Thanks DAL

[Dave Benjamin]

"Business fares stay low three weeks after Delta restructuring
[font=Verdana, Arial, Helvetica, sans-serif]Business fares on the most popular 40 routes have tumbled by 33% since Delta Air Lines restructured its prices three weeks ago, the Wall Street Journal reports. Most airlines matched Delta's fares on competing routes. " - WSJ[/font]

Just the shot in the arm the industry needed. With load factors already very high I'm sure decreasing yields makes good financial sense. If I got a frontal labotomy maybe I could get a management job in ATL.

 

[Spooky 1]

Dave, you have not figured it out yet. The airlines are not run for the benefit of the employees. It's the passengers that count. If Delta goes out of business, so be it. If all the current crop of airlines go out of business, to bad. Some one else will pick up and start over. That's the way it is, and it's not likely to change anytime soon. If on the other hand Delta drives USAir out of business with this plan, maybe, just maybe they (Delta) will pull through. If a few LCC take it on the chin at the same time thats just the way it is in the new world order. BTW? Do you have a degree in airline management? Inspite of numerous posts on this board not everyone in airline managment is stupid. Sometimes busines plans that would be considered foolish or inapropriate are in fact just the right plan for that moment. I am not smart enough to tell which is right but unless you work for Delta, USAir one of the LCC's you needn't worry about the Delta business plan.

 

[Ty Webb]

Simma down, Spooky.

Airline management's bufoonery is certainly fair game on this board, and you don;t have to have an ID from the airline in question to have an opinion.

After watching Mullin p!ss away almost $6 Bil in cash in an attempt to "maintain marketshare" believe me, there is no end to some of the stupidity going around these days.

If you can't serve that market at that price, then it ain't your market, and all the seat-dumping and fare-slashing in the world isn;t going to change that.

 

[TonyC]

The airlines are not run for the benefit of the employees. It's the passengers that count.

Funny... I thought it was the shareholders that count. Isn't the company in business to turn a profit, to make money? Ultimately, the Company must make money or fold, right? I don't think it's fiscally responsible to plan on losing money in the long run. (I'm not saying that's what this is, just making a general comment.)

If the Company was only run to serve the passengers, it should offer free tickets to all city pairs at unlimited frequencies, and replace all the coach seats with leather recliners and free pay-per-view TV.

No, a successful business will consider the employees and the customers, but the bottom line is always going to be profit.

... unless you work for Delta, USAir one of the LCC's you needn't worry about the Delta business plan.

If you think Delta operates in a vacuum, you're quite naive. Each entity's actions has a ripple effect on all others. There's no place for a "mind your own business" attitude around here, right?

 

[Noserider76]

DL has come up with this fare structure because they think it will ultimately increase their profits. I would be surprised if they are anxious to see US Airways gone just to see some new airline with food stamp wages and dog food retirement programs pop up to replace them.

 

[Dave Benjamin]

It will cost them over half a billion in revenue to find out.

 

[FDJ2]

It will cost them over half a billion in revenue to find out.

They've just pulled $2.3B in savings from their employees.

 

[Dave Benjamin]

They've just pulled $2.3B in savings from their employees.

And they're still losing money. So after cutting prices on flights that are mostly full already I wonder what's next? Another round of paycuts? A visit to the courthouse? DAL pilots working for commuter wages, 95 hours/month, with 11 days off?

 

[FDJ2]

And they're still losing money. So after cutting prices on flights that are mostly full already I wonder what's next? Another round of paycuts? A visit to the courthouse? DAL pilots working for commuter wages, 95 hours/month, with 11 days off?

Dave, you might just be ignorant of the fact that the $2.3B in savings from employees I was referring to didn't start for the pilots until December 1st '04, and for everyone else starting January 1st '05. Don't you think it's a little early to categorically state "they are "still losing money" when it comes to the nexus between savings, that in the most part are not reflected in the 4Q statement, and for revenue from a fare structure which was successfully proven in CVG, but was also not reflected in the 4Q SEC statement?

Here's some real simple cash flow math for you as it relates to a hypothetical loss of $.5B from simplifares and employee cost cuts. $2.3B in cuts - $.5M in simplifares still = + $1.8B for DAL.

Will it all work? Only time will tell, but the final result most certainly won't be determined by anything any one on this forum thinks.

 

[habubuaza]

They're trying to put AIRTRAN OUT OF BUSINESS. I tells ya!! OK fine don't believe me then. I do have some airline management experience and had an opportunity to deal with some legacy carrier management personnel. Believe me when I say that they have their share of retards in the ranks. I shouldn't have to tell you guys that, there is plenty of history to show idiotic management decisions being made.
Ciao

 

[GVFlyer]

The sad thruth is that all the Legacy Carriers will have to go through bankruptcy to restructure costs in order to survive.

GV

 

[doh]

I am not convinced that Delta will have to go through BK. I think they have a better than even chance of avoiding it. Here's to recalls!

 

[jobear]

I am not convinced that Delta will have to go through BK. I think they have a better than even chance of avoiding it. Here's to recalls!

Have any of the early retirees accepted positions? Does this affect the bottom line? or recalls?

Just wondering

 

[Dave Siegel]

DL has come up with this fare structure because they think it will ultimately increase their profits. I would be surprised if they are anxious to see US Airways gone just to see some new airline with food stamp wages and dog food retirement programs pop up to replace them.

Delta is trying to hurt the competition. I think AirTran has terrible customer service, but at least they're charging fares that enable them to attract customers while still making money. Southwest is the ONLY airline that has good prices, great customer service, and ability to operate in the black while offering both. Delta used to have great customer service, but now they're Atlanta's other crappy airline.


Hey Nosepicker, tell your Daddy to log off next time. If he sees what you wrote, he'll be very disappointed. Disappointed that his son is a complete idiot.

 

[Tim47SIP]

At it again!

Just the shot in the arm the industry needed. With load factors already very high I'm sure decreasing yields makes good financial sense. If I got a frontal labotomy maybe I could get a management job in ATL.


Dave, based on the several posts on this board in that past few weeks, I'd say your all ready qualified. No need for a second operation.

 

[MedFlyer]

For comparison, let's look at Alaska. Last February, Alaska announced a restructuring of their fares (similar to Delta). They reduced walk-up fares and removed restrictions. Let's look at what impact that had on unit revenues.

4th Quarter 2003 (before the fare restructure): 9.71 RASM
4th Quarter 2004 (after the fare restructure): 9.75 RASM

Alaska's unit revenue actually INCREASED about half a percent. Alaska still lost money in the 4th quarter, but that was more related to costs (fuel) not revenue.

Now, let's look at Delta during the same period, but of course no fare restructuring (except for CVG):

4th Quarter 2003: 10.01 RASM
4th Quarter 2004: 9.55 RASM

So by holding on to the old fare model, DL's unit revenues declined by 4.6%.

Which would you prefer?

 

[737 Pylt]

Maybe they're just pissed at NWA for not following all the attempts over the past several years at raising fares!
737

 

[thesource]

Ok, here's a little story about the state of airline mgmt.

A recent graduate of an esteemed business school, some hot shot MBA, is talking to an older business man. He mentions that he has been wanting to run his own business for some time and that he just knows he can do better than all those old guys who have no idea what they are doing.

The older business man asks what business he plans to operate.
The MBA says he is going to open a hotdog stand and he has the inside line on a great new supplier from (well let's say China); where he can undercut the local market.
The business man asks, how much are they going to charge you for the hotdogs?
MBA says, ten cents.
Business man: wow everyone else is paying thirty cents apiece, you should do very well in the business. How much do you plan to charge for your hotdogs?
MBA says, ten cents.
The supprised business man asks in a puzzled tone; How could you possibly think that you could turn a profit by selling your hotdogs for ten cents when they are costing you ten cents?

The MBA looks at the old fool and with a cocky smile (picture Joey from friends saying this) he says...
VOLUME my friend, VOLUME.

 

[Dave Siegel]

Maybe they're just pissed at NWA for not following all the attempts over the past several years at raising fares!
737

Pot calling the kettle black.