FWIW
Delta's future?
I was hoping to see something addressing the ACA FRJ situation, but its interesting none the less.
____________________________________
Comments from a furloughed Delta pilot who attended a road show
meeting.
They are going on with all employee groups at all stations.
Don
Subject: Grinstein Meeting at DFW
To All:
The following is simply my view of the presentation that Gerald
Grinstein
made to the pilot group at DFW on 3/17/04.
First off, the man looks good for 71, he carries himself more like
someone
who is 10 years his junior. At no time during the 2-hour meeting did
he
dance around any of the questions, if fact he was refreshingly up front
with
some difficult topics. He started with the fact that he was not here
to
negotiate with us, and in fact he did not do that. Is what he did do
was
paint a picture of the current situation at Delta. Not any new
revelations
here, most of the stuff I had in fact heard before. His thoughts on
where
the industry as a whole is going were interesting. I think he’s been
around, very sharp whenever talking negatively about the
previous/current
management team; he always did so in a very professional manner. Also
made
a comment about trying to maintain/assemble a management team. The man
also
has a sense of humor and will use an occasional four-letter word. The
following are the points that I remember from the meeting, I did not
take
notes, this is from memory so don’t hold me to specifics.
Ø In 5-6 years he thinks there will be 2 hub and spoke airlines
around.
One of them will probably be AA, he hopes that Delta is the other.
Ø Consolidation will take place between the "Network" carriers.
Ø DAL no longer has the ability to borrow money. Even if we could
borrow money he would not want to assume more debt as our current debt
is at
a dangerous level.
Ø Due to our inability to borrow we are no longer able to hedge
fuel at
a reasonable rate. Don't quote me but something along the lines of
costing
DAL $130 million just to hedge now.
Ø In the coming months our liquidity will start to dramatically
decrease.
Ø Pre-911 Delta was worth more than AA, now we are worth about the
same
as AirTran and Skywest! Acknowledged that this is management’s fault
for
wasting away the best balance sheet of the “Network” carriers.
Ø A question was asked in nature about our large number of RJ's in
use
and the fact that DAL is still going to lose $400 million for the 1st
quarter. He said that in 03' the RJ's were in fact profitable for DAL.
Ø He thinks the future of DAL is with the 757/767 fleet. And in
fact
the future of hub and spoke airlines is going to be with larger
aircraft,
not the 100 seat market. Just my opinion in trying to read between the
lines. With the growing of the LCC segment in the industry we will
never be
able to get our cost down close to SWA, AT or JBLU on the short haul
markets. He did mention with the larger aircraft we could gain an
advantage
on the cost per seat mile.
Ø Delta might get an 8-10% pricing premium over the LCC’s, not the
20-30%??? we had in the past.
Ø LCC’s in combination with the internet pricing has changed the
industry forever.
Ø The traditional up-turn down-turn cycle will no longer exist.
Not
sure what he meant by that? I think that the profits in the good times
will
not be able to cover the losses in the bad times as they have before.
That’
s a guess.
Ø He said that he will take responsibility for hiring LEO and that
it
was not the right thing to do. He mentioned that in the future Mngt.
should
come from within.
Ø Said that he and Fred Reid had philosophical differences on how
the
airline should be run. I picked up another comment like that about
Fred as
well.
Ø One pilot mentioned how bad our marketing dept. was. Mr.
Grinstein
said that he has looked at marketing and that the necessary changes
are/will
be made. Again, he didn’t throw any stones at the marketing team, just
indicated that changes would be made.
Ø He is fundamentally against the airline within an airline
concept.
Wants more info. On Song before making a decision on it.
Ø On his watch there will not be any Exec. Bonuses. Etc.
Mentioned
something about some of the people leaving requested more $$ to stay,
he
refused, and said he wants people who want to work for Delta.
Ø With pay concessions and work rules combined we will be looking
at
about 40% pay cut.
Ø Does not have a problem with keeping Delta pilots the highest
paid in
the industry.
Ø One pilot made the comment that even if we give the “30% plus”
it won
’t do any good unless management has a clear plan. He replied that he
is
aware of that and cited US Airways; and then replied that we will see
his
plan in the future.
Ø When asked why not accept the current position of the union and
get
the benefit of pay cuts now. He replied that Delta has suffered a
heart
attack and that aspirin will not fix it. DAL needs major repair work.
If
DAL cannot get cost in line before the next downturn we are in big
trouble;
in that case, a 15% pay cut would not be adequate.
Ø Wanted to know if the union would go back to the saying of C01’
“United plus” as he is more than willing to give us UAL plus 1% right
now.
That was actually a well-delivered joke on his part.
Ø When asked what time period would they be looking at Bankruptcy?
He
replied that he would not tell us that but assured us that ALPA knows
exactly when it is.
Ø Said that management needs to be reduced in size.
Ø Other work groups have had work rule, benefit changes that make
them
competitive with groups from other airlines and therefore they will not
take
pay cuts.
I’m sure I’m forgetting lots. I really did get the impression that he
was
not trying to sell anything and that he wanted the pilots to know what
the
company is facing. He approached everything with a very matter of fact
attitude, not emotional at any time if someone threw a dagger at him.
At
the end of the presentation the number of pilots who spoke up and said
that
they felt better after hearing him speak surprised me. Certainly was a
sobering meeting. He never made any guarantees that Delta will come
out of
this ok, only that he would “fight like hell to keep us out of
bankruptcy”.
Although I certainly did not agree with everything he said, I think
that he
will do everything he can for this company. If anyone has the
opportunity
to hear him I would strongly suggest attending one of his meetings.
Don’t
let me or anyone else shape your decisions, stay informed and make your
own.
So from someone who has not had faith in either Management or
ALPA………………I
trust him.
Delta's future?
I was hoping to see something addressing the ACA FRJ situation, but its interesting none the less.
____________________________________
Comments from a furloughed Delta pilot who attended a road show
meeting.
They are going on with all employee groups at all stations.
Don
Subject: Grinstein Meeting at DFW
To All:
The following is simply my view of the presentation that Gerald
Grinstein
made to the pilot group at DFW on 3/17/04.
First off, the man looks good for 71, he carries himself more like
someone
who is 10 years his junior. At no time during the 2-hour meeting did
he
dance around any of the questions, if fact he was refreshingly up front
with
some difficult topics. He started with the fact that he was not here
to
negotiate with us, and in fact he did not do that. Is what he did do
was
paint a picture of the current situation at Delta. Not any new
revelations
here, most of the stuff I had in fact heard before. His thoughts on
where
the industry as a whole is going were interesting. I think he’s been
around, very sharp whenever talking negatively about the
previous/current
management team; he always did so in a very professional manner. Also
made
a comment about trying to maintain/assemble a management team. The man
also
has a sense of humor and will use an occasional four-letter word. The
following are the points that I remember from the meeting, I did not
take
notes, this is from memory so don’t hold me to specifics.
Ø In 5-6 years he thinks there will be 2 hub and spoke airlines
around.
One of them will probably be AA, he hopes that Delta is the other.
Ø Consolidation will take place between the "Network" carriers.
Ø DAL no longer has the ability to borrow money. Even if we could
borrow money he would not want to assume more debt as our current debt
is at
a dangerous level.
Ø Due to our inability to borrow we are no longer able to hedge
fuel at
a reasonable rate. Don't quote me but something along the lines of
costing
DAL $130 million just to hedge now.
Ø In the coming months our liquidity will start to dramatically
decrease.
Ø Pre-911 Delta was worth more than AA, now we are worth about the
same
as AirTran and Skywest! Acknowledged that this is management’s fault
for
wasting away the best balance sheet of the “Network” carriers.
Ø A question was asked in nature about our large number of RJ's in
use
and the fact that DAL is still going to lose $400 million for the 1st
quarter. He said that in 03' the RJ's were in fact profitable for DAL.
Ø He thinks the future of DAL is with the 757/767 fleet. And in
fact
the future of hub and spoke airlines is going to be with larger
aircraft,
not the 100 seat market. Just my opinion in trying to read between the
lines. With the growing of the LCC segment in the industry we will
never be
able to get our cost down close to SWA, AT or JBLU on the short haul
markets. He did mention with the larger aircraft we could gain an
advantage
on the cost per seat mile.
Ø Delta might get an 8-10% pricing premium over the LCC’s, not the
20-30%??? we had in the past.
Ø LCC’s in combination with the internet pricing has changed the
industry forever.
Ø The traditional up-turn down-turn cycle will no longer exist.
Not
sure what he meant by that? I think that the profits in the good times
will
not be able to cover the losses in the bad times as they have before.
That’
s a guess.
Ø He said that he will take responsibility for hiring LEO and that
it
was not the right thing to do. He mentioned that in the future Mngt.
should
come from within.
Ø Said that he and Fred Reid had philosophical differences on how
the
airline should be run. I picked up another comment like that about
Fred as
well.
Ø One pilot mentioned how bad our marketing dept. was. Mr.
Grinstein
said that he has looked at marketing and that the necessary changes
are/will
be made. Again, he didn’t throw any stones at the marketing team, just
indicated that changes would be made.
Ø He is fundamentally against the airline within an airline
concept.
Wants more info. On Song before making a decision on it.
Ø On his watch there will not be any Exec. Bonuses. Etc.
Mentioned
something about some of the people leaving requested more $$ to stay,
he
refused, and said he wants people who want to work for Delta.
Ø With pay concessions and work rules combined we will be looking
at
about 40% pay cut.
Ø Does not have a problem with keeping Delta pilots the highest
paid in
the industry.
Ø One pilot made the comment that even if we give the “30% plus”
it won
’t do any good unless management has a clear plan. He replied that he
is
aware of that and cited US Airways; and then replied that we will see
his
plan in the future.
Ø When asked why not accept the current position of the union and
get
the benefit of pay cuts now. He replied that Delta has suffered a
heart
attack and that aspirin will not fix it. DAL needs major repair work.
If
DAL cannot get cost in line before the next downturn we are in big
trouble;
in that case, a 15% pay cut would not be adequate.
Ø Wanted to know if the union would go back to the saying of C01’
“United plus” as he is more than willing to give us UAL plus 1% right
now.
That was actually a well-delivered joke on his part.
Ø When asked what time period would they be looking at Bankruptcy?
He
replied that he would not tell us that but assured us that ALPA knows
exactly when it is.
Ø Said that management needs to be reduced in size.
Ø Other work groups have had work rule, benefit changes that make
them
competitive with groups from other airlines and therefore they will not
take
pay cuts.
I’m sure I’m forgetting lots. I really did get the impression that he
was
not trying to sell anything and that he wanted the pilots to know what
the
company is facing. He approached everything with a very matter of fact
attitude, not emotional at any time if someone threw a dagger at him.
At
the end of the presentation the number of pilots who spoke up and said
that
they felt better after hearing him speak surprised me. Certainly was a
sobering meeting. He never made any guarantees that Delta will come
out of
this ok, only that he would “fight like hell to keep us out of
bankruptcy”.
Although I certainly did not agree with everything he said, I think
that he
will do everything he can for this company. If anyone has the
opportunity
to hear him I would strongly suggest attending one of his meetings.
Don’t
let me or anyone else shape your decisions, stay informed and make your
own.
So from someone who has not had faith in either Management or
ALPA………………I
trust him.
