DAL International plan "struggling."

[crj567]

Well, Gen-

I guess "failing" was too strong a word for the ATL paper to use, but these routes are failing-real hard. 17-plus percent drop in the Pacific region in one year? Over-expanding into INTL routes has been he demise of many an airline.

I do love the corporate doublespeak throughout the article. "continue to grow the global footprint that is the cornerstone of our successful strategy." This is my favorite part. "Successful strategy" would tend to imply that some part of this strategy had indeed succeeded. Do these clowns even recongize how foolish these statements make them look?

Oh well-I guess that response is a lot better than "we f-cked up-real bad."

-And I love the part at the end about things turning around in a couple of years... Does anyone really think the company will last that long-bleeding half a billion or so each quarter?

-RA and Steenland-Once again, Gen. These guys will destroy the airline if they are allowed to run things like they did at NWA. Any management team stupid enough to think INTL would skyrocket while domestic just tanked needs to be shown the door. Everyone knows this strategy was doomed from the start.

http://www.ajc.com/business/deltas-international-strategy-struggling-94932.html

 

[maxblast72]

Does anyone really think we are heading back to a 2005 or 2006 economic environment in the next couple of years? The companies that will do the best will be conservatively run without overextending themselves and proceeding cautiously.

 

[crj567]

Does anyone really think we are heading back to a 2005 or 2006 economic environment in the next couple of years? The companies that will do the best will be conservatively run without overextending themselves and proceeding cautiously.

My point, exactly!

If they had not dumped so many eggs into that INTL basket (just like DAL did in the early 90's-which resulted in a near bankruptcy,) the airline would be in a much better position to weather the storm.

RA needs to hit the road-unfortunately, that will be hard to see happening-given the fact that former NWA guys now totally control the board. Stockholders and employees really need to wake up and see what horrible mgmt. has taken the helm.

 

[propdog]

Well, Gen-

I guess "failing" was too strong a word for the ATL paper to use, but these routes are failing-real hard. 17-plus percent drop in the Pacific region in one year? Over-expanding into INTL routes has been he demise of many an airline.

I do love the corporate doublespeak throughout the article. "continue to grow the global footprint that is the cornerstone of our successful strategy." This is my favorite part. "Successful strategy" would tend to imply that some part of this strategy had indeed succeeded. Do these clowns even recongize how foolish these statements make them look?

Oh well-I guess that response is a lot better than "we f-cked up-real bad."

-And I love the part at the end about things turning around in a couple of years... Does anyone really think the company will last that long-bleeding half a billion or so each quarter?

-RA and Steenland-Once again, Gen. These guys will destroy the airline if they are allowed to run things like they did at NWA. Any management team stupid enough to think INTL would skyrocket while domestic just tanked needs to be shown the door. Everyone knows this strategy was doomed from the start.

http://www.ajc.com/business/deltas-international-strategy-struggling-94932.html

Show me one international airline in the whole wide world not affected by this economic downturn. Not one.

NWA used to be a very conservatively run ship. Thinly staffed and with a very conservative route strategy. DAL on the other hand ran a more aggressive airline. Both has it's positive and negatives. During financial downturns, NWA's plan worked better. During other times DAL's plan worked better.

If the economy re-bounds, DAL will reap benefits from thier expansionary vision. If it does not re-bound, all of us will be in deeper $hit (and that includes wherever the hell you work as well).

 

[ACL65PILOT]

Show me one international airline in the whole wide world not affected by this economic downturn. Not one.

NWA used to be a very conservatively run ship. Thinly staffed and with a very conservative route strategy. DAL on the other hand ran a more aggressive airline. Both has it's positive and negatives. During financial downturns, NWA's plan worked better. During other times DAL's plan worked better.

If the economy re-bounds, DAL will reap benefits from their expansionary vision. If it does not re-bound, all of us will be in deeper $hit (and that includes wherever the hell you work as well).

I agree that we have been getting pounded. But and it is a big one, our leaders have and are smart enough to cut their losses and trip the schedule. They have done this. 15% is huge. It will make that S3C to Europe impossible. It currently is almost impossible to do it on an S3. We are full except to a few select destinations.
Also, when something has been under performing, they have cut it. Look at what we are cutting. If ego was an issue we would not be making any of these cuts.
Also note, that to date there have not been any furloughs. This one has surprised even me the half full guy. Also looking forward, it appears that this is now off the the table until at least next summer/fall.

 

[Microclimates]

I don't know much about this but, on a hunch, it seems to me that the plan still makes sense. This is the time when people with cash place their bets, stake their claims or whatever other metaphor you want to use. When things bounce back, and they will sooner or later, they will be first in line to reap the benefits of their planning. In other industries the companies that continue to invest in R&D during downturns are the ones to typically kick ass on the upswing. this is no different.

On a personal note, my family is from Florence, Italy. 2 years ago Delta started service to Pisa from JFK which is the perfect way to get to the touristy parts of the country. for the first year the flights were half empty (a dream for me), now I've been looking at loads and they are consistently full. I'll bet they are making a crapload of money. Seems as though the bets paid off.

just my .02

 

[General Lee]

Well, Gen-

I guess "failing" was too strong a word for the ATL paper to use, but these routes are failing-real hard. 17-plus percent drop in the Pacific region in one year? Over-expanding into INTL routes has been he demise of many an airline.

I do love the corporate doublespeak throughout the article. "continue to grow the global footprint that is the cornerstone of our successful strategy." This is my favorite part. "Successful strategy" would tend to imply that some part of this strategy had indeed succeeded. Do these clowns even recongize how foolish these statements make them look?

Oh well-I guess that response is a lot better than "we f-cked up-real bad."

-And I love the part at the end about things turning around in a couple of years... Does anyone really think the company will last that long-bleeding half a billion or so each quarter?

-RA and Steenland-Once again, Gen. These guys will destroy the airline if they are allowed to run things like they did at NWA. Any management team stupid enough to think INTL would skyrocket while domestic just tanked needs to be shown the door. Everyone knows this strategy was doomed from the start.

http://www.ajc.com/business/deltas-international-strategy-struggling-94932.html

From a very recent AP article:

ANALYST TAKE: A recent Morgan Stanley research note said Delta's strategic shift towards international is a serious near-term risk. There has been a big drop-off in international travel. Delta is now moving to shed capacity overseas, while it had moved to expand international capacity in the past. Still, investors could benefit down the line, the firm said.

"Though we are not bulls on the Delta/Northwest synergy opportunity - which we expect to ultimately be competed away - recent selling pressure has created an opportunity for investors to get a very cheap 'synergy option' should the opportunity prove more powerful in 2010 than we expect," Morgan Stanley said. "Furthermore, Delta's status as a likely survivor makes valuation particularly attractive for investors willing to look through the cycle."


Well, Delta did take some risks when they opened many many INTL routes in a couple years, but at the time that is where we were making money, along with all of the INTL airlines. The key here is that we have been proactive in cutting routes ahead of the predicted very slow Fall/Winter period of this year, and still have the route authorities waiting when things probably do pick up next Spring and Summer. It is normal for us to have a Europen pulldown in the Fall anyway, and we also could have started more flights this Summer infact (RDU-CDG, Sal to a few different African Capitals), but we did not. We also have the cash available to withstand a slow Fall/Winter. And, those synergies (combining ground people, reservation centers, and placing the right planes on the right routes to make them profitable) will help out eventually. Thanks for caring, now get back to the fries.....



Bye Bye--General Lee

 

[DYLIN]

On a personal note, my family is from Florence, Italy. 2 years ago Delta started service to Pisa from JFK which is the perfect way to get to the touristy parts of the country. for the first year the flights were half empty (a dream for me), now I've been looking at loads and they are consistently full. I'll bet they are making a crapload of money. Seems as though the bets paid off.

just my .02

I went to and from in business elite two weeks ago, where were ya?!

I know what you mean though. It was mostly full for most of the days surrounding when I went.

 

[nimtz]

On a personal note, my family is from Florence, Italy. 2 years ago Delta started service to Pisa from JFK which is the perfect way to get to the touristy parts of the country. for the first year the flights were half empty (a dream for me), now I've been looking at loads and they are consistently full. I'll bet they are making a crapload of money. Seems as though the bets paid off.

just my .02

\

You would think, but we are in the only farking business in the world where you can lose money at full capacity. The yields are dogsh!t everywhere, especially across the pond. Until that changes, many are heading right back down the gutter of '01-05. The sad thing is I still hear friends bi!tch to me about having to pay 200 bucks to go to NYC-LA.

 

[NuGuy]

Heyas,

Isn't CRJ the bitter little man whose job is getting downsized and insourced to Skywest?

Sad.

Nu

 

[Tanker Clown]

Song is pretty much printing cash, so it will more than make up for the retarded international plans that Delta had.

 

[BLUE BAYOU]

Don't worry, at least Delta's New York's hometown airline...

 

[KCPilot]

Well the two int'l rotations I just finished all the seats were full and one was oversold. I guess it can't be that bad, or it's just summer time!

 

[crj567]

From a very recent AP article:

ANALYST TAKE: A recent Morgan Stanley research note said Delta's strategic shift towards international is a serious near-term risk. There has been a big drop-off in international travel. Delta is now moving to shed capacity overseas, while it had moved to expand international capacity in the past. Still, investors could benefit down the line, the firm said.

"Though we are not bulls on the Delta/Northwest synergy opportunity - which we expect to ultimately be competed away - recent selling pressure has created an opportunity for investors to get a very cheap 'synergy option' should the opportunity prove more powerful in 2010 than we expect," Morgan Stanley said. "Furthermore, Delta's status as a likely survivor makes valuation particularly attractive for investors willing to look through the cycle."


Well, Delta did take some risks when they opened many many INTL routes in a couple years, but at the time that is where we were making money, along with all of the INTL airlines. The key here is that we have been proactive in cutting routes ahead of the predicted very slow Fall/Winter period of this year, and still have the route authorities waiting when things probably do pick up next Spring and Summer. It is normal for us to have a Europen pulldown in the Fall anyway, and we also could have started more flights this Summer infact (RDU-CDG, Sal to a few different African Capitals), but we did not. We also have the cash available to withstand a slow Fall/Winter. And, those synergies (combining ground people, reservation centers, and placing the right planes on the right routes to make them profitable) will help out eventually. Thanks for caring, now get back to the fries.....



Bye Bye--General Lee

Yep-General... All these same numbnuts were saying that it would be impossible for DAL to go bankrupt after 9-11. Remember how much cash they had on hand-way more than American, United, or anyone else. How did that turn out?

Synergy=Complete B.S.-Anyone with any sense knows that. Just look at what the stock has done post-merger. Smart investors stay the hell away from any company led by anyone foolish enough to even use the word "synergy" in serious conversation. (DAL stock performance certainly bears that little theory out.)

 

[propdog]

Yep-General... All these same numbnuts were saying that it would be impossible for DAL to go bankrupt after 9-11. Remember how much cash they had on hand-way more than American, United, or anyone else. How did that turn out?

Synergy=Complete B.S.-Anyone with any sense knows that. Just look at what the stock has done post-merger. Smart investors stay the hell away from any company led by anyone foolish enough to even use the word "synergy" in serious conversation. (DAL stock performance certainly bears that little theory out.)

Dude...just worry about your job. We have already announced a lot of regional capacity cuts and trust me....more cuts for feeders are on the way. You may be on the unemployment line sooner than anybody at DAL.

 

[johnsonrod]

Sounds like you have all the answers CRJ567. I guess you could say Delta is now better positioned for the eventual upswing once the recession has bottomed out because international business will always command premium pricing because of less competition. Who knows, Africa could become a business goldmine if they can start to reduce some of the corruption. I know some countries there are vigorously attempting to attract more investment capital and they realize reducing corruption and improving transparency facilitate that process. Delta might be in a stronger position over the long term because of this initial expansion.

Meanwhile, almost everyone is hurting domestically and you can't blame Delta for that.

 

[crj567]

Sounds like you have all the answers CRJ567. I guess you could say Delta is now better positioned for the eventual upswing once the recession has bottomed out because international business will always command premium pricing because of less competition. Who knows, Africa could become a business goldmine if they can start to reduce some of the corruption. I know some countries there are vigorously attempting to attract more investment capital and they realize reducing corruption and improving transparency facilitate that process. Delta might be in a stronger position over the long term because of this initial expansion.

Meanwhile, almost everyone is hurting domestically and you can't blame Delta for that.

You could be right-I genuinely hope you are. My point is that INTL is incredibly expensive. The overhead of INTL routes (landing fees, airport fees, ATC fees, MX, logistics of all sorts, etc, etc,) just outstrips every other operation any airline can do. People focus on RJs being as unprofitable-but they lose nowhere near as much money as a bunch of 767s flying across the world with a 60% load factor will.

My point is that DAL mgmt. relied on flawed logic from the start. RA and pals saw INTL as a way to make up for the domestic downturn. It is true that the signs of the massive recession did appear domestically at first, but any upper manager who is not smart enough to see that the U.S. economy is so inter-related with the rest of the world deserves to lose their job. Where the hell did they think all this INTL growth would come from?

I remember actually reading quotes from some of the upper-level DAL guys that they would profit enough from increased INTL operations to offset the high fuel prices and the effect these prices had on the domestic market. Really?

-Think about the logic here: RA and company were betting that they could charge huge fuel surcharges on INTL flights that domestic travelers couldn't pay. Consider further: If it becomes clear that people in the U.S. cannot afford to pay higher domestic prices because of a recession, why the hell would anyone with any sense believe that passengers would all of a sudden have huge amounts of extra cash to pay vastly higher INTL prices?

-Now, really think... Do these guys still deserve to be in charge? What kind of a future will they be able to build if they are this dumb?

-It really was a stupid plan. I stated that it would not work-and it hasn't. You can't expect good results from people who are clearly this inept.

 

[General Lee]

You could be right-I genuinely hope you are. My point is that INTL is incredibly expensive. The overhead of INTL routes (landing fees, airport fees, ATC fees, MX, logistics of all sorts, etc, etc,) just outstrips every other operation any airline can do. People focus on RJs being as unprofitable-but they lose nowhere near as much money as a bunch of 767s flying across the world with a 60% load factor will.

My point is that DAL mgmt. relied on flawed logic from the start. RA and pals saw INTL as a way to make up for the domestic downturn. It is true that the signs of the massive recession did appear domestically at first, but any upper manager who is not smart enough to see that the U.S. economy is so inter-related with the rest of the world deserves to lose their job. Where the hell did they think all this INTL growth would come from?

I remember actually reading quotes from some of the upper-level DAL guys that they would profit enough from increased INTL operations to offset the high fuel prices and the effect these prices had on the domestic market. Really?

-Think about the logic here: RA and company were betting that they could charge huge fuel surcharges on INTL flights that domestic travelers couldn't pay. Consider further: If it becomes clear that people in the U.S. cannot afford to pay higher domestic prices because of a recession, why the hell would anyone with any sense believe that passengers would all of a sudden have huge amounts of extra cash to pay vastly higher INTL prices?

-Now, really think... Do these guys still deserve to be in charge? What kind of a future will they be able to build if they are this dumb?

-It really was a stupid plan. I stated that it would not work-and it hasn't. You can't expect good results from people who are clearly this inept.

Southwest is forcasting a bad 3rd quarter, possibly a loss. If they are hurting domestically (they only fly domestically), then I guess you can surmise that most carriers are hurting domestically. Add poor INTL loads and that is bad. The key here is that we finally have a wide variety of planes to choose from if loads get better or worse. We also have the ability to move DCI carriers around to find the cheapest one (Mesaba), and throw them in there when we need it. Then look at our joint venture with Air France/KLM. Looks like we will be called upon this Fall/Winter to provide some of our 757s and 767s that we may have parked temporarily, to cover for some Air France/KLM widebodies that are too big also. So, essentially we have the planes to make the loads justifiable, for not only DL/NWA routes, but other SkyTeam members as well. It's all about getting through this turbulent period, and then emerging on the otherside ready to jump on underserved markets. We will be ready. Now, don't you have some mopping to do at McRonalds?


Bye Bye---General Lee

 

[GogglesPisano]

Then look at our joint venture with Air France/KLM. Looks like we will be called upon this Fall/Winter to provide some of our 757s and 767s that we may have parked temporarily, to cover for some Air France/KLM widebodies that are too big also. Bye Bye---General Lee

Where'd you hear that, General?

 

[RedRum]

You could be right-I genuinely hope you are. My point is that INTL is incredibly expensive. The overhead of INTL routes (landing fees, airport fees, ATC fees, MX, logistics of all sorts, etc, etc,) just outstrips every other operation any airline can do. People focus on RJs being as unprofitable-but they lose nowhere near as much money as a bunch of 767s flying across the world with a 60% load factor will.

My point is that DAL mgmt. relied on flawed logic from the start. RA and pals saw INTL as a way to make up for the domestic downturn. It is true that the signs of the massive recession did appear domestically at first, but any upper manager who is not smart enough to see that the U.S. economy is so inter-related with the rest of the world deserves to lose their job. Where the hell did they think all this INTL growth would come from?

I remember actually reading quotes from some of the upper-level DAL guys that they would profit enough from increased INTL operations to offset the high fuel prices and the effect these prices had on the domestic market. Really?

-Think about the logic here: RA and company were betting that they could charge huge fuel surcharges on INTL flights that domestic travelers couldn't pay. Consider further: If it becomes clear that people in the U.S. cannot afford to pay higher domestic prices because of a recession, why the hell would anyone with any sense believe that passengers would all of a sudden have huge amounts of extra cash to pay vastly higher INTL prices?

-Now, really think... Do these guys still deserve to be in charge? What kind of a future will they be able to build if they are this dumb?

-It really was a stupid plan. I stated that it would not work-and it hasn't. You can't expect good results from people who are clearly this inept.

Thank god we don't have people like you running corporations these days. Say what you will about management-types, but the entrepenuerial spirit is still alive in some folks. (Including our management team at DAL)

I don't know what it is about people like you who love to thrive on other peoples' misery, but I guess misery loves company. This country was founded on foresight and the can-do attitude. We will rise above this current downturn. It is really easy to sit there and chip away on the sidelines and mock, but I am hear to say that DAL will be well-positioned from this point forward to take advantage of an upswing. If an upswing doesn't exist then so beit. But I am not going to sit here and mock like you do.

Why don't you try doing something productive with yourself. If things get much worse you are going to find yourself in the food line too. Hopeflly it won't come to that, but the more you spout off about what a bad management team we have the more stupid you will appear when things turn around.

By the way, I think things aren't going to turn around a fast as everyone thinks. We now have better accounting practices and there is more transparency in the way we do business these days. I predict a slow-go of it for the next few years but we will be back in shape. I know that isn't what all the younger gotta-have-it-now generation wants, but it is the new reality and we are going to have to live with it.