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Success Of DL Bankruptcy Reorganisation Vs UA, US  
User currently offlineNickofatlanta From Australia, joined May 2000, 1488 posts, RR: 0
Posted (6 years 6 months 3 weeks 2 days 1 hour ago) and read 2683 times:

Hello all -
Before I begin, this is by no means a post to start a battle of the fans of the different airlines. I am currently working on a paper for an airline management course. I have read in a number of posts here and seen references elsewhere to how effectively DL reorganised compared to some of its peers. Big favour: does anyone have a link to any substantive sources on this - such as the Financial Times, Wall Street Journal etc.

Any assistance would be very much appreciated!

3 replies: All unread, jump to last
 
User currently offlineFlighty From United States of America, joined Apr 2007, 8543 posts, RR: 2
Reply 1, posted (6 years 6 months 3 weeks 2 days ago) and read 2638 times:

Nick, those are not the type of sources I would recommend. Honestly, the people here know more than the Wall Street Journal about airline planning, aircraft utilization and things like that.

One viewpoint is Delta was more mis-managed than other airlines were, and had a harder break with their previous philosophy. My main point is Delta went from being domestic to international very, very fast. Mostly, this means they expanded JFK into an international hub very fast, using aircraft that were previously flown domestic.

But as for your thesis, all 3 airlines are doing quite well. US for example made a lot of money last year. And don't forget NW, the most profitable airline (if I remember right), which had gone into bankruptcy in lockstep with Delta.

Why is Delta unique? Delta had been suppressing their own success, and they finally stopped doing that. Also, the media is big in NYC, where Delta has expended its JFK hub. Therefore, Delta is viewed by the media as important.

In terms of the recent bankruptcies, US went bankrupt twice. The second time around, US was experienced and achieved unexpected courtroom success. Many staffers from US went to Delta and NW to help them with their bankruptcies. For example, the US CFO went to NW to help them copy what US had done. Delta and NW both went to the very same bankruptcy judge US had recently used with great success, Alan Gropper. He helped all 3 airlines do everything they wanted.

Really this is a matter of excellent legal advice rather than corporate strategy. DL, NW and US all had great lawyers and got everything they wanted from the bankruptcy court. In doing so, they all cheated death and became healthy again.

United is the odd one out. Most people think they did not cut enough expenses during bankruptcy. So, they did not do as good a job as NW-DL-US. Hope this is useful

[Edited 2008-03-02 23:55:42]

User currently offlinePHXtoDCAtoMSP From United States of America, joined Feb 2008, 299 posts, RR: 0
Reply 2, posted (6 years 6 months 3 weeks 1 day 17 hours ago) and read 2501 times:



Quoting Flighty (Reply 1):
Nick, those are not the type of sources I would recommend. Honestly, the people here know more than the Wall Street Journal about airline planning, aircraft utilization and things like that.

You may be right, but he can't cite "according to a knowledgable person from Airliners.net" in his works cited.


User currently offlineDartland From United States of America, joined Apr 2005, 644 posts, RR: 2
Reply 3, posted (6 years 6 months 3 weeks 1 day 16 hours ago) and read 2413 times:
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Quoting Flighty (Reply 1):
Really this is a matter of excellent legal advice rather than corporate strategy. DL, NW and US all had great lawyers and got everything they wanted from the bankruptcy court. In doing so, they all cheated death and became healthy again.

It depends on how you define healthy.

First off -- US did not exit bankruptcy on its own. HP bought US assets out of bankruptcy on the cheap, calling it a merger. It was a good outcome for US, b/c liquidation was on the table and obviously would have been worse. Whether the carrier today is better off for having done that is up for debate, but certainly US benefited b/c they might not have made it otherwise.

Second off -- Flighty's arguement about DL is an interesting one. DL is the only one that changed strategy, not just cut costs. But I don't think anyone can say yet who is going to win long-term.

For sources -- do a search of WSJ and you'll get some articles. They cover bankruptcies pretty well. Check the SEC filings for the bankruptcies also. They will be LOOONG documents, but there are often executive summaries and summary tables with figures indicating how much cost they are getting out, etc., that might help you in your analysis.


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