Holly Hegeman goes after DL management

[mad691]

A few points from Holly Hegeman's Planebusiness Banter

Delta finally announced earnings last week, not sure the adage "better late than never applies here. It probably would have been better if the airline had simply skipped this quarter, all things considered. For the quarter, the airline posted a net loss of $1.13 billion.

Big red flag ... The airline ended the quarter with only $1.4 billion in unrestricted cash. Going into the bleak winter months, this is not a lot of money. For the first nine months of the year, Delta has now lost $2.6 billion.

The situation at Delta is much worse than the situation we have at Northwest or at United Airlines. The situation at Delta runs deep and it runs throughout the airline's management ranks. And it certainly runs through the airline's revenue management group.

This airline, as it has proven over the last year, does not know how to make money.

The airline finds itself with aging airplanes with aging interiors, a fractured brand, thanks to Song, huge regional jet exposure, and no clue as to how to make money. Oh, and let's not forget that because management waited so long to file for Chapter 11, there are no more assets to collateralize.

This airline could collapse. And it could collapse pretty quickly. Bottomline, this airline is in deep trouble. On many fronts.

Not much to like in Delta's third quarter numbers. Worse yet, don't see indications anywhere that management knows how to improve the situation.

 

[Spooky 1]

Suprise!

Why is anybody suprised at this situation?

 

[AlbieF15]

...because 15 years ago they had more loyalty than Jetblue, better service in coach than about anyone, and an employee workforce that was extremely proud of their company and their brand.

It makes me sick to think of ATL without DAL. It won't be due to a lack of good people if the company fails, but a horrendous run of poor leadership.

 

[Palomino]

I agree fully with Albie. Lots of great folks are paying the price of tragically poor leadership and planning.

The Delta product has lost nearly all of its luster. I hope they can turn it around. It's gonna be a tough holiday season for lots of Widget Workers.

 

[General Lee]

I read today that we just sold 10 738 orders for 2007/2008 for $600 million. Heck, we don't need NEW planes.....?(our lease negotiations for current old planes have gone well though, lowering some MD88 lease rates per month from $285,000 to $80,000, and we may keep some old 737-200s since their rates went down to $15,000 a month)


Bye Bye--General Lee

 

[Gobi Gred]

Since 9-11 everyone has been saying that "someone needs to go under". For some reason lately, I've had a bad feeling that it's going to be Delta. I certainly don't want it to be since the holding company that owns my airline just invested a large amount of money to get more Delta Connection flying. Not to mention the thousands of jobs that would be lost if that were to happen. Thoughts anyone?

 

[miles otoole]

I read today that we just sold 10 738 orders for 2007/2008 for $600 million. Heck, we don't need NEW planes.....?(our lease negotiations for current old planes have gone well though, lowering some MD88 lease rates per month from $285,000 to $80,000, and we may keep some old 737-200s since their rates went down to $15,000 a month)


Bye Bye--General Lee

What's the trade off, long term? The lessor doesn't simply drop the lease because they are nice. Much like an interest only home loan, you just sold your soul to the devil.

I can git me this 10 year old Camaro for only 35% interest per year.

 

[Draginass]

GE isn't going to allow Delta to go under. They'd rather have all the legacy airlines barefoot and pregnant.

One thing for sure. ALPA's going to take a real ream-job, again.

 

[Spooky 1]

I read today that we just sold 10 738 orders for 2007/2008 for $600 million. Heck, we don't need NEW planes.....?(our lease negotiations for current old planes have gone well though, lowering some MD88 lease rates per month from $285,000 to $80,000, and we may keep some old 737-200s since their rates went down to $15,000 a month)


Bye Bye--General Lee

I saw that sale yesterday. Is Delta getting the 600 million up front, or piece by piece as the airplanes show up for delivery? If it is spread out over the delivery calander, this 600 million while better than the alternative, is still far short of what Delta needs to survive. Some fresh management might be better than this deal, although I am sure that it would not improve the pilots chances for better treatment over the next few years.

 

[General Lee]

I saw that sale yesterday. Is Delta getting the 600 million up front, or piece by piece as the airplanes show up for delivery? If it is spread out over the delivery calander, this 600 million while better than the alternative, is still far short of what Delta needs to survive. Some fresh management might be better than this deal, although I am sure that it would not improve the pilots chances for better treatment over the next few years.

We have no clue what banks will come to the rescue. Look at United. They got GP Morgan and Bank of America to give them $3 billion, and that was $500 million more than expected. Who knows? But, there seems to be no shortage of billionares who want to become millionares.


Bye Bye--General Lee