BK Judge points to DAL union busting

[Publishers]

General, when I was writing my comments there were two retired Delta pilots sitting across from me. They are my good friends but understand that I think that both labor and management within the legacy airlines BOTH are way out of touch in a business that makes little sense at this point.
Let's face it, this business is a very complicated and sophisticated one. Even running a little 135 we have is a much bigger pain than ever before. When I had my first 135, I could not spell TSA nor 12/5 fingerprint programs or half the stuff we have to mess with today.
It is unfortunate that todays legacy carriers got so screwed up from their own advancements in a way. Yield management systems masked along with hub and spoke systems masked some real problems in generating profits. Aircraft leasing and equipment leasing, internet selling, etc.. have changed the world the airlines operate in but labor and mangement for the most part only moan about how things used to be instead of taking dramatic steps to adapt.

 

[General Lee]

General, when I was writing my comments there were two retired Delta pilots sitting across from me. They are my good friends but understand that I think that both labor and management within the legacy airlines BOTH are way out of touch in a business that makes little sense at this point.
Let's face it, this business is a very complicated and sophisticated one. Even running a little 135 we have is a much bigger pain than ever before. When I had my first 135, I could not spell TSA nor 12/5 fingerprint programs or half the stuff we have to mess with today.
It is unfortunate that todays legacy carriers got so screwed up from their own advancements in a way. Yield management systems masked along with hub and spoke systems masked some real problems in generating profits. Aircraft leasing and equipment leasing, internet selling, etc.. have changed the world the airlines operate in but labor and mangement for the most part only moan about how things used to be instead of taking dramatic steps to adapt.

I can see it from your point of view too. But, so far I have kept up my side of the bargain, I've kept it safe. Can you say the same about mangement? $10 billion loss in 5 years. Was it the faulty 50 seat RJ idea?(we need FREQUENCY) How about waiting for USAir to die (Leo Mullin), which never happened. How about owning part of Orbitz and dumping thousands of cheap fares onto the internet to keep that company doing well, when at the same time was killing us? It's not right to take it out on loyal employees, especially when we just gave back another $1 billion a year for the next 5 years. It's time for everyone to sit down and negotiate this thing.


Bye Bye--General Lee

 

[Publishers]

That is the problem,,,, it is not about being right or wrong but that is where all the energy is placed. Pilots are a high cost item so an easy target. The other side of that is other than they are necessary to fly the aircraft, they play a small part in the success or failure quotient. WE operate today in a "oit does not matter at all what you did yesterday" environment.

All these pilots including the ones sitting here were promised retirement pensions and security. But-- they were yesterday and the BK judge is not in the yesterday business. She is in the tomorrow business. The same with the --we gve this yesterday.... does not matter what you gave yesterday. This is what can be afforded today.

You think my reactions are from a bias against one group or the other. No, it si just I spend a good part of my business career assigned to fixing messes. In that business, you are in the today and tomorrow businesses.

 

[General Lee]

That is the problem,,,, it is not about being right or wrong but that is where all the energy is placed. Pilots are a high cost item so an easy target. The other side of that is other than they are necessary to fly the aircraft, they play a small part in the success or failure quotient. WE operate today in a "oit does not matter at all what you did yesterday" environment.

All these pilots including the ones sitting here were promised retirement pensions and security. But-- they were yesterday and the BK judge is not in the yesterday business. She is in the tomorrow business. The same with the --we gve this yesterday.... does not matter what you gave yesterday. This is what can be afforded today.

You think my reactions are from a bias against one group or the other. No, it si just I spend a good part of my business career assigned to fixing messes. In that business, you are in the today and tomorrow businesses.

True, but what has made this business is the current employees. Taking it out on them instead of coming up with a good future plan is what is wrong. I thought those MBA's would be worth what we pay them? Taking it out on labor is not the answer.

Bye Bye--General Lee

 

[Green]

The other side of that is other than they are necessary to fly the aircraft, they play a small part in the success or failure quotient.

Ya think??? That's like a hospital administrator saying a doctor plays a small part in the "success or failure quotient" of a hospital.

Here's another good quote from you..."have changed the world the airlines operate in but labor and mangement for the most part only moan about how things used to be instead of taking dramatic steps to adapt.11-29-2005 21:50"

So labor has failed to take dramatic steps? How can a seemingly intelligent individual such as yourself make a statement like that? Most major airlines pilots have seen their pay cut nearly in half, thousands have been furloughed, in several cases they have lost millions, I say again millions, in retirement benefits, and work rules have been devestated. Someone who has put 30+ years into a company only to see their multi-million dollar retirement vanish has made a DRAMATIC sacrifice. Sacrifices that many of these robber barron modern day managers will never make. The screwing that airline labor has taken over the past couple years borders on criminal.

Yet management awards themselves retention bonuses....Have to keep that top talent around, right? Just because you can find pilots to fly your old king air, C-310, or whatever around for peanuts does not mean that's what airline pilots should settle for.

 

[Draginass]

The cherry-picking LCCs are driving pricing. The big shots at the legacy carrier managements are stuck in the hub and spoke model, trying to service non-major cities with low cost service. A LOT of small and medium size cities don't deserve air service unless the service can pay for itself instead of being subsidized from follow on flights. Those follow-on flights are now going at rock bottom prices. Small and medium size cities need to have their air fares jacked up to at least stand-alone break even points. If not, take the bus, pal. It's not up to other people to subsidize your ticket price any longer.

Any complaints . . . call SWA and JetBlue so they can tell you to pound sand where the sun don't shine.

 

[Tim47SIP]

Sorry guys, but the Pub is correct. It does not matter at all what happened in the past, but whether or not you can afford it in the future. No matter how much the Pilots gave, no matter how fair or unfair the decision is, the bottom line is what the company can afford to pay. This does not matter what is right or wrong for any side, but what is best for the whole to survive. You can feel that your side (whomever that may be) is "taking it in the shorts" , but the reality is the industry norm and company ability to be viable.

 

[Guitar Guy]

True, but what has made this business is the current employees. Taking it out on them instead of coming up with a good future plan is what is wrong. I thought those MBA's would be worth what we pay them? Taking it out on labor is not the answer.

Bye Bye--General Lee

While I totally agree with you on the point about not taking it out on labor, I wonder how you explain your signature line and the underlined portion of your previous response. (That signature line is, "Delta is not failing to plan, and we are certainly not planning to fail," -DL CFO.)

And truly, I wish for a good future for you and your co-workers at Delta. This is certainly a scary and tension-filled time.

 

[General Lee]

While I totally agree with you on the point about not taking it out on labor, I wonder how you explain your signature line and the underlined portion of your previous response. (That signature line is, "Delta is not failing to plan, and we are certainly not planning to fail," -DL CFO.)

And truly, I wish for a good future for you and your co-workers at Delta. This is certainly a scary and tension-filled time.

My post was from an article from the ex-CFO Pulumbo. I thought it was funny, so I put it at the bottom for my signature.

Tim,

If you need to save a certain amount of money, then you divide it among all of the employees, not mainly the only unionized group. Do you think management may be to blame for part of this mess? Why only 10% pay cut? Oh, that's right, we need to attract smart people to lead us. How much have we lost again in the last 5 years? Oh, that's right, it was because of the Pilot's contract........Not selling fuel hedges, not waiting for USAir to die, not buying $2 billion in stock that vaporized.....

While it is true that we need to go forward, we still can't let one group take the major hit. Even the judge asked "why are you throwing darts at your pilots?"

Bye Bye--General Lee

 

[Publishers]

General and Green, Again right or wrong is not what we are talking about at this point.

I remember sitting with some airline analyst years back when Delta was extremely profitable and looking at the industry. Bob Crandall had said at one point -- 5 to survive to 95. There was fair agreement then that Delta would have problems downstream mainly due to their route system. and the fact that they were only really strong in the SE. There were pages of points of discussion but the point is that when you would have thought things were rosey, the business end guys were wondering.

All that said, the thing here is how can we generate cash flow and profits in the short term so we can do the long term things to build a solid foundation.
BTW, the analogy of a doctor to a hospital is not quite on target. Passengers do not go book Delta because Captain Joe Smith is going to be their pilot. Doctors on the other hand are the generators of beds filled for a hospital.

It is not saying that good trained pilots are not germaine to the issue, just that as far as the business success they play a role no greater than a bunch of other aspects. Unlike Doctors, they do not directly generate the revenue.

One of the things that changed in the eighties and nineties was that the guy running the yield managment system became on of the most critical keys to companies success. What is the guy that made the fuel hedging decisions at SWA worth. Can good management make a difference-- look at Bob or Gordon Bethune at Continental or Herb at Southwest. What were they worth to their companies.

In a no forgiveness hard core world, Delta failed. If there were no BK court, if there were no secured priority lenders, there would be no Delta, no Delta jobs, No Delta airlines. There would be no General Lee debates, no discussions at all. All these people would have been looking for work and the deal Delta offers not so bad.