Delta's Loss Widens, Sets New Furloughs

[duckman]

OUCH....200 new furloughs???!!!






Delta's Loss Widens, Sets New Furloughs
April 17, 2003 08:43:00 AM ET


NEW YORK (Reuters) - Delta Air Lines (DAL) reported a wider first-quarter net loss on Thursday and announced new pilot furloughs, as the airline industry grapples with a crippling downturn.

Atlanta-based Delta, the No. 3 U.S. air carrier, reported a net loss of $466 million, or $3.81 a share, compared with a loss of $397 million, or $3.25 per share, a year earlier. Before items, the loss was $426 million, or $3.49 per share.

Wall Street analysts expected Delta to report a loss of $3.51 per share, with estimates ranging from a loss of $3.16 to $3.95 per share, according to Thomson First Call.

Northwest Airlines (NWAC) and Continental Airlines (CAL) reported $617 million in combined losses this week, as the tepid economy, the war in Iraq, and the spread of Severe Acute Respiratory Syndrome (SARS) in Asia sacked results.

But industry watchers say Delta, whose first-quarter revenue rose slightly to $3.2 billion from $3.1 billion, is better-positioned than most of its rivals to survive the industry's downward spiral.

Delta said lower travel demand caused by the war in Iraq will require it to furlough 200 pilots during April and May, in addition to an 18 percent cut in its total work force that began after Sept. 11, 2001.

Pilots are the only major unionized group at Delta.

Delta also said on Thursday that it expects its new marketing agreement with Northwest and Continental to eventually yield an extra $150 million to $200 million per year in revenue.

Delta said it ended the quarter with $2.5 billion in cash and short-term liquidity, with unrestricted cash accounting for $1.9 billion of the total.

The airline said it has arranged for $900 million in incremental financing this month to replace facilities that will expire later this year.

© 2003 Reuters

 

[Publishers]

NOW

This is the most interesting situation of the moment. With the settlement at American, Delta is now out here by themselves from a labor cost perspective.

All of their other supposed majors are now in BK or have a new cost structure.

It is inevitable that they will have to accomplish the same thing to survive.

 

[tbkane]

This is not a new 200 furloughs, it is the same ones they told us about two weeks ago. The are approx 50 in April and 150 in May.


THIS IS NOT NEW NEWS THIS WAS POSTED WEEKS AGO!

 

[duckman]

This is not a new 200 furloughs, it is the same ones they told us about two weeks ago. The are approx 50 in April and 150 in May.


THIS IS NOT NEW NEWS THIS WAS POSTED WEEKS AGO!

Well hell....no wonder REUTERS is about to go Bankrupt themselves!!

 

[NYRANGERS]

Re: NOW

This is the most interesting situation of the moment. With the settlement at American, Delta is now out here by themselves from a labor cost perspective.

All of their other supposed majors are now in BK or have a new cost structure.

It is inevitable that they will have to accomplish the same thing to survive.

This is getting tiresome........Pilot costs are not just measured by hourly rate. After American's concessions Delta pilots are still more productive.

Delta CASM 8.8 (not including fuel, If the Delta pilots worked for free, I believe we would lower our CASM to 8.3)
AA CASM 8.7 (after concessions, not including fuel)

Delta has hedged fuel much better than AA.


And as far as your "supposed majors" comment.......I assure you the "supposed majors" meet the definition of major.

 

[SWA/FO]

Where is General Lee?

What is his thoughts on this?

 

[Publishers]

Pilot Pay

Once again, it is not a pilot only issue in a vacumn. It is across the board employee costs that impact the company. American did not just deal with pilot issue.

Secondly, we have not had time to see what the new post concession, post BK, post all the changes really are. Let's check CASM down the road a bit.

 

[hawkowl88]

In regards to Delta, IT IS only a pilot issue, because they are the only unionized labor group. If Delta wants to cut wages & change work rules from all their other labor groups, they don't have to threaten Ch. 11 to do it.

 

[Publishers]

CASM

When you look at the cost per available seat mile, I don't think that there is a line there that says pilot and another one for everyone else.

My point was that Delta was faced with the highest cost across the board for employees after all the adjustments to everyone else with the possible exception of Northwest.

In the case of pilots, yes they have to deal with a union. That in no way means that they do not have to deal with the others.

 

[Networ-King]

Delta dispatchers are also unionized...... its not just the pilots. Anyways...... just look at our illustrious (sp?) leaders salary........ then and only then will you see where the problems really start. My measely 80 grand for 2nd year is moot.

SWA F/O

nice of you to join in the discussion with flame bait again.

 

[rjcap]

My measely 80 grand for 2nd year is moot.

Its all about pilot compensation. That measley 80 grand for second year right seat is more than 85% of all the ASA and Comair pilots combined. And thats Captains pay.

Until the disparity in mainline pay and regional pay is corrected all the flying will shift to the regionals.

 

[fox3]

Sour Grapes?

RJCAP,
We need another political party in this country anyway. Run for Pres. on the communist party ticket, then we can all be payed the same, live in the same kind of house, drive the same kind of car and work for the state.

 

[SWA/FO]

Net-working,

I was looking for General Lee... I just remember his qoutes "we are better off, then everyone else....we have lots of money (something along those lines)" call it what you will, I was just looking for his take on it.

 

[hawkowl88]

It's not all about pilot compensation!!! Do you have any idea that UAL rampers averaged, averaged!! about $60K per year!?! At the regional I work for, they start out at $8 per hour and we use less than half the people to turn a plane. People tend to focus on the pilots wages as the be all and end all of airline costs. Highly skilled, highly regulated labor is supposed to cost more in an open market (even though the airlines are by no stretch of the imagination in anything resembling a free market). But rampers, customer service agents, flight attendants can't sustain these $25-50 per hour. You can train anyone without prior experience and a GED how to do one of these jobs in about 3 weeks. Not so with pilots, or mechanics--not if you don't want to kill people. I was jumpseating the other day chatting with the Delta pilots, and the captain brought up an interesting point. He'd been at Delta for about 25 years and pointed out that the high paid rampers, cs agents etc. wages were actually relics from the regulation era when airines were run like public utilities. In an open market unskilled manual labor rates are going plummet. He said that Delta had been doing an ever larger share of "outsourcing" these jobs. It is inevitable. UAL, USAir, and AAL are in the deepest pile of sh*t because they have the highest paid & least productive unskilled workers (i.e; it takes more people to do the same job) than the other carriers. Pilots & to a lesser extent the mechanics, have simply gotten caught up in the wholesale cost cutting. However, in good times they may make up lost ground. I would expect this not to be the case with the other groups of employees--especially if they aren't unionized.

 

[Heavy Set]

SWA FO,

You sounded like flame bait to me... I don't always want to defend General Lee - because he is one sarcastic SOB sometimes, but he is very LOYAL to the furloughees at Delta and I admire that... Everyone knows that Delta is not American and it is not UAL - despite what its management might claim in order to get concessions.... Delta has ample cash and it is not mired with a crappy St. Louis hub or fuel that it can't hedge.

I don't know where the General is - maybe he is flying his 767 to Bermuda.

 

[T45Flyer]

For now...

From Heavy Set:

"Delta has ample cash and it is not mired with a crappy St. Louis hub or fuel that it can't hedge."

-What is "Ample" cash when your losing $426 million a quarter/ a BILLION Plus dollars a year?? I can't believe that people are under some "illusion" that this company isn't in big trouble! Delta only has "ample" cash because they are selling the farm to raise it.

I find it incredible that Delta is actually losing more money than ever and generating more operating revenues at the same time! This is a broken machine folks! If you guys like this companies business model I would highly recommend some K-Mart stock for ya!

For the record, I am talking about the company as a whole, NOT Delta's pilot pay! And I do concur with Heavy set's in depth analysis of the St Louis hub! 25 mile finals really suck!

 

[Networ-King]

RJCap,

I can't believe that something like that would even come out of the mouth of a regional pilot unless your part of the RJDC and that means your screwed anyways. When I used to work for Eagle all I could think of was how the hell am I going to get the hell out of this place and make it on to a major. I never for one moment thought that the pay of the majors should be brought down to match my pay at Eagle or anywhere near it. I did not get into this business to make 80 grand for the rest of my life. Eventhough that its still a good wage, the pay scales are there for a reason. I am willing to bet that when you got hired by your regional, your goals were not to retire from there. NOBODY's goal is that!!!!!!! Sh*t happens and people get stuck places that they dont want to retire from. Now a days, having a job is the only thing that matters. Pay is unfortunately irrelavent. These fu*&king management teams know how much we love to fly and use that against us. Management likes to call this time in aviations a transition period. Transitioning the 300 thousand dollar a year job to maxing out at a 120 thousand. And now even you guys out there making the 120 after 12 years are losing the flying to the real whores of aviation........ CHQ, TSA, Continenta Connection, etc.... Im not dogging the employee groups with that statement, Im just pointing out the fact that Comair and ASA, in DAL's management eyes, are making too much money so they are shifting the flying to the least paid in the industry. RJCAP....... I know you have nothing to do with the growth or shrinkage of your company, but you sound like you want mainline to shrink so you can grow or the pay at mainline should shrink, why? I dunno. Albeit..... I think concessions should be made, but not when my fu*&ed up CEO takes a 1.4 million dollar bonus while he lays off 200 more guys.

T45,

The hub and spoke model is not obselete. It can work and it will work again. DAL is in the best position out of all the dinasours. DAL is getting 422 million dollars of the bailout money, which is the most out of all the airlines, because Delta carried the most passengers out of all the airlines. AMR and UAL are both bigger, but yet Delta carried more. Now are Delta, AMR, UAL, US Air run by some sh&theads? Yes...... Now I wish I could find out what secret management schools these idiots attended so I could bully the future CEO's attending right now.

ps. Sorry for the long post

 

[Publishers]

Adjust

While not trying to defend management on specific issues, the main problem that they all have is that airlines are not structured to deal with the giant swings of the last few years.

 

[SWA/FO]

Wondering where General Lee is/and or his take on DAL latest news, has nothing to with flame bait.

DAL sucks (would be flame bait)...now before you go yelling at me, I was just kidding.... take care.

 

[Heavy Set]

Did you guys ever think that General Lee might be flying?