Song

[Flying Freddie]

Anyone hear how Song is doing?

 

[Cardinal]

They intend to embark on a minor rebranding. "Psalm" has been focus-grouped and was more readily accepted by those passengers of Hebrew extraction.

 

[FlyingSig]

Haven't heard much but I just checked the loads.... pretty weak this week, but oversold next week....

 

[General Lee]

I think it has gone pretty well so far, and I believe that Fred Reid will evenutally want a larger percentage of our flying to be Song. That's fine with me, as long as he doesn't want to separate the pilot groups and sell off the company etc. I don't ever see our Union accepting that. I think Song will do great, and eventually it will be a major success for us, and probably stunt Jetblue's growth a little. Hey, we will fly out of all three major NYC airports to all of the same cities, with Direct TV and a better frequent flyer program---it will do well I think.

Bye Bye--General Lee

 

[Blue Dude]

probably stunt Jetblue's growth a little.

You might be right, but not in a way you want. It may very well slow JetBlue's growth in the NY-Fla corridor, but I suspect the airline's growth won't be slowed at all, merely redirected to areas you wouldn't like. Like ATL-OAK, ATL-SEA, ATL-LAS, CVG-JFK, CVG-FLL, CVG-OAK, etc. At that point you'd be forced to either share those markets and wreck any hope of profitability (for you, not JetBlue) in those markets, or else roll out Song in your hubs and thus compete with your own mainline. Be careful what you wish for.

 

[Heavy Set]

Blue Dude,

That eye! It's looking at me!!!!!! Ahhhhhhhhhh!!!!

Well, you also need to consider one major constraint in Atlanta - gate space.... I know Jet Blue is efficient, but you can only do so much with a limited number of gates - Airtran has unfortunately learned that in ATL....


Cheers

 

[General Lee]

Blue Dude,

Yikes, we better back off from those threats, not. You guys talk big for an airline with 50 or so planes, right? Your largest market is out of JFK to Florida, and we will start service out of all three NYC airports to Florida. We will eventually fly from JFK to the West Coast, and will eventually have the same number of planes at Song--36-50 757's. This is not good news for you. Yes, you just started ATL--LGB and FLL. We fill our 767-400's on those routes (actually to LAX, SNA, and ONT) because most of our passengers come in on RJ's from Ashville, NC and Wilmington, NC etc.---and connect. We have a very large feed system, which you do not. If you want to compete on the CVG---JFK route, go right ahead. Heavy Set is right, good luck on getting the required gate space etc. at some of our large airports to compete---it won't happen. The stunting of your growth will happen, no doubt.

Bye Bye---General Lee

 

[Eagleflip]

Don't interperet BlueDude's post too literally. Not too many JetBlue pilots wish for Delta/Song to fail. It represents a shift in operations that must occur in today's environment. I for one simply hope that we (B6) continue to thrive in the midst of a major change in the way the industry is organized and operated.

I strongly believe that once the economy turns around (and there are hints that it may happen soon) there will be sufficient market for most--but frankly, probably not all--of today's carriers to succeed.

For the sake of my friends out there flying for Delta, United, etc., I hope we all survive. Competition is a great thing--it makes us all stronger and viable in the long run.

I simply hope we all stay employed for the duration.

Interestingly, I was scared to death the other day during a JFK-PBI run. Song was taxiing out three jets behind us for departure from NY. Once we arrived at PBI, lo and behold....

Song was already there at the gate!

Hey...wait a daggone minute! They couldn't have flown that much faster than we did. Could they? Come on. It was only a two and a half hour flight, for cripes sake...The bags were already off the jet to boot!

Then I saw it pushing...not more than 10 minutes after we blocked in....oh. Nevermind. Nobody makes a turn that fast.

Guess they have more than one jet in the fleet now...doh!

 

[Blue Dude]

Hey, General, don't get me wrong. I'm not hoping for Song to fail, nor am I threatening anyone. But Delta has been a little too obviously bloodthirsty in wanting to harm JetBlue. Not so much to take back some market share, but to inflict pain for its own sake and going after JetBlue specifically. I'm just saying that if that's the attitude you take, don't be surprised by a response in kind. JetBlue is obviously not nearly large enough to threaten Delta seriously, but it's small and agile enough to nip at your heels and wreck a lot of your best markets. It also has a large enough cost advantage to inflict financial pain on Delta without ever feeling it on its own bottom line.

Nobody wants the industry to get uglier than it is already. Just look to your own corporate motivations. Are you trying to make a profit or trying to put JetBlue out of business? Can't do both. JetBlue is small but hardly defenseless. I think there's more than enough room for both airlines, unless certain egos at Delta decide otherwise. But the ball is in your court. We don't want to deliberately harm anyone, but might if pressed too hard.

 

[Ty Webb]

Yeah, but JB is actually making money flying passengers. That's the difference. DAL is still living in the past . . . . you guys are going to have to decide between marketshare and profitablility.

How many more quarters before the shareholders start calling for Leo's head? How many more quarters before Chapter 11? You can;t go on losing a billion dollars a year before something gives.

Delta can't be all things to all markets . . . not and make money.

The stunting of your growth will happen, no doubt.


Yup . . . . like Airtran!


Bye Bye---General Lee [/B]

 

[FlyDeltasJets]

Ty,

Out of curiosity, what would you suggest?

 

[General Lee]

Blue dude,

I was not threatening anyone, I said we were going to possibly stunt your growth, and there will be some truth to that. Our management wants to stop your unbelievable growth, and with some good competition it will happen, I didn't say you were going to go Chap 11 etc. There will be a flood of seats on the North --South routes along the East Coast, and the passengers will have to decide what they want. I think you guys have a great and spirited work force, and that is good, but Delta has plans to try to stunt your growth and get back marketshare lost to you because of your superior product. That is why we are adding Direct TV etc onto our 757's and trying to make them more efficient etc... Along with the ability to fly out of all three NYC airports (which might be a big deal for some New Yorkers...) and a better frequent flyer porgram (hey, a free trip to Venice, Italy doesn't hurt after 4 or 5 trips down the coast, right?)--we think we will give you some good competition. I do not underestimate our management team here at Delta or Song, and I think they want to be the leader. Time will tell, but I never said I wanted you guys to go under etc. We should all be able to do well--but there will be competition.

Ty Webb,

Your post really had a little bit of "attitude." If you really think that Delta will go Chap 11 or that we are still living in "the past" then I think you are mistaken. Yes, we have had some major problems lately, but everyone in the Wall Street community thinks there will be a major turnaround. We still have over $2 billion in cash, and our stock price has doubled in the last 2 weeks. We have scaled back our workforce (through some furloughs unfortunately) and now have many more Kiosks for checkin--replacing a lot of ticket counter people. Fuel prices have come way down and our European flights are going to be at near 100% starting June 1st. (The European flights were very light during the War which hurt us, but now they are coming back) We had no effects from that SARS disease like the other majors. We have more RJ's than anyone else, giving us flexibility on many routes. We just got over $400 million from the Gov't for the security issues (watch our quarterly loss shrink for June), and fares just increased. The economy is getting better and more people will travel over the Summer. Do you need some more reasons Ty? We (the pilots) will probably give some pay back soon to the company, but will still be paid higher than anyone else. Our other employee groups will probably be GIVEN pay cuts since they have no unions, and that gives our company a lot of flexibilty compared to the other heavily unionized companies. Do you need anymore reasons TY? Are we still living in the past TY? We are the only major to go after the LCC's with our own version--Song. We have prepared long before any other Major. We have a great idea (with an interesting name...?) and we have a plan that will work. We are actually proactive. We have some executives that are maybe questionable when it comes to their pension plans, but they still are great leaders compared to others. Leo Mullin is a genius, and Fred Reid is a proven leader (ex Lufthansa chief). Even the Song president has good experience. If you think we are set up to fail Ty, you are wrong.
Delta Express was NOT a failure, it just had the wrong airplane (737-200) and junior pilots (the first 400 furloughs were largely made up of Delta Express 737 Fo's). Song will do well and there probably will be more planes given to that operation. Don't count us out as "old school." And Airtran's growth at ATL has been stunted because you can't find anymore gate space-----so you needed to find other mini-hubs like BWI and MKE. Keep trying to get more gates in ATL, the new terminal should be built in a couple or three years. Living in the past, huh? Right.

Bye Bye--General Lee

 

[Ty Webb]

Losing money with no end in sight, in an attempt to regain marketshare is a dinosaur tactic . . . a holdover from the early days of deregulation. It doesn;t work against LCC's that are making money.

Yes, we have had some major problems lately, but everyone in the Wall Street community thinks there will be a major turnaround.

I don;t listen to "Wall Street" brokerage firms . . . . surprised that you still do. You can pretty much find an analyst to agree with whatever you are paying for.

We still have over $2 billion in cash, and our stock price has doubled in the last 2 weeks.

How much is restricted? And how many more quarterly losses of your present magnitude will it take to exhaust your unrestricted cabbage? About 3-4.

We have scaled back our workforce (through some furloughs unfortunately) and now have many more Kiosks for checkin--replacing a lot of ticket counter people. Fuel prices have come way down and our European flights are going to be at near 100% starting June 1st. (The European flights were very light during the War which hurt us, but now they are coming back) We had no effects from that SARS disease like the other majors. We have more RJ's than anyone else, giving us flexibility on many routes. . . . . . .
Do you need some more reasons Ty?

Yup. Because as long as you guys keep trying to undercut the LCC's, you will continue to lose money. Sure, you might save a few bucks here and there, but you can;t have the network you want and still compete on price. You guys could be making money right now, but Leo (who is hardly an innovator) still thinks that somehow he will "beat" the LCC;s. It ain't gonna happen.

We are the only major to go after the LCC's with our own version--Song.

CAL-Lite, Metrojet, Shuttle, Express- come on, you don;t really believe that, do you?

We have prepared long before any other Major. We have a great idea (with an interesting name...?) and we have a plan that will work. We are actually proactive. We have some executives that are maybe questionable when it comes to their pension plans, but they still are great leaders compared to others.

OK, we'll see, but if you guys don't start making money in the next couple of quarters, the shareholders will be calling for Leo's head, and you're not going to make money trying to compete against JB and FL on price.

Leo Mullin is a genius, and Fred Reid is a proven leader (ex Lufthansa chief).

Uh, that's not what the folks at Com-Ed said when Leo was VP there. the guy is not an innovator. His background is in highly regulated, non-competitive industries (Utilities and Banking) and I don;t see him pulling this off.

Delta Express was NOT a failure, it just had the wrong airplane (737-200) and junior pilots (the first 400 furloughs were largely made up of Delta Express 737 Fo's).

A LCC would have realized that in foresight, not in hindsight, and would have made the adjustments necessary to make it work. Of course it was a failure- it didn't make money.

And Airtran's growth at ATL has been stunted because you can't find anymore gate space-----so you needed to find other mini-hubs like BWI and MKE.

Not necessarily. We got 4 more gates in D, but we're only using 2 . . .we had said last year that bypassing ATL was where the future growth was going to be- it makes us more attractive to higher-end consumers . . . . it prevents WX delays in ATL from screwing up our whole system, and has other advantages.

I don;t know if I would call MKE a "mini hub", but MCO and TPA and FLL are . . . . and those were all cities that competed against your other LCC attempt.

Keep trying to get more gates in ATL, the new terminal should be built in a couple or three years. Living in the past, huh? Right.

Hey, that should work out just fine, when our bigger planes are really ramping up!

Delta will succeed by doing what Delta does best, not by hemmorhaging money trying to be something they are not. You guys could have been making money two quarters ago, if you weren;t trying to compete against the LCC's for the bottom customers, IMHO.

 

[FlyDeltasJets]

Ty,

What would you do if you were Leo?

 

[General Lee]

FlyDeltajets,

TY beleives he is an expert in the field, and he is the only one who is right.

Ty Webb,

What do you mean we are bleeding with no end in sight? How do you know this? Are you in there with our CFO Michele Burns? Have you ever heard of "One time charges?" Most of our losses lately have been one time charges. When things get better, and they will, there will be huge profits stated because all of the one time charges were already used. We lost a supposed $466 million last quarter, except we got $422 million from the government--which will be added on in the June quarter. The loss last quarter mainly came from the lack of travel on our European flights during the War---which is over. Also a lot of that loss was due to the high gas prices and the amount that wasn't covered by the fuel hedging. Guess what? Fuel prices are way down (near 60 cents a gallon now) and the war is OVER. Sounds like we will still bleed huge, huh? Wrong. Our loads are almost full and the Summer loads are filling up, and even with the discounted fares, we have made the whole airline more efficient in this whole process. We are Wall Street's "darling," everyone over there loves us because we are better managed than any other Major, and probably every LCC except Southwest. Do I listen to the Wall Streeters? A lot of stockholders do, but you are a genius pilot and don't have to, well good for you. You are the genius of the industry with all of the answers. Your HUGE hubs in TPA and MCO are kicking everyone's butt, right? Hmmm. Those flights to Flint and Dayton from MCO are killing everyone in the market. Oh yeah, I think I saw some of your NEW gates in the D concourse over there in ATL, the one with Air Tran RJ's. Impressive. We have 500 RJ's flights a day and you have 30. And those bigger planes you are getting some day (Not the ones operated by Ryan--taking YOUR routes)---they will fill the gates that your 717's are using. You just aren't getting anymore gates--face it, until another terminal is built. I guess you will have to move those 717's when and if your A320's or 737-800's come, and fly them to new city pairs--like Flint to San Juan. Go for it. You can try to get some gates in the E- concourse---oooops, I forgot---we have 777's flying to Europe from there---sorry. (making no money according to you) And your CEO Leneord is a genius compared to Leo, huh? Yeah, I guess that's why Leo was voted to lead the ATA, and not Leneord. He secured more money on 9-11 than anyone else could, and has helped keep our cash secured. Cash is King, and we have plenty to keep us afloat for years. And, our pension problem is a function of the stock market---so when the stock market raises only 10%, our $4billion shortfall will be erased. (It is almost there anyway) Those LCC's you were talking about---Metrojet etc, didn't work for a reason---we did well on Delta Express and are expanding the idea with more efficiency and better airplanes to maximize revenue----but you really aren't in there doing the planning, are you? Nope. But you know it will fail---like all of the others right? You really are a know it all. Admit it, we both don't really know what is going on in the inner circles, but you seem to know. I wouldn't count us out, we have the cash, and we have good leadership. We also have the ability to try new things, and we own ATL. The fares are going up and fuel prices are going down. The economy seems to be getting better, and that will help us. We got the codeshare with CAL and NW, so that will result in more feed. Our payscales are coming down, even alittle helps, and that really isn't "old school" now is it? A lot of people, like yourself, like to throw stones at people when they are down, and we are starting to rise again. Soon we will be able to thrive once again, and the LCC's will not be as much of a threat---because our LCC will combat the others. Not every town can have a LCC, and I bet your airline will have a corner on the Flint market for a long time. I just can't see a Song 757 in Flint, but I will bet an RJ will compete there against you, and stunt your Flint growth as well.(we have 1000 RJ's on order or optioned---and we're spending $1billion this year alone on RJ's---yeah, we are bleeding)

Bye Bye--General Lee

 

[Ty Webb]

Ty,

What would you do if you were Leo?

That's easy . . . . . new rug, cap those teeth, loose the bifocals, get a different trainer, and start hanging out at Malone's.

Heh-heh.

No, I would:

1. Focus on Delta's core competencies (to use a tired euphemism).

2) Hire people from successful LCC's, not stagnant VP's from Same Ol', Same Ol' Airways. I would involve the empoyees at all levels and get them invested in changing to a brighter, quicker, faster animal.

3) Develop a new focus. "Everything else is just a bus" with the play on words showing the difference in quality while exploiting support for American-made Boeings. I would emphasize, service, quality, efficiency and economy. I woud re-vamp the pricing ala AWA. I would have examined selling gourmet food (these are things that I was advocating long before any of them were adopted, if you care to do a search from last year!). I would continue to invest in technology, as they are doing.

4) I would cede some of the bottom-tier customers to AirTran, JB and SWA. It is not worth it to hemmorhage money to try to keep the bottom customers. Face it- leave the bottom tier to them, and focus on the other 2/3's. Give thm a superior product, treat them like customers, not patients. Earn their business.

There are some customers that will never ride on AirTran. There are some customers that will never ride on Delta, and it is not worth it to match LCC prices at huge losses, not when you don't have to.

5) Many other things, invented by other employees far more talented than myself. I would do my **CENSORED****CENSORED****CENSORED****CENSORED**dest to put forth an atmosphere that encourages people to think, to find better ways to do their jobs, and reward them for their successes.

 

[Ty Webb]

For the General:

I think you've lost it, Pal.

Your insults and taunts show that you aren;t approaching the situation with much logic or discipline/.

Trying to compare Delta in it's 70th year (or whatever) to AirTran in its fifth year (or tenth, however you want to look at it) is pretty ridiculous. That's like me saying, "Well, in our tenth year, we had 73 jet airplanes doing 500 flights a day, when you guys only had 12 Stearman cropdusters". I mean, give me a break. You used to have some logical, well-reasoned posts, but not today, my friend.

If you want to compare where we are right now, you could compare our growth with SWA. We are quite a bit larger at this point in our history than they were in theirs.

I think we're doing just fine. You keep on spending your money trying to hurt us, and we'll keep on making money and growing. Eventually, they'll get rid of Leo after the OSng boondoggle, and you guy's will get back on track. Then, we can both raise our prices and make so0me real money.



We'll see how you fare in the second quarter

 

[General Lee]

Ty,

Sounds good. We already know that we will be up $422 million due to the Gov't money, so I have a feeling we will show a better result. Then the next quarter will show the results of our Summertime flying. The better financial picture is on the way, and it can only get better from this last winter with the War looming etc.

I have not lost my logic or discipline, I have just lost my patience with some people who like to gloat and throw stones in a bad period in our mutual industry. Nobody could have predicted 9-11 and the aftermath. Then the tech bubble bursted. Then came Iraq and the high fuel prices. Hopefully we have overcome some of these problems. Now labor is being racked. We are coming to terms with that and taking necessary steps, but I am sure we will survive and eventually thrive as Leo states it. We have a good market share and a good product, and we are just tweeking it to make sure we thrive.

As far as comparing yourself to Southwest, I wouldn't go that far. In the beginning Southwest operated from Dallas Love Field and didn't have that much competition in the intra-Texas market. They were allowed to thrive and then expanded. They then started to operate out of Houston Hobby, another airport that wasn't utilized much by other airlines. From there they went on to Phoenix, and eventually Chicago Midway, yet another under utilized airport. Airtran has always had to deal with limited growth potential at ATL. Delta has 80% of the gates, and they aren't giving any up. Delta would love to have more, along with Airtran. Airtran has not made the big move yet to find another major hub. Yes, you have some mini-hubs, but nothing more than 20 or 30 flights total at those airports. If 20 or 30 flights make a mini-hub, then we have 30 or so mini-hubs. It will be interesting to watch Airtran try to expand elsewhere, since ATL is limited. Where will you guys try another hub? COS? Where? How long will it be when the next terminal is built and is ready in ATL? I know they are building another runway, but what about another terminal? I know Jetblue is starting to fly to ATL, and they probably want some gates too. I guess you can try to expand in MCO, but Southwest has expanded there recently, and Delta Express 737's are leaving for CVG and ATL, and Song 757's are moving in. I am not trying to put your airline down necessarily, I am just trying to show you the size of ours and our resolve to make sure we succeed.

Bye Bye--General Lee

 

[Palerider957]

General:

Not to quibble, but "one time charges," are often an accounting scheme to hide real losses. I really hope Momma D returns to profitiability in the near future, but who knows. There was a rumor that Delta was trying to get rid of the 777's...any inside info. on that?

 

[General Lee]

Palerider957,


I know they tried to get rid of them about 1 year ago, trying to sell them to South African, when--unfortunately during a test run in Johanassburg, we blew an engine on takeoff---and they then bought A340's. I don't think they are trying to sell them now, because they are trying to get a common type rating on the 777, 764, 757, 767, and 738. When times are good, which they are returning, the 777 does really well for us.

As far as the one time charges, an MBA friend of mine said it was a common practice to, in bad times, make sure everything looked really bad---that way in good times everything was good. We have 19 daily 767-300ER's to Europe each day from JFK alone, and during the War we had to cancel a lot of them. The gas prices were really high even though we hedged a lot, but not all. We have reinstated almost all of the Europe flights (except JFK--to Milan) on June 1st, and the loads seem great on the computer. SARS has not affected us at all---airlines like UA and NW are still hurting. Things are turning around, slowly. But, we will it turns out take some sort of pay cut--which will help them too.

Good luck with your contract negotiations at ASA---we will remember you when we start hiring again after the furloughs come back in 3-4 years. We appreciate your help.

Bye Bye--General Lee