Delta's Future

[Howard Hughes]

Hey, I’m just trying to get a handle on where Delta is going from their current position based on info I have gathered from the company website, press releases, aircraft order cancellations/modifications, Pilot message boards (grimace) and the like. I would like to start a thread talking about where Delta has been, where it is at now and where people think it will go in the next five years. Here are some facts I have accumulated followed by a brief analysis. Please feel free to correct or add your two bits. Let’s try to keep this thread "friendly" for at least one page ok?!

• Five 777-200LR will come on the property. Does anybody know exact delivery dates on these?
• Thirty-eight 738s (previous orders) will be immediately sold to third party vendors, at least one of which is a leasing company. This will span over the next three years or so as Delta's original delivery dates for these go into affect.
• Ten 737-700s are being acquired allowing for longer/thinner routes than the -800 could perform. Better for South of the boarder, etc? They come onto the property when?
• No official talk of retiring the MDs at this point.
• Thirteen 757s slated to come on the property starting in 2007. Purchased from AA.
• Recently purchased 30 CRJ 900 series to be used where and who will fly them?
• Continual expansion of DCI flying and more of this flying constantly up for grabs. Delta already has the biggest fleet of any US carrier of regional jets in terms of ownership or farming out to carriers such as SkyWest, ASA, Chat, etc
• Rumors of a 787 order after leaving bankruptcy to start replacing the older 767 fleet. Due to backlogs on these and even with a second production line opened by Boeing it is unlikely these would be available until 2012 unless they can get some from a leasing company sooner.
• According to the company website, Delta has had the largest expansion of international flying over the past year of any North American Airline. This is destinations not airframes.
• Talk of even more increased international flying in the not too distance future including the use of the thirteen 757’s coming on line from AA.
• Talk of buying JB for the 190’s (I’ll just say right now this seems like a long shot unless the plan is not so much for aircraft as it is to take out what Delta sees as a cancer up and down its eastern seaboard).
• Recall of all furloughed guys/gals nearly complete with the exception of those who bypassed. How long can they bypass for (ten years)?
• Current number of Pilots is 6850, down from over 10,000 prior to 911.
• Interviews for new hires started Jan 23 and are continuing through the present. Plans to hire over 200 new hire pilots in addition to furloughs coming back for 2007. Maybe twice that number for 2008. What seats would these new hires be filling? Will the company grow back to pre 911 size in terms of the number of pilots or will more widebodies decrease the need for as many pilots all other things being equal?
• Warded off a US Airways takeover bid. Rumblings were started about a NWA merger but not at this time and not during the first year out of bankruptcy. For some reason it seems the powers that be qualify this by saying things like “not at this time” as if they have some things they have to do before they would actually make this happen. (perhaps fleet re-organization).

It would seem the international side is where everything is headed. IMHO the powers that be have decided it’s really not worth trying to run with Airtran, JB, Virgin A, SkyBus, SWA and any number of other LCC’s for domestic routes with some exceptions. It’s just like beating your head against the wall. Why not focus on international where LCC’s haven’t really cannibalized yet? Maybe strike a balance of tons of DCI flying to every city, USA to feed to the larger hubs. Transcon in the existing 800’s connecting the larger hubs together with good frequency. Maybe add a few widebodies in here depending on slots and demand. A little more point to point and close international (i.e. Mexico and South America) in the 700’s. But most of all the model of the future at Delta IMHO will be international. Now I would think if this is in fact their model going forward they have to be thinking about Asia and the emerging markets there that are gaining traction. Also, India and Africa to a lesser degree. Perhaps this is where increased 777LRs, 787’s and a hookup with NWA to get some Asia action would make sense? There are problems with fleet commonality with that though and maybe hubs? What would a UAL/CO counterattack look like?

Once again, I think domestic flying for Delta is all but on its way out. Frankly from a business standpoint I don’t blame them. It’s frustrating when every Tom, Dick and Harry is seeing “How low can you go?” For what they are I would think the international expansion would be the best option all things considered. As a pilot I’m not sure I like the idea of RJ’s flying some good layovers where you used to have fun but that old saying “change or die” comes to mind. It’s just getting too hard to duke it out with the overcapacity presented to the domestic market these days with the Fred Reids, new LCC’s and thousands of pilots with shiny jet syndrome willing to fly for next to nothing…the rest of their pilot brothers/sisters be danged! Thoughts anyone?

Update: OK, I just got some of my delivery date questions for the 777's answered here: http://airlinepilotcentral.com/airlines/legacy/delta.html Looks like a total of nine 777-200LR on order now with deliveries spread from 2008 to 2010. The ten 737-700's to be delivered 2008 to 2009. The info on this site conflicts with press releases regarding the 757's however.

• Starting in 2008, lie-flat business class seating on 777s
• Ten additional 757s being added between Jul 2007 and Nov 2007
• Rejected US Airways' hostile takeover offer
• Creditors' committee endorses Delta's independent plan
• Currently interviewing pilots for new-hire classes
• Unlimited jumpseats now for reciprocal carriers
• Selling 38 future 737-800s on order
• Delta placed an order for 10 737-700s and 5 additional B777-200LRs for 2008-2009 delivery Four more 777-200LR orders for 2010 for a total of 9 additional 777-200LRs
• Int'l expansion in 2007: ATL-Prague, Vienna, Dubai, Seoul, and Sao Paulo
• Out of JFK: JFK-London (Gatwick), Pisa, Bucharest
• To serve 36 total trans-Atlantic destinations by summer 2007
• Pilots will receive $650M note and $2.1B unsecured claim due to A-plan termination
• Taking delivery of two 777-200LRs in 2008
• First US carrier to receive 777-200LR (new long range model)
• Signed letter of intent with ILFC to lease 10 757-200s
• Adding flights to South Africa, Senegal and Ecuador
• Delta simplifying fleet to 4 aircraft types by 2008

One additional question for those of you in the know, above it says Delta is simplifying the fleet to 4 aircraft types. Would this be 777, 757/767 (counted as one), 737, MD 88/90? I understand the 767-400 will soon be a common type rating with the 757/767 as well?

 

[AA717driver]

"Domestic is on its way out." International route structures without a LARGE domestic feed are a recipe for disaster.

IMO, Delta has the same problem (although to a much smaller extent) as USAir did in the '90's. They are heavily weighted on one end of the country. CVG has been de-emphasized (and could still be considered to be in "the East") and SLC isn't exactly another DEN.

As a traveller, it just seems like a shorter day to fly from MCO to DFW or DEN and connect to PDX than to do MCO-ATL-PDX (or whatever West coast destination you choose).

I think if Delta (or any other legacy) wants to become a decent place to work, they have to bite the bullet and get the >70 seat flying. Yeah, you'll have to pay JB ERJ wages but that's where the industry is today. Airlines have proven that they will pay decently for 100 seaters. They won't pay the same rates for 75 seaters. TC

 

[Howard Hughes]

"Domestic is on its way out." International route structures without a LARGE domestic feed are a recipe for disaster.

IMO, Delta has the same problem (although to a much smaller extent) as USAir did in the '90's. They are heavily weighted on one end of the country. CVG has been de-emphasized (and could still be considered to be in "the East") and SLC isn't exactly another DEN.

As a traveller, it just seems like a shorter day to fly from MCO to DFW or DEN and connect to PDX than to do MCO-ATL-PDX (or whatever West coast destination you choose).

I think if Delta (or any other legacy) wants to become a decent place to work, they have to bite the bullet and get the >70 seat flying. Yeah, you'll have to pay JB ERJ wages but that's where the industry is today. Airlines have proven that they will pay decently for 100 seaters. They won't pay the same rates for 75 seaters. TC

You make some good points. Maybe an alternate plan would be to start adding mainline back in on routes that have grown to frequency of over say five per day. I am reminded of when Delta, right or wrong, bought ASA to shore up some quality control issues. I know Delta is refitting most of their planes with fancy new entertainment packages. It would seem that along with increasing international destinations they are working on product differentiation. Keeping a solid presence on heavy traffic domestic routes with a higher quality product than other operators might makes sense. I would prefer to see Delta take back some of the domestic flying they have farmed to little Ricky with his thousand hours and ipod. We will see.

 

[AC560]

International route structures without a LARGE domestic feed are a recipe for disaster.

See PanAm.

 

[Howard Hughes]

See PanAm.

Not sure but I think Delta has one of the largest domestic feeds of any airline in North America when including DCI. I think this was part of their strategy.

As far as not much feed to/from the west, that doesnt reconcile with this info below:

Delta Goes West with New Service from its Growing Salt Lake City Hub

Customer choice expands with hub as airline adds Salem, Ore. and Yakima, Wash. to flight schedule
SALT LAKE CITY, Feb. 26, 2007 – Delta Air Lines this spring will expand its fastest growing domestic hub with the addition of daily nonstop service between Salt Lake City and Salem, Ore. and Yakima, Wash., effective June 7, 2007. Delta Connection carrier SkyWest Airlines will operate two daily nonstop flights in each city using the 50-seat CRJ200.
“We’re pleased to provide Salem and Yakima customers with convenient nonstop service to Delta’s fastest growing domestic hub,” said Joe Esposito, managing director - Network Planning. “With the addition of these two markets, our Salt Lake City hub offers customers access to 111 destinations, more cities than any other airline from any hub in the West.”
Additionally, Delta Connection carrier SkyWest Airlines will resume seasonal service from Salt Lake City to Steamboat Springs, Colo., between June 8 and Sept. 3, 2007, and will add summer seasonal service in Montrose/Telluride, Colo., between May 25 and Sept. 22.
Delta’s daily service between Salt Lake City and Salem*, effective June 7, 2007 FlightDepartsArrives2040Salt Lake City at 11:30 a.m.Salem at 12:25 p.m.2042Salt Lake City at 9:05 p.m.Salem at 10:00 p.m.2041Salem at 1:15 p.m.Salt Lake City at 4:00 p.m.2043**Salem at 6:35 a.m.Salt Lake City at 9:15 a.m.

Delta’s daily service between Salt Lake City and Yakima*, effective June 7, 2007 FlightDepartsArrives3834Salt Lake City at 11:40 a.m.Yakima at 12:20 p.m.3926Salt Lake City at 9:20 p.m.Yakima at 9:55 p.m.4027Yakima at 1:25 p.m.Salt Lake City at 3:55 p.m.3956**Yakima at 6:35 a.m.Salt Lake City at 9:05 a.m.
* Service between Salt Lake City and Salem and Yakima are operated by Delta Connection carrier SkyWest Airlines.
** Service effective June 8, 2007

Salt Lake City is Delta’s fastest growing domestic hub in terms of destinations served. Since fall 2005, Delta has added or announced flights to nearly 30 new nonstop destinations from Salt Lake City, including the airline’s 100th destination from Salt Lake City in March 2006. Salt Lake City is Delta’s largest gateway to Hawaii, is the only Delta hub to offer customers year-round service to Alaska and is a growing gateway to Mexico with nonstop service to six Mexican destinations. Delta and the Delta Connection carriers offer Salt Lake City customers 335 peak-day departures to 108 nonstop destinations.
Delta Air Lines (Other OTC: DALRQ) offers customers service to more destinations than any global airline with Delta and Delta Connection carrier service to 304 destinations in 52 countries. With more than 50 new international routes added in the last year, Delta is America’s fastest growing international airline and is a leader across the Atlantic with flights to 31 trans-Atlantic destinations. To Latin America and the Caribbean, Delta offers nearly 600 weekly flights to 58 destinations. Delta's marketing alliances also allow customers to earn and redeem SkyMiles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Including its SkyTeam and worldwide codeshare partners, Delta offers flights to 453 worldwide destinations in 97 countries. Customers can check in for flights, print boarding passes and check flight status at delta.com.

 

[~~~^~~~]

My contacts speculate a lot about a 100 seat aircraft order with Boeing, or Embraer and rumors of a new boeing product based on 787 technology adapted to an aircraft that would keep Embraer out of Boeing's turf in the future.

(IMHO a 737 replacement is too far out and there are not many E190 types floating around to be bought) A JetBlue merger is a possibility, but turning that into a profitable operation would be difficult. Folks probably already take JB to JFK and get on DL flights to some degree.

I can't imagine Delta running a CRJ program with the 90 seaters. My crystal ball has those airplanes going to Comair to increase Delta's asset value coming out of bankruptcy and ASA staying put at 80% of DCI flying from ATL. DCI is already up against scope limits, but will be adjusted to remain within limits based on the mainline fleet. DCI is starting to get fixed and ASA's ATL ramp operation is running better than it ever has.

Replacing the MD88 fleet would require a lot of payments and my guess is that lease rates on MD88's are very cheap. The airplane is still pretty efficient and NorthWest has proven the airplane can go forever.

Where is General Lee, the 737 twins and 707 when you need them for the latest on Delta's design for World domination?

 

[General Lee]

Domestic flying is NOT on the way out. No. We are evaluating a 100 seater, and worse case we will order more 737-700s also on BK emergence. We have to have large airplanes (mainline birds) to fuel connections on our INTL expansion. We are not the next Pan Am. Also, expect more than 13 757s from AA (ex TWA birds), probably 17. Also, more 777s are likely, and we will be getting 5 more in the next 3 years. The MD88s are not going to be leaving the fleet until at least 2011, and then slowly they will leave. Look at AA's MD80s---they are a lot older than our MD88s and they are still flying.

Look for South American expansion from LAX soon, and more Africa. We already do India (Mumbai to JFK nonstop on the 777), and we are evaluating new cities all the time. The key to our huge INTL expansion was the availability of our 767-300ERs and 764s---the ones we were using for domestic flying. They are now all going INTL, and some DOM 767-300s are also getting ER equiped as we speak. The 757s are now filling in for the 767 DOM trips, and the 738s are doing more of what the 757s were doing. The MD88s are doing more Song trips up and down the East Coast, and since that is our smallest plane currently, some RJs have had to come into ATL to try to replace the old MD88 flying--like ATL--TYS, GSP, CHS etc. Delta wants to find 100 seaters to resume flying those types of routes, and the RJs are just not as profitable, even Whitehurst acknowledged that. The 736 was looked at supposedly, but the costs with that and the 737-700 are closer, and the -700 has more seats for more revenue. Either it is a cheaper 100 seater (E190 or E195), or more 737-700s will likely be purchased. The RJs do well to smaller cities without competition from the LCCs, but when they start to compete with them, they aren't very profitable, unless they carry pax with connections to far away cities that LCCs do not fly to. We can charge whatever we want on those tickets, because if you absolutely have to get to Dakar, Senegal from Dothan, AL, you may have to fly on us.

We are very happy that the USAir deal fell through, and we look forward to our future. A merger may happen with someone we want to merge with (maybe NWA), but that would only happen if there was minimal job loss (Congress looks at that) and it made us an overall stronger airline. It could happen, along with buying or merging with another smaller airline first, and then merging with NWA.


Bye Bye--General Lee

 

[General Lee]

My contacts speculate a lot about a 100 seat aircraft order with Boeing, or Embraer and rumors of a new boeing product based on 787 technology adapted to an aircraft that would keep Embraer out of Boeing's turf in the future.

(IMHO a 737 replacement is too far out and there are not many E190 types floating around to be bought) A JetBlue merger is a possibility, but turning that into a profitable operation would be difficult. Folks probably already take JB to JFK and get on DL flights to some degree.

I can't imagine Delta running a CRJ program with the 90 seaters. My crystal ball has those airplanes going to Comair to increase Delta's asset value coming out of bankruptcy and ASA staying put at 80% of DCI flying from ATL. DCI is already up against scope limits, but will be adjusted to remain within limits based on the mainline fleet. DCI is starting to get fixed and ASA's ATL ramp operation is running better than it ever has.

Replacing the MD88 fleet would require a lot of payments and my guess is that lease rates on MD88's are very cheap. The airplane is still pretty efficient and NorthWest has proven the airplane can go forever.

Where is General Lee, the 737 twins and 707 when you need them for the latest on Delta's design for World domination?

Most of the MD88 leases were reduced from $280,000 a month to $80,000 a month. They will be around for awhile, and it takes the same gate space as a SkyWest CR9, but has 66 more seats, or 66 more connections to the European flights.....


Bye Bye--General Lee

 

[Howard Hughes]

My contacts speculate a lot about a 100 seat aircraft order with Boeing, or Embraer and rumors of a new boeing product based on 787 technology adapted to an aircraft that would keep Embraer out of Boeing's turf in the future.

(IMHO a 737 replacement is too far out and there are not many E190 types floating around to be bought) A JetBlue merger is a possibility, but turning that into a profitable operation would be difficult. Folks probably already take JB to JFK and get on DL flights to some degree.

I can't imagine Delta running a CRJ program with the 90 seaters. My crystal ball has those airplanes going to Comair to increase Delta's asset value coming out of bankruptcy and ASA staying put at 80% of DCI flying from ATL. DCI is already up against scope limits, but will be adjusted to remain within limits based on the mainline fleet. DCI is starting to get fixed and ASA's ATL ramp operation is running better than it ever has.

Replacing the MD88 fleet would require a lot of payments and my guess is that lease rates on MD88's are very cheap. The airplane is still pretty efficient and NorthWest has proven the airplane can go forever.

Where is General Lee, the 737 twins and 707 when you need them for the latest on Delta's design for World domination?

Ha Ha, yeah where are those guys when you need them? I thought they had a internet card implanted directly into the cerebellum and just by thinking create posts on here?

As far as the 737 replacement I agree...its a ways out. For more info on that click here and then click on the Y1 program. It appears that without a newer more efficient engine its still a ways out even though they may launch in the next few years just to keep ahead of airbus. http://en.wikipedia.org/wiki/Boeing_Yellowstone_Project

Taking out JB would kill two birds with one stone (more domestic aircaft and removing some competion in the east coast as well as having more gates to operate the newly aquired planes out of JFK) to a degree but it doesnt come without its own set of new problems (ie another aircraft type when Delta has stated they want to get down to 4).

 

[~~~^~~~]

...and I'm not sure Jet Blue can make money once the discounts of being a new market entrant are factored out of the equation. Delta would not even get the same discounts JB gets (or used to get) and what about that AirBus? Candidly, AirTran makes more sense if Delta wants a 100 seat aircraft that bad.