Delta is ******!!

[buttercup]

Delta CFO Says Airline Is 'Tapped Out'
Tuesday March 14, 11:31 am ET
By Harry R. Weber, AP Business Writer Delta CFO: Airline Is 'Tapped Out,' Needs Pilot and Benefit Cuts to Survive
WASHINGTON (AP) -- Delta Air Lines Inc. is "tapped out" and can't borrow any more money to cover its mounting losses, making deep pay and benefit cuts it is seeking from its pilots essential to its survival, the company's chief financial officer told an arbitration panel Tuesday.
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The pilots union has said repeatedly it will strike if its contract is rejected. A walkout would put the nation's third-largest carrier out of business, Delta has said.
"We are clearly in the worst shape and are the most fragile of anyone in the industry," Bastian told the panel.
Atlanta-based Delta, which is operating under bankruptcy protection, has lost roughly $12.6 billion since January 2001, the year the industry downturn started amid the terrorist attacks.
The panel, on the second day of two weeks of hearings at a Washington hotel, must decide by April 15 whether to grant Delta's request to reject its pilot contract. The pilots, meanwhile, will wrap up their strike authorization vote on April 4. Typically, if such a vote is approved, union leaders could set a date for a strike.
Delta has said a strike by its pilots would be illegal, and it would likely seek a court injunction if its pilots walk off the job.
Bastian told the panel that Delta expects fuel prices to remain high and ticket prices to remain low because of competition and too many seats available in the industry. Therefore, he said, Delta needs to keep cutting costs to survive long-term. He noted the pilot cuts the airline is seeking are only about 10 percent of the $3 billion in overall annual cost cuts Delta is seeking.
"We have both a revenue problem and a cost problem, and we're tackling both," Bastian said.
The pilots have acknowledged that the company is in trouble and they have offered to help. But the pilots argue that they previously gave Delta $1 billion in annual concessions in a five-year deal in 2004, and they believe the amount of further concessions the company is seeking is too much. They also argue that since the company has admitted it will likely terminate the pilots' defined benefit pension plan, they should receive some credit for the savings they say the company will reap.
Delta has said it hopes to emerge from bankruptcy in the summer of 2007.
The airline had asked the New York bankruptcy court in November to void the pilot contract, but shortly before a judge was set to issue a decision, the company and its pilots reached a deal on interim pay cuts.
That deal, equal to a little less than half of what the company is seeking on an annual basis, would be replaced by the long-term deal the two sides have been negotiating since December. They missed a March 1 deadline to settle on their own, sending the matter to arbitration.
In the latest negotiating proposals, the company has agreed to reduce its request to $305 million in cuts annually, while the union said it is offering $140 million annually.
According to the company, the average earnings of pilots last year who worked the full year was more than $157,000. Delta Air Lines Inc.: http://www.delta.com

 

[FCPhotography]

Whole industry and 80% of all the commercial pilots out there.

 

[General Lee]

First of all, Southwest added $10 to all fares today. That should help a lot. Then, Ed bastian, the CFO, said he would seek an injunction if we tried to strike, even though the previous judge told him, while he was on the stand, that the Federal Courts would NOT get involved during a strike, and then asked him "what does the RLA have to do with this?" Ed couldn't answer that.

When it comes down to it, they need a pilot deal to get exit financing, and they won't get one if they drop our contracts. Also, we are not obligated to work without a contract. Nope.

Ed also said we are the most "fragile" airline out there, but our cash on hand, unrestricted, is $2.1 billion, which was a lot more than NW's $1.3 billion.

I love the part about the average pay being $157,000 a year. What? Look at the new pay rates. That is probably a senior 767 Captain. No FO makes even close to that now. We just took an additional 14% pay cut on Dec 15th of last year----and that figure was what people made in 2005 on average. A lot of captains were given trips or picked up trips to cover for the retirements, which throws the actual average off.

Again, when it comes down to it, we will not work without a contract (major protections are gone--merger, fragmentation, even the seniority list)---and Ed knows this. He also must paint a terrible picture to the arbitrators to try to win their case. They have squandered all of the money we have given already? What about DL bringing in 85% of the normal RASM that the other legacy carriers bring in? Why don't they go after that other 15%, which equals about an extra $1.5 billion a year? I bet they will after they try to get concessions.


Bye Bye--General Lee

 

[Capt. X]

Say it ain't so

 

[SWA/FO]

Delta has said it hopes to emerge from bankruptcy in the summer of 2007.

This statement seems way out there. We are going to shut the doors anyday oh, we will be out of CH. 11 in Summer of 2007.

 

[Deacon]

Lets face it DAL management is about 3 years behind here and they are fearing becoming the next Eastern Pan Am.should have filed in 2003 or for that matter done something besides sit on their a** and wait.......sucks cause in the end the pilots will end up getting screwed anyways

 

[737 Pylt]

Lets face it DAL management is about 3 years behind here and they are fearing becoming the next Eastern Pan Am.should have filed in 2003 or for that matter done something besides sit on their a** and wait.......sucks cause in the end the pilots will end up getting screwed anyways

What's even worse is that any airline providing "feed" for DL is in just as much trouble if we go TU...Including CMR, CHQ, ASA, SKYW. All these carriers also face major problems including possible furloughs! This is bad all around!

This statement seems way out there. We are going to shut the doors anyday oh, we will be out of CH. 11 in Summer of 2007.

Remember, liars figure, and figures lie! If their lips are moving, you know they're lying!
737

 

[tie1on]

what makes you think the DAL pilots have the balls to strike. They have a history of never striking. So what is so different now. They wil not do it because they cannot do anything else other than fly, there are very few aviation positions available. flame away. I don't care

 

[Dizel8]

This is the really scary part:

"Bastian also told the panel that what the company is asking of its pilots could be worse.

"One of the things that keeps me up at night is whether we're being aggressive enough," Bastian said. "I'm not suggesting we do, but that's the thing I worry about."
He said in an interview outside the hearing that Delta has no current plans to seek more cuts from its pilots after this request, but he added there can be no guarantee."

 

[Jetpipeovht]

DAL's remedies are beyond pay-cuts. The ship is sinking and the pumps have failed.

 

[81Horse]

... "Bastian also told the panel that what the company is asking of its pilots could be worse.

"One of the things that keeps me up at night is whether we're being aggressive enough," Bastian said. "I'm not suggesting we do, but that's the thing I worry about." ...

Hmmm. The Academy Awards are over for this year.

 

[General Lee]

what makes you think the DAL pilots have the balls to strike. They have a history of never striking. So what is so different now. They wil not do it because they cannot do anything else other than fly, there are very few aviation positions available. flame away. I don't care

I am glad you don't care. First off, you seem to have missed all of the previous posts explaining the demographics of the DL pilot group today. We just recently retired 2300 Captains, in 18 months. They were the "loyalists"--or the guys with 20 or more years that would do anything for DL, especially to keep their pensions (like the NW guys did). Well, they are GONE now. And, so will our pension plan. We all know it. That leaves us with a "younger", more flexible group that actually has more options. We won't fall for the same things NW did because they were so TOP HEAVY. We ain't. We are bottom heavy and the votes will reflect that. As far as other aviation positions available, most of us could get jobs either overseas (I have a buddy in Taipei who flies Eva MD11s for the Cargo side), or they will just do something else. This was a career, and it is turning into a bad job. Also, other airlines will grow as a result of a liquidation, and I am sure they would take some or most of our guys.


Bye Bye--General Lee

 

[General Lee]

This is the really scary part:

"Bastian also told the panel that what the company is asking of its pilots could be worse.

"One of the things that keeps me up at night is whether we're being aggressive enough," Bastian said. "I'm not suggesting we do, but that's the thing I worry about."
He said in an interview outside the hearing that Delta has no current plans to seek more cuts from its pilots after this request, but he added there can be no guarantee."

Thumbs DOWN. Bye Bye.


Bye Bye--General Lee

 

[Andy]

Go back three years, substitute United for Delta, and it's deja vu all over again.

 

[wmuflyguy]

What's even worse is that any airline providing "feed" for DL is in just as much trouble if we go TU...Including CMR, CHQ, ASA, SKYW. All these carriers also face major problems including possible furloughs! This is bad all around!



Remember, liars figure, and figures lie! If their lips are moving, you know they're lying!
737

Not just furloughs, ASA and CMR would be gone, they both fly exclusively for DL.

Huge furloughs at CHQ and SkyW. And well Mesa, cockroaches seem to survive nuclear explosions, so why would a DL explosion matter

Delta Air Lines Inc. is "tapped out" and can't borrow any more money to cover its mounting losses, making deep pay and benefit cuts it is seeking from its pilots essential to its survival, the company's chief financial officer told an arbitration panel Tuesday

Anybody catch the stupidty in this statement? Lets borrow Money to fund a Loss!! Brilliant!

 

[Jetpipeovht]

Go back three years, substitute United for Delta, and it's deja vu all over again.

Not really, UAL did not lose 12.6B in 5yrs.

 

[Andy]

Not really, UAL did not lose 12.6B in 5yrs.

Depending on the accountant you use, you can any result you desire. Just ask Enron and Worldcom shareholders. That hasn't changed.

 

[johnsonrod]

I have spoken with a number of Delta pilots recently and what they were saying was very consistent and resolute: they absolutely will strike if the contract is thrown out. Time to negotiate. Simple as that.

 

[((7))]

No Way Will The Elite Strike. Have To Sell The Vacation House? Send Buffy And Thurston To A Public School With The Commoners? Nope, The Pro's Will Suck It Up And Run In To Work Bent Over. Managment Knows It And So Does Every Other Airline Pilot.

 

[johnsonrod]

No Way Will The Elite Strike. Have To Sell The Vacation House? Send Buffy And Thurston To A Public School With The Commoners? Nope, The Pro's Will Suck It Up And Run In To Work Bent Over. Managment Knows It And So Does Every Other Airline Pilot.

Don't be so sure. Your management spin does not fool anyone. Management is distorting the truth (spinning the stats including the "average" pilot pay before the 2300 retirees) and exploiting the pilot group. DAL is not in the same shape as NWA despite what management will say to dramatize the situation even more.

Time to negotiate or else - it's that simple.

 

[Draginass]

DALPA won't strike. They'll accept a butt-slamming contract, declare they did the best they can considering the rest of the industry, and continue working. Sound familiar?

Who's next? Ah yes. American.

 

[QXpeon]

Anybody catch the stupidty in this statement? Lets borrow Money to fund a Loss!! Brilliant!

Sounds like a president I love to hate.....

 

[AAflyer]

DALPA won't strike. They'll accept a butt-slamming contract, declare they did the best they can considering the rest of the industry, and continue working. Sound familiar?

Who's next? Ah yes. American.

Not after the BOD shifts during this weeks election. Plus I think the PUP put that concession freight train on a different track for the time being.

AAflyer

 

[inthewind]

Depending on the accountant you use, you can any result you desire. Just ask Enron and Worldcom shareholders. That hasn't changed.

I actually have an accounting degree and I will agree with that. You can make anything look like a loss or a profit for that matter with the 'proper application' of accounting principles. I'm sure that right now Delta's accountants are busy accelerating depreciation of aircraft and other assets to insure that they show a huge loss to the courts. In a few years they will be showing huge profits because the aircraft and other assets will have already been depreciated to near zero. Just watch. It's all about the cashflow!

 

[munson]

Delta expects fuel prices to remain high and ticket prices to remain low because of competition and too many seats available in the industry. Therefore, he said, Delta needs to keep cutting costs to survive long-term.

Well that seems like the biggest problem to me for everyone in this business. Hate to say it, but the industry would be much stronger if they left. Wont happen though, too many people have too many fingers in too many pies in these companies. I wish nothing but good carma on the pilots there.

 

[General Lee]

No Way Will The Elite Strike. Have To Sell The Vacation House? Send Buffy And Thurston To A Public School With The Commoners? Nope, The Pro's Will Suck It Up And Run In To Work Bent Over. Managment Knows It And So Does Every Other Airline Pilot.

Thanks Gilligan. You sure are a dumba$$, little buddy. Coconuts hit your head lately? Yup.

Bye Bye--General Lee

 

[General Lee]

Interesting part of the article---last couple of sentences

The airline anticipates top line revenue growth of 6 percent annually in 2006 and 2007, which is ambitious even in good times much less the challenging business environment facing the biggest U.S. airlines.
Delta also expects higher fuel prices, which are exacerbated by its older fleet. The airline updated its 2006 business plan last week to reflect an increase in fuel costs from $1.74 per gallon to $1.85, Bastian said. That equals a $275 million increase in costs if fuel prices remain at the higher level.
"We have to address that reality and start making plans to deal with that reality," he said.
A three-member arbitration panel, hearing testimony this week and next, will determine if Delta can terminate its pilots' contract if the two sides fail to reach a deal on more than $300 million in givebacks.
The pilots, represented by the Air Line Pilots Association, and the company are $190 million a part on the total amount of cuts needed from the labor group.
Pilot leaders say they are aware of the company's need to cut costs but note Bastian's testimony on Tuesday also included an update that the company's performance has improved since its bankruptcy filing in September.


Bastian noted that Delta ended 2005 with cash reserves that were $400 million higher than expected.
"They can't have it both ways," said Lee Moak, chairman of the union's Delta unit.




So, our cash reserves are going up, yet they still are demanding more. YOU REALLY CAN'T HAVE IT BOTH WAYS. And yes, we have an older fleet, but the 737-200 lease rates were just negotiated down to a paltry $15,000 a month, and the MD88s were brought down from $285,000 a month to $80,000 a month. They saved $200 million a year in lease rates for only 88 aircraft. Amazing.


Bye Bye--General Lee

 

[737 Pylt]

No Way Will The Elite Strike. Have To Sell The Vacation House? Send Buffy And Thurston To A Public School With The Commoners? Nope, The Pro's Will Suck It Up And Run In To Work Bent Over. Managment Knows It And So Does Every Other Airline Pilot.

I've been called a lot of things lately....Mostly that end in "head" or "face," but never have I been called "elite." Thanks 7!
And you're basing this well thought out sentence on......
Enquiring minds and all that!
737

 

[Andy]

I actually have an accounting degree and I will agree with that. You can make anything look like a loss or a profit for that matter with the 'proper application' of accounting principles. I'm sure that right now Delta's accountants are busy accelerating depreciation of aircraft and other assets to insure that they show a huge loss to the courts. In a few years they will be showing huge profits because the aircraft and other assets will have already been depreciated to near zero. Just watch. It's all about the cashflow!

That's why IMHO cash on hand is the best indicator of an airline's health. Delta has north of $2B; they will be just fine (barring any shocks to the air travel industry) until fall. Need to reassess this fall and review how much cash is on hand then.
I don't see liquidation in Delta's future.

Good luck to all the pilots at Delta and Northwest. Bankruptcy is not an easy road to travel. Whatever choice you (collectively) make, don't take crap over it from any armchair quarterbacks. Until they've worked for a company where they've been threatened with liquidation, they've got no right to judge the decisions of those who are going through it.

 

[AA717driver]

Sounds like they are overestimating their current problems (to stampede the herd) and overestimating future revenue (to avoid stampeding the creditors).

If NWA didn't strike, Delta shure as hell won't. $125k/year is better than nothing and most people have a few years to build up another retirement.TC

P.S.--The General WILL find a way to keep Buffy and Thurston in private school AND keep the wife's weekly day spa standing appointment even if he has to take a second job. He's just that kind of guy...