DL Negotiations effects on DCI Pilots from WSJ

[General Lee]

Medflyer and Inclusivescope,


You guys are the ones who don't get it. Let me take on each stance:

Medflyer,

Would we strike rather than get a bad deal and lose seniority---ummmm YES. That is one thing that would force a strike. Sorry.

A DL and CO merger would have lots of obstacles to clear--and NYC is one of them. We still have more transatlantic flights than anyone else, and we dropped most of those cities when we were doing well. We stopped flying to those cities before 9-11, and we also parked a lot of the planes that could have been used to fly those. Our Domestic ERs have always flown Domestic, but have the fuel capability and fuel dump capability required to fly those long flights. Maybe I heard it from someone in the CPO. We all know that our INTL flights have no LCC competition---and it makes sense. Also, I have heard about 767ER domestic replacements--coming from the desert--but I won't give that fully away....

AA has sold off the Fokkers, but have bought a heck of a lot more new 70 seat CRJs---and that is fine. Look at NW and their new stance--their MEC said they would fly anything 70 seats and up. I bet our MEC is looking at the same--and our 737-200 leases are slowly going to expire from next year to 2008, Heck, 3 of our MD-11 leases don't expire until 2015.

Why do we fly widebodies domestically? What? Have you been to ATL lately? We funnel in a bunch of passengers each day--from all over--INTL and domestic. Have you seen our 764s and 763s flying hourly to FLL and MCO? So, we should stop those and put MD-88s on them? I am not in charge of the fares--but at the current low fares thanks to Spirit, Jetblue, Airtran etc--we need more seats to try to squeeze a profit. Lower fares and less seats don't mix. We also carry tons of cargo and mail. I recently did a 767-300 flight from ATL to ANC and back (nice layover), and we carried mail and a lot of fresh fish. I guess we shouldn't do that anymore....


Inclusivescope,

What are you talking about? With the low fares out there, we need to have bigger planes---not smaller. Why does Southwest have 737s and not RJs? The lower fares can still squeeze out a profit with more seats compared to 50 seats. The problem we have now is higher costs--which are being addressed. When those come down, we will compete better. Why would Delta create Song with 199 seats instead of 119 seats on Delta Express? Are you smarter than our Delta execs incharge of these things? You are? Ok. Song has actually turned a profit in the first quarter (as stated in public by Grinstein and Salvaggio---lying could lead to jail time).

As far as this Fall and Winter---let me break something to you-----Fall is ALWAYS slower than Summer. Yep, it might be hard to believe--but a lot of passengers are students, and they go back to school. We have already prepared for this partially by removing some flights on TUE and WED at Song--instead allowing some of the planes to get heavy maintenence done. That is smart. As far as Winter goes--sure, it may be slower--but the Holidays always bring in the loads, and then we start over again with our best times--Spring and Summer. It is a cycle. By the time our cycles start in the Fall--we will have already given back some cash (or the TA will be ready)--and that will help.


SSDD,

Do we have a choice? Thanks to those new rates---we will have to stay "competitive". That $ucks, but in the past Dalpa has gone for the lower rates to keep jobs (Delta Express), and right now we have over 1000 pilots still on the street, and Malone stated he wanted the recall rates to continue in some form. That sounds like we will be making a play for any new aircraft.

Bye Bye--General Lee

 

[MedFlyer]

So basically what you are saying General is that DL should just keep flooding the market with seats and driving yields lower and lower and lower? What happens when fares between JFK and Florida get down to $19 one-way? Can Song make money on those fares?

Speaking of Song, how do we know if Song is profitable?

Does Song pay for their planes? No.
Does Song pay reservation and distribution costs? No.
Does Song have its own heavy maintenance? No.

You say Comair/ASA aren't profitable because they don't pay those costs, but somehow Song is profitable despite the fact that they don't pay those costs either.

In one post your critcizing management for being stupid and grounding the MD11's, but then your praising management for flooding the market with more seats using Song? So which is it, is management smart or stupid? You can't seem to make up your mind.

You ever get the feeling that maybe DL's strategy of trying to flow every living soul through ATL may not be working? Filling up 764's with trash fares that have to connect through ATL is no way to make money. If having lots of seats is the key to success shouldn't DL be the most successful carrier of all time? DL flies far more big planes domestically than any other carriers....yet DL is losing more money than anyone else. So far, the carriers that have been most successful aren't the ones with the biggest planes.

Why is JetBlue buying smaller planes, General? I thought only bigger planes with more seats were better? Shouldn't JetBlue be buying A321's instead of EMB 190's?

 

[chperplt]

Speaking of Song, how do we know if Song is profitable?

Does Song pay for their planes? No.
Does Song pay reservation and distribution costs? No.
Does Song have its own heavy maintenance? No.

That's an excellent point. Does Song pay for their gas or is that paid for by Delta?

 

[General Lee]

Medflyer,


Wait, wait--you are twisting my words and the facts.

As far as having more seat--yes--you need to flood the market on some routes to keep the competitors out or cause them to leave. Why did AA start F100 service out of DAL when Legend started? To flood that market and eventually it worked. Why did TED and Frontier start more service from DEN to FLL---it bumped Spirit out. Sure, it can affect earnings--but it is a necessary evil sometimes. As far as all of our Widebody service from ATL to FLA---we have the passengers and we have millions of Skymiles members who want to go there. They will pay more money on our other routes to get free tickets to warm FLA in the Winter. Sad but true.

Does Song make a profit? Yes, according to Grinstein and Salvaggio. Does DCI make a profit? Yes, according to Grinstein. No dispute there. But, does it cost money for Song and DCI to operate and does Delta spend a lot fo cash on both of them? Yes, and you aren't willing to accept that! I bet Delta paid to paint the Song planes--heck, I didn't pay for it. We all know that---it is just YOU aren't willing to accept the fact that Delta is subsidizing a lot of your business. That is the key here---you wouldn't be AS profitable without help from Mainline Delta---but you wish to take all of the credit for "saving us."

Yes, I critisized Delta for parking the MD-11s after the Iraq War started---primarily because our VP of Marketing came out and said we "left money on the table" after that Summer was over. She said we could have used them---but we parked them fearing nobody would fly to Europe. Boy was she wrong. I flew twice to Europe that year (last year) and had to sit in the cockpit 3 out of the 4 legs---no seats left. As far as INTL markets go--we should have kept those MD-11s flying--and we probably would have even more revenue flowing right now if we had. Obviously domestic routes are hurting us with the lower fares right now--but not the INTL routes--which really are saving our bacon. But, we parked the planes--still paying $15,000 a day on each sitting in the desert--and 3 have leases until 2015. So, I want you to get this straight in your head now---I think we needed to keep the MD-11s flying (as long as we are paying for them) on lucrative INTL routes, and we also need domestic widebodies with more seats to help spread out the costs and bring in some cargo revenue. Got it?

Our hub system in ATL is a great system, because we have to buy equipment once (until it breaks)--and use it all day long with many aircraft flying in each day using it. The way to make money is to consistantly fill our hubs with as many passengers as possible and soomthly get them through the hub with little problems. We have passengers coming in from INTL destinations that pay higher fares than some domestic, and passengers flying in on RJs form smaller cities that don't have LCC competition--which results in higher fares. Some of those passengers come off the RJs (from Peoria for example)--and pay more to fly to FLA on those 764 because there is no direct service from PIA. So, not every fare on those 764s are bottom fares. Same goes for the people who want to go to Liberia, Costa Rica, or St.Thomas. Not every fare is cheap. But, you knew that.

Why is Jetblue buying smaller planes? Hmmmm. They have found out that on some routes the A320 doesn't fit--like to some Upstate NY cities. But, they did figure out how many seats would be needed to squeeze a profit--and it wasn't 50 or 70 seats. They probably won't put those planes on established NYC--FLA routes--but to new ones like to Daytona Beach, JAX, Melbourne, Sarasota etc---which would put them against your 50 and 70 seaters. We will have to get larger planes also to compete. Do you think your 50 seat Comair RJ could compete from NYC (LGA or JFK) to Savanah with a Jetblue Emb-190? That must make you nervous. Their A320s will still grow in numbers(I guess they could swap A321s in future orders or options), and they will continue to deploy them on markets they think they can fill them with. That makes sense--and we can fill our 764s to LAS, LAX, TPA, MCO, FLL, MIA, etc--all year round. Now we are also starting our 764s to Lima, Peru--where we fill up the plane with passengers and aspergus. (you don't want that extra cargo, right?$$$$)

Had enough yet? I thought so.

Bye Bye--General Lee

 

[standaman]

Could not resist

I now see why nobody flies on Delta anymore. The planes are full of nothing but aspergus and fish.

 

[bvt1151]

Inclusivescope,

What are you talking about? With the low fares out there, we need to have bigger planes---not smaller. Why does Southwest have 737s and not RJs?

Why is Southwest flying 737's and not 767's?

 

[General Lee]

They got 737s first. Their model revolved around 737s. They also didn't fly to the larger cities (besides DAL and HOU) for a long time--finally leaving Texas and the contiguous states in the mid-80s. By then, they had established their model. But what do I know?----I ain't Herb..... Good try BVT.


Bye Bye--General Lee

 

[InclusiveScope]

They got 737s first. Their model revolved around 737s. They also didn't fly to the larger cities (besides DAL and HOU) for a long time--finally leaving Texas and the contiguous states in the mid-80s. By then, they had established their model. But what do I know?----I ain't Herb..... Good try BVT.


Bye Bye--General Lee

But General,
Using your logic, they would make more money with a 767 fleet. Their CASM would be less right? Which is it General?

 

[General Lee]

Well, I suppose they could use 767s and they would lower their casm--especially with 737 payscales. The problem is that their "model" includes quick turn around times---and let me tell you---767s have longer turn around times. Also, the 767s we have have two class seating---and Southwest would have one class. That would mean more passengers and more clean up time. The transcon deal at Southwest is fairly new--2 years ago they were still stopping two or three times to cross the country. So, yes--they could use 767s--but it would mess up a lot of their model. (besides having a second aircraft type) A lot of our 767s fly from Europe to JFK, and then onto LAX or SFO etc. I flew one a few days ago that had just come in from Rome--and all of the bottles of water were from Rome--they tasted GOOD.


Good try.


Bye Bye--General Lee

 

[InclusiveScope]

Well, I suppose they could use 767s and they would lower their casm--especially with 737 payscales. The problem is that their "model" includes quick turn around times---and let me tell you---767s have longer turn around times. Also, the 767s we have have two class seating---and Southwest would have one class. That would mean more passengers and more clean up time. The transcon deal at Southwest is fairly new--2 years ago they were still stopping two or three times to cross the country. So, yes--they could use 767s--but it would mess up a lot of their model. (besides having a second aircraft type) A lot of our 767s fly from Europe to JFK, and then onto LAX or SFO etc. I flew one a few days ago that had just come in from Rome--and all of the bottles of water were from Rome--they tasted GOOD.


Good try.


Bye Bye--General Lee

So now it is the greater turn times of larger aircraft? Your circular arguments are laughable General. The RJ has a much shorter turn time than the 737.

 

[General Lee]

And your RJ doesn't bring in enough revenue. Your arguments are just wrong. Look, I just read something about Indy Air and their low load factors(on Aviation daily?--I couldn't copy it) and how they are burning up almost 50% of their cash by the end of this year. Why? Because RJs can't fly competitively against low fare operators. And, they are growing. Your RJs are good as route finders, and flying to cities with no chance of LCCs---but those are getting smaller in number.


Why would Song go for more seats (199) on a 757 and go against Jetblue? (they could have used smaller aircraft) Are you smarter than John Salvaggio? He had it right. Now what about using Skywest RJs only flying to Montana in the Summertime? I don't know who came up with that one--since most of the flights used to be on 737-300s and 738s--with an occasional MD90 on there. There is no LCC competition there--and still we went to more frequency (even though we have three connection banks with larger mainline planes) with RJs. Makes no sense.

The key here is that RJs should be used as they were intended---to find new routes, to provide feed from cities that cannot sustain a mainline aircraft--and to replace props on routes that could sustain them. Someone in ATL needs to look at all this again..... (or instead we should pillage the pilot's contract!)

Bye Bye--General Lee

 

[strega7]

The key here is that RJs should be used as they were intended---to find new routes, to provide feed from cities that cannot sustain a mainline aircraft--and to replace props on routes that could sustain them. Someone in ATL needs to look at all this again.....

Now that's the smartest thing anyone's said in along time.

 

[flaps30]

Yep

Every FO at a regional will work for those wages, welcome to our world. The chance to make Captain at an airline that is expanding beats waiting for scraps from you guys.

 

[N2264J]

Re: DL Negotiations effects on DCI pilots...

Now what about using Skywest RJs only flying to Montana in the Summertime? I don't know who came up with that one--since most of the flights used to be on 737-300s and 738s--with an occasional MD90 on there. There is no LCC competition there--and still we went to more frequency (even though we have three connection banks with larger mainline planes) with RJs. Makes no sense.

It makes a lot of sense. I've been operating from Salt Lake City to Helena frequently since last September and I've never had 50 people on the plane going or coming. Usually 20 to 30. Almost half the time, less than 10.

By the way, despite all your tough talk about striking the company during bankruptcy, the mainline pilots just aren't up to it. It would tear the pilot group apart. I predict the Delta pilots will look over the edge into the abyss of bankruptcy and fold like a cheap card table.

 

[vc10]

USAir bought $4.5 billion worth of new RJs in CHAP 11.

Not true. US Airways bought those RJs after they exited Ch 11 and the financing was provided by GE in return for US Airways not scalping GE when US Airways was in Ch 11. In other words "we won't gut your existing leases with us if you provide us with financing after Ch 11". GE basically did a double-or-nothing.