Delta to use cash to outlast competitors

[Ty Webb]

I mean they expect you to sit it out and work at Home Depot (or whatever) for however many years it takes.

I am sure you will not find a more supportive group of pilots in the industry then the Delta pilots.

Well, you could look over at Concourse "C". Our senior pilots voted to give up 11% of their pay in exchange for not furloughing the junior guys after 9/11. Now, that's what I call supportive! Their pay was back to normal within 60 days, in fact, we are coming up on our second annual raise since then.

One more thing........In a time of overcapacity I find it hard to understand your suggestion of us not competing with your continuous expansion.

Re-read what you just wrote. DAL "competes" by dumping seats into an overcapacity? In other words, they "compete" by increasing their losses? You call that competing? I call that ensuring losses and furloughs. At least we're charging an honest price that we can make money at.

Look, we can go back and forth over this all year. If the economy snaps back, then DAL's chosen path of preserving marketshare will pay off. If the economy doesn't, or at least if the business traveler doesn't come back, then all they did was throw good money after bad, until they ended up in Chapter 11 too.

History will be the judge.

As for your generous offer- thanks, but don't hold any place for me in that line. I made the decision to work where I did, continuously, but at alower pay scale, instead of working somewhere else for more money, with a few years of furloughs factored in. Like I said, we all make our choices. I truly wish you a speedy return to work.

Good luck to all.

 

[HA25]

Or you could say that the airline in the best cash position is the one that has the most RJ's..... Could it be that their "best paid pilots" had the luck to have the last contract prior to Sept 11?

Think before you type...

1. UAL was paying almost dollar for dollar for DAL and when they fell, everyone blamed $330,000 747 captains....

2. AMR and Continental have a LOT more RJ's than DAL

3. The date of the contract has nothing to do with my comment, as the ones like AMR and CAL which got theirs before 9/11 are still having to talk about give back to keep their poorly run airlines running while DAL is only hoping for them, but certainly not in dyer need of them.


Do I make my prior point more clear now?

 

[46Driver]

OK, I ask this in the generic, non-offensive way:
1) How many RJ's do American and Continental have (as compared to Delta's portfolio of Comair, ASA, SkyWest, ACA, and Chautaqua)?
2) Weren't the pilot's salaries based upon revenue projections - and when this revenue generated declined drastically (in particular, both the number of business travellers and the amount the business traveller was willing to pay), the companies (AMR, Continental, etc.) have no choice to but to try and reduce labor costs?

 

[HA25]

OK, I ask this in the generic, non-offensive way:
1) How many RJ's do American and Continental have (as compared to Delta's portfolio of Comair, ASA, SkyWest, ACA, and Chautaqua)?


2) Weren't the pilot's salaries based upon revenue projections - and when this revenue generated declined drastically (in particular, both the number of business travelers and the amount the business traveller was willing to pay), the companies (AMR, Continental, etc.) have no choice to but to try and reduce labor costs?

1. Only ASA and Comair are Delta's planes... thus the remaining are not part of delta's financial balance sheet. I don't know the actual numbers, but I just read in the paper recently that Coex is #1 and Eagle #2 in fleet size. Sorry if that isn't accurate enough.

2. Sure... but the fact is that DAL was a better managed airline. The lack of revenue is more to do with fleet allocation and route structure, and less to do with wages. It also bears noting that DAL has only 1 union, DALPA, while AMR and UAL have many more. I made the point many times before on this message board that $65-70,000 F/As with low productivity work rules and $30/hr Rampers don't make it easy for an airline to make money.

However, dropping the wages of their professionals (pilots and middle managers) is how they are coping with that poor management, but some here have tried to blame the pilots wages for that lack of profitability and that is BS at it's best.

IMHO

 

[spinup]

Heavy Set,

You say I lack facts, so I'll reiterate.

1. UAL and AAA have CBA's in distress; AA and NWA are renegotiating their CBA's.

2. Leo Mullin stated that if #1 happens your CBA is not sustainable.

BTW, sticks and stones




NYRANGERS,

I do have passion for this, it is important to realize what is happening to our profession. I want more than anything for the bar to be held high at DAL, and this cannot be accomplished without being prepared. My posts may not reflect it, but I am squarely in your corner. What happens to you guys and gals in the next year will define my career expectations. So yes, I'm quite vested.





General Lee,

I apologize if I stepped over the line with you.

 

[FlyDeltasJets]

Ty,

A couple of points:

1. I have mentioned this before, but few seem to want to listen. I have personally heard Fred Reid himself say that they had no desire to trade furloughs for concessions. His quote was, "If we only need X pilots, we will only keep X pilots, regardless of the cost." Continued allegations about our senior pilots from many on this board seem to ignore that fact.

2. I don't expect you to agree with this, but sometimes NOT giving away money helps your pilot group more than giving.

3. You have often mentioned that you made the choice to come to aai because of a number of factors. I commend you on your choice, and wish you continued good luck there. However, in the interest of full disclosure, did you make that choice because you had no others besides staying where you were? Please do not take offense, because none is intended, but I am interested in your decision making process. Did you apply to any major? Did they hire you? Did you turn down any job offer from a major in favor of aai? My point is, a choice when no alternatives were present except staying put is not really a choice worthy of much praise. All the same, I hope that it works out for you. And, just as you are happy where you are, I would like to say that furlough or not, I wouldn't trade numbers with any other pilot right now. I am quite confident that Delta will be around long after most others die. I, like you, was very careful to which airline I hitched my wagon. I am very confident that Delta will prosper, which is one of the reasons that I left two other airlines to join them.

4. You still have not answered my earlier post. You might not want to go back to it, so I will repeat my questions.



Please post all the routes where we increased seats on routes you fly. You have mentioned one. One does not a trend make. Also, if we did as you suggest, our airplanes would be empty and you would be adding service on every route. Airline tickets are very inelastic, and even a dollar increase in fares over a competitor will usually result in a lost sale. Res computers print lowest price first on an identical route, and the first shown is more often than not the one purchased. Your suggestion to us ignores that reality. There are many other factors that you seem content to ignore in your oft-repeated theory.

A. Every airline is suffering from fares being too low. Your thery seems to indicate that only fares on routes in direct competition to aai should suffer.

B. There is too much capacity in the industry, causing airlines to lose their pricing ability. Most airlines recognize this and are cutting capacity. Some (yours included) are adding capacity, further harming the industry's price control ability. Do I blame them? Not really, if it makes sense for them. But it is pretty ironic to hear one of their pilots blame US for low fares!

C. The ONLY airlines who are able to make a profit at current pricing levels are ones who pay their people below industy standard rates. I have mentioned this before, and people always argue that it doesn't have an effect on the profession. If that is the case, why is EVERY airline who does pay industry standard wages asking for concessions (major concessions)? LCC cost advantage lies primarily in wages and benefits. I think all of us, regardless of airline, should be pretty concerned about the future of this career. In most LCC examples, if the majors were to lower their wages and benefits to your level, your airline would die. Without low costs, you could not compete with our routes, schedules, size, international presence, ff program, alliances, cash reserves, marketing budget, etc. Your only choice would be to lower wages. Then we would be exactly where we are now, only making less money. LCC disciples can ignore it if they want, but their wage packages ARE having a devastating effect on this profession. MUCH worse than a few extra seats on a single route out of florida.

I await your response. I enjoy our discussions, but I think that you are WAAYY out in left field with this one. The very vast majority of industry analysts do too. In fact, I have never heard one propose what you are proposing.

As always, I could be wrong. In this instance, I don't think that I am. I look forward to a list of city pairs to back up your allegations.

 

[46Driver]

V70T5,
I was going with the total number of RJ's in use by a corporation. Since Delta derives profits from SkyWest, ACA, and Chautauqua, I would include them just like American uses Trans States. Maybe if we post this question on the regional board we can find out - I'm kind of curious now about how many aircraft each regional has.
Although wages gather a lot of the headlines, I still think that the major problem is lack of revenue. Businesses are on a much tighter budget and aren't spending as much, the leisure traveller is always on a tight budget. And with increased competition from the SoutWests, AirTrans, etc, the majors have not been able to raise fares. Maybe somebody who has been around here longer than me (which is about everybody) can answer this question: "Is the current airline market as competitive as it has ever been?". And I will certainly agree that Delta has better managers (the smartest and hardest working pilot from my old Marine Corps squadron is part of the group that plans Delta's route structure - if he is representative of the people at Delta, then Delta is in very good shape.)
I would think that one of the reasons that wages are under attack is that it is something that can dealt with right now. While the managers are still figuring out what direction they want to take their airlines, they can strengthen the position of their respective company by reducing expenses immediately.
Who knows how this thing is going to shake out....

 

[FlyDeltasJets]

From each airline's website:

Expressjet (CAL) has 188 rjs
Eagle (AMR) has 142 rjs
DCI (ASA and CMR) have 210 rjs.

The above numbers are for year end, 2002.

 

[HA25]

Although wages gather a lot of the headlines, I still think that the major problem is lack of revenue. Businesses are on a much tighter budget and aren't spending as much, the leisure traveller is always on a tight budget. And with increased competition from the SoutWests, AirTrans, etc, the majors have not been able to raise fares. Maybe somebody who has been around here longer than me (which is about everybody) can answer this question: "Is the current airline market as competitive as it has ever been?". And I will certainly agree that Delta has better managers (the smartest and hardest working pilot from my old Marine Corps squadron is part of the group that plans Delta's route structure - if he is representative of the people at Delta, then Delta is in very good shape.)

Here we are in total agreement. I guess I'm just sick of this whole idea that the reason the airlines are ruined is they over pay pilots.... the fact is, it a demand issue...

 

[46Driver]

FDJs,
Thank you for the help. ACA has 30 Dorniers on the Delta side, Chautaqua has 34 RJ's and I don't know about SkyWest.

 

[HA25]

From each airline's website:

Expressjet (CAL) has 188 rjs
Eagle (AMR) has 142 rjs
DCI (ASA and CMR) have 210 rjs.

The above numbers are for year end, 2002.

Wow... that is a shocker.. I guess the WSJ was wrong then? I would like a good answer to this one... maybe someone can ask a commuter dog at those airlines what their "current" size is. When I left ASA we had some 30 RJ's...

 

[FlyDeltasJets]

V,

You can go to the "Investor Relations" section of each airline's website and look up the fleets. That should answer your question. Perhaps you are confused because Eagle has many more props.

P.S.
Year end 2002 was only two months ago, so the above numbers should be pretty accurate.

 

[46Driver]

Just a guess, but maybe the WSJ was technically correct in saying that ExpressJet and Eagle have more than either Comair or ASA separately. However when combined, ASA/Comair is the biggest.

 

[General Lee]

Ryanair is really Ryan International Airlines----the guys who fly older 727's for Emery. They also fly A320's for Apple Vacations in the winter. Very low pay and conditions are poor, I have heard.

Spinup,

No, you haven't stepped over the line with me, this is an open forum with opinions from everyone. I just beleive that Delta is in a better postion than UAL and AA. I didn't say our Sh!t don't stink. I have faith in DALPA and their independant advisors that will look over the situation, and if need be--I will give what is necessary. What is wrong with that? Should we always give in without getting the actual facts? I beleive we will give some form of relief, but who knows right now what they will be? Am I against getting lower pay? Nope. I would hope, though, that when times get good again eventually, that we could get back what we fought for. If times never get good again, well, the pay cuts stand. I find that hard to believe with this industry and the cycles it goes through. One form of relief that I beleive the company is interested in is the addition of more 70 seat RJ's---and I know about 1060 pilots that would love to fly them--at fair rates. We also have many furloughed flight attendants from mainline that would probably like to work those planes. Is that wrong? Can't we get our people back in the air? I think pay rates will go down a little, and maybe future raises cancelled. But, I still think that Delta has a better chance to come out of this in better shape than anyone (except Southwest). We just need a short War and the economy will return to better days. I saw on the news last night that the first night of a war with Iraq would involve over 1200 bombing runs---with more smart bombs dropped on the first night than the whole last war there. I hope it is over fairly quick.

Ty Webb,

How many A320's are you guys getting? I thought I read 60. Also, how many of them can fit around your terminal at ATL? I am not making fun, I just wonder about the future growth of ATL with the lack of space for everyone. I know Delta is running out of room for the new 70 seat RJ's over there in the C councourse.

Bye Bye---General Lee

 

[flx757]

Ryanair is really Ryan International Airlines----the guys who fly older 727's for Emery. They also fly A320's for Apple Vacations in the winter. Very low pay and conditions are poor, I have heard.

Actually, Ryanair is a low cost carrier based in Dublin, Ireland.

In addition to operating B727s on an Emery contract, as well as other 727s on other contracts, Ryan International operates B737s, B757s, A320s and DC-10s on various contracts, one of which is for Apple Vacations. None of the aircraft are Ryan's. At least on the passenger side, they are all foreign registered aircraft belonging to variious European charter airlines, who contract with Ryan to operate these aircraft during their off-season. A few are on year-round contracts. Several of these contracts call for a reciprocity agreement with the companies that supply the aircraft whereby Ryan pilots on these contracts fly for the European airlines during the summer. This greatly improves the "very low pay and poor conditions". However, they are a contract based, 121 supplemental carrier. And as such, the pay and conditions will never be compared to Delta.

Ty Webb,

How many A320's are you guys getting? I thought I read 60.

Sorry to keep answering your questions addressed to Ty, (and if he has anything to add, I'm sure he will) but AirTran has not decided if they are getting any A320s at all. It's true they are interested in an order of around 50 aircraft, but are still in the process of negotiating whether these will be B737-700s, B717-300s (if Boeing even decides to produce this model) or A319s.

I don't think AirTran's business plan restricts their growth solely to ATL, either. As a matter of fact, I think it will be quite the contrary.

 

[HA25]

Just a guess, but maybe the WSJ was technically correct in saying that ExpressJet and Eagle have more than either Comair or ASA separately. However when combined, ASA/Comair is the biggest.

That must be it, total fleet size, not just jets... Whether they are jets or props shouldn't really matter if they are used for feed, and not to replace mainline flights.. or if they are doing mainline flying, as long as it's to build up a route for the mainline..

I must admit though, that DAL is probably not using all of it's RJ's for feed...

 

[General Lee]

FLX757,

Didn't I say that Ryanair(in the other persons posts) was actually Ryan International Airlines? Re-read my post. I know the difference between the two. Ryanair in Europe also has hubs in London Stanstead, Frankfurt Hahn, Brussels Cherloi, and a new one in Milan Bergamo.

I thought I read somewhere that Airtran was going to purchase 60 A320 aircraft. I wonder if Boeing would consider making the 717-300 with extra range? Getting away from one type of aircraft or "derivative" aircraft (like Southwest has with the 737's) might not be wise for a LCC. One aircraft type allows you to buy extra spare parts etc. at lower costs and have fewer training costs. I know Delta is trying to install the same "flight deck panel" in all of the 737-800, 757, 767,764, and 777 aircraft, (at $2mil a pop for installing new panels in older 757's and 767's) and get them to be on a single type rating. I was told that the FAA has approved that for Delta. It will be interesting to see what Airtran does.

Bye Bye---General Lee

 

[flx757]

General,

I was just messing with you with the Ryanair deal...plus giving a little insight to Ryan Int'l, having formerly flown there on the passenger side of the operation.

As far as which aircraft AirTran winds up with....who knows? I read the same article about the 60 A320s, but there were numerous errors in that article, so I take it with a grain of salt at this point. Boeing has indicated they will make a decision by summer about producing the 717-300, however, I'm sure it will come down do whoever comes up with the best deal. Plain and simple. We hear all sorts of rumors, up to and including that if they go with the 319, that eventually all the 717s will be replaced by the A320 family. Personally, I believe that the talk and rumors are all just posturing as part of the ongoing negotation process. I guess time will tell.

 

[General Lee]

FLX 757,

That is interesting. I know that Leo did the same thing with Boeing recently (atleast that is what I have heard...). Apparently he and some other execs were supposed to go up to Chicago (Boeing's new base of ops) for a couple days of fun with the Boeing people and listen to them spout off about the 737-600 etc (We were looking for 100 seaters--the -600 has 106 seats). Well, Leo and his cronies show up with no overnight bags, and after a presentation tell the Boeing people, "Hey, we have to get back to ATL ASAP, we have to go to Europe tonight...." (Airbus)
That supposedly spooked Boeing a little bit. I don't really know if this story was true, but it sounds like a shrewd business move.

I have jumped a lot in A320 cockpits (pre-911), and I thought they were really nice and "pilot friendly." The cockpit layouts were really comfortable, and the sidestick looked neat. The one thing I thought was offensive was the fact that the flight computer started calling the PF a "retard" just before landing. God, the French really hate us. (Kidding!!!!)(Joke) I think you will like the Airbus if you get them.

Bye Bye----General Lee

 

[120% Torque]

Worldspan sale price estimated at $800 million-$1 billion
Dateline: Thursday March 06, 2003

American Airlines, Delta Air Lines and Northwest Airlines stand to reap a handsome profit from the sale of Worldspan to Travel Transaction Processing Corp. if the deal is consummated (ATWOnline, March 5).

The buyer is a new company owned by Citigroup Venture Capital Equity Partners and Teacher's Merchant Bank, the private equity arm of the Ontario Teacher's Pension Plan.
Although the parties to the transaction have not disclosed the price to be paid, Salomon Smith Barney's Brian Harris estimated in a report released late Tuesday that the sale "could fetch between $800 million and $1 billion pre-tax" for the three airlines. As the largest shareholder in Worldspan with a 40% stake, Delta potentially could net $190-$250 million on an after-tax basis, according to Harris. Northwest, with 33.7%, would make $160-$200 million while American's 26.3% share could provide that carrier with $125-$160 million in much-needed cash