Delta cost per employee

[Dizel8]

Not sure about he gas prices in the EU for jetA, but you may be right.

As for desperate carriers, well I can think of one that makes a "profit"!

All in good fun you know!

Buh-bye

 

[General Lee]

Not sure about he gas prices in the EU for jetA, but you may be right.

As for desperate carriers, well I can think of one that makes a "profit"!

All in good fun you know!

Buh-bye

And without Song on your a$$, you would make more. The Green Sperm machine is on your tail......I think? Maybe I shouldn't say that....?

Buh Bye---General Lee

 

[Widow's Son]

Herr General,


I don't think the cost per employee is as important as the number of employees per "unit", (airplanes, passengers, et-cetera).
SWA employees are highly paid but they are also highly productive so while your cost per employee may be lower, if you still have more employees per sales unit your labor cost overall can still be higher.

 

[General Lee]

Herr General,


I don't think the cost per employee is as important as the number of employees per "unit", (airplanes, passengers, et-cetera).
SWA employees are highly paid but they are also highly productive so while your cost per employee may be lower, if you still have more employees per sales unit your labor cost overall can still be higher.

Well, we have gotten a lot more productive as of late because of 2200 Captain retirements, and a lot being LCA. So, we have only been able to recall a certain maount because the FAA is training our new Line Check pilots. Also, SW only has one fleet type, so they can be more productive. With all of our retirements, people are moving up to larger aircraft, and that can take a month doing a full 757/767 type rating--gnd school is now shorter, and 7 or 8 siims, then IOE, etc. The SW guys go to Initial once and then do recurrent that probably takes 3 days per year.


Bye Bye--General Lee

 

[Dizel8]

Actually, the one that I was thinking of, that makes a "profit" was indeed Song!

As for cost of jetA in the EU, I found this, but not sure how current it is: "paying less than 20p a litre for jet fuel".

 

[General Lee]

Hey Gen,

clear out your private message file so I can send you one. It says you are full! Boy you get a lot of messages!

Send it again, I just cleaned it out. I get a lot of hate mail. I don't know why? I LOVE EVERYONE.


Bye Bye--General Lee

 

[FlyBoeingJets]

Can Delta fly solo, even if it files for Chapter 11?
By Marilyn Adams, USA TODAY
A year ago, Delta Air Lines (DAL) was struggling to stay out of bankruptcy-court protection. Increasingly, the question for the USA's No. 3 carrier, industry analysts say, is whether it can survive at all as an independent airline.

Delta's historic strengths may not be enough to carry it beyond bankruptcy.
By Paul J. Richards, AFP/Getty Images

Buckling under soaring fuel prices and $26 billion in debt, Delta got some relief last week when it sold a subsidiary airline for $425 million. But the sale of Atlantic Southeast Airlines only bought Delta time to mull its next moves.

Delta executives now face a pivotal decision. They can stay the course and try to raise more cash by borrowing or by selling more assets.

Or they can join competitors United Airlines and US Airways and attempt to reorganize in Chapter 11. Heavy debt, shrinking cash and a change in the law giving the airline more flexibility if it files before mid-October appear to be pushing it toward a bankruptcy filing.

But in the brutal new world of $65-a-barrel oil and relentless low-fare competitors, Delta's historic strengths may not be enough to carry it beyond bankruptcy. US Airways, for example, has visited Chapter 11 twice since 2002 and couldn't survive alone. It's being acquired by America West.

"As a stand-alone carrier, Delta is the weakest of the Big Five (American, United, Delta, Continental, Northwest)," says airline analyst Bill Warlick of Fitch Ratings, because it doesn't have as broad an international route network.

Veteran airline analyst Phil Baggaley of Standard & Poor's says that even if Delta were to cut costs and debt in Chapter 11, its post-bankruptcy success wouldn't be assured.

"Whether or not it could be profitable is hard to say," Baggaley says.

Delta says all its options remain open. Says Delta spokesman John Kennedy: "In or out of court, we have a plan."

Harsh realities

Delta has formidable strengths. Its operation at its hometown airport of Atlanta is the biggest airline hub in the world. Delta is a force in New York, the world's biggest air market, and in Florida, the nation's top tourist haven. It is the leading U.S. carrier to Europe in terms of flying capacity.

But, as it wrestles with the question of whether to seek bankruptcy protection in coming weeks, Delta faces these realities:

•Debt. After losing about $10 billion since the beginning of 2001, Delta is now the sickest of the major airlines. It has the biggest debt burden, including pension plans that are underfunded by $5 billion.

•High costs, low revenue. Despite a year of cost-cutting under CEO Jerry Grinstein, Delta Air Lines companywide has one of the major airlines' highest costs for every seat flown one mile, although Delta's costs minus its subsidiary carriers look better. Despite a string of recent fare increases, its passenger revenue for every seat flown one mile lags behind other airlines', according to analysis by Back Aviation Solutions.

How the Big Six airlines compare
For the first half of the year:
Operating margin Passenger revenue1, in cents Operating costs2, in cents Total debt3, in billions
American 2.5% 9.22 9.92 $25.2
Continental -1.0% 9.26 9.92 $18.4
Delta -13.9% 8.48 10.74 $26.4
Northwest -7.9% 9.42 11.24 $18.2
United -2.4% 8.96 10.39 $25.34
US Airways -4.5% 9.13 10.74 $9.5
1 — Per available seat mile; 2 — Per available seat mile for main jet operations; 3 — Includes leases, pension underfunding, retiree medical liability and other debt as of June 30; 4 — Includes underfunded pension plans being terminated in bankruptcy.

Sources: Back Aviation Solutions, Standard & Poor's

 

[FlyBoeingJets]

•Competition. Delta is more dependent than most major airlines on routes within the USA, which, unlike international routes, are vulnerable to competition from low-cost carriers such as AirTran, JetBlue and Southwest. About 80% of Delta's revenue comes from flights within the USA vs. 70% for the industry in general.

Even now, at the height of what is normally the airlines' strongest season, Delta is burning at least $2 million in cash every day, a fact Baggaley calls "scary."

Another looming crisis could cut off the credit card transactions that are the lifeblood of every airline. Delta's current contract with its credit card processor expires Aug. 29. To extend the contract to Oct. 31, the processor, which Delta won't identify, demands Delta advance $750 million to cover ticket refunds in the event Delta were to stop flying.

Delta is seeking another processor. Going without one isn't an option. The vast majority of passengers buy airline tickets on credit cards, so without a processor, Delta would be forced to shut down.

Meanwhile, as bad news has piled up, Delta's senior executives and senior pilots have been retiring in droves. Many are choosing to take half their pensions upfront in a cash lump sum, as the rules allow, because the future of Delta's pension plan is so murky. About 560 senior pilots retired in the first seven months of this year alone, and hundreds more are old enough to retire if they wish. A 60-year-old pilot flying a wide-body jet on international routes can retire with as much as $1 million cash.

Last week, Delta notified its pilots' union that cash reserves had fallen to a point that the airline might ask for new contract concessions in the next month. Delta, which had $1.7 billion in cash on June 30, didn't disclose how far reserves have dropped, and it didn't immediately ask to reopen the contract.

In bankruptcy court, Delta would have far more legal leverage than it does out of court to cut pilots' pay, benefits and pensions.

'They have not done enough'

Washington, D.C.-based aviation consultant Jon Ash believes Grinstein, who vowed 18 months ago to "transform" Delta, hasn't moved aggressively enough. Ash says Delta should already be in Chapter 11.

Grinstein, who served as a Delta director for 17 years before being named CEO, formed a task force and spent eight months studying the company last year before unveiling a transformation plan.

Critics such as Ash wonder whether, even in bankruptcy, Grinstein and his team would take painful steps if necessary, such as terminating Delta's generous pension plans, as United has.

"One of the questions many analysts have had is whether Delta can run the business," Ash says.

Delta defends the pace of its cost-cutting. "We absolutely are committed to filing for bankruptcy only as a last resort," says airline spokesman Kennedy. "The reason we are still fighting so hard is because bankruptcy is hardship to employees, shareholders and other investors."

Other Delta loyalists say the Wall Street criticism is unfair. Former Delta chief operating officer Maurice Worth says Grinstein inherited Delta's financial mess. Worth says record-high fuel prices have "covered up the progress" Grinstein has made.

Under Grinstein, Delta won $1 billion a year in contract concessions from Delta's pilots union late last year. It closed its unprofitable Dallas/Fort Worth hub and restructured its Atlanta hub, allowing the same number of aircraft to make more flights and revenue every day.

In January, Delta simplified its fare structure and reduced its most expensive fares to lure back business fliers. In recent months, Delta has worked to expand its international system, launching routes to 11 new destinations since last fall. "We have the ability to change, we are changing, but we do need time to do it," says Kennedy.

'A terrific challenge'

Grinstein has shaken up his management team. He recently named Edward Bastian, Delta's former controller, as CFO. Bastian replaced Michael Palumbo, the CFO whom Grinstein brought to Delta after he succeeded former CEO Leo Mullin in January 2004.

Grinstein also just promoted chief planning officer Jim Whitehurst to chief operating officer. Whitehurst is a Harvard MBA who joined Delta three years ago from the Boston Consulting Group.

"Jerry made a commitment to do everything he could to save Delta outside bankruptcy," Worth says. "But when you look at the numbers and the fuel prices, it's a terrific challenge."

Longer term, Worth and others close to Delta think the company could prosper post-bankruptcy reorganization. Except for its pilots, Delta's work groups are non-union, rare in the airline industry.

"Delta still has a terrific employee group," says Worth, who worked for Delta for 38 years. "They would climb a mountain for you."

But in other important areas, Delta has major disadvantages compared with its peers. Unlike No. 1 American or No. 2 United, Delta has only one big hub city: Atlanta. Although Delta has more flights to Europe every day than any other U.S. airline, it is not well diversified in other parts of the world. Delta lacks American's rich network in the Caribbean and Latin America or United's lucrative routes to Asia.

Chapter 11 is no cure-all

Even more sobering: The recent track record for major airlines in Chapter 11 is poor.

United, which has a broader route structure and more large hubs than Delta, has paid a small army of consultants to help it slash costs in every corner of its operation during nearly three years in bankruptcy court.

United has walked away from aircraft leases and airport bonds, won two rounds of contract concessions from its workers and renegotiated terms with all of its feeder airlines. Recently it terminated all of its pension plans, resulting in the largest corporate pension default in U.S. history.

Yet for all of its work in Chapter 11, United has not been able to craft a business plan that would turn a profit with the current fuel prices.

That may not bode well for Delta if it hopes to remain independent. Unless fuel prices drop dramatically, some analysts say, Delta's best hope may be a merger with another big carrier such as Continental or Northwest, which has large hubs and more international routes.

"It's going to be hard for Delta to survive alone unless it can drive its costs down to the level of the low-cost carriers," says Warlick of Fitch.

For a traditionally high-cost carrier like Delta, he says, that's unlikely.

 

[FlyBoeingJets]

From the Delta quarterly report:

DAL labor cost per employee is now 7% below that of Southwest. In March 2004, DAL labor cost per employee was 23% above Southwest.

Bye Bye--General Lee

Welcome to the race to the bottom.

Now riddle me this, how many employees or pilots per aircraft????

 

[outtahere]

You know now that we are owned by Skywest I no longer have to worry about this crap. Bankruptcy no longer effects us ASA pilots. We have guarnteed flying and boy that feels nice.