DCMartin
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- Apr 26, 2004
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Reuters
Delta eyes premium routes, service to survive-WSJ
Monday August 16, 12:28 am ET
NEW YORK, Aug 16 (Reuters) - The chief executive of Delta Air Lines Inc. (NYSE:DAL - News) may add more longer-haul routes, spend more on customer service and amenities and cede some U.S. market share in a bid to help ensure the No. 3 U.S. airline's survival, the Wall Street Journal said on Monday.
In discussing the plans of Gerald Grinstein, the chief executive, the newspaper cited people familiar with his thinking and accounts of recent discussions among senior management and investors.
"Our aim should be to become a long-haul carrier," Grinstein told employees this summer, according to several people who were present, the newspaper said. Asked whether that idea sounded like the last, failed strategy of now defunct Pan Am in the 1980s, Grinstein said, "No, that's the future," the newspaper said, citing the people.
The shift in strategy would take place as Atlanta-based Delta tries to negotiate $1 billion of concessions from its pilots, and staunch a near $4 million a day cash drain in the first half of this year.
Delta, which ended the half with $2 billion of cash, last week said it is tapping its cash reserves to pay expenses, and said it expects its cash balance to fall at a level consistent with the first half decline.
Analysts have said the carrier might need to file for Chapter 11 bankruptcy protection as soon as this autumn.
Grinstein believes Delta can -- much as Starbucks Corp. (NasdaqNM:SBUX - News) has for coffee -- charge more than low-cost carriers, maybe 10-15 percent more, by providing better service, at a time security concerns have made flying less pleasurable, the newspaper said.
Counter to longtime industry conventional wisdom, Grinstein is suggesting that Delta abandon some U.S. routes into regional hubs, and expand routes and amenities for flights across the Atlantic, the United States and to Latin America, the paper said.
Seventy percent of Delta passengers connect through one of its U.S. hubs, but many of the flights lose money, it said.
Grinstein has also criticized Song, Delta's low-fare airline-within-an-airline launched last year.
At recent meetings, he called Song and the former Delta Express "mistakes," joking that he would like to add "Swan" before Song's name, the newspaper said, citing unnamed people present at recent meetings.
Delta shares closed Friday at $3.41, after earlier falling to $3.38, their lowest level in more than 20 years.
Delta eyes premium routes, service to survive-WSJ
Monday August 16, 12:28 am ET
NEW YORK, Aug 16 (Reuters) - The chief executive of Delta Air Lines Inc. (NYSE:DAL - News) may add more longer-haul routes, spend more on customer service and amenities and cede some U.S. market share in a bid to help ensure the No. 3 U.S. airline's survival, the Wall Street Journal said on Monday.
In discussing the plans of Gerald Grinstein, the chief executive, the newspaper cited people familiar with his thinking and accounts of recent discussions among senior management and investors.
"Our aim should be to become a long-haul carrier," Grinstein told employees this summer, according to several people who were present, the newspaper said. Asked whether that idea sounded like the last, failed strategy of now defunct Pan Am in the 1980s, Grinstein said, "No, that's the future," the newspaper said, citing the people.
The shift in strategy would take place as Atlanta-based Delta tries to negotiate $1 billion of concessions from its pilots, and staunch a near $4 million a day cash drain in the first half of this year.
Delta, which ended the half with $2 billion of cash, last week said it is tapping its cash reserves to pay expenses, and said it expects its cash balance to fall at a level consistent with the first half decline.
Analysts have said the carrier might need to file for Chapter 11 bankruptcy protection as soon as this autumn.
Grinstein believes Delta can -- much as Starbucks Corp. (NasdaqNM:SBUX - News) has for coffee -- charge more than low-cost carriers, maybe 10-15 percent more, by providing better service, at a time security concerns have made flying less pleasurable, the newspaper said.
Counter to longtime industry conventional wisdom, Grinstein is suggesting that Delta abandon some U.S. routes into regional hubs, and expand routes and amenities for flights across the Atlantic, the United States and to Latin America, the paper said.
Seventy percent of Delta passengers connect through one of its U.S. hubs, but many of the flights lose money, it said.
Grinstein has also criticized Song, Delta's low-fare airline-within-an-airline launched last year.
At recent meetings, he called Song and the former Delta Express "mistakes," joking that he would like to add "Swan" before Song's name, the newspaper said, citing unnamed people present at recent meetings.
Delta shares closed Friday at $3.41, after earlier falling to $3.38, their lowest level in more than 20 years.
I wonder which hubs he's talking about.
Wow, thats a big friggin surprise. Im glad he has a sense of humor about it.
