Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Tongue In Cheek: DL In Bankruptcy Court  
User currently offlineDB777 From United States of America, joined Apr 2001, 886 posts, RR: 39
Posted (11 years 9 months 1 week 4 days 7 hours ago) and read 2800 times:
Support Airliners.net - become a First Class Member!

Disclaimer: this is not real - it's a joke someone dreamed up. Original source unknown but supposedly a DFW pilot wrote about a fictional trip to the bankruptcy court.

Delta Goes to BK Court

Judge: Ok, let's get these proceedings started. I understand you are the
attorney representing Delta Air Lines, and that Delta Air Lines is seeking
protection under the chapter 11 of the federal bankruptcy code. Is this
correct sir?

Delta's attorney: Yes your honor. Here are the required documents and

JUDGE: I must now review actions by Delta Air Lines leading up to
this situation. Please state your case.

DL: Your honor, for the past three years, Delta has suffered major financial
losses and a dramatic increase in debt. We are now in a position whereby we
cannot pay the debt service given our current revenue and costs. We feel,
the primary culprit of our financial situation is pilot salary costs and we
seek relief from the pilot contract.

JUDGE: That's it? Just the pilots?

DL: Uh, yes your honor.

JUDGE: Well looking at your quarterly financial reports for the past 7
years, it appears you have let your debt level to swell up to around 20
billion dollars, which causes roughly an annual debt service of a billion
dollars per year. So I'd like to see where all this debt came from. First, I
see that your company engaged in a 2.5 billion dollar stock buyback program.
How much is this worth now?

DL: Um, virtually nothing.

JUDGE: You also spent over 2.5 billion dollars purchasing Comair and ASA?

DL: Yes. Both these companies were subcontractors of ours previously. In the
case of ASA, there was quality control issues we felt could be better
managed if we owned them. As for Comair, by outsourcing to them so much
work, we allowed to become a monopoly in our Cincinnati hub. We were afraid
they could become a competitor, or be purchased by one of our competitors.

JUDGE: OK, I also see that your management then went on an aircraft spending
spree, buying hundreds of regional jets for your Comair and ASA Delta
Connection division at a cost of an additional few billion dollars. I hope
these planes are a wise investment. Are they are cheaper to operate?

DL: Well not exactly. These regional jets have a seat cost of around 16 to19
cents per seat mile whereas our existing mainline jets cost about 9.5cents.

JUDGE: So then I hope they attract more passengers. They are more
comfortable, right?

DL: No, they are smaller, offer no first class, no overhead storage, and you
have to be a contortionist to use the lavatory. But they sure beat flying a
turboprop. We believe we can we create greater demand due to higher
frequency when we replace mainline flying with these jets.

JUDGE: So you offer more of a product your customer doesn't truly prefer?

DL: Yes, but they are profitable.

JUDGE: Well how can that be when they cost almost twice as much to operate?

DL: Oh that's easy. Delta mainline subsidizes them by purchasing their
airplanes, paying for their facilities, providing marketing, as well as
reservations, distribution, etc. etc. Basically, we pay all their fixed

JUDGE: Well how would Delta mainline be doing if Delta Connection was
actually paying their own expenses?

DL: Well it doesn't matter, we are all one big company and all the money
goes into one big pot, so to speak.

JUDGE: Then how do you know if the regional jets are truly profitable?

DL: Um, I'll have to get back to you in about four to six weeks on that one.

JUDGE: And if all your money goes into one big pot, how is it you figure
that your mainline pilot costs are your problem?

DL: Look, we need to get our costs down and this is the easiest expense to
go after, OK?

JUDGE: That is your plan? I did mention you have to have a viable business
plan, right? How is your Song operation doing?

DL: Great! It is profitable, customers love it, and it has received great
reviews from the press.

JUDGE: Because you have gotten lower cost pilots at Song?

DL: Well your honor, that is not exactly correct. Song uses the same
mainline pilots at the same pay rates.

JUDGE: Bailiff, can you get me some aspirin? I am getting a headache.

Bailiff: Here you go your honor.

JUDGE: All right, what about these charges of over a billion dollars for
terminal improvements in Boston and New York?

DL: Well, our old terminals looked "yucky."

JUDGE: "Yucky?" How about the 600 million you lost due to the Comair strike?
I hope it was worth it.

DL: Well, we settled at our last offer, so we didn't really save anything.
We figure the difference between what the Comair pilots wanted and what we
gave them will have been worth it in about 20 years.

JUDGE: And I see a few hundred million dollars spend for stock equity in a
South American airline?

DL: That airline unfortunately went out of business, your honor.

JUDGE: I see. I mentioned that Delta needed a viable business plan. You do
understand this would presume a management team capable of competent
execution and decision making. It appears as though your management has
exercised all the financial restraint, responsibility and competence of a
spoiled sorority girl with her father's Neiman Marcus charge card. Were they

DL: Um no. Actually we gave them bonuses. And a separate "bankruptcy proof"
retirement trust fund. You have to pay top dollar to keep top talent!

JUDGE: And have been able to keep top talent?

DL: Well, the funny thing is.............um.......they kind of...........left.

JUDGE: All of them?

DL: Just about.

JUDGE: Shouldn't you raise ticket prices?

DL: I'll have to get back to you on that one as well, your honor. You see, a
funny thing happened. We tried to save money by cutting out travel agent
middle men by forcing our customers to the internet. And we kind of lost
control of our product distribution. (Heh, heh!) We believe the customer
always goes with the lowest price.

Photographing aircraft since the Earth was flat and on Airliners.net since #338
2 replies: All unread, jump to last
User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 9 months 1 week 4 days 6 hours ago) and read 2715 times:

LOL!  Laugh out loud

Ok...now...do the same thing, but change the names, routes, and a few tweaks here and there, and you have:

drum roll, please....

US Airways
UAL Corp.
AA (while not in Ch. 11, the same basic storyline applies here, too)

Others? Give it an international flavor, and perhaps Alitalia maybe?

User currently offlineLuv2fly From United States of America, joined May 2003, 12341 posts, RR: 45
Reply 2, posted (11 years 9 months 1 week 4 days 6 hours ago) and read 2711 times:
Support Airliners.net - become a First Class Member!


Good read, now add the part about to better offer customer service DL introduced DL direct, replacing all the customer service people with a telephone that is answered in India. Also the famous fast break service.

You can cut the irony with a knife
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Tongue-In-Cheek, Aeroflot Style posted Thu Jul 21 2005 06:36:01 by VANGUARD737
ATA In Chapter 7 Bankruptcy? posted Wed Jan 16 2002 04:38:02 by Jmc1975
SilkAir Lawsuit In Singapore High Court Begins posted Wed Jul 4 2001 04:50:54 by Airbus A380
Is Pan Am 3 Next In The Bankruptcy Line posted Thu Jun 21 2001 07:02:29 by Defunctairline
Larger Cups In Y On DL? posted Sun Nov 26 2006 21:47:53 by Zone1
Why Is Altitude In Metres In China? posted Fri Nov 24 2006 22:19:14 by JezUK77
US Bankcorp Will Be Decider In US/DL Merger posted Thu Nov 16 2006 16:17:42 by DLPMMM
DC-10 Water Bomber In Use In CA Fires posted Sat Oct 28 2006 01:42:00 by Nbgskygod
EADS: No A380 Deliveries In '06, 1 In '07 posted Tue Oct 3 2006 19:17:12 by NYC777
Airports In Tunis In 1959? posted Wed Aug 23 2006 05:16:59 by Siren