Here's an interview with DCI chief, Fred Buttrell. It's not that greatly informative, but I thought some on this board might like to read it.
INSIDE METRO BUSINESS: UP CLOSE: FRED BUTTRELL: Airline exec in charge of 'regional' missions
Russell Grantham - Staff
Sunday, December 7, 2003
Fred Buttrell is the kind of guy who will hike with his wife across the Grand Canyon, twice in two days --- and run most of the way back.
He's also the kind who, when his military career flying F-15 fighters was cut short by the onset of diabetes, was soon climbing the career ladder again at American Airlines --- this time on the ground.
Therefore, it shouldn't be surprising that, after switching to Delta Air Lines in 1996, the 41-year-old executive is sitting at the controls of one of the carrier's strategic plans: using small regional jets to cut costs and hang onto markets.
As president and chief executive of Delta Connection, Buttrell oversees two Delta subsidiaries, Atlantic Southeast Airlines and Comair, plus three contract carriers and a few odds and ends like a flight school and an executive jet service. Delta Connection's units fly about as many aircraft and more flights than Delta's mainline operations.
That fleet --- the largest among the big mainline carriers --- allowed Delta to downshift capacity after the Sept. 11 terrorist attacks while maintaining a presence in shrinking markets.
Since 9/11, Delta has continued to expand on that strategy by shifting much of its capacity at the Dallas and Salt Lake City hubs to smaller jets. The carrier also continued to spend about $1 billion a year on regional jets, after shelving most of its big-jet orders.
But Delta's current orders for the small jets wind down next year, and one of Delta Connection's partners has plans to launch its own discount carrier. Buttrell talks about those and other changes Delta Connection is facing.
Q: Especially since 9/11, you've got a whole lot more of these regional jets, more than people realize. It's the majority of Delta's flights now, right?
A: Delta Connection has 2,700 daily departures. Delta mainline has 2,000 daily departures.
Q: Why does Delta rely so heavily on regional jets?
A: Just like in the military, you don't use a C-5 [transport plane] for ground attacks. The [regional jet] has specific missions that it's well suited for.
The first mission is what I call hub feed. ... About 80 percent of the missions we fly represent feeding Delta's hubs and connecting itineraries. Thirteen percent of all the seats in Atlanta on a large-body aircraft are filled by connecting traffic. .. We're able to also garner a revenue premium for that connecting traffic.
The second [mission] is to preserve market presence. ... We can still keep scheduled service into a community when demand has really dropped with a regional jet vs. a mainline aircraft.
New-market development in another key mission that the [regional jet] is well suited for. You put numerous [RJ flights] into a new market, develop that market, and then you can can upgauge [with bigger jets]. We've done that in Fort Walton Beach [Fla.]. We've done that in Grand Rapids [Mich.] to Cincinnati. We've done it between Atlanta and Manchester [N.H.].
It's a great competitive tool. Delta Connection plays a critical role in our competitive battles with AirTran [Airways] and ... all of the other hub-and-spoke carriers.
Q: Lately, ASA has ranked at or near the bottom of the Department of Transportation's airline rankings for late arrivals and baggage complaints. How come?
A: Seventy percent of their departures are in the Atlanta hub, and the Atlanta hub ranks second-to-last in on-time performance in the system. That's still no excuse as it applies to the customer not ultimately getting to their destination on time, but we've had tremendous improvement over the last two years. We're going to have more improvement next year.
Q: Bad weather often has also been blamed for ASA's problems. How do you fix that?
A: That's a part of it. ... Most of their departures out of Atlanta are, like, from Atlanta to Fort Walton Beach, Atlanta to Greensboro. ... Anytime there's lots of traffic ... they all get ground holds.
Still, no excuses. We still want to achieve mainline service levels, but, structurally, we're going to have to overcome the [ground hold problem].
Q: You're running an operation that consists of two wholly owned airlines plus three independent carriers. Between all these units, it seems from the outside like there's a whole lot of overlap of routes, redundant management layers, etc. Is there? What are the advantages of having all these units?
A: Each of these carriers have the operational staff to operate on their own [commercial carrier] certificate. But in terms of network planning, revenue, inventory allocation --- basically everything that you see on the marketing side to distribute and sell tickets --- all of that is done at the Delta level. These carriers don't have any [corporate] staff.
We have done the analysis [and determined] it would be more cost-inefficient to merge and try to integrate [union employees'] seniority lists and all the disruption that could potentially create. ...
... In terms of the [route] overlap, absolutely. We're integrating schedules so that we can take advantage of as much [aircraft] utilization as we possibly can.
Q: What kind of financial shape would Delta be in right now if it didn't have the regional carriers?
A: If you look at the other two major network carriers, actually all three of them --- US Airways, United and American --- that were very restricted in their use of regional jets, they've all gone into bankruptcy or restructured outside of bankruptcy.
Q: Comair recently asked pilots and flight attendants for cost concessions and offered more aircraft for future growth, but the unions effectively rejected that. What's the fallout?
A: I don't think there's really any fallout. We've had a tremendous amount of growth at both ASA and Comair over the last two years.
Q: Meanwhile, Mesa is trying to buy Atlantic Coast Airlines, which flies for Delta Connection, and ACA is also trying to launch its own discount carrier that could become a competitor. If either of those things happens, how does that affect Delta?
A: If ACA continues to pursue its low-cost strategy or low-cost carrier objective vs. a regional feed provider, then our business models are diverging. ... We have contingency plans to make sure that we can still secure lift ... without any sort of financial impairment to Delta.
Q: So what does the future hold for Delta's recipe of regional and mainline jets?
A: Well, I think the recipe going forward is still going to have the ingredients of regional jets but in smaller sprinkles.
INSIDE METRO BUSINESS: UP CLOSE: FRED BUTTRELL: Airline exec in charge of 'regional' missions
Russell Grantham - Staff
Sunday, December 7, 2003
Fred Buttrell is the kind of guy who will hike with his wife across the Grand Canyon, twice in two days --- and run most of the way back.
He's also the kind who, when his military career flying F-15 fighters was cut short by the onset of diabetes, was soon climbing the career ladder again at American Airlines --- this time on the ground.
Therefore, it shouldn't be surprising that, after switching to Delta Air Lines in 1996, the 41-year-old executive is sitting at the controls of one of the carrier's strategic plans: using small regional jets to cut costs and hang onto markets.
As president and chief executive of Delta Connection, Buttrell oversees two Delta subsidiaries, Atlantic Southeast Airlines and Comair, plus three contract carriers and a few odds and ends like a flight school and an executive jet service. Delta Connection's units fly about as many aircraft and more flights than Delta's mainline operations.
That fleet --- the largest among the big mainline carriers --- allowed Delta to downshift capacity after the Sept. 11 terrorist attacks while maintaining a presence in shrinking markets.
Since 9/11, Delta has continued to expand on that strategy by shifting much of its capacity at the Dallas and Salt Lake City hubs to smaller jets. The carrier also continued to spend about $1 billion a year on regional jets, after shelving most of its big-jet orders.
But Delta's current orders for the small jets wind down next year, and one of Delta Connection's partners has plans to launch its own discount carrier. Buttrell talks about those and other changes Delta Connection is facing.
Q: Especially since 9/11, you've got a whole lot more of these regional jets, more than people realize. It's the majority of Delta's flights now, right?
A: Delta Connection has 2,700 daily departures. Delta mainline has 2,000 daily departures.
Q: Why does Delta rely so heavily on regional jets?
A: Just like in the military, you don't use a C-5 [transport plane] for ground attacks. The [regional jet] has specific missions that it's well suited for.
The first mission is what I call hub feed. ... About 80 percent of the missions we fly represent feeding Delta's hubs and connecting itineraries. Thirteen percent of all the seats in Atlanta on a large-body aircraft are filled by connecting traffic. .. We're able to also garner a revenue premium for that connecting traffic.
The second [mission] is to preserve market presence. ... We can still keep scheduled service into a community when demand has really dropped with a regional jet vs. a mainline aircraft.
New-market development in another key mission that the [regional jet] is well suited for. You put numerous [RJ flights] into a new market, develop that market, and then you can can upgauge [with bigger jets]. We've done that in Fort Walton Beach [Fla.]. We've done that in Grand Rapids [Mich.] to Cincinnati. We've done it between Atlanta and Manchester [N.H.].
It's a great competitive tool. Delta Connection plays a critical role in our competitive battles with AirTran [Airways] and ... all of the other hub-and-spoke carriers.
Q: Lately, ASA has ranked at or near the bottom of the Department of Transportation's airline rankings for late arrivals and baggage complaints. How come?
A: Seventy percent of their departures are in the Atlanta hub, and the Atlanta hub ranks second-to-last in on-time performance in the system. That's still no excuse as it applies to the customer not ultimately getting to their destination on time, but we've had tremendous improvement over the last two years. We're going to have more improvement next year.
Q: Bad weather often has also been blamed for ASA's problems. How do you fix that?
A: That's a part of it. ... Most of their departures out of Atlanta are, like, from Atlanta to Fort Walton Beach, Atlanta to Greensboro. ... Anytime there's lots of traffic ... they all get ground holds.
Still, no excuses. We still want to achieve mainline service levels, but, structurally, we're going to have to overcome the [ground hold problem].
Q: You're running an operation that consists of two wholly owned airlines plus three independent carriers. Between all these units, it seems from the outside like there's a whole lot of overlap of routes, redundant management layers, etc. Is there? What are the advantages of having all these units?
A: Each of these carriers have the operational staff to operate on their own [commercial carrier] certificate. But in terms of network planning, revenue, inventory allocation --- basically everything that you see on the marketing side to distribute and sell tickets --- all of that is done at the Delta level. These carriers don't have any [corporate] staff.
We have done the analysis [and determined] it would be more cost-inefficient to merge and try to integrate [union employees'] seniority lists and all the disruption that could potentially create. ...
... In terms of the [route] overlap, absolutely. We're integrating schedules so that we can take advantage of as much [aircraft] utilization as we possibly can.
Q: What kind of financial shape would Delta be in right now if it didn't have the regional carriers?
A: If you look at the other two major network carriers, actually all three of them --- US Airways, United and American --- that were very restricted in their use of regional jets, they've all gone into bankruptcy or restructured outside of bankruptcy.
Q: Comair recently asked pilots and flight attendants for cost concessions and offered more aircraft for future growth, but the unions effectively rejected that. What's the fallout?
A: I don't think there's really any fallout. We've had a tremendous amount of growth at both ASA and Comair over the last two years.
Q: Meanwhile, Mesa is trying to buy Atlantic Coast Airlines, which flies for Delta Connection, and ACA is also trying to launch its own discount carrier that could become a competitor. If either of those things happens, how does that affect Delta?
A: If ACA continues to pursue its low-cost strategy or low-cost carrier objective vs. a regional feed provider, then our business models are diverging. ... We have contingency plans to make sure that we can still secure lift ... without any sort of financial impairment to Delta.
Q: So what does the future hold for Delta's recipe of regional and mainline jets?
A: Well, I think the recipe going forward is still going to have the ingredients of regional jets but in smaller sprinkles.
