More Delta Trouble

[MedFlyer]

Why would DL's management talk Chapter 7 (very extreme) when UAL and USAirways have been surviving (maybe even thriving with the ability to offer cheaper fares) in Chapter 11 for years? Give me a break.

Unlike UAL and US, DL has few assets left to leverage if DL were to file CH11. UAL had over 3 Billion in assets which is why they have been able to sit in CH11 for years. DL's management might not publicly state CH7, but they can certainly hint at it. In fact, they've already done so with their SEC filing early this month:

"A restructuring under Chapter 11 of the U.S. Bankruptcy Code may be particularly difficult because we pledged substantially all of our remaining unencumbered collateral in connection with transactions we completed in the December 2004 quarter as part of our out-of-court restructuring," Delta said in the filing.

Of course they don't come out and say CH7, but it's not hard to read between the lines. I'm not saying that CH7 is imminent because it's certainly not. But if DL gets desperate enough and wants more from the pilots, I expect they will play this card.

Clearly, if Chapter 11 were the best course of action at this point, Delta would have likely ALREADY taken that path.

You're assuming that DL's management knows what the best course of action is. If the past five years are any indication, the people running DL rarely ever know the best course of action. Racking up billions of debt and hoping other carriers will die first probably wasn't the best course of action, but DL's managment chose to do it anyway.

 

[On Your Six]

Great quote On Your Sex....


That makes a lot of sense..

UAL and USAirways are still bleeding like stuck pigs.....

They are THRIVING!!!


Must be those EMB190 rates...
Wow...

Just think when they actually start to fly!!

"Thriving" is a reference to increased cash flow - not profits. UAL has steadily built its cash flow over the last few years as a result of major cost-cutting and some market-share grabbing using aggressive pricing. Chapter 11 provided the avenue for these cash generators - that's the point.

 

[General Lee]

The Grand, All-knowing and Benevolent GL would not blink at:
1. Outsorcing all the mech's jobs to Canada (everyone's doing it)
2. Cutting the pay of all other employees by 15% (the dumb b*stards have no unions)
3. Furloughing every other mainline pilot with a seniority number higher than GL's (tough s**t, they're juniors)

Why not? He and all the other seniors on the list have just come off the best three years of their careers, all the while claiming that Delta was exagerating the financial warnings during that time. DALPA's delay in the negotiations and taking action led directly to the problems which have essentially shut down recalls.

GL is no different than Leo.

HAHAHHAHAHAH. What an idiot. Give me a break. Drastic times necessitate drastic measures. If you knew the facts, you wouldn't come up with your ridiculous arguments. AA and DL are the only two airlines left who do heavy maintenance themselves. So, according to you--everyone else is bad because they outsource. I was told by a CP that it costs 1/3 the price to outsource. But, you DAVE, would rather us bleed more money and keep those jobs going. I guess all the other airlines have "commies" because they outsource in El Salvador (Jetblue) and Canada (Southwest I believe) You MUST be an idiot.

Then comes the pay cuts. We pilots have been paying union dues to protect ourselves. We pay extra money for that. The others do not, and that can be good and bad for them. It can be bad when times are rough, and we are in THOSE times. They only were given a 10% pay cut before because the company didn't want more unions to come onto the property. And, in the case of the stews, they now can fly as many hours as they want, and many are flying over 120 hours a month, which means they fly more and take home more than before. Had they unionized, they could negotiate for their pay cuts. Not now.

Regarding the "new" furloughs-----ok, what? We are retiring a bunch more Captains in May due to the increasing GATT rate again, and that will bring back even more recalled pilots. That is the way it works. The senior guys leave to protect their lump sums, and the rest of us move up. Did you know DAVE that we are getting more recalls in May than initially advertised? You didn't? I figured that out. YOU HAVE NO CREDIBILITY BECAUSE YOU DO NOT BACK UP YOUR STATEMENTS WITH FACTS. YOU ARE AN IDIOT, TOO.


So Davie, go sulk in the corner again and think up some more lies.


Bye Bye--General Lee Mullin

 

[General Lee]

Gen. Lee says: "I don't know, do you?"

Since you do not know, his assesment is as valid as yours and I got to say, for someone who doesn't know much, you sure act like you know better than every one.

It will be interesting to see how much is offered, if DAL tries to spin off DCI or better yet Song, the breadwinner in the family. Maybe then we WILL know!

I know a lot more than you dude. I like your outlandish guesses.


Bye Bye--General Lee

 

[General Lee]

It seems clearly evident that Delta is going after two things. It needs relief from the pension fund which is huge, and additional employee cost cuts. Look for BK to do just that. Mainline guys will take it in the shorts again with the rest of us in the 10-15% area. Delta will make it, but it wont be Delta as we know it when it comes out the other end.

Pension reform is probably on the way, according to the ATL Dalpa rep I talked to today. He said they are lobbying hard in D.C. and they think it will happen soon, or otherwise the PBGC will be even more under water. As far as a bankruptcy scenario, that is just speculation on your part, and our management is working hard to try to avoid that. Gas prices are a major factor, but believing that the pilots will be asked before anyone else is your guess. Didn't we all think USAir would be gone by now? How about United? Airlines have ways of pulling stuff out from nowhere, and those management guys are paid well to become creative. We have some good people trying to do good things to help us survive without court intervention, and you and I have no idea what really is going on back there on the fourth floor.


Bye Bye--General Lee

 

[General Lee]

General, this post disappoints me greatly. You are one of the last people that I would expect to be calling for employee pay cuts. And the last highlighted quote about pensions going away, ARE YOU SERIOUS? .....................I must be misunderstanding your words.

Help me out, are you advocating that DAL needs to cut pay and benefits to survive?

enigma

I am not calling for any pay cuts. I guessed that if management were to call for pay cuts, they would go to the non-union people first since they originally had a smaller pay cut percentage wise, and they have no contracts which would make it easier, hence no negotiations. I think DL needs to work on the revenue side first, and they are addressing those issues, along with becoming more competitive with certain cost cuts that every other airline has---like outsourcing maintenance. We cannot compete with the likes of the LCCs and other Majors when they ALL outsource their heavy maintenance to Canada and Latin America. We are trying ot cut $5 billion a year out of our yearly budget. That is huge, and we are on our way. I don't want anyone to get more pay cuts or lose their jobs really, but what else can we do in regards to the maintenance issues? We have to compete.


Bye Bye--General Lee

 

[General Lee]

My crystal ball says in 15 years LCCs will dominate domestic travel. A few, or one, Legacy carrier will survive, but international travel will be largely done by foreign carriers. Isn't that a great possibility?

You forgot about what would happen when California falls into the sea in 10 years due to that earthquake in 2015. Then what would happen Nostradamas?


Bye Bye--General Lee

 

[General Lee]

DL doesn't need BK to get additional paycuts and pension relief. Both can be gotten outside of BK....even from the mainline pilots.

In DL's case, BK would primarily be used for debt reduction. DL's debt burden is so extreme that the company will struggle for many years in the future. Even if DL manages to return to profitability, DL will have a hard time competing with other airlines that aren't forking out hundreds of millions in interest payments alone.

However, it's quite possible that DL is beyond the point of using the bankruptcy system. The company is so leveraged that a CH11 filing would likely become a CH7 liquidation. DL's management may have put the company in a position where they either restructure outside of the courts or liquidate....no sitting in CH11 for years like UAL.

This is ridiculous. We still have furinture to burn (ASA/Comair, BOS terminal, JFK, etc..) and we are on the way to cutting $5 billion a year from our spending. With that type of savings all you need is current cash on had to pay the required payments for debt and keep a certain balance in the bank. Then, when good times do return (fares go up, gas goes down somewhat, another lagacy carrier finally goes away) then those costs savings come into play and we do make more money to pay off that debt. Even Grinstein said we must pay down the debt, and it will take a long time, but that is what we will have to do. You have no idea who would or would not invest in the largest airline hub in the world. The probable sale of YOUR airline will give us the time we need to have those cost savings initiatives into effect.


Bye Bye--General Lee

 

[Dizel8]

"I know a lot more than you dude."

Sure, you know it all!

 

[General Lee]

I don't think the pilots will be the first place DL looks for additional cuts. There are easier places to cut....as evidenced by yesterday's maintenance cuts. But if DL gets desperate, they will come knocking. Keep in mind, DL pilots are still some of the highest paid in the industry...despite the fact that DL has one of the lowest yielding networks.

If DL management starts talking CH7, I think a lot of pilots will all of the sudden become amenable to additional cuts. I know many on this board will thump their chests and say "No More", but when it comes down to a 10% paycut versus liquidation, many will change their tune. Remember, DL only needs 50%+1.

Hopefully, it won't come to this and DL won't need anymore labor cuts...pilot or otherwise. But with the chaos of this industry, it's hard to know where DL is headed.

All that has happened in the last few weeks was said in that infamous crew lounge meeting, including the heavy maintenance issue (I think I stated that a few days ago before my trip). Talk of your sale was also stated there, and this was all known---about 7 weeks ago. None of this was spur of the moment.


Bye Bye--General Lee