Grinstein talks about DCI in Q&A

[Medeco]

For those who think it is or was a real possibility that ASA or Comair would be sold to raise money ,here is what the top guy is saying to the troops.

This is from a company website. And one of many questions answered.\

Topic: Delta ConnectionQ. Where does DCI fit into the picture?A. I don’t want to get ahead of the Strategic Assessment. I generally see Delta running a portfolio of businesses. For DCI, stretching the RJ range to serve routes beyond two hours is inconsistent with the image Delta wants to provide. And when the leg is three hours long, it is an extremely uncomfortable experience. As I said, I think DCI will continue to have a role as part of Delta’s portfolio, but that role has to be well defined and consistent with the market. At the moment, DCI is profitable. The DCI planes are 100% financed by the manufacturer because they know that if something were to happen, they could re-sell them. Larger aircraft, on the other hand, are not 100% financeable. Manufacturers know larger planes couldn’t be resold, so they’re reluctant to finance them. That tells you a lot about the market now.



I cant agree more as an ASA pilot that we need to do very little 2hr plus flying if we intend on keeping the customer comfortable.

On the other hand if we supplement mainline to the same destination because of market demand then fine.

If we need to remain in the market but demand doesnt meet mainline cost then DCI should be there too.

Medeco

 

[Medeco]

Another interesting answer

Topic: SongQ. What do you see as the future of Song?A. If we’re able to manage costs, we could continue to use Song to develop and serve specific types of markets that focus on low fares and non-traditional services. Air Tran and JetBlue are doing that to us. They came in as bare bones, then they did business class and IFE and moved up the value chain. We might have International by Delta, Mainline by Delta, Song by Delta, Connection Carriers by Delta. Similarly, General Motors supports different product lines with Chevrolet, Pontiacs and Cadillacs

 

[Medeco]

I should have posted this one first

Topic: Delta ConnectionQ. Have you thought about selling connection carriers to gain capital?A. Connection carriers are one of the few areas of the company that are profitable. We hardly want to get rid of that. If they were sold, the drama would go on for a while longer. Then we would be in worse shape.



There you have it General.

Medeco

 

[On Your Six]

But it's always an option if times really get tough... Never say never in this business...

 

[JetPilot_Mike]

But it's always an option if times really get tough... Never say never in this business...

Give it up already..sheesh

 

[Medeco]

Just to clarify, I didnt say it would never happen, I just said this is what the top dog is thinking.

To me, everything I have heard from him makes a lot of sense.

My biggest dissagreement with Grinstein so far is his bashing of the pilots in the media and among the other employees. He could have had his consessions long ago if he had approached the pilot group with a more positive approach.

Otherwise he seems pretty in touch

Medeco

 

[MedFlyer]

But it's always an option if times really get tough... Never say never in this business...

Actually, it's not really an option. Comair and ASA have little value right now because they are tied to a parent company that is heading toward bankruptcy.

If/when DL mainline restructures and the threat of bankruptcy passes, then the value of Comair/ASA would likely rise. I could definitely see DL selling one or the other after the mainline restructuring is done. The proceeds of the sale could be used to pay down debt, purchase new aircraft or improve facilities (JFK is a dump).

But until the threat of BK passes, Comair/ASA have little value.

 

[General Lee]

Medflyer is correct. And, I do think that DCI is showing a profit--but as other analysts have shown, that could all change if Delta actually charged them for using Delta's gate space, distribution (Delta.com), etc.... And, I bet all of the CRJ flights are full--since they used to have 727s on those routes. They should have larger planes on many of the flights--but we have run out of mainline aircraft. When the LCCs start expanding more into DL territory--then it will be tougher for the CRJ to post record profits when the fares take a dive. I still think RJs will do great when they aren't directly competing against a LCC. But, as they expand, that will be tougher. I never said RJs couldn't make money---it just depends on if there is direct LCC competition on the route.....And, RJs are a great tool---but when you use them to fly longer flights--sometimes that can be deleterious to the customer base. But, new flights like CVG to Billings is a great way to use RJs on new routes. (that flight time is probably long enough)


Bye Bye--General Lee

 

[Freebrd]

Not quite full General. The new weights are causing us to bump passengers/bags regularly, and unfortunately jumpseaters too. The 50 seater may end up, for all practical purposes, being used as a 40-45 seater now.

 

[Medeco]

Medflyer and General Lee,

You guys have beat this horse so bad it should be put to sleep.

You sell your assets and your left with nothing.

General Lee, I continue to lose respect for you every time I read your cookie cut post, and reponses

I am just glad your not making the financial calls for the company, you second guess everything with no real ideas of your own.

Medeco