MEA321
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Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:24 pm

From a source within the company, it is rumoured that Delta Airlines is on the verge of bankruptcy. Delta currently has a debt of over 8 billion dollars. They will need major restructuring at the executive level.

The bankruptcy can be expected within the next 3 to 4 months. In my honest opinion, I would like to see this happen simply because Delta will be a much better airline as a result. No one likes to lose their job, however the airline needs to do this in order to survive.

Any thoughts/comments on this?
MEA321
 
FlyGuyClt
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:27 pm

Name "1" U.S. Airline that has been better off filing for bankruptcy other than CO ?

Safe Flying  Smile
Florida Express, Braniff II and ......
 
United4everDEN
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:30 pm

I would say the higher ticket prices that I see, the less seat pitch, no IFE has driven them into this state. I think it is bad for them to be transitioning to RJ's, I personally don't like the way the windows are positioned and the cramped feeling on flights 1+ hrs.
 
Delta767300ER
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:38 pm

I would say the higher ticket prices that I see, the less seat pitch, no IFE has driven them into this state. I think it is bad for them to be transitioning to RJ's, I personally don't like the way the windows are positioned and the cramped feeling on flights 1+ hrs.

I definetely agree with your comments. Delta needs more IFE as well as better seat pitch. I try to avoid 757's on flights 2 of more hours long due to the pitch. I dont like the RJ's either, unless they are used on short routes like ATL-CLT, DFW-AUS, CVG-CLE ect. Hopefully Delta will get things straightened out soon!

-Delta767300ER
 
Guest

RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:50 pm

"Name "1" U.S. Airline that has been better off filing for bankruptcy other than CO ?"

America West, they were in Chapter 11 from 91 to around 94 and without the reorganization of that chapter 11 filing they would not be here today.
 
tcfc424
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:50 pm

First, and I am not discrediting the source, just the possibility that it may not be completely accurate, we have seen this type of thread many times before.

Now, with the disclaimer out of the way, I don't like to see anyone file bankruptcy, however Delta has been unsuccessful, thus far, in renegotiating its pilot contract. Their pilots are among (possibly THE) highest paid among US airlines, and bankruptcy would give the airline a greater ability to handle that (I believe?). It has been reported in newspapers around the country (do a search...should find something from about six months ago) that Delta is not in a good financial situation, so there is a good likelihood that this is not far from the truth. Personally, after flying Delta several times, I have chosen to fly CO instead...better customer service, more mainline jets, and a newer fleet.

Just my .02

Mike S. in AUS
 
COAB767
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:50 pm

Y'all know that CO is the best major airline there is.
Continental Micronesia: "Fly With The Warmth Of Paradise"
 
Guest

RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 2:59 pm

"Y'all know that CO is the best major airline there is. "

Not in my opinion they are not. I have never found anything but CO employees to be rude and un helpful.
 
tu154m
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 3:12 pm

DL's debt is over 20 BILLION dollars..........if it were around 8 million it would be a whole different story. DL is famous for smoke and mirrors with it's employee group. The big thing they are trying to promote now(ie-what we keep hearing about at work) is that they funded their pension for 2004. The thing that isn't being said is that they borrowed to do it..........something in the neighborhood of 340 million..........which comes due to 3 different lenders around 2015. Another thing that gets under peoples skin is that after gutting all non-pilot pensions the last 2 yrs(most of the company), the last thing most people want to hear about is pre-funding a years pension account. The next couple of months will be difficult...........especially if fuel prices continue to soar.
S
CEOs should swim with cement flippers!
 
Guest

RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 3:19 pm

Delta should unload their MD-80/90's and older 737's. Convert all 737-800's to coach with 35" pitch, reduce Business Elite pitch to 50" from 60" to get some more seats, and convert all coach seats on the 757/767/777 fleet to 35" pitch.

Also, order the 7E7 to replace the 757/767/777 fleet. ASAP!

Two aircraft 737-800 (High density short haul/Normal density medium haul) and 7E7 (High density medium haul and long haul). Real simple. Supplement with RJs.

[Edited 2004-03-12 07:23:37]
 
Shenzhen
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 4:50 pm

My opinion is probably worth amount as much as your "inside" sources, nothing.

If there was truly a person within Delta that was in a positon to know this information, they would be risking jail time by releasing it. Just ask Martha  Smile

Cheers
 
keesje
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 4:54 pm

Delta should unload their MD-80/90's and older 737's.

Convert all 737-800's to coach with 35" pitch, reduce Business Elite pitch to 50" from 60" to get some more seats,

and convert all coach seats on the 757/767/777 fleet to 35" pitch.

Also, order the 7E7 to replace the 757/767/777 fleet. ASAP!


Well they surely would not survive that...
"Never mistake motion for action." Ernest Hemingway
 
Dalmd88
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 4:58 pm

No inside source is very reliable these days in ATL. Right now the best indicator is the stock price. Many have said the price has to drop below $2 before Chapt 11 is an option. At the current $8-10 range there is too much inverstor equity at stake. If they took the company into Chapt 11 the BOD would be hunted down by the shareholders. Also if it happens it would most likely happen after the summer season. The third quarter numbers had better be good.
 
alphascan
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 5:09 pm

If there was truly a person within Delta that was in a positon to know this information, they would be risking jail time by releasing it. Just ask Martha

Sorry China, not only is that statement false, but there is no comparison between the two situations. Delta's Board of Directors is obligated to its shareholders to paint an accurate picture of the financial situaton of the company. Chapter 11 has already been publicly discussed by the company as a possibility and will no doubt happen if DL ALPA refuses to negociate a contract that brings pilot compensation in line with the industry norms.

"To he who only has a hammer in his toolbelt, every problem looks like a nail."
 
Shenzhen
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 5:26 pm

USA or Alph,

Please provide a link where Delta said they would file within 4 months. Selectively releasing information to individuals by someone that actually has facts and data, is what is termed releasing insider information.

Without a public anouncement, or a SEC filing...

Cheers
 
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Aloha717200
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 5:59 pm

I sure hope this doesn't come to pass. Delta is a big thing here at SLC and a filing of bankruptcy could end up being one of the nails in SLC's coffin. They already trimmed down the hub forcing mainline flights into RJ flights...unpleasant.

On the other hand it may make them more competitive. I'd like to not have to pay $300 to fly from PIH-SLC and back. I can fly to Florida on that fare for god's sake! (Though Skywest provides that route).

But no, I really don't want this to occur. I enjoy having Delta around, I enjoy their mixed fleet, and a filing of bankruptcy would mean the end of both here at SLC.  Sad
 
Guest

RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 6:00 pm

Well they surely would not survive that...

Err.... Wrong. First class in short haul is now irrelivant in the US. Pamper the long haul and make the rest a hub and spoke LCC. You gain by having a lower cost structure and gain pax by having better comfort than the competition. You also gain by fleet simplification, and yes they would survive. Quite well. Of course, you're from Europe so I guess you are hinging the non-survivabillity on the lack of Airbus aircraft.

Lame.
 
artsyman
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 6:00 pm

This thread is utter BS, and a sad reflection on some of the nonsense that gets spouted on here.

Delta is not on the verge on BK, and the 8 billion dollars worth of debt is not new, they have had it for years, have a plan to pay it, and have been paying it as scheduled. People often comment that because DL is losing money every day, how can they service this debt, but folks, one of the reasons they are losing money every day is because they are paying this debt as part of their daily costs.

Don't look for DL to be filing any time soon

J
 
ATL2CDG
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 7:46 pm

All:

Delta Air Lines' regional jet operation through Delta Connection, Inc. is the ONLY portion of the company making any money at the moment. It would be foolish for DL to consider reducing its regional jet fleet. It's quite juvenile to think that DL would consider fleet changes because passengers don't like the window location or 'cramped conditions'; unless you're doing jumping jacks or playing basketball in-flight, the regional jet fleet is perfectly fine for the routes on which DL has them.

The main source of cash hermoraging is the mainline pilots' contract. They are, far and above, the highest paid pilots in the U.S. commercial air carrier industry, by almost 30%. Without concessions from the pilots in the near term, I do question the on-going stability of Delta Air Lines. However, I do not think that the corporation is as close to bankruptcy as many would have us believe. Grinstein, the new CEO, is taking many new steps to re-evaluate how DL operates on the most basic of levels; I would think anything as major as bankruptcy would wait until after that evaluation is complete and analyzed.

TysV
Ignorantia juris neminem excusat.
 
flyingdoctorwu
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 8:21 pm

Name "1" U.S. Airline that has been better off filing for bankruptcy other than CO ?

Well for starters the ones still operating- being able to reorganize debt instead of completely folding has protected UA and US

Chris
 
airlinelover
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 9:43 pm

America West, they were in Chapter 11 from 91 to around 94 and without the reorganization of that chapter 11 filing they would not be here today.

Ehh.. I wish they were gone..

But seriously, All I see in this thread is CO this CO that, where is hard proof that DL is in dire financial straits??

Chris
Lets do some sexy math. We add you, subtract your clothes, divide your legs and multiply
 
FlyGuyClt
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 9:49 pm

Amwest:

Forgot about HP. You are most correct. My apologies. And you are right. America West has come a long way in improving. Continued success to you.

To All:

Every airline will be bankrupt no matter what employees take in pay cuts if the fuel prices don't go down. When you think about it. It cost you almost double to fill your own personal car. But, ticket prices remain the same.

Safe Flying  Smile
Florida Express, Braniff II and ......
 
Mit
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 10:01 pm


Please provide a link where Delta said they would file within 4 months. Selectively releasing information to individuals by someone that actually has facts and data, is what is termed releasing insider information.

Without a public anouncement, or a SEC filing...


Releasing insider information is not illegal. Profiting from insider information is illegal. Key distinction.

Unless the informant plans to sell Delta stock short, releasing the information is not illegal.
 
Alpha 1
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 10:11 pm

Delta needs more IFE as well as better seat pitch.

IFE's and seat pitch, while nice, are not what is going to make or break an airline financially.
 
skymileman
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 11:40 pm

I don't know about being near bankruptcy now, but give it time and they will be. What they really need to do is to get rid of Grinstein.
 
ord
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RE: Delta On The Verge Of Bankruptcy

Fri Mar 12, 2004 11:42 pm

"Convert all 737-800's to coach with 35" pitch, reduce Business Elite pitch to 50" from 60" to get some more seats, and convert all coach seats on the 757/767/777 fleet to 35" pitch."

Why would Delta go to a 35" seat pitch? It has been proven time and time again that this does not add revenue since there are fewer seats available to sell. TWA failed with its Comfort Class and we've already seen American get rid of MRTC on 757s and A300s, with the rest of the fleet rumored to be next.

And at a time when airlines are expanding the room in business class, why would Delta decrease the room? Nobody would fly them.
 
blackbird615
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 12:46 am

Delta RJ's do appear to be the cash cow at the moment and represent efficient asset deployment. My long term argument with Delta and RJ deployment is passengers initially were ecstatic when an RJ replaced a prop and ASA F/A's generally were a pleasure to deal with. Now, Delta uses RJ's on 2.5 hour flights, Delta saves money on crew/costs and passengers have fewer amenities and room while paying a fare equal to a mainline jet. Once again passengers are shorted as airlines slash costs and increase efficiency.

In today's world where in our own lives we live more frugally it is not hard to understand the airlines need to save money and operate efficiently. The down side is the traveler is shorted to make a buck.

Living in ATL if I frequently have a choice between flying AirTran 717 vs. Delta RJ, AirTran wins every time. So lets pose the question: Are RJ's in the end resulting in fewer booked seats when travelers have the option of choosing the airline based on equipment. After Delta tinkered with the Medallion structure by eliminating segments and altering flight mileage based on ticket price my loyalty was seriously challenged.

Having said the above I fervently hope Delta finds a way to succeed, many families and communities have dedicated careers and their trust to Delta management.
Never fly the "A" model of anything!
 
Alpha 1
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 12:52 am

Why would Delta go to a 35" seat pitch? It has been proven time and time again that this does not add revenue since there are fewer seats available to sell.

Ord, he's preaching to a choir on here, who, in part, have absolutely no idea what it takes to make a profit: it isn't seat pitch; it isn't IFE's, it isn't running "sexy" planes, like widebodies, in markets where all it will do is generate empty seats. All these things are just creature comforts that don't do squat to turn a profit. What will turn a profit is a sound business plan, deplyoing assets where it makes most sense, and having a reliable, consistent product. THEN, some of the creature comforts will have an impact.

As for people bemoaning RJ's, you better get used to them. They already account for 30% of the domestic market, and they're not going to go away. They saved CO after 9/11 and the economic downturn; as did CO not having too many extra seats, which seems to be something that stung DL, AA and UA big-time, since they are heavy (no pun intended) in widebodies.

Do things to make your product reliable, and the creature comforts are the added bonus, NOT what will make profits.
 
DeltaMD11
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 2:36 am

Artsy, Alpha, and ATL2CDG---all three very well-said. Kudos to you guys.

DL has gotten stung because of it's wealth of available seats in light of the market downturn over the past few years. However, things are starting to come around again. Slowly but surely traffic levels are going to keep rising as our economy re-stabilizes. Leo Mullin did a so-so job (don't really like the whole bonus thing and frankly I think that there should be caps put on executive payscales). Grinstein has been brought in to help trim the fat off of the airline so to speak and hopefully he'll be able to work the pilots down a bit as they are payed REALLY well, and this would save the company millions and millions of dollars per year. Grinstein will get the job done. He worked wonders for WA.
Too often we ... enjoy the comfort of opinion without the discomfort of thought. - John Fitzgerald Kennedy
 
N670UW
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:00 am

Of course, you're from Europe so I guess you are hinging the non-survivabillity on the lack of Airbus aircraft.

Lame.


No, your last sentence was pretty lame.


670
 
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EA CO AS
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:12 am

DL's debt is over 20 BILLION dollars..........

Source, please? And, "Um, that's what someone told me," doesn't count.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
gigneil
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:24 am

DL's debt is over 20 BILLION dollars

Heh that's the most ridiculous thing I've ever heard said here.

N
 
Thrust
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:28 am

If Delta really is on the verge of bankruptcy, they had better file for Chapter 11, or if it's even worse, Chapter 7. An airline should not be afraid to humiliate itself by filing for bankruptcy protection...they should be more afraid of the consequences of not filing. Delta's recent cancellation of all of their remaining 777s on order was a good indicator that they were nearing bankruptcy, because they were putting off a deal on such a great aircraft. I hope Delta does not go down...they are probably tied with United for my 3rd favorite airline.
Fly one thing; Fly it well
 
N863DA
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:41 am

To MEA321,

I'm guessing that I know you well, albeit without knowing it - largely given that I got the same information from the same source, concerning Delta Air Lines. FWIW, Dr. J said that the debt was due in two years, but yes, nonetheless, you are right.

Then again, Dr. J. doesn't appear to be the largest supporter of the company, but it is true that he definately gave us the $8 billion figure. And if anyone knew, it would be him.

FLY DELTA JETS


N 8 6 3 D A
 
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:42 am

Delta's recent cancellation of all of their remaining 777s on order was a good indicator that they were nearing bankruptcy, because they were putting off a deal on such a great aircraft.

That's a ridiculous statement.

Your argument is like saying I'm near bankruptcy because I turned down a free Lamborghini as my daily commuter car when realizing I can't afford the gas and insurance on it.

Even if Boeing gave DL the 777s, they'd still be hurting thanks to the exorbitant pay rates for pilots on that equipment. That is why DL doesn't want more right now - it also sends a message to the pilots; "Help us get our costs down, and we'll add more planes and fly larger equipment."

"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
phollingsworth
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 5:43 am

As for DLs debt and the like, the balance sheet on yahoo.
http://finance.yahoo.com/q/bs?s=DAL only goes through 30-Sep-03. They had $25 bill in liabilities, of which $6.6 billion are current. They also had $4.9 billion in current assets. Delta's biggest problem is cost per ASM, which is absurdly high. Their yield per RPM is great, and the load factors are OK ~68-69%. The crew costs are killing them, between 30% and 200% higher than their competitors'. This is also the reason you see a lot of 50-70 seat RJs. The crew costs for the 737-200 are so much higher than the CRJ70, that even with a 100% load factor the operating economics are worse.

Other airlines have used Ch. 11 or the threat thereof to get their costs down. Delta will do the same. The funny thing is that outside of DOC, Delta has done very well, these are significantly lower than they were in CY 2000. However, their DOC are killing them. While reducing the number of seats will help their load factors it won't improve yield per RPM and will hurt cost per ASM. <-- This comes from a recent Av Week article which I don't have in front of me.

The entire industry is current unsustainable. It will correct itself over time; however, there is a significant risk of a catastrophic correction. Removal of two big players would help significantly. I get the feeling from some people in the industry that about 20% of markets should disappear entirely and never reappear.

[Edited 2004-03-12 21:46:14]

[Edited 2004-03-12 21:47:58]
 
goomba
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 6:30 am

I'd agree that the crew costs are killing them based on what I've read, but it seems to me that operating such a variety of aircraft is to blame as well.

737-200
737-300
737-800
757-200
767-200
767-300
777-200
MD-80
Am I forgetting any here?

Plus the CRJ's and other regional planes.

They are no longer running the 727 and the MD-11 as of recently.

Doesn't it make sense to follow the model of the LCC's and fly only a few aircraft types.

Could Delta get rid of everything but the 737-800's, the 757's and the 777's and run the airline well based on short to medium (737-800) medium to long (757-200) and long haul (777) routes? Plus keep the regional jets flying too as this is the only profitable element to the airline as it stands today.

Would this allow Delta to continue the purchase of their 777 commitment to Boeing?

Would this allow Delta to recognize additional revenues faster as well as restructuring the pilot contracts?

Perhaps I'm naive here, but it makes logical sense to me.
 
DeltaMD11
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 6:38 am

Goomba,
That idea would never work. The way DL's fleet is now you have the 115-287 passenger range well-covered, with a multitude of different capacities to move around on different routes. Extricating the 767's from the fleet would be retroactive as they are so versatile. DL uses them on high-density Florida routes, premium transcons, as well as to Europe. Not to mention you have type commonalities within the 737 family, 757/767. Crews can be also easily re-trained from the 767 to the 777. You idea wouldn't work for a multitude of reasons.

By the way, you forgot the MD-90 and 767-400ER. The specific type of MD -80 is the -88. Big grin
Too often we ... enjoy the comfort of opinion without the discomfort of thought. - John Fitzgerald Kennedy
 
goomba
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 6:55 am

Crews can be also easily re-trained from the 767 to the 777.

Crews could just as easily be trained from the 757 to the 777 as the cockpit of the 757 and 767 are almost identical. What difference would that make?

Extricating the 767's from the fleet would be retroactive as they are so versatile. DL uses them on high-density Florida routes, premium transcons, as well as to Europe.

OK I see your point here, so then get rid of the 777. The only route that would royally screw up is the ATL-NRT route. Perhaps use the 767-400 for this route and perhaps some European routes too. Today it's only being used for ATL-LAX, ATL-LAS, ATL-HNL, ATL-SLC, and I believe ATL-SFO. Continental is using the 767-400 quite nicely on her European routes.

All I'm saying is this: If you look at the model of the profitable LCC's (AirTran, SouthWest, and JetBlue), they have one, maybe two aircraft types and they run the same routes as DL domestically. International is a different story, but as you stated, the 767 is versatile. The 777 is a far better choice from a passenger perspective, but hey...since when recently does the passenger matter when it comes to a non LCC operator?
 
ConcordeBoy
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 7:09 am

Perhaps use the 767-400 for this route

Yes, and watch it splash down a thousand miles short of the airfield.....



so then get rid of the 777

They almost [temporarily] did in late 2001... sad, considering that they were planning or ordering more a few months before that.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
DeltaMD11
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 7:16 am

"Crews could just as easily be trained from the 757 to the 777 as the cockpit of the 757 and 767 are almost identical. What difference would that make?"

Point taken. I was just throwing out a few examples to save myself having to go through a whole diatribe of reasons why your naivety preceeds you. The 777 is a good fit for DL in my humble opinion. ATL-NRT is a money-maker, and it's used on some of the more premier European routes. Once this sour economy really starts pushing forward again they're become even more invaluable to DL. And your thinking is skewed. DL is not a LCC and doesn't wish to use the LCC template on it's mainline services. Cost structures are totally different as is the entire business model. What works for some might be disaster for other (as is the case here).
Too often we ... enjoy the comfort of opinion without the discomfort of thought. - John Fitzgerald Kennedy
 
mlsrar
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 7:16 am

Pamper the long haul

This sounds rather contradictory to your previous statement (not that I am in any way surprised by this) which said:

reduce Business Elite pitch to 50" from 60" to get some more seats

So your conclusion is that pampering the long-haul services would include a tighter-pitch?

You gain by having a lower cost structure and gain pax by having better comfort than the competition

Because of course Delta's CASM is well in-line to accomplish this without posting grave losses  Insane And, fewer seats per segment and block hour help to reduce the cost structure how?

Also, order the 7E7 to replace the 757/767/777 fleet. ASAP!

Because Delta having recently unloaded and deferred 777 deliveries to other customers is a fiscal barometer that they are in a position to assume more new-frame debt?

Whatever comes out, I wish Delta the best in survivability in this volatile market.


I mean, for the right price I’ll fight a lion. - Mike Tyson
 
srbmod
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RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 7:54 am

Some of you seem to think that Delta filing for CH. 11 would be the end of the airline. Delta does seriously need to get their house in order, and the biggest obstacle is their pilots. Delta's pilots need to get the chip off their shoulders and realize that the pilots at nearly every single airline has made concessions since 9/11 in order to stave off layoffs and/or bankruptcy. The worst thing that could happen to Delta would be if the pilots went on strike once the contract has expired. Grinstein's town hall meetings are not going to get Delta's pilots reps on the side of management. The two parties need to just go ahead and have the dispute mediated because if Delta does file for bankruptcy without having gotten concessions from their pilots, the first thing they'll do is have a judge do it for them. We're not talking about in the vein of Frank Lorenzo @ CO either. They can basically go to the bankruptcy judge and tell the judge that the other side refuses to agree to a renegoiated contract and that this new version of the contract is important in getting us out of CH. 11. The judge can review the contract and decide whether or not to void the old contract and make the pilots work under the new contract, approved by the court. If it went to that, Delta would be in some serious trouble (I mean serious trouble as in Eastern), as I doubt the pilots would want to work if they were forced into a contract that they did not want to work under.
 
MEA321
Topic Author
Posts: 381
Joined: Mon Oct 06, 2003 11:28 am

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 8:48 am

Im honestly surprised at how fast everyone jumped at me and called this thread non-sense! Had you read my intro. post you would have seen that I used the word "rumoured".

I did not state that Delta WILL file Chapter 11. The fact that the airline is billions of dollar in debt is true. The fact that the airline is ailing is true. The fact that bankruptcy is 3 to 4 months away is also rumoured...RUMOURED! But you know what they say sometimes, there is no smoke without fire!

I created this thread to put this issue out in the open, and I believe that it has been a productive thread so far.

I appreciate all of the intuitive and intelligent replies.
MEA321
 
artsyman
Posts: 4516
Joined: Wed Feb 28, 2001 12:35 pm

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 8:57 am

I did not state that Delta WILL file Chapter 11. The fact that the airline is billions of dollar in debt is true.
****

Please go and find me a major airline that does not have billions in debt.(other than WN, who probably has it also0

J
 
dl1011
Posts: 315
Joined: Tue May 18, 1999 6:42 am

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 9:11 am

"737-200
737-300
737-800
757-200
767-200
767-300
777-200
MD-80
Am I forgetting any here?"

Also add MD90's and 767-400's! When you add in all the engine types, it is a mess and I don't know how anybody could plan maintenance.

JT8's for the 737-200's and MD88's. (2 types)
CFM56's for the 737-300 and NG. (2 types)
PW2000's for the 757's. (1 type)
RR for the 777. (1 type)
PW4000, CF6-80A, 3 models of CF6-80C's (5 types!)

Something like 11 engine types!


FWIW, rumor is that F Reid will be leaving soon. So much
for the bankruptcy proof retirement packages to keep the talent. Several (many) co-workers planning for CH11. Several seem to have lost faith in management. Imagine that.
 
dl1011
Posts: 315
Joined: Tue May 18, 1999 6:42 am

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 9:15 am

Looks like Fred is leaving.

"Date: March 12, 2004

To: All Delta Employees

From: Jerry Grinstein, Chief Executive Officer

Subject: Fred Reid

Today, Fred Reid announced his decision to leave Delta, effective April 1, 2004. Fred made many valuable contributions to our company since he joined Delta in 1998 and helped position Delta as a strong competitor both domestically and globally. Join me in sharing our appreciation for his efforts and in wishing him well with the next stage of his career.

Initially, the overall responsibility for the Chief Operating Officer Team will come under my direction, with the expert support of the operational leaders. I have asked each of these leaders to remain on the COO Team, although some responsibilities may shift as the result of organizational changes. We will keep Delta people fully informed as further changes occur.

Leadership transitions can sometimes be unsettling. With any change in leadership, some members of the previous management will move on for a variety of reasons. That is expected. Fortunately, our company has the talent within its own ranks to step into most key leadership positions. We will promote from within, whenever possible, to strengthen our company for the long-term.

That doesn't mean we won't sometimes look outside to find people with special talents, but my first priority will always be to turn to Delta people first.

During this time, it is important that we continue to work together and remain focused on restoring our financial health, watching out for each other and delivering great customer service. Each of you plays a critical role in the long-term success of the Delta team.

Jerry Grinstein"


The rats are jumping ship.



 
FlyPNS1
Posts: 5271
Joined: Wed Dec 01, 1999 7:12 am

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 9:19 am

DL isn't going to file BK in the next few months....it's not possible. You can't just declare BK whenever you feel like it. You have to prove that you exhausted all means and are no longer able to fulfill your financial obligations. At this time, DL has NOT reached that point.

DL has almost 3 Billion in cash on hand which is enough to fulfill all of DL's obligations for 2004.

The rumor that MEA321 is reporting is a false leak by DL management. DL management is trying to get concessions from the pilots, so all of these "rumors" about BK are being leaked as a scare tactic.

With all that said, if DL does not get its costs in line with the rest of the industry, they will eventually face BK. However, it won't be in 2004 (barring some catastrophic event).


 
atrude777
Posts: 4258
Joined: Wed Aug 13, 2003 11:23 pm

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 12:33 pm

What Delta needs to do is to cut back on a hub heavily again like AA did to STL, maybe get rid of SLC but keep high routes, again what AA did to STL. Then they need to focus on ATL and strengthen the routes like AA is doing to DFW. Then focus on JFK and CVG, for the regional jet routes and more popular destinations like CVG-MIA and JFK-MIA add more routes etc etc. Like AA does with MIA and FLL. Then use SLC to its bare minimum and transfer routes to ATL or CVG and keep the profitable ones and popular routes with RJs and the smallest mainline jet which would be the 732 correct? Can 732 handle routes out of SLC? Like AA does with STL, most flights are MD80 and RJ/Props. I realize I am comparing AA with DL which is probably a bad idea, HOWEVER, AA was once in the same position nearing bankruptcy like what a day from actually physically filing it? Then they changed the STL hub changed thingsa now they are rumored, note i said RUMORED to post a small marginal profit if not more? So if DL can see what AA does maybe they can turn around. I personally think Delta should get rid of SONG, the less work DL has to focus on the better they can tunr around, havign song no matter how much money it could make them only adds more problems in the end.

what do u all think?
Alex



Good things come to those who wait, better things come to those who go AFTER it!
 
tu154m
Posts: 610
Joined: Tue Oct 02, 2001 4:52 am

RE: Delta On The Verge Of Bankruptcy

Sat Mar 13, 2004 1:22 pm

Gigneil & EA CO AS
Sorry to sound so ridiculous but here it is word for word from a Jan. 14, 2004 Internal Analyst Conference Call:
A second area of focus must be to address our debt load
1. Delta’s debt, including operating and capital leases, is currently $20.8 billion.
2. Such deep borrowing has damaged our balance sheet.
3. Repairing that damage requires a comprehensive strategy that addresses costs and establishes a realistic, disciplined plan that, over time, will reestablish our balance sheet.
4.The time required for this recovery makes it all the more important that we begin the process now, with a commitment to see it through to completion.
Read line number 1. So, your source is a memo from CEO Jerry Grinstein. Sorry I was off by .8!!!!
S
CEOs should swim with cement flippers!

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