Your long post seems to be more fantasy than anything else....
DeltaSFO claims that "with United dying a slow and painful death and American floundering at the moment, Delta, who has a cool 2.5 billion in cash in the bank right now, is sitting in the catbird seat."
Wishful thinking. 1.25 billion of that 2.5 million is borrowed money. Delta only had the good fortune of arranging to close a debt offering just prior to Sept. 11. AA had the same good fortune because they had a credit facility of 1 billion in place before Sept. 11.
Besides this illusory advantage in cash, there are other items that should worry Delta. It must manage much higher pilot costs than AA during this downturn. It has been less aggressive in cutting employees costs than AA or CO because it is afraid of giving a boost to union organizers. In fact, it may have initially done the opposite by committing to much more expensive furlough packages than AA or UA in an effort to wage an anti-union PR campaign. From what I hear, however, they have already been backing out of some of these commitments. We'll see next week how much cash Delta's hesitancy and cynicism cost them.
You are factually incorrect, and your conclusion is even further off the mark. That $1.25 billion EETC was finalized on September 17th, not prior to September 11th. Delta did not close that EETC because of good fortune. Delta closed that EETC because Delta Air Lines, Inc. is considered one of the best credit risks among U.S. air carriers. Also, the cash advantage is not "illusory." More cash is more cash, no matter how you get it. Continental has been living beyond their means for years by way of EETCs.
On the cutback issues, again, you claim that Delta did what Delta did purely out of fear of union organizers. Obviously, AFA and AMFA's recent efforts have put the spotlight on Delta the past few months, and I'm certain that our leadership did what they did in part based on that. But don't forget that Delta's generosity compared to other majors was made possibly by our superior financial position.
Also, going back to the issue of good fortune, are you sure it was Delta that got lucky and not American? Sure, Delta pilots are the highest paid in the industry, but how convenient it is that you left out the fact that American put an offer on the table not too long ago that they claimed was "significantly" more lucrative than what Delta pilots are currently earning. Maybe it was American's luck that APA balked a bit. Otherwise, AA would be hurting even worse than they are.
Delta SFO also claims that "Delta doesn't really target the 13-15 year old white trash segment for their Europe services. Still, even after cutting 44% of our international services at Kennedy, Delta is still the leading U.S. carrier by far in the transatlantic market."
Oh, I wouldn't be to sure of that. Delta's yield has over the last two years been lower than American's, United's, US Airways' and Continental's. Could that be because Delta does indeed target the white trash, leisure segment? If Delta did not have a definitive cost advantage during this period, it would have been challenged to make a profit.
It should not come as a coincidence to anyone that of all the majors it was Delta that cozied up to Priceline. On the Delta board over at webflyer, this relationship went a long way toward explaining why Delta has done nothing to respond to AA's MRTC and UA's E+ and why Delta has been more panicked about allowing upgrades on discount fares. Could it be because Delta needs to fill every last seat to make money and sees far more discount fares than AA or UA? Study the yield numbers. They tell quite a story.
Yes, the yield numbers tell quite a story, namely, that you are dead wrong. Delta falls right in the middle of the pack you named as far as yields go, slightly lower than American, and slightly higher than United and Continental, with everybody significantly lower than US Airways. Suggest you check your sources. Mine are the actual annual reports of the companies you named.
On the MRTC/E+ issue, Delta's system load factor has consistenly been the highest in the industry. Why take seats out when they are in demand? Delta isn't that stupid.
That brings me to the last faulty premise that Delta SFO makes. If Delta continues to be "the leading U.S. carrier by far in the transatlantic market," the reason for this has less to do with the fact that more high yield passengers prefer Delta over UA and AA, and more to do with the fact that unable to operate at Heathrow Delta tries to compensate by flying to more leisure destinations. Given the high profit margins that AA and UA expect from any international destination they serve, AA and UA have been content to operate to Heathrow and one or two additional European destinations. The money is in Heathrow and not in Istanbul.
Uh, negative. Delta serves more European markets than do AA and UA because Delta has hub operations that are perfect for serving Europe's smaller markets profitably. ATL's combination of sheer feed and geographic location make it better than DFW or ORD for transatlantic operations, and JFK's O&D is unmatched by any other market in the world. I suppose AA, now that it has acquired all those TWA rights, could try and set up some stuff at Kennedy, but they'd run up against some stiff competition from Delta. If you want to believe that there is no business traffic to anywhere in Europe except London Heathrow, you're welcome to believe that, just how you believe that Delta's yields are lower than the rest of the Big Six. But it makes you seem pretty uninformed.
That is why despite serving fewer destinations and operating fewer flights to Europe AA and UA both derive a greater percentage of their revenue from Europe than Delta does.
Dead wrong there, buddy. Europe is Delta's cash cow.
The events of Sept. 11 have, of course, thrown all of the traditional distinctions between the various carriers into disarray. But, I don't expect much to change when things return to normal. UA will probably be much smaller but it will still have two very profitable franchises, its Heathrow routes and its Asian routes. AA will have the assets to rebuild its route structure, a cache of TWA slots at JFK, LGA, DCA that it still would not have rationalized into its system, its London Heathrow routes and its Latin American routes. By this time, AA may also have locked up Heathrow as a result of an open skies agreement with the British. Call it payback for all of the suport the British have shown the US following the events of Sept. 11. Meanwhile, Delta will be no stronger internationally or domestically. It is true it may end up with a better balance sheet than United, but without United's Asian routes or AA's cache of domestic slots at key airports there is little it will be able to do to provide a case for anyone but the Priceline crowd to fly them.
Your predictions are quite entertaining. You seem to think this is some little storm cloud that will soon pass. United is fighting for its very existence. American is too. Just ask Don Carty. He said so himself.
You think US-UK Open Skies or AA/BA Antitrust Immunity are going to happen anytime soon? Keep on dreaming, ace. Delta and Continental are banging at the door of Heathrow and the British government isn't about to let them in, even if it means preventing BA/AA, which itself is so anticompetitive that it will never happen.
You're looking for a big AA transatlantic buildup at JFK? Don't bet on it. Delta is well entrenched there as far as international ops go, and Carty knows it. Delta at Kennedy and Continental at Newark are going to be the only game in town as far as transatlantic goes. American will be relegated to O'Hare or Dallas/Fort Worth.
You don't think Delta will be any stronger internationally or domestically? Are you sure? Who do you think will benefit most from United cutting away some of its already measly European routes? Assuming United were to go under, who is it that would have the financial wherewithal to pick up Heathrow or Asia? Assuming US Airways went under, who would it be that moves in on all those juicy Northeast markets? Who will emerge from this tumultuous period sitting atop the industry?
I know you hate Delta, Ladevale. You hate Atlanta, you hate Widgets, you hate everything even remotely associated with Delta Air Lines. But, as much as you may not want to accept it, the answer to those questions I brought up in the last paragraph is easy:
The Big D.
It's a new day. Every moment matters. Now, more than ever.