on.<---

At my former legacy airline, we had a "no Furlough" clause in our contract.

So when times got tough, the company just didn't replace retiring pilots. IOW....furlough from the top.

So there was no growth. Now, with few retirements for the next couple of years....who knows what strategy companies will use.

 

[JoeMerchant]

Pilots are morons. We are extremely short-sighted and selfish. When something bad happens to our fellow pilots at another airline, we just turn our backs. After all, if an airline goes out of business, my airline will expand and I will get more seniority. Who cares if a pilot with 20 years in this industry has to go work for Compass for $23/hour? I got mine. They takes us down one at a time. We have no unity, and no back-bone. I am embarrassed to tell people I am a pilot.

So would you support a national seniority list?

 

[Fly4hire]

So would you support a national seniority list?

Only if all Regional pilots are below all Legacy Pilots :uzi:

 

[JoeMerchant]

Only if all Regional pilots are below all Legacy Pilots :uzi:

That's the system we have now....I guess we'll just keep on.......:uzi: Reload!

 

[RedRum]

So would you support a national seniority list?

No thanks.

Maybe that question should have come up prior to the America West / US Airways hookup. Or maybe even before the NWA / DAL merger. Either way, you have a large number of pilots now that got SCREWED due to a lack of a national seniority list.

The list we have at DAL is arbitrated and BINDING. That means it will never be undone. Why would I want to agree to a national seniority list? If DAL merges with another carrier, those pilots would come right in ahead of me, just like a lot of Delta Air Lines pilots did in December. I can't see pre-merger Delta pilots giving up their seniority, or even lobbying for a national seniority list after the windfall they received from a bunch of ignorant arbitrators in December.

Until it is fair for all involved, and the pilots that have reaped the benefits of a lopsided award want to give back their newfound seniority, a national seniority list won't leave the discussion stages.

It would have been great to come up with this idea prior to merger mania. However, I am with Hockeypilot, pilots are too greedy to take part in shared sacrafice. Bunch of vultures fighting over table scraps for the most part.

Seems pretty trivial today after the tradgedy that happened in BUF. Life is too short.

 

[ACL65PILOT]

Fact is that the plan a few months ago would put this company out of business. This economy is getting worse by the day. DAL has scaled back all of its growth plans. Most to the end of the year. I commend them for that.

It is not that I am seeing the light of day. It is the fact that where we were operating last summer is not where we are now.
If our Sept numbers do not pick up you will more than likely see furlough. Fact is that I am shocked that 300 are not on the street now. It is attributed to a few things. Mainly that when we would have dumped these pilots on the street we needed to look good for the government. Now we do not know where the ROI is on a furlough. Add the CPZ flow and it gets real expensive to be wrong. Our projections show us being aqeduately staffed post SOC. Over staffed now but not by a lot. If we cut more than 4-5% of our flying in our fall sked. I would be floored not to see furloughs.
It is not that I was looking at the world with rose colored glasses on six to 24 months ago. It was the reality of the time. I personally could not have seen this going this bad. It will get worse before it gets better. This is not where we want to be now, but it is about survival. We at DAL have a lot more short term costs than other companies. Many of these cannot be reduced because of the merger. We did not get enough early outs. Becuase of this you will probably see front line employees furloughd.
To date there are no pilot furloughs planned.