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Delta Shedding Domestic Waste?  
User currently offlineRIXrat From United States of America, joined Nov 2005, 788 posts, RR: 0
Posted (8 years 8 months 4 weeks 1 day 22 hours ago) and read 5772 times:

Hi guys. I'm a new member to this forum and this is my first post, so be a bit patient with a first-timer.

I have been reading this forum for quite a while and only now am I amble to express my views or feelings after I joined today. Let all that be aside and let's get to the topic.

My cousin, who is a retired senior vice president for DL, told me in an e-mail the other day that DL will come out of it. If you don't mind, I'd like to quote him:

"Delta is now struggling to put its house in order. I can only blame the company's Board of Directors for bringing in lousy management from some Electricity Company in Chicago that has absolutely nothing to do with running an airline.

"The five years under that management is what made Delta go the way it went. Right now, very austere measures are being taken to put the house back in order.

"It will take about two years to accomplish it and I am sure that Delta will emerge from bankrupcy a better, leaner and a more efficient airline.

"Delta now is cancelling 25% of domestic operations that compete directly with the low-fare carriers, and it is increasing international flights also to new destinations by 15%. The international flights do not compete with the domestic low-fare carriers and there is much more money in the international routes."

[Edited 2005-11-28 00:53:29]

23 replies: All unread, jump to last
 
User currently offlineBobnwa From United States of America, joined Dec 2000, 6464 posts, RR: 9
Reply 1, posted (8 years 8 months 4 weeks 1 day 22 hours ago) and read 5733 times:

Quoting RIXrat (Thread starter):
My cousin, who is a retired senior vice president for DL

What department was he at in Delta?


User currently offlineCadet57 From United States of America, joined Jul 2005, 9085 posts, RR: 30
Reply 2, posted (8 years 8 months 4 weeks 1 day 22 hours ago) and read 5710 times:

Well first of all welcome to A.net!

That being said,

Quoting RIXrat (Thread starter):
"Delta is now struggling to put its house in order. I can only blame the company's Board of Directors for bringing in lousy management from some Electricity Company in Chicago that has absolutely nothing to do with running an airline.

Their really being run by a utility Corp?

Quoting RIXrat (Thread starter):
"The five years under that management is what made Delta go the way it went. Right now, very austere measures are being taken to put the house back in order.

Im going say 9/11 and the economic downturn thereafter.

Quoting RIXrat (Thread starter):
"It will take about two years to accomplish it and I am sure that Delta will emerge from bankruptcy a better, leaner and a more efficient airline.

"Delta now is cancelling 25% of domestic operations that compete directly with the low-fare carriers, and it is increasing international flights also to new destinations by 15%. The international flights do not compete with the domestic low-fare carriers and there is much more money in the international rloutes."

This is a really good move. Being a bit of an armchair ceo here, let me say that all airlines need to do this. I don't care if you are trying to save slots, dominate another airline, for the legacy of the route, what ever. If the route doesn't make $$$ ditch it. This also being said their int'l expansion is brilliant, your cousin is right, that's where the money is and that's a market that LCC'S cant touch and probly will never touch. But before DL expands more id think that they'd need to get some more longhaul ac, or atleast etops certify their 752's and maybe the 738's.

With that, the armchair ceo is finished for today, and will close with this. In the long run I think DL will pull out of this dive, and will become once again a force to be reckoned with.

Cheers,
Justin



Doors open, right hand side, next stop is Springfield.
User currently offlineRIXrat From United States of America, joined Nov 2005, 788 posts, RR: 0
Reply 3, posted (8 years 8 months 4 weeks 1 day 22 hours ago) and read 5684 times:

Senior VP for Central and South America based in Miami and then Atlanta. If you know DL, you probably know his name. Rose from aircraft cleaner in Philadelphia to New York manager and then so on. His e-mail had no hidden agenda. He still consults for DL and has a wholly-owned travel bureau for DL in Riga.

User currently offlineRIXrat From United States of America, joined Nov 2005, 788 posts, RR: 0
Reply 4, posted (8 years 8 months 4 weeks 1 day 22 hours ago) and read 5634 times:

Quoting Cadet57 (Reply 2):

I don't know re the utilities, but I will try to find out.


User currently offlineMalaysia From United States of America, joined Nov 1999, 3342 posts, RR: 0
Reply 5, posted (8 years 8 months 4 weeks 1 day 21 hours ago) and read 5562 times:

Quoting RIXrat (Reply 3):
Rose from aircraft cleaner in Philadelphia to New York manager and then so on

Yeah an Old DL Fart rose from an A/C Cleaner to a retired DL Old Fart rehired as a manager to almost terminate me once but instead I had him terminated. they dont necessarily make the best people.



There Are Those Who Believe That There May Yet Be Other Airlines Who Even Now Fight To Survive Beyond The Heavens
User currently offlineRIXrat From United States of America, joined Nov 2005, 788 posts, RR: 0
Reply 6, posted (8 years 8 months 4 weeks 1 day 21 hours ago) and read 5502 times:

Quoting Malaysia (Reply 5):



Quoting Malaysia (Reply 5):
Yeah an Old DL Fart rose from an A/C Cleaner to a retired DL Old Fart rehired as a manager to almost terminate me once but instead I had him terminated. they dont necessarily make the best people

It may be as you say, but my cousin with a full command of the Portuguese and Spanish language at that time did a breakrough in the Central and South American countries. If he did not achieve this goal, why would DL keep him on?

And then make him a vice president and later a senior vice president. I don'td think his aircraft cleaning had anything do do with it. The guy was career minded. Good for him.

Emil


User currently offlinePositiverate From United States of America, joined May 2005, 1590 posts, RR: 8
Reply 7, posted (8 years 8 months 4 weeks 1 day 21 hours ago) and read 5449 times:

Quoting RIXrat (Reply 4):
Quoting Cadet57 (Reply 2):


I don't know re the utilities, but I will try to find out.

That's a reference to Leo Mullin. Prior to coming to Delta he was, among other things, at a utility company I think in Chicago.


Quoting RIXrat (Thread starter):
"It will take about two years to accomplish it and I am sure that Delta will emerge from bankrupcy a better, leaner and a more efficient airline.

Let me begin by saying that I am a HUGE DL fan. I fly them exclusively (save for one flight today on USAir). Having said that there's a few issues that this statement does not take into account:

1. The threat to the earned benefit plans of the employees. Fortunately the Congress, and specifically I think Sen. Isakson from Georgia, have begun to take steps to try and protect these plans for airline employees everywhere. However, the very real possibility exists that DL will be forced to shed these plans on the PBGC, at which point these employees will in essence lose most of their retirement. The blow to employee morale will be staggering, and may be something from which the company never recovers.

2. There seems to be no direction from senior leadership as to where the company is going. First they went to Simplifares, then they went away from it. First this leadership team said they wanted to take a hard look at Song, then they added destinations, now it is going away entirely. First this leadership team said they wanted to compete witht he LCC's for domestic share, now it seems like they are ceding some of that market in favor of looking internationally. I'm not an employee at DL, but if I were while I would be cautiously optimistic, I would also be concerned about some of the contradictory moves made recently.


User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 8, posted (8 years 8 months 4 weeks 1 day 18 hours ago) and read 5231 times:

LEO MULLIN...the guy that kept on raising my electricity rates while he was at COM-ED.

RIXRAT,
not trying to imply that your cousin is from the mullin posee but didnt mullin secure alot of benefits for the execs prior to him leaving...read some where the grinstin was trying to cancel the "consulting"work that was awarded to the top execs after they "retired"..didnt ron allen have some incredible deal as a "consultant"



bus driver.......move that bus:)
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3590 posts, RR: 10
Reply 9, posted (8 years 8 months 4 weeks 1 day 18 hours ago) and read 5204 times:

A couple of points for you:

Quoting Positiverate (Reply 7):
. The threat to the earned benefit plans of the employees. Fortunately the Congress, and specifically I think Sen. Isakson from Georgia, have begun to take steps to try and protect these plans for airline employees everywhere. However, the very real possibility exists that DL will be forced to shed these plans on the PBGC, at which point these employees will in essence lose most of their retirement. The blow to employee morale will be staggering, and may be something from which the company never recovers.

The PBGC guarantees payment to the employees up to $50K/year, so the people who will get "screwed" on this are the upper management and some of the pilots (most of the recent pilot retirements have taken the 50% cash payout option). The rank and file retirees will not see a reduction in their pensions if their payout is under $50K per year.

Mr. Grinstein (sp?) seems to have been very focussed. They are folding Song into the mainline for all the long distance domestic flying as the consumers said they like the product. They are also adding F seats to song as the premium customers have asked for it. This will make the product more consistant across the company, increase scheduling flexibility, and raise RASM. They are decreasing domestic and increasing international also in an effort to raise RASM.

Their biggest problem is their crushing long term debt and old defined benefit plans (some $10 Billion + worth). All the employees are now covered by defined contribution plans, but the long term liability from the old defined benefit plans are a sword of Damacles over DL's head.


User currently offlineOttoPylit From , joined Dec 1969, posts, RR:
Reply 10, posted (8 years 8 months 4 weeks 1 day 18 hours ago) and read 5198 times:

I personally think that not competiting with the LCC's is a bad move. By not competiting with them, you are giving the market to them, therefore allowing them to make money and grow, rather than keep them under thumb and allowing them to only make money by whoring themselves out for million dollar subsidies in markets where no other airline needs the subsidies(a la Airtran).

Quoting Positiverate (Reply 7):
First they went to Simplifares, then they went away from it.

Simplifares is actually working. Sure, they had to cap it up $100 for fuel prices, but since then, CVG(where they began) has seen a 30% increase in traffic, whereas cities like CAK, DAY, SDF, etc. have not seen as much a year over year increase since before Simplifares. So they are doing their job, for the most part. They work for some people, they don't work for others.

Quoting Positiverate (Reply 7):
First this leadership team said they wanted to take a hard look at Song, then they added destinations, now it is going away entirely

Because they are turning the entire airline into Song, but keeping the DL name. Why run two operations that do the same thing? Thats pissing money away to keep running Song when mainline DL is doing the same thing. Plus, you only have so many 757's. LOL

Quoting Positiverate (Reply 7):
now it seems like they are ceding some of that market in favor of looking internationally

Ya go where the cash is. No LCC in their right mind is going to start flying internationally(this means trans-Atlantic/Pacific people!), because their costs would triple. This will allow the legacies to make the big money, and let the LCC's make the meager dollar on $99 trans-con fares.



OttoPylit


User currently offlineDeltaGator From United States of America, joined Sep 2005, 6341 posts, RR: 13
Reply 11, posted (8 years 8 months 4 weeks 1 day 18 hours ago) and read 5174 times:

Quoting Positiverate (Reply 7):
Let me begin by saying that I am a HUGE DL fan. I fly them exclusively

As am I but don't let that taint my opinion.

Quoting Uadc8contrail (Reply 8):
but didnt mullin secure alot of benefits for the execs prior to him leaving...read some where the grinstin was trying to cancel the "consulting"work that was awarded to the top execs after they "retired"..didnt ron allen have some incredible deal as a "consultant"

Mullin did secure a lot of benefits for the upper management. While I thought some of it was excessive one of the reasons was to retain good leadership despite problems the company was experiencing which I agree with in principle. Of course, you need to follow through and get the good leadership which they obviously didn't.

I sure wish I could screw up my job as good as some of these guys and get a fat consulting agreement when they can me. But I'll just get walked out the front door instead.



"If you can't delight in the misery of others then you don't deserve to be a college football fan."
User currently offlinePositiverate From United States of America, joined May 2005, 1590 posts, RR: 8
Reply 12, posted (8 years 8 months 4 weeks 1 day 17 hours ago) and read 5080 times:

Quoting DLPMMM (Reply 9):
The PBGC guarantees payment to the employees up to $50K/year, so the people who will get "screwed" on this are the upper management and some of the pilots (most of the recent pilot retirements have taken the 50% cash payout option). The rank and file retirees will not see a reduction in their pensions if their payout is under $50K per year.

That guarantee implies PBGC has the funds on hand (which it gets through premiums paid to it by companies who make payments to their define benefit plan) to be able to meet its obligations. Under pension law (ERISA), the maximum yearly benefit guaranteed by the PBGC in 2005 is $45,613 for a participant in a plan that terminates. That figure is reduced for those who retire before age 65, or elect survivor benefits. PBGC posted a deficit of $23.5 billion for the fiscal year that ended Sept. 30, after recording surpluses as recently as fiscal 2001. According to its latest annual report, the agency had assets of $40.1 billion at the end of fiscal 2004, well short of the $63.6 billion in liabilities it carries.

According to the PBGC, the so-called defined-benefit plans offered by U.S. air carriers were underfunded by $31 billion at the end of 2003.

The government is worried about this as well: "The combination of several carriers facing current or potential bankruptcy, each with large underfunded pension plans, presents a threat” to the PBGC according to a GAO report in 2004..

If the plan is terminated, not just "upper management and some of the pilots" will lose out.

Quoting DeltaGator (Reply 11):
Quoting Positiverate (Reply 7):
Let me begin by saying that I am a HUGE DL fan. I fly them exclusively

As am I but don't let that taint my opinion.

It certaintly didn't influence my opinion.

Quoting OttoPylit (Reply 10):
Quoting Positiverate (Reply 7):
First this leadership team said they wanted to take a hard look at Song, then they added destinations, now it is going away entirely

Because they are turning the entire airline into Song, but keeping the DL name. Why run two operations that do the same thing? Thats pissing money away to keep running Song when mainline DL is doing the same thing. Plus, you only have so many 757's. LOL

So if the purpose was to create a "laboratory" to test new things, then why go through the whole rebranding, repainting, etc. It seems to me all that could have been sone under the Delta name (like the "experimenting that was doen the the Shuttle configured 737-800's). My point, I guess, is that it shouldn't have ever been created.

Quoting OttoPylit (Reply 10):
Quoting Positiverate (Reply 7):
now it seems like they are ceding some of that market in favor of looking internationally

Ya go where the cash is. No LCC in their right mind is going to start flying internationally(this means trans-Atlantic/Pacific people!), because their costs would triple. This will allow the legacies to make the big money, and let the LCC's make the meager dollar on $99 trans-con fares

That's a risky move. First, they are admitting that they cannot compete with the LCC's. Secondly, the int'l market is very finicky. God forbid their is another terrorist attack, or a downturn in the economy; if that happens int'l takes a huge hit.

Quoting Uadc8contrail (Reply 8):
read some where the grinstin was trying to cancel the "consulting"work that was awarded to the top execs after they "retired"..didnt ron allen have some incredible deal as a "consultant"

http://www.law.harvard.edu/programs/...l.Journal-Constitution_7.27.05.pdf


User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 13, posted (8 years 8 months 4 weeks 1 day 17 hours ago) and read 5054 times:

positiverate,
that was some deal that ron allen received........thanks for the harvard law link...



bus driver.......move that bus:)
User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 14, posted (8 years 8 months 4 weeks 1 day 16 hours ago) and read 5007 times:

Quoting Malaysia (Reply 5):
Yeah an Old DL Fart rose from an A/C Cleaner to a retired DL Old Fart rehired as a manager to almost terminate me once but instead I had him terminated. they dont necessarily make the best people.

Dude...how are we supposed to believe what you say? You also are the person who claimed to have been given free travel on CGK-IAD by Independence to interview for a Flight Attendant position, and then again claimed to have been given free travel on SIN-IAD by Independence to interview for a Customer Service position. With all due respect, sometimes I feel like you say this stuff for no reason whatsoever except to anger people.



Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineMalaysia From United States of America, joined Nov 1999, 3342 posts, RR: 0
Reply 15, posted (8 years 8 months 4 weeks 1 day 12 hours ago) and read 4900 times:

Quoting SHUPirate1 (Reply 14):

Dude...how are we supposed to believe what you say? You also are the person who claimed to have been given free travel on CGK-IAD by Independence to interview for a Flight Attendant position, and then again claimed to have been given free travel on SIN-IAD by Independence to interview for a Customer Service position

There is a reason I made that claim to counter your Indy interview midshap, I was just being sarcastic. Its kinda great why you really remembered my previous post???? maybe cause you felt cheated if it were true, forgive me.



There Are Those Who Believe That There May Yet Be Other Airlines Who Even Now Fight To Survive Beyond The Heavens
User currently offlineLawnDart From United States of America, joined May 2005, 970 posts, RR: 3
Reply 16, posted (8 years 8 months 4 weeks 1 day 5 hours ago) and read 4643 times:

Quoting OttoPylit (Reply 10):
I personally think that not competiting with the LCC's is a bad move. By not competiting with them, you are giving the market to them, therefore allowing them to make money and grow, rather than keep them under thumb

Amen!

Quoting OttoPylit (Reply 10):
Simplifares is actually working.

Even Continental said so...

Quoting OttoPylit (Reply 10):
Because they are turning the entire airline into Song, but keeping the DL name.

Well, at least the 757s...

Quoting OttoPylit (Reply 10):
No LCC in their right mind is going to start flying internationally(this means trans-Atlantic/Pacific people!), because their costs would triple.

Okay, now you lost me. If an LCCs costs would triple, wouldn't a legacy carrier's cost do the same thing? And doesn't that mean the LCC cost advantage domestically could translate to the international (trans-oceanic) market as well? And if an LCC could make money on a 5 hour trans-continental market at $99, could they not make money on a 6 hour transatlantic market at $129?

Two reasons I think the transoceanic expansion won't be the gold mine everyone at the legacy carriers think it will be...first, because capacity is increasing exponentially in the international market and may drive down yields, and second, because I think LCCs will eventually enter many international markets (and yes, I'm referring to trans-Atlantic/Pacific, eventually).

Look around the world - I think you're seeing progressively longer-range flying by carriers billing themselves as low-cost. GOL in Brasil is flying to neighboring countries...Air Asia (by the very geographic nature of Asia) is flying longer distances...Virgin Blue starts Pacific Blue. Spirit in the U.S. is making a big push into the Caribbean - how much harder to fly 500 miles further into Latin America?

The B737NG and A319 can fly some pretty long segments, but I believe the next big low-cost push will occur with the advent (and economies) of the B787 / A350.

Also, historically there have been many "low-cost carriers" flying transatlantic services in the past (some even successfully!)...Loftleider...Laker Skytrain...didn't Virgin start out offering low fares?


User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 17, posted (8 years 8 months 4 weeks 1 day 2 hours ago) and read 4035 times:

I too don't understand the sudden "lets fly international" to make money plan...
Besides if this was the case why did DL abandon many of the routes they are trying to return to...??? I mean really if you look at it the routes they are talking about most were once served by them a few years ago.... and they lost money then.... why will they make money now...???

I don't think DL has a plan as it appears that they keep changing their focus and methods....

I also don't think giving up the fight against the LCC's will work for them.... they will just continue to loose money while the LCC is able to make money.... it is a matter of how much it costs DL to fly.... and that figure is still too high...



Wally Bird Ruled the Skys!
User currently offlinePhollingsworth From United Kingdom, joined Mar 2004, 825 posts, RR: 5
Reply 18, posted (8 years 8 months 4 weeks 1 day 2 hours ago) and read 3975 times:

Quoting Positiverate (Reply 12):
So if the purpose was to create a "laboratory" to test new things, then why go through the whole rebranding, repainting, etc. It seems to me all that could have been sone under the Delta name (like the "experimenting that was doen the the Shuttle configured 737-800's). My point, I guess, is that it shouldn't have ever been created.

You are probably right, that in hindsight, it would have been better never to have created Song and just done some internal comparison. However, Song was created under the Mullin tenure, which as we know was not known for its really smooth moves, i.e., taking no assertive cost cutting steps worth a darn after Sep 11. Furloughing junior people actually has the tendency to raise your costs per employee hour. You better get a lot more productive if you want to cut your overall costs.

However, most of the sunk cost for Song was already incurred when Grinstien took over. This makes it easy to continue testing things out on the separate airline without directly diluting the original brand. The side question becomes did people (not a.netters) automatically associate Song as Delta? If so they were still diluting the original brand. Remember that improvements in one part of the product devalue those parts that were not improved. By having Song only operate in certain markets there should be less expectation that the live TV, etc. be available in all markets. Now DL will be driven to bring "Song" service to all of its markets. The initial 1750 mi limit for the service is artificial and will not hold over time.

Quoting OttoPylit (Reply 10):
I personally think that not competiting with the LCC's is a bad move. By not competiting with them, you are giving the market to them, therefore allowing them to make money and grow, rather than keep them under thumb and allowing them to only make money by whoring themselves out for million dollar subsidies in markets where no other airline needs the subsidies(a la Airtran).



Quoting RIXrat (Thread starter):
"Delta now is cancelling 25% of domestic operations that compete directly with the low-fare carriers, and it is increasing international flights also to new destinations by 15%. The international flights do not compete with the domestic low-fare carriers and there is much more money in the international routes."

Remember that some 70% of DL's domestic routes have LCC competition, so they are not running away from LCCs entirely. What DL is hoping to do is make a better use of its current resources by flying routes that have the maximum revenue to cost potential. This is a good idea as it maximizes the return for its creditors (who will most likely be its shareholders if it emerges from BK).


Quoting LawnDart (Reply 16):
Two reasons I think the transoceanic expansion won't be the gold mine everyone at the legacy carriers think it will be...first, because capacity is increasing exponentially in the international market and may drive down yields, and second, because I think LCCs will eventually enter many international markets (and yes, I'm referring to trans-Atlantic/Pacific, eventually).

Long-term international operations will not be immune from new carrier competition (it may not be the "LCC business model"). However, all signs point to them being cash-flow positive for several more years. This is something that airlines like DL desperately need. Additionally, international operations look to be the only real source for significant market growth for US carriers in the future (the deregulation s-curve it beginning to burn itself out domestically). The increase in bi/multi-lateral open skies agreements will effectively do for international travel what deregulation did for domestic travel. If there is anything that keeps an airline healthy it is fairly constant measured growth. This has done wonders for Southwest's $/ASM.


User currently offlinePanamair From United States of America, joined Oct 2001, 4895 posts, RR: 25
Reply 19, posted (8 years 8 months 4 weeks 1 day 1 hour ago) and read 3462 times:
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Quoting Lono (Reply 17):
I too don't understand the sudden "lets fly international" to make money plan...
Besides if this was the case why did DL abandon many of the routes they are trying to return to...??? I mean really if you look at it the routes they are talking about most were once served by them a few years ago.... and they lost money then.... why will they make money now...???

Because demographics and travel patterns/trends change over time. Some of those places have seen travel (both tourist and business) boom since the last time DL was in there; some of those countries' economies have improved, etc. Take TXL - when DL was serving it in the '90s, it was barely emerging from the fall of Communism and now, it has become the German capital as well as a thriving and hip cultural city. Even DL has been positively surprised by the loads they have been getting (especially up front in Business). Ireland as a destination for Americans in the summer has also grown leaps and bounds....Notice they didn't restart all of the services they gave up previously (e.g., HAM, ARN, WAW, LYS, JFK-ZRH/MUC); this recent round is a targeted effort focusing on those areas that have experienced/are experiencing the strongest growth.


User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 20, posted (8 years 8 months 4 weeks 1 day 1 hour ago) and read 3324 times:

Dl has a large struggle ahead of it. I wish them luck. They must be careful not to lose too much ground from the like of WN and FL or there is no customer base for an international carrier.


One Nation Under God
User currently offlineRIXrat From United States of America, joined Nov 2005, 788 posts, RR: 0
Reply 21, posted (8 years 8 months 4 weeks 1 day ago) and read 2849 times:

There has been a healthy back and forth on this subject. I haven't taken a post-by-post poll, but I think the majority believe that DL is doing the right thing.

I don't think that by any means DL is going to abandon its domestic service. In order to fight the LLC's, it might even beef up its Delta Connection service in order to get passengers to their international hubs for travel onward.


User currently offlineCkfred From United States of America, joined Apr 2001, 5214 posts, RR: 1
Reply 22, posted (8 years 8 months 4 weeks 22 hours ago) and read 2329 times:

Leo Mullin spent most of his career in banking before joining Commonwealth Edison, the electric utility that serves the northern third of Illinois, including the Chicago metropolitan area.

While President of Com Ed, he got the capital spending program to bring service back to the levels that people had expected. It was quite common for people to lose electricity on a sunny day in the 70s, and a large portion of Chicago lost power, because the power grid couldn't handle the load, when the temperature hit the lower 90s.

The belief by DL's Board was that someone who had worked hard to improve service at a non-airline company would do 2 things. First, he would restore Delta's reputation as an airline with a very high level of service. Ron Allen, the prior CEO had let go a lot of customer service people to cut costs, and Delta lost its reputation for being a friendly, passenger-oriented carrier.

Second, by hiring someone from outside the industry, the belief was that Mullin would bring fresh thinking.

Obviously, the Board didn't hire the right person.


User currently offlineOttoPylit From , joined Dec 1969, posts, RR:
Reply 23, posted (8 years 8 months 4 weeks 2 hours ago) and read 1967 times:

Quoting LawnDart (Reply 16):
If an LCCs costs would triple, wouldn't a legacy carrier's cost do the same thing?

No, what I'm saying is that the majors spend more of their money on international flying. While your CASM may be on average of 10 cent, what that really translates into is you paying 4 cent for domestic ASM and 6 cent for international ASM(since we all know that the CASM never is attributed to one seat, its always deemed as overall). The legacies costs are already up as compared with the LCC's because they are flying international. If WN or B6 wants to start flying to FRA, they are welcome to do so, but would need to buy bigger planes(as the 73G's and A320's, if having the expanded range, would need to lose seats to make it), which increases costs. They would have to offer food, which increases costs(you wanna be on an 8 hr flight with no food?), and in an effort to attract any moneymaking fare, would need to offer something high paying passengers would want, like a First Class section(again, increased costs). They would also have to pay the extra labor and fuel for such long haul flights, the additional landing tariffs in another country, and a bunch of other jargon. Basically, the legacies costs are already higher and that is why they charge higher fares. The LCC's, which don't make as much per passenger as the legacies, would have to price much more for prices overrall to get around their costs being driven up.

Quoting LawnDart (Reply 16):
Loftleider...Laker Skytrain...didn't Virgin start out offering low fares?

Exactly. Loftleider and Laker are no longer around, one reason of their demise is LCC across the Pond. And Virgin started off offering fares lower as compared to BA with 1 747-200. Now, they are hardly cheap, and in many cases, even higher priced than BA.


Other than that, I concur with everything you said wholeheartedly.



OttoPylit

[Edited 2005-11-29 21:36:00]

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