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CO V DL Interesting Story  
User currently offlineTpaewr From United States of America, joined May 2001, 450 posts, RR: 0
Posted (8 years 3 months 2 weeks 6 days 3 hours ago) and read 4520 times:

This is just a second hand story from elsewhere. Not something I heard first hand. But I do know that the premise and background is true from folks in Houston. It jumped out at me since I had just been speaking hypothetically about the very concept before reading it. Regardless I think CO has a valid reason to be concerned!

Quoting quote:
Well...it goes deeper than that. Glenn Haustein and Bob Cortaleu, who now run DL's network planning group, were the people who ran CO's network planning until 2004. So DL didnt just notice it, they hired the exact people who planned and implemented the narrow-body/secondary European int'l buildup. Smisek has actually threatened suing DL b/c DL is growing into CO's future markets, and he feels like they are using CO proprietary info to plan DL's expansion.

While there may not be any legal recoarse, or any even any basis to the above statement, it will still be interesting to see how CO responds to the recent movements at DL

23 replies: All unread, jump to last
 
User currently offlineGift4tbone From United States of America, joined Dec 2004, 612 posts, RR: 0
Reply 1, posted (8 years 3 months 2 weeks 6 days 3 hours ago) and read 4501 times:

Quoting Tpaewr (Thread starter):
it will still be interesting to see how CO responds to the recent movements at DL

Yes, it will be. BUT I'm more curious as to WHY they left CO for DL? especially considering DLs financial situation, two years ago, things weren't exactly much better.

If DL is paying them more than CO was, then I think we have found 1 of DLs many financial headaches.  banghead 

-Tony@PVD



Top 3 airports: PVD 26.0%(115 flights), PHL 15.6%(69 flights), PHX 12.0%(53 flights)
User currently offlineSLCUT2777 From United States of America, joined Dec 2005, 4019 posts, RR: 11
Reply 2, posted (8 years 3 months 2 weeks 6 days 2 hours ago) and read 4397 times:

This is one feud between these two SkyTeam carriers that could either result in COs defection to OneWorld, or a possible merger between the two carriers in the not to distant future. I highly doubt DL is paying them more than what CO was paying.


DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
User currently offlineIkramerica From United States of America, joined May 2005, 21456 posts, RR: 60
Reply 3, posted (8 years 3 months 2 weeks 6 days 2 hours ago) and read 4356 times:

CO may have recourse if those execs are bringing that information to a direct competitor. It doesn't usually happen that way. Execs from one company are usually hired by other airlines in different markets.


Of all the things to worry about... the Wookie has no pants.
User currently offlineRwSEA From Netherlands, joined Jan 2005, 3076 posts, RR: 2
Reply 4, posted (8 years 3 months 2 weeks 6 days 2 hours ago) and read 4314 times:

Quoting Gift4tbone (Reply 1):
If DL is paying them more than CO was, then I think we have found 1 of DLs many financial headaches.

Right. The $15,000 or so more that DL might be paying is what tipped them over the line into Chapter 11.  Yeah sure


User currently offlineDiesel33 From United States of America, joined Mar 2004, 301 posts, RR: 0
Reply 5, posted (8 years 3 months 2 weeks 6 days 2 hours ago) and read 4295 times:

Quoting Ikramerica (Reply 3):
CO may have recourse if those execs are bringing that information to a direct competitor.

Do you think CO had any intention of starting a EWR-DKR-JNB routing prior to the DL announcement?


User currently offlineAirwave From United States of America, joined Mar 2006, 1117 posts, RR: 3
Reply 6, posted (8 years 3 months 2 weeks 6 days 1 hour ago) and read 4225 times:

Quoting Ikramerica (Reply 3):
CO may have recourse if those execs are bringing that information to a direct competitor. It doesn't usually happen that way. Execs from one company are usually hired by other airlines in different markets.

I would have expected to see, as part of their employment contract with CO, a covenant to not compete for a certain amount of time in the airline industry. Was/is there anything like that for them?



When you do things right, people won't be sure you've done anything at all.
User currently offlineIncitatus From Brazil, joined Feb 2005, 3994 posts, RR: 13
Reply 7, posted (8 years 3 months 2 weeks 6 days 1 hour ago) and read 4225 times:

The originating posting simply does not give the right credit to the right people. Continental is an organization far more sophisticated than two people and it is fair to pose the question that Gift4bone did. Maybe somebody will pitch in the answer. Clue: Several weeks ago Delta published a schedule missing hundreds of flights.

Also it is not easy to bring the Continental recipe to Delta. Delta does not and will not have a real hub in the NY area. It simply does not have enough gates at JFK to make the operation viable.

Finally, if Continental really felt threatned by Delta, the can always ACQUIRE IT. Continental is the most solid network carrier in the US. They can go to the capital markets, raise a few pennies, take it to bankruptcy judge and get Delta assimilated. At this point Continental has not done it because Delta is in such a mess.


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 8, posted (8 years 3 months 2 weeks 6 days 1 hour ago) and read 4164 times:

Of course no company is 2 people but when those 2 people helped define who CO is today, they have tremendous influence. And one of them , Hauenstein, came from AZ so he has been away from CO for a couple years - not sure how long.

DL doesn't have as strong of a NYC int'l operation as CO does but that doesn't mean there aren't opportunities. The fact that CO is talking about legal action says they do feel threatened. And as for DL walking into markets CO had on its "to fly" list, most of the destinations DL has added from NYC are routes that are former Pan Am.

CO also has to contend with DL's ability to launch services from JFK and ATL, the latter of which is unquestionably stronger in pulling in connecting passengers. There are few flights that can be supported solely by NYC traffic so DL is not at all out of bounds to start routes via ATL that are more dependent on connecting traffic outside of the NE.

And your fantasies of CO acquiring DL are just that, fantasies. CO doesn't have the money and won't be able to find someone willing to assist in acquiring DL because DL is turning their business around. DL's creditors stand to gain far more by DL recovering and becoming profitable for the creditors than for them to sell to another airline where even the process of an acquisition is risky. Industry consolidation won't occur until one carrier is so much weaker than the one being acquired that the investors in the acquiree see little hope that that airline can be turned around. That scenario is very unlikely to happen between CO and DL.


User currently offlineMalpensaSFO From , joined Dec 1969, posts, RR:
Reply 9, posted (8 years 3 months 2 weeks 6 days ago) and read 4120 times:

Quoting SLCUT2777 (Reply 2):
This is one feud between these two SkyTeam carriers that could either result in COs defection to OneWorld, or a possible merger between the two carriers in the not to distant future.

Dont count on One World... Star Alliance, is a more likely candidate. Not to mention the fact that AA and CO are nearly one for one in both the New York, and Texas markets. American as much of a darling they would like to be, are not going to be welcoming another legacy into One World anytime soon. As it is now United and Continental are more likely to become chummy than Delta and Continental could ever dream to be...


User currently offlineIkramerica From United States of America, joined May 2005, 21456 posts, RR: 60
Reply 10, posted (8 years 3 months 2 weeks 6 days ago) and read 4105 times:

Quoting Diesel33 (Reply 5):
Do you think CO had any intention of starting a EWR-DKR-JNB routing prior to the DL announcement?

This reads as sarcastic, but if it's not, I don't know. I'm not a CO insider.

If it is sarcastic, way to choose one irrelevant route to prove your point. Never mentioned this, nor does the thread starter. Talking about secondary airport European expansion, especially out of NYC.

Quoting Airwave (Reply 6):
I would have expected to see, as part of their employment contract with CO, a covenant to not compete for a certain amount of time in the airline industry. Was/is there anything like that for them?

I would expect the same, and have no idea whether there was one, but I would assume so. Sometimes, they aren't legally enforceable, though.



Of all the things to worry about... the Wookie has no pants.
User currently offlineDiesel33 From United States of America, joined Mar 2004, 301 posts, RR: 0
Reply 11, posted (8 years 3 months 2 weeks 6 days ago) and read 4060 times:

Quoting Ikramerica (Reply 10):
This reads as sarcastic, but if it's not, I don't know. I'm not a CO insider.

If it is sarcastic, way to choose one irrelevant route to prove your point. Never mentioned this, nor does the thread starter. Talking about secondary airport European expansion, especially out of NYC.

It was not sarcastic. I was just thinking out loud considering the content of this thread and that DL had announced TXL just a few short hours before CO had planned to. Thats all.


User currently offlineTornado82 From , joined Dec 1969, posts, RR:
Reply 12, posted (8 years 3 months 2 weeks 6 days ago) and read 4034 times:

Quoting Incitatus (Reply 7):
Finally, if Continental really felt threatned by Delta, the can always ACQUIRE IT. Continental is the most solid network carrier in the US.

That would be the first step in making Continental NOT the most solid network carrier in the US.

Quoting MalpensaSFO (Reply 9):
As it is now United and Continental are more likely to become chummy than Delta and Continental could ever dream to be...

Economy Plus mixed with CO's great customer service. Sounds like a win-win for the consumers. Not to mention complimentary instead of parallel route structures.


User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Reply 13, posted (8 years 3 months 2 weeks 6 days ago) and read 4009 times:

Quoting Incitatus (Reply 7):
Continental is the most solid network carrier in the US

Actually, given that CO has few things it owns, it would be more accurate to say that CO is the most 'smoke and mirrors' network carrier in the US.

They have perhaps the most limited ability of anyone to go to the capital markets.

Steve


User currently offlineAirwave From United States of America, joined Mar 2006, 1117 posts, RR: 3
Reply 14, posted (8 years 3 months 2 weeks 5 days 23 hours ago) and read 3933 times:

Quoting Ikramerica (Reply 10):
I would expect the same, and have no idea whether there was one, but I would assume so. Sometimes, they aren't legally enforceable, though.

True, very true. Perhaps, due to the fact that there are so many airlines operating around the world, it becomes difficult to enforce any sort of covenant; there's so much competition anyway that there is less protection for the employer and thus, less need for a covenant (or at least a longer/more restrictive one. Following that path, perhaps these guys got away from CO with very little holding them back.



When you do things right, people won't be sure you've done anything at all.
User currently offlineIncitatus From Brazil, joined Feb 2005, 3994 posts, RR: 13
Reply 15, posted (8 years 3 months 2 weeks 5 days 19 hours ago) and read 3742 times:

Quoting WorldTraveler (Reply 8):
And your fantasies of CO acquiring DL are just that, fantasies. CO doesn't have the money and won't be able to find someone willing to assist in acquiring DL because DL is turning their business around.

If you go back to my posting and also...

Quoting Tornado82 (Reply 12):
That would be the first step in making Continental NOT the most solid network carrier in the US.

you would figure out the reason why Continental has not made a bid.

Other multiple threads and news about Delta's pilots give some insight too.

Quoting WorldTraveler (Reply 8):
CO also has to contend with DL's ability to launch services from JFK and ATL, the latter of which is unquestionably stronger in pulling in connecting passengers.

Compared to Newark, Atlanta is poorly located as a connection point to Europe. With a single hub in Newark Continental is able to serve Europe far more efficiently than Delta's network divided between JFK and Atlanta.


User currently offlineDb373 From United States of America, joined Sep 2005, 237 posts, RR: 1
Reply 16, posted (8 years 3 months 2 weeks 5 days 18 hours ago) and read 3714 times:

Quoting Incitatus (Reply 15):
Compared to Newark, Atlanta is poorly located as a connection point to Europe.

But on the same token, compared to Atlanta, Newark offers far less connection oppurtunities to cities in the US. Newark is great because of the O&D, but it doesn't serve near what DL serves out of ATL.



Keep Delta My Delta
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 17, posted (8 years 3 months 2 weeks 5 days 17 hours ago) and read 3630 times:

And EWR's superiority is why DL is considerably larger across the Atlantic than DL's strategy of 2 main gateways at JFK and ATL and 1 secondary gateway at CVG. (sarcasm)

EWR is GEOGRAPHICALLY a superior gateway to Europe but it is about 15 air miles from JFK so if you want to argue that EWR is superior, you just included JFK. Add in DL's huge ATL hub and DL is able to pull the 75% of passengers to Europe that are NOT from the NE. DL very effectively uses JFK for the largest markets and then the unique markets while ATL serves every route that can support two or more flights or which does not depend largely on NE originating traffic. Examples: EDI - DL doesn't want to fight w/ CO for the NYC market but they will pull as many connections off of CO's EWR flight and do just fine. NCE and ATH on the other hand are unique DL cities and can support double daily service through the summer. KBP is not served by any other US carrier so DL will serve it from the closest gateway and the one that generates the most Eastern Europe traffic. MAN and DUB/SNN are competitive and DL needed to serve them from NYC as well as ATL in order to develop brand preference. There are large numbers of DL loyal customers in the NE that will use those services as well as those connecting for whom a gateway in ATL or JFK is not important.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16795 posts, RR: 51
Reply 18, posted (8 years 3 months 2 weeks 5 days 16 hours ago) and read 3532 times:

Quoting WorldTraveler (Reply 17):
EWR is GEOGRAPHICALLY a superior gateway to Europe but it is about 15 air miles from JFK so if you want to argue that EWR is superior, you just included JFK.

JFK and EWR are not the same.

At EWR CO has a 68 gate terminal (plus 8 more in Terminal A for a total of 76 EWR gates) that received a $1Billion dollar expansion 4 years ago, they have a brand new 19 gate International concourse, a brand new customs and Immigration hall, a huge new cargo facility, 4 modern maintenance hangars, their own Caterer (Chelsea) etc..

At JFK DL only has 24 gates which are connected to a 40 year old terminal, DL's cargo operations at JFK are weak and they don't have a maintenance facility at JFK.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineCubsrule From United States of America, joined May 2004, 22680 posts, RR: 20
Reply 19, posted (8 years 3 months 2 weeks 5 days 15 hours ago) and read 3488 times:

All this talk of CO bolting O.W. seems to ignore how close CO and NW are. Recall that that relationship (along with NW/KL) predates the alliance membership.


I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineStirling From Italy, joined Jun 2004, 3943 posts, RR: 22
Reply 20, posted (8 years 3 months 2 weeks 5 days 15 hours ago) and read 3485 times:

Quoting SLCUT2777 (Reply 2):
I highly doubt DL is paying them more than what CO was paying.

While Delta is fighting over pennies with its Pilots, don't be fooled, Delta, or any airline will pay a handsome sum for executive talent. Didn't NW come out recently stating this very fact? (Or was it AA?...some airline recently came out defending their executive salaries)

Quoting RwSEA (Reply 4):
The $15,000 or so more that DL might be paying is what tipped them over the line into Chapter 11

It would be much more than $15K to get these guys to move. If these guys can produce, they will be very rich. Whatever they made at CO, I would guess DL beat it by six figures, plus bonuses. How else do you get someone to jumpship from a successful airline to one fighting for survival.

Quoting WorldTraveler (Reply 8):
CO doesn't have the money and won't be able to find someone willing to assist in acquiring DL because DL is turning their business around

All I can think of is HP and US. There was no shortage of capital being extended to this deal. Why would a CO/DL marriage be any different?

Quoting WorldTraveler (Reply 8):
DL's creditors stand to gain far more by DL recovering and becoming profitable for the creditors than for them to sell to another airline

So wouldn't it stand to reason that a stronger carrier would be even more attractive to the creditors? All the guys holding the paper care about is getting paid, whether the checks are signed by CO or DL is irrelavant...

Quoting Ikramerica (Reply 10):
Sometimes, they aren't legally enforceable, though.

I don't know...I have seen maybe only one out of ten of these "non-compete" contracts getting tossed. For whatever reason, corporate America takes these things very serious and will fight them tooth and nail.

Quoting Incitatus (Reply 15):
Compared to Newark, Atlanta is poorly located as a connection point to Europe

Not if your Delta where your largest and most important hub is located. The NE is not the only market to Europe.



Delete this User
User currently offlineAirwave From United States of America, joined Mar 2006, 1117 posts, RR: 3
Reply 21, posted (8 years 3 months 2 weeks 5 days 14 hours ago) and read 3440 times:

Quoting Stirling (Reply 20):
I don't know...I have seen maybe only one out of ten of these "non-compete" contracts getting tossed. For whatever reason, corporate America takes these things very serious and will fight them tooth and nail.

I think what Ikramerica means is that CO wouldn't be able to use these covenants (if any) in a court of law as the basis for an injunction against DL for its recent moves, as detailed in the OP. Now, I don't want to get flamed for putting words in anybody's reply window, but that's how I read it.

Ikramerica, if my interpretation is off--sorry and I'm taking it as my own idea, lol.  Cool



When you do things right, people won't be sure you've done anything at all.
User currently offlineMalpensaSFO From , joined Dec 1969, posts, RR:
Reply 22, posted (8 years 3 months 2 weeks 4 days 16 hours ago) and read 1924 times:

Quoting Cubsrule (Reply 19):
All this talk of CO bolting O.W. seems to ignore how close CO and NW are.

Continental and One World?

Quoting Incitatus (Reply 15):
Compared to Newark, Atlanta is poorly located as a connection point to Europe

 yes 

Quoting Db373 (Reply 16):
Newark is great because of the O&D, but it doesn't serve near what DL serves out of ATL

That is part of the reason Continental makes money and Delta is broke. Basing an airline in a non O/D heavy market has never been a recipe for profit. As can be seen with TWA at St. Louis, NWA at Minneapolis, AA at San Jose.


User currently offlineCubsrule From United States of America, joined May 2004, 22680 posts, RR: 20
Reply 23, posted (8 years 3 months 2 weeks 4 days 16 hours ago) and read 1888 times:

Quoting MalpensaSFO (Reply 22):
Continental and One World?

Heh, meant Skyteam... frankly, considering the condition I was in last night, I'm surprised the post was that coherent.



I can't decide whether I miss the tulip or the bowling shoe more
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