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Analyst Letter About Delta  
User currently offlineBucky707 From United States of America, joined Aug 2000, 1028 posts, RR: 3
Posted (8 years 6 months 1 week 1 day 15 hours ago) and read 4847 times:

Here is a letter written by an analyst here in Atlanta. He runs a company that invests 401k money for Delta employees, and yes, he is also a Delta pilot.

But this pretty much sums up whats going on at Delta.

Read the letter then fire away.




Thursday, March 16, 2006


Delta - Theater of the Absurd





There are two very distinct and different shows playing on stage right now at Delta Air Lines.

One is external - on the road -- in Washington, DC.

The other is internal - at home -- in Atlanta.

One is being played before a 3-man arbitration board.

The other is playing out before 50,000 loyal, active employees and another 40,000 retirees - all watching and waiting - to see if Delta Air Lines goes out of business - as the company continues to warn unless they get the maximum additional demands and concessions from the pilots.

The playwrights themselves -- Delta management -- wonder why there is little trust among the audience - an audience of faithful workers -- from every department -- generally regarded as smarter viewers than the average bear - and not easily fooled.

One must then ask, how can two very different simultaneous stage shows be a truthful and fair representation -- when they are vastly different in both script and content.

Observe and draw your own conclusions:

Two weeks ago (2/28) -- COO Jim Whitehurst told a packed house of 700+ employees at the GICC that in 2005, if Delta had just been an average legacy carrier -- we would have brought in another $2.5 billion in additional revenue.

In other words, if Delta had the same relative RASM numbers (revenue per available seat mile) as our competitors -- AMR, United, Northwest, USAir and Continental -- we would have been not only the most profitable - but the only profitable legacy carrier among the majors in 2005.

Jim told the standing room only crowd -- of mostly non-contract employees -- that we had a very good chance the airline would be "in the black" operationally in the next 12-18 months. I was in the audience. I did not mistake what Jim said or what I heard spoken on stage.

One then asks: How much is just being average worth to Delta? Again, Jim says it would yield an additional $2.5 billion in revenue if we just catch up - and be on par with the other guys - who pay for the same fuel and have competitors of their own.

Next observation:

On Delta's website -- is a copy of the most current interview from the December NewsDigest with Glen Hauenstein, Delta's new Executive VP of Network and Revenue Management - whom we hired away from Continental in 2005, along with Bob Cortelyou - also from Continental.

Both gentlemen came to Delta because they saw an extensive opportunity to shine -- not suffer defeat. In fact, listening to and watching Glen Hauenstein, there is a certain "glee" in his optimism about the potential he feels certain we can and should achieve and thus, surpass the competition.

Jim, Glen, and Bob each project a "fight's on" attitude. They appear motivated to not rest until we succeed. Their mantra? We will not tolerate or accept any more excuses about our past failure to produce better results. We have the routes and the assets. We will do better.

From the December 5th interview with Glen, he clearly states that during the first nine months of 2005, Delta only achieved 85% of the RASM realized by the other network/legacy carriers. That additional 15% "shortfall" is worth -- in his estimate -- the same $2.5 billion in additional revenue to Delta - that Jim spoke of two weeks ago on stage at the GICC in Atlanta.

Jim and Glen - both agree on the numbers and the potential already being realized with the latest changes to our scheduling and increased route efficiencies - day to day.

Closing the gap on that 15% shortfall and additional $2.5 billion is what Glen and Bob Cortelyou were hired to do. Thus far, they appear to be making positive strides toward achieving parity with our competitors and "getting it done".

In January, Delta's year over year revenue jumped by 14% from the preceding year. By chance? By luck? No. By being smarter.

As Jim pointed out two weeks ago at the GICC, Delta had built the best route structure in the industry..for the last century. A large fleet of RJs were a good feeder mechanism to the hubs - until everyone else started getting them too.

The parallel focus on increasing our International flying from 20% to 35% of the total will also significantly help close the gap with respect to increased RASM. The moves at JFK, designed to feed our newly proclaimed International "hub" with more passengers is the kind of productivity and increased efficiency that wasn't being done prior to the arrival of these newly hired, motivated thinkers - who've joined the team.

These guys are on a mission to succeed - the fresh blood we needed to feel hungry again. It's the same reason a JetBlue or Song becomes successful -- and popular.

There is a sense of purpose in every action and decision made - a driving desire to excel, to be the best -- and prove it -- with actions - each day. At the same time, those kinds of employees are building pro-active trust and respect with action - not words.

So this is one very important scene -- Act I -- being played out in Atlanta - live and on stage every day. Sounds promising and not at all similar to the doom and gloom being heard in the nation's capital this past week.

The other act -- Act II -- also live and on stage - is being played out in Washington, DC the next few weeks.

How very different is the script being heard by the audience watching and listening to Act II at the Marriott hotel in DC. Tickets are still available.

In fact, is it possible we are watching the same play about the same company?

While COO Whitehurst and VP of Revenue Hauenstein are touting increasing our numbers by a couple billion - if we can just manage to achieve "average" status among our peers -- the company negotiators/lawyers are telling the world, the press, and three arbitrators that Delta is doomed if the company doesn't secure more deep sacrifices -- another 1/3 of a billion dollars -- from the pilots -- those lowly harbingers of destruction and greed.

ALPA and the company have been haggling over a couple hundred million for months - the equivalent of less than 2% of the company's operating revenue in a single year.

At this point, if the reported numbers are anywhere close - ALPA says they are offering an additional $140 million -- today -- on top of the $1 billion already contributed by the pilots in the past 12-15 months.

The company says they still need an additional $305 million. Or all bets are off.

Something was rotten in Denmark - and now in DC and Dixie.

Between the intelligent efforts being put forth to significantly increase revenue being touted in Atlanta and the dire straits of a sinking ship being portrayed by company attorneys at the Marriot Hotel in DC - there is a major disconnect between Act I and Act II.

And folks wonder why trust has been an issue the past couple years???

The two sides are now only supposedly $165 million apart on securing a deal.

How about the large amount of money the company saved six months ago, as well as now, by not making the required payments into the pilot's Defined Benefit retirement fund? Have we seen any credit given for that sacrificial lamb?

How about the additional savings realized by abruptly stopping all "Unqualified" dollars being paid to pilot retirees who earned every dollar of that money. What value has been contributed to the company pot by denying those promises to these men and women?

Or don't those dollars count towards the effort because they were "Unqualified"?

Every contract negotiated during a Delta pilot's career included the value of those "Unqualified" dollars, lest anyone forget that fact.

There's something else that deserves clarification and more attention with respect to those retirement dollars referred to as "Unqualified".

"Unqualified" is a bad term. Makes it sound like they weren't earned or were given out as extra compensation -- like a goodwill bonus or maybe a SERP -- or not really part of the benefits due to those retirees. Nothing could be further from the truth. The term "Unqualified" projects the wrong connotation of that well-earned value promised to those folks in retirement. Somebody along the way -- with the integrity and power to do so -- needs to right that wrong when we make money again.

But like every other crisis situation at Delta, those retired pilots have swallowed that bitter pill in stride - and continue to hope for the best. Many I talk with are not only saddened but have moved into the realm of both disgust and disbelief - a dark place they said they never thought they could ever go in their hearts and minds with regard to Delta.

At some point - which may be the crux of ALPA's current stance - there is a breaking point where you have to stop subsidizing bad decisions and a lack of good faith.

One might also ask - how much is being frittered away on legal fees and other resources? How much revenue has already been lost with book-aways over the last 3 months?

Arbitrator Richard Bloch's assessment with Monday's opening remarks was that both sides have failed at the collective bargaining process. Appropriate assessment - except I believe it to be one side not negotiating -- not both -- knowing the players in the play.

How much time and effort is being spent on squeezing every last nickel from our Delta pilot group vs. focusing on the real enemy - JetBlue, AirTran, AMR, and United?

Deep down, many want to see us avoid a strike, focus on crushing the competition, and be successful again. Who doesn't? (Other then a large contingent of our F/O's -- who feel cheated and lied to - repeatedly. Last time we told them we were going to grow the airline we ordered a large fleet of RJs. Who can blame them? They know what they see.)

As I've mentioviablened many times, the same Marriottstrong personalities we specifically hired to be our future Captains and leaders are the same folks who are now willing to draw a line in the sand. It should be no surprise why.

Even a casual observer would have to ask how two very different scenes at the same company are being played on these two stages.

During testimony in DC before the arbitration panel this week, Ed Bastian, Delta's CFO, made it sound as though Delta is so fragile -- on literal egg shells -- that if we don't get the additional sacrifices from the pilots - the equivalent of about 2% of our total operating revenue in a single year - that it's over. The fat lady's warming up.

Shutter the doors. Send the airplanes to the bone yard. We're barely keeping her afloat. People are up at night wondering how we're possibly getting through the next day without the additional dollars from the pilots.

Something's not adding up here with respect to the true, honest, forthright health of the patient.

If we don't survive it won't be because the company didn't squeeze that last $305 million from the pilots - 2% of the company's total $15 billion size.

Delta Air Lines is a $15 billion company. It takes roughly $40 million a day to run Delta. $40 million x 365 days = $14.6 billion.

The difference between the company demands ($305 million) and what ALPA is offering ($140 million) is about four days' revenue.

There is still $2 billion in DIP financing available and revenue coming in daily. Are GE, Citibank, JP Morgan, Merrill, and Boeing really going to sit idle and let Delta close the doors -- for good?

A spade is a spade. And someone in a management/leadership position needs to call it.

It's the only way to start re-building the trust - at every level.

If we don't survive the current stand-off and continuing uncertainty, it will be because ultimately we lost all trust in the leadership, and consequently -- the spirit and the will to compete in a tough business - where your employees make the difference.

It will be because our leaders forgot the intrinsic value of the most valuable resource at any company -- its people.

Too many family livelihoods and futures are at stake.

This is not how Delta Air Lines grew up resolving differences -- and prospered.

Richard Bloch is right. We have failed at the collective bargaining process - at the increasing expense of the morale and faith of our current employees and retirees.

As has always been the case throughout Delta's history - the deal gets done when the company wants it to get done.

Shame on those who have the experience, the knowledge, the resources, and most of all -- the power -- to make the difference.



Respectfully, ********

64 replies: All unread, showing first 25:
 
User currently offlineRumorboy From United States of America, joined Aug 2002, 356 posts, RR: 1
Reply 1, posted (8 years 6 months 1 week 1 day 15 hours ago) and read 4815 times:

great post. Its kinda of funny when you think about it. Delta is crying over 300 million dollars. Four days of revenue. A 15 billion dollar a year company hinges on 300 million dollars from the pilots. And you wonder why Delta is in the shape it in.  Yeah sure

User currently offlineTu154m From United States of America, joined Oct 2001, 682 posts, RR: 5
Reply 2, posted (8 years 6 months 1 week 1 day 13 hours ago) and read 4701 times:

I can speak that about 100% of the people in the ATL side of the "play" are 300 billion % sick of DL's games.


CEOs should swim with cement flippers!
User currently offlineMidway2AirTran From United States of America, joined Jul 2003, 864 posts, RR: 2
Reply 3, posted (8 years 6 months 1 week 1 day 13 hours ago) and read 4680 times:

Quoting Bucky707 (Thread starter):
It will be because our leaders forgot the intrinsic value of the most valuable resource at any company -- its people.

Worth putting up again, one big thing a couple of DL's rivals are doing right.



"Life is short, but your delay in ATL is not."
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6608 posts, RR: 24
Reply 4, posted (8 years 6 months 1 week 1 day 9 hours ago) and read 4549 times:

While the writer of this letter is clearly biased, I think the underlying point to take from this is that REVENUE and not pilot costs are really the source of DL's current problems.

All those who repeatedly bash the pilots and blame them for most of DL's woes should read this letter. It's not the pilots fault that DL has poor revenue performance.


User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 5, posted (8 years 6 months 1 week 1 day 8 hours ago) and read 4530 times:

Well, that was interesting.
Where Delta is at now is the lending institutions are telling them "No more $$.. we have given you plenty the last three years to keep you afloat. Now, start turning a dollar and show us you can survive and pay us back".
Thats it in a nutshell. I don't think Delta can do it with givebacks. Lets see how this plays out.
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 6, posted (8 years 6 months 1 week 1 day 8 hours ago) and read 4521 times:

Is it possible to work out a deal with pilot union for the $300 million concession in exchange for new shares in the future?

User currently offlineSLCUT2777 From United States of America, joined Dec 2005, 4068 posts, RR: 11
Reply 7, posted (8 years 6 months 1 week 1 day 8 hours ago) and read 4494 times:

Quoting FlyPNS1 (Reply 4):
While the writer of this letter is clearly biased, I think the underlying point to take from this is that REVENUE and not pilot costs are really the source of DL's current problems.
All those who repeatedly bash the pilots and blame them for most of DL's woes should read this letter. It's not the pilots fault that DL has poor revenue performance.

I quite honestly think the pilots understand where they made mistakes in the past, and have conceeded what they think they should considering that Grinstein's predecessor Leo Mullin is the one who screwed up DL more than anyone with the idea that DL had to acquire ASA and ComAir (& eventually SkyWest was on his radar). The pilots can and should insist on a stake in the post "Chapter 11" company that emerges, but understand those limitations and not make the same mistakes thier counterparts at UA made years earlier.
DL has much pension reform work to do since this plan as presently constituted will not work and will likely be terminated. Most DL employees should plan on being transitioned to a 401k based retirement plan.
DL can't survive very long post bankruptcy exit as a stand alone carrier and must seek a merger with a carrier with a better Asian network than what they have currently. I just don't see them getting the China routes they want into ATL, and SkyTeam is the poorest alliance with connections into SE Asia and Australia/NZ. If DL wants a better revenue stream into their cashflow longterm, this is what they must do.



DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
User currently offlineJumbojet From United States of America, joined Dec 2003, 1159 posts, RR: 0
Reply 8, posted (8 years 6 months 1 week 1 day 8 hours ago) and read 4466 times:

Quoting SLCUT2777 (Reply 7):
DL can't survive very long post bankruptcy exit as a stand alone carrier and must seek a merger with a carrier with a better Asian network than what they have currently. I just don't see them getting the China routes they want into ATL, and SkyTeam is the poorest alliance with connections into SE Asia and Australia/NZ. If DL wants a better revenue stream into their cashflow longterm, this is what they must do.

what? are you nuts? are you serious when you say they wont survive as a stand alone carrier post chapt 11? explain in detail please, I want to hear your logic of thinking


User currently offlineAlitalia744 From United States of America, joined Mar 2000, 4750 posts, RR: 44
Reply 9, posted (8 years 6 months 1 week 1 day 7 hours ago) and read 4436 times:

Quoting Bucky707 (Thread starter):
One might also ask - how much is being frittered away on legal fees and other resources? How much revenue has already been lost with book-aways over the last 3 months?

Bucky, this is the first time I've fully respected one of your posts, thanks for posting it. I don't think anyone on here, Otto included disagree that management was partially, if not majorly at fault for the current position.

One must however, also lay blame on the Pilots for the book-aways over the last three months. Many of your loyal passengers (myself included) wonder if we'll have an airline to fly on for our travels in May/June and beyond. Some of the loyal passengers have booked on other airlines. Can you blame them with the constant threat that you may strike and the resultant Management talked about shut-down?

I must be crazy for having faith in a company that has so many times treated me with respect and provided service I have yet to experience on any other carrier. I'm booked through December on Delta Air Lines. My biggest hope of course, is that there is a Delta Air Lines.

As for the differences in opinions (+/1 165M), it is in fact sad that the company is leaning over a cliff because of the equivalent of "4 days revenue" if that truely is what it is.

There was at one point in history when Delta was THE legacy carrier. Times have changed but a company founded on such passion for service and a drive to succeed can return once again.

Of course, that decision rests on the shoulders of the Gerry's and Bucky707s of the company.

Wish everyone luck.



Some see lines, others see between the lines.
User currently offlineBucky707 From United States of America, joined Aug 2000, 1028 posts, RR: 3
Reply 10, posted (8 years 6 months 1 week 1 day 7 hours ago) and read 4377 times:

Quoting Alitalia744 (Reply 9):
Bucky, this is the first time I've fully respected one of your posts, thanks for posting it. I don't think anyone on here, Otto included disagree that management was partially, if not majorly at fault for the current position.

thank you, but I did not write what I posted. I simply copied it and passed it on. In the name of honesty, I tried to explain who wrote it without giving his name.

Please send me a private message, I would like to ask you a question.
[Edited 2006-03-18 02:58:08]

[Edited 2006-03-18 02:58:24]

[Edited 2006-03-18 02:59:23]

User currently offlineElectech6299 From United States of America, joined Aug 2005, 616 posts, RR: 3
Reply 11, posted (8 years 6 months 1 week 1 day 5 hours ago) and read 4307 times:

Quoting LAXDESI (Reply 6):
Is it possible to work out a deal with pilot union for the $300 million concession in exchange for new shares in the future?

Hmmm.. Not my fight, nor my expertise, but I'll throw out an opinion. I think this and many other suggestions here are oversimplified.

(Don't get me wrong here-I personally like the idea of "temporary" concessions as an alternative to solve the numbers problem. Ideally it would force the DL management to put up the numbers the next few months to pay back the concessions, and give them some time to do things right to improve morale)

But the "numbers" problem is not the real issue in DC right now.

Bargaining fails when ideas get reduced to numbers; bargaining succeeds only when numbers are passed over (or erased) until the ideas have been heard. Kudos for the author for voicing his opinion- that's necessary- but let's gloss over the numbers (e.g. 2%, $300 million...) and instead listen to him. And then make a thoughtful reply, if at all. IMHO, DL morale will never improve at the ALPA bargaining table, because ALPA is driven by financial and legal considerations, and the real beef is the members who are reading about the numbers in the papers, or if they're lucky, in the audience. Not at the podium, where they need to be if the pilot's morale is going to improve.

OK, so not every management decision is going to go over with the pilots (like the RJ expansion)- but pilots with the committment and respect of DL will get over the occasional mud-pie-in-the-face because they are reasonable people and eventually realize that it's not all that bad. But when it's constant- when it is all that bad for a period of time- then the pilots need to be heard. So while ALPA is arguing, the members link their frustrations to these oversimplified numbers like "2% of operating costs."

Really, does "2% of operating costs" mean anything different to you than "1.3% of operating costs" (what they offered), or "3.2% of operating costs", or "27% of monthly revenue", or "-118% of historical average profits", or any other such number? But what about "When are we going to be heard and treated as a valuable part of this company?" If they can answer that question, I'll bet that DL management will get every bit of "2%" from the pilots.

As I said, finances and unions and airline management are not my expertise, and what will solve the numbers problems DL is facing are beyond what I will speak to. But if the DL pilot's morale is reflected by these posts, letters, and negotiations, then there isn't as much of a numbers problem as a communication problem. And that is a problem that needs mutual agreement to solve- (I might suggest DL management should take the first step of listening, then thoughtfully responding to the concerns-without using numbers. But perhaps they need to be "reminded" of this necessity, and unions unfortunately know how to do that- by hitting the bottom line, which tends to wake up the management quickly, if not peacefully)

Either way, I hope the standoff ends soon- 'cause everyone loses when people stop talking, whether it's a marriage, a small business, a government, or a once-bright airline with every potential of being far brighter.

[Edited 2006-03-18 04:11:11]


Send not to know for whom the bell tolls...it tolls for thee
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 12, posted (8 years 6 months 1 week 1 day 5 hours ago) and read 4283 times:

In fair disclosure, the author is a Delta 767 pilot. Everything written in the article has to be written within that context.

Federal regulations require that anyone that dispenses investment advise or comments financially on a company in a for profit setting must disclose their relationship to the company if one exists. Further, I will not disclose the author's name but one cannot legally be a ghost writer if there is a known financial connection between the company written about and the author and if the author gains from his or her comments about the company. Because the author operates an investment company, it would be highly suspect that there is not only a personal but also a professional financial investment in DL's position.

This article would not pass the merits of an objective analysis based on the author's personnel involvement with Delta, regardless of whether he is right or not.


User currently offlineBucky707 From United States of America, joined Aug 2000, 1028 posts, RR: 3
Reply 13, posted (8 years 6 months 1 week 1 day 5 hours ago) and read 4259 times:

Quoting WorldTraveler (Reply 12):
In fair disclosure, the author is a Delta 767 pilot. Everything written in the article has to be written within that context.


fair enough. I believe I started this thread by saying he was an investment person who was also a Delta pilot.

Quoting WorldTraveler (Reply 12):
This article would not pass the merits of an objective analysis based on the author's personnel involvement with Delta, regardless of whether he is right or not.

Give me your objective analysis. Is anything he wrote factually wrong? Did management not make the statements he claimed in front of a non pilot crowd in Atlanta? Did January revenue not jump year to year? Did Delta not stop putting legally required money into the pension plan, and then not give the pilots credit for that savings when determining how much they need from the pilots? Is the difference between our positions not about 4 days revenue?

I never claimed he was anything other than what he is. Howeve, I stand by what I said, I think he did a pretty darn good job of summing up the situation as it stands now.


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 14, posted (8 years 6 months 1 week 1 day 4 hours ago) and read 4215 times:

I'm not disagreeing with his comments, just saying he cannot legally offer advice without disclosing his relationship to the company on which he is commenting.

I do know who the author is and generally find him to be objective. There are a number of statements in his letter which are subjective and emotional reactions to his perceptions of fact. see comment about shutting down and sending planes to the boneyard. that kind of subjectivism cannot be included in objective financial analyses.


User currently offlineCXA330300 From South Africa, joined May 2004, 1562 posts, RR: 2
Reply 15, posted (8 years 6 months 1 week 1 day 3 hours ago) and read 4172 times:

Maybe the DL execs should cut their multimillion dollar salaries before their employee's paychecks.

I was talking to a friend who is a DL f/a and according to her the execs have Minis painted to look like DL planes...........



The sky is the limit as long as you can stay there
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 16, posted (8 years 6 months 1 week 22 hours ago) and read 4104 times:

the minis are promotional tools and have been used in DL markets throughout the east coast. They are not used by executives. And DL executives are some of the lowest paid airline executives - substantially lowered paid than DL's other employees (esp. the pilots) when compared to other airlines' employees - by their own choice.

try again w/ something factual.


User currently offlineBucky707 From United States of America, joined Aug 2000, 1028 posts, RR: 3
Reply 17, posted (8 years 6 months 1 week 19 hours ago) and read 4050 times:

Quoting WorldTraveler (Reply 14):
I do know who the author is and generally find him to be objective. There are a number of statements in his letter which are subjective and emotional reactions to his perceptions of fact. see comment about shutting down and sending planes to the boneyard. that kind of subjectivism cannot be included in objective financial analyses.

I know him too. Frankly, don't care for him personally. And yes, there are some emotioinal statements.

But again I ask you, since you dodged the question, are any of the facts he presented not true? Aside from the emotional statements, what that he wrote is factually incorrect? My bet is you can't find anything.

And as far as subjectivism in a financial analysis, frankly, thats what I pay for. I want to know what you think, your gut reaction. Any fool can parrot back the company financial statments. Tell me what you think they mean.

[Edited 2006-03-18 14:41:31]

User currently offlineBobnwa From United States of America, joined Dec 2000, 6475 posts, RR: 9
Reply 18, posted (8 years 6 months 1 week 18 hours ago) and read 4037 times:

Quoting CXA330300 (Reply 15):
Maybe the DL execs should cut their multimillion dollar salaries before their employee's paychecks.

I was talking to a friend who is a DL f/a and according to her the execs have Minis painted to look like DL planes...........

Everything in your posting is factually wrong. Please research and list the execs who are getting "multimillion dollar salaries".


User currently offlineOkie73 From United States of America, joined Mar 2006, 446 posts, RR: 0
Reply 19, posted (8 years 6 months 1 week 17 hours ago) and read 3817 times:

Jim Whitehurst made some statements during an employee chat session online on the 15th that make it seem like Delta is anything but 'tapped out".

[Edited 2006-03-18 16:28:19]

User currently offlineSocalfive From , joined Dec 1969, posts, RR:
Reply 20, posted (8 years 6 months 1 week 17 hours ago) and read 3743 times:

Quoting Bucky707 (Thread starter):
One might also ask - how much is being frittered away on legal fees and other resources? How much revenue has already been lost with book-aways over the last 3 months?

Well, this is a one dimensional response but Believe me, as long as the "parasites" are in Washington playing any associated parts in Act II, you can count on the fact that the resolutions will be lengthy, hostile and costly. How much is being spent on the Legal Fees you ask? I guarantee you it will exceed the amount the company is asking for from the pilots before it's all over with. With management typically too ignorant to find the fast solutions to simple problems, they turn a load of the problems over to the attorneys that WILL resolve them in ten to twenty times the time it would take the average idiot. Otherwise, it's just not profitable. Look deep inside the strife between the Union and the Company, remove the CFO and I'll bet you have a swarm of parasites creating a lot of the hostility.


User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3805 posts, RR: 29
Reply 21, posted (8 years 6 months 1 week 16 hours ago) and read 3455 times:

Quoting Bucky707 (Thread starter):
And folks wonder why trust has been an issue the past couple years???

Over the past couple of years? How about going back to the Ronald Allen regime when dating the year trust in DL's upper management died? Lack of trust in management has simply snowballed since then -- and management has no one to blame but themselves.

Quoting Bucky707 (Thread starter):
At some point - which may be the crux of ALPA's current stance - there is a breaking point where you have to stop subsidizing bad decisions and a lack of good faith.

You can talk the talk, but will you walk the walk when management pushes you to the breaking point?

Quoting Bucky707 (Thread starter):
How much time and effort is being spent on squeezing every last nickel from our Delta pilot group vs. focusing on the real enemy - JetBlue, AirTran, AMR, and United?

And how much more time and effort and have been wasted focusing on competitors rather than on what will differentiate Delta from these and other competitors to a degree that customers will choose Delta over others -- for reasons other than Delta happens to throw more largess at customers in their high-cost, never-ending quest to buy customer "loyalty."

Quoting Bucky707 (Thread starter):
Deep down, many want to see us avoid a strike, focus on crushing the competition,

How many unquantifiable billion$ have been squandered by Delta's high-cost shenanigans in their futile attempts to "crush competition?" Their game plan for squelching competition was flawed from the beginning; the costs of their flawed game plan have become unsustainable due to proliferation of the fronts on which the high-cost games they insist on playing must now be played.

Seems to me the author of the letter is, by the view expressed on Delta's strategy for dealing with competition, also singing two very different tunes. On the one hand, the writer rightly resents demands by management that Delta's employees subsidize (management's) "bad decisions and lack of good faith." On the other, the writer is also advocating that Delta should continue to squander every dollar and more the pilots and non-contract employees have given back by throwing even more $$$ at "crushing the competition" which ensures that regardless of how much the eeeeeeeeeeevil greedy Wink pilots give back, management will be back before long to extract still more from the pilots and other employees.


User currently offlineOttoPylit From , joined Dec 1969, posts, RR:
Reply 22, posted (8 years 6 months 1 week 15 hours ago) and read 3273 times:

Quoting Alitalia744 (Reply 9):
I don't think anyone on here, Otto included disagree that management was partially, if not majorly at fault for the current position.

Oh thanks for bringing me into the fray! Boy, ya think you know someone. lol

Quoting CXA330300 (Reply 15):
Maybe the DL execs should cut their multimillion dollar salaries before their employee's paychecks.

I was talking to a friend who is a DL f/a and according to her the execs have Minis painted to look like DL planes...........

Stop reading Chinese and get a clue. lol First of all, why in the hell would a DL exec have a Mini painted like a DL plane? With the exception of 99% of a.net, why would anyone have that? Its like painting a bulls-eye on your car. Secondly, those Mini's that you speak of, that have little DL wings and tails on them, are marketing ploys(or toys?). If DL is sponsoring something, you take the car out there and park it in front, to get the additional advertising. Everyone has something in that form. And third, DL execs have no MULTI MILLION dollar salaries as you claim. In fact, Delta's CEO, Jerry Grinstein, is getting paid roughly $300,000 a year, with no bonuses or strings attached. That is less than any other airline CEO. I don't remember Glen Tilton of UA, who was paid $1.8 milllion last year alone, getting paid so little while trying to bring his carrier out of BK. Heck, you have doctors and airline pilots making more than the CEO of Delta. He has nothing to fight for. He's already rich. He's already got millions. And he's already got a resume that speaks for itself. The only reason he would be working as CEO of Delta is because he is that passionate about the company. Unlike some others.


I don't know why anyone is putting any faith into the letter. It was clear it was written by a DL pilot. And everything in the letter(not saying its all wrong or anything) is in some way biased by that. He sings the same tune that all pilots sing without being the first bit objective on the conclusions or destinations of some things DL might do, both positive and negative.

Its kinda pointless, if you ask me.


OttoPylit


User currently offlineSocalfive From , joined Dec 1969, posts, RR:
Reply 23, posted (8 years 6 months 1 week 15 hours ago) and read 3251 times:

Quoting Tango-Bravo (Reply 21):
How many unquantifiable billion$ have been squandered by Delta's high-cost shenanigans in their futile attempts to "crush competition?" Their game plan for squelching competition was flawed from the beginning; the costs of their flawed game plan have become unsustainable due to proliferation of the fronts on which the high-cost games they insist on playing must now be played.

Yup, what DL needs to do now is what CO did in 94, Solidify, Unify, Simplify and concentrate on quality. DL can do what NW cannot, Come out of this alive and thriving. Forget the competition, Airtran and the others aren't going to go away, imagine ten years ago today's scenario; "Delta taking on Valujet and winding up in bankruptcy court." It isn't the reason they're BK of course, but it is a contributing factor when one worries more about what the other guys are doing than what's going on in one's own backyard. It really takes a "Team" leader to yank these kinds of situations out of the crapper and turn them around. It doesn't sound to me as though DL has it, but, at least they DO have the cheerleading team out there in front of the employees that are working on making a difference and CAN communicate effectively with the rank and file while Management confines themselves to the glass tower. These guys need to put a face on this thing and stand united with the employees and get it DONE.

Mathmatically speaking, if all the numbers are correct as is stated in the letter and there has been a 15% gain in RASM, that is a strong starting point to better results as Spring becomes Summer, IF however, the employees are getting some satisfaction, SOMEWHERE in the process. The Key HERE will then need to be " great service" to continue building the numbers but service will suck and gains will be lost if the employees keep feeling as though they're unrecognized second-class citizens in the eyes of management.
If all the information IS correct, Management needs to get off the Pilot's backs for the time being and concentrate all efforts on maximizing upcoming loads. This goes back to what I've recently said about NW, the "Whittle and Shave" accounting at this stage of the game is horribly counter-productive. They'll shave Two million to save Two hundred instead of Spend Two hundred to make Two million. But, then you've got the huge egos in typical upper-tier management that refuses to admit they could be wrong about any one issue and to back down in the face of any adversity, even to their own detriment and demise.


User currently offlineTVNWZ From United States of America, joined Feb 2006, 2389 posts, RR: 2
Reply 24, posted (8 years 6 months 1 week 14 hours ago) and read 3214 times:

Quoting Bucky707 (Thread starter):
Even a casual observer would have to ask how two very different scenes at the same company are being played on these two stages.

Quite simple, two different audiences and strategies. Just like any other company Delta is trying to lower its labor costs as low as possible. Not just lower, but as low as possible. That means lots of pain for the pilots.

Quoting Bucky707 (Thread starter):
The difference between the company demands ($305 million) and what ALPA is offering ($140 million) is about four days' revenue.



that's a lot. I would love Delta to make another $165 million profit. 2% of the company's revenue in labor savings would be significant to Wall Street.

Quoting Bucky707 (Thread starter):
It will be because our leaders forgot the intrinsic value of the most valuable resource at any company -- its people.

And in labor negotiations companies...any company not just Delta...try to drive down that value as much as possible. I don't think they forgot anything.

Quoting Bucky707 (Thread starter):
As has always been the case throughout Delta's history - the deal gets done when the company wants it to get done

And so it goes for all companies.

This guy may be a great pilot, but I wouldn't give him my money to invest.
Financial and labor dealings in struggling industries are always traumatic. What is being played out here really is no different than what has played out at other industries and businesses over the years. And it is tragic to see labor take it on the kisser, but that seems to be the way this country is taking its overall labor cost strategies. It will be a very bumpy ride.


25 Tango-Bravo : All of which, when added together, is the crux of why Delta continues to be Delta's worst enemy.
26 Alitalia744 : Anytime Otto! But I think you got my point. How's the 3-off going?
27 Ckfred : Here's the dumb question. How long has Jim Whitehurst been at Delta? I get the feeling that ever since Leo Mullin was hired away from a Chicago utilit
28 Tango-Bravo : Quite the opposite according to the consensus of those I have spoken with who were with Delta during the Allen regime. It was Allen and accomplices w
29 ContnlEliteCMH : Perhaps, but I think all of this misses the point. The author of the letter in the thread starting post makes some good points, but he either misses
30 FlyPNS1 : Not necessarily. Cost-cutting too deep can backfire. Pilots may call in sick more often or turn down overtime requests which will result in delayed/c
31 ContnlEliteCMH : Of course. You'll pardon me for forgetting about "punitive but unannounced job actions." Those of us who play in the free market don't think that way
32 Post contains images LAXDESI : Well said and my sentiments exactly.
33 TVNWZ : This is not only one of the quickest ways to reduce costs, but as you know, it allows for increased profit when revenue increases to earlier levels.
34 FlyPNS1 : It happens all the time in the free market, as well. Lots of companies pay their employees poorly and in return, they get poor performance. I've know
35 Bucky707 : you are right. Often during the good times costs swell to unsustainable levels. So tell you what. How about labor simply gets the same raises and bon
36 Post contains images Dl757md :
37 OttoPylit : Well deserved and well rested, if you ask me. Jim Whitehurst has been with Delta in a variety of positions since 2002. Before that, he worked for the
38 B777-700 : Past leaders...*PAST* not the current ones. But hey, if you think that letter was an epiphany, read this one...written by...hey! another pilot! To th
39 Post contains images OttoPylit : Oh my God!! Talk about hitting the nail right on the head. Someone speaking with truth, reason, and logic...and ironically a pilot. I think this gentl
40 Yyz717 : The fact remains that DL's costs are still too high, and DL employees remain overpaid for their labour compared to the competition. Whatever failures
41 Dl757md : you need to put the word some in front of that statement. DL757Md
42 Bucky707 : I challenge you to back up that statement. Which Delta employees are overpaid relative to the competition? And by how much? I bet you have no idea wh
43 Yyz717 : The fact that some airlines are profitable (such as Southwest, and AirTran) alone is proof enough that DL (which operates in the same environment and
44 Bucky707 : partially true. Delta does suffer from self inflicted cost problems. But that does not mean labor costs are the problems, nor does it mean the employ
45 Bobnwa : Would this mean that the pilot group would be willing to work for the same pay scale as the managers since the average pilot makes significantly more
46 Bucky707 : the managers make significantly more than the flight attendants, gate agents and ramp workers. So why don't the managers work for the same as those p
47 Yyz717 : Labour is the #1 expense of airlines. You cannot have cost problems witho labour being part of the equation. What is the hourly rate of a DL M88 or 7
48 Bobnwa : Do the pilots work for the same pay as flight attendants, gate agents and ramp workers? I noticed you neatly avoided answering my question about the
49 Bucky707 : no I didn't answer your question because its really a stupid question. The value that each employee brings to the job is represented by the amount th
50 FlyPNS1 : Actually, for most of the carriers, FUEL is the #1 expense. Actually, it is lower even before the additional cuts that DL management wants. WN pilots
51 Bucky707 : All rates taken from AirlinePilotCentral.com, so go check for yourself. Rates for a twelve year captain, Southwest 737 $190 Airtran 717 and 73G $153
52 Bucky707 : Found this on another website and verified the numbers from airlinepilotcentral.com. SWA $190 all 737s CAL $163 737-800 AA $158 737-800 Frontier $157
53 Bobnwa : No I do not consider it fair for 400 management people to get 15% of the stock at UA but that 400 is a very small percentage of the total management
54 Dl757md : Actually, I was wrong you need to put the words "few if any" in front of that statement. OK. I think Bucky has demonstrated rather irrefutably that y
55 ContnlEliteCMH : You make an excellent point, friend. What you describe is true and I have seen it with my own eyes. But the result is decidedly not the same. Not eve
56 FlyPNS1 : Not totally true. For many of DL's junior pilots, they can find jobs that will pay more than DL wants to offer them. DL's pilots are by and large wel
57 ContnlEliteCMH : But those junior pilots aren't the guys driving this recent contentiousness. It's the guys with seniority. THEY can't change airlines, and THEY are t
58 Yyz717 : While I am surprised that the reported current hourly rates of DL pilots appears lower than other carriers, the fact remains that there is something
59 Bobnwa : You hit the nail on the head. Taking salary alone, the DL costs alone are lower than WN. Factoring in workrules, productivity, pension, medical, etc
60 FlyPNS1 : Actually, I think you would find it to be quite the opposite. The junior guys have little to lose so they are the ones that are willing to strike. Th
61 ORD : WN, at this point in time, is only profitable because of its fuel hedges. This has been reported many times by analysts. So it is not fair to say WN'
62 Dl757md : I was talking to a 764 captain the other day who was hired in '85 and he's number 349 out of roughly 5000 on the seniority list.
63 Yyz717 : No, it IS fair. WN is benefiting from fuel hedges for 2 reasons: 1. Prior inherent profitability that gave WN the financial muscle to hedge. 2. Forwa
64 Post contains images FXramper : eveything my uncle tells me off jetnet and aapilots.com spells doom for DL.
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