ZASpringboks
Topic Author
Posts: 132
Joined: Fri Jan 30, 2004 8:47 am

Delta Bankruptcy And Delta Connection

Tue Mar 23, 2004 1:08 pm

If Delta Airlines continues with financial losses as we have seen this last quarter, what different scenarios might we see regarding their connection carriers? How would this affect carriers like ASA or Comair?
 
rockyracoon
Posts: 1008
Joined: Tue Oct 14, 2003 3:58 am

RE: Delta Bankruptcy And Delta Connection

Tue Mar 23, 2004 2:48 pm

If anything maybe they'd grow. Comair and ASA are both profitiable. If it's not broke, don't fix it. If there's anything delta is doing right, it's their Delta Connection program.

Peace
 
FlyPNS1
Posts: 5258
Joined: Wed Dec 01, 1999 7:12 am

RE: Delta Bankruptcy And Delta Connection

Tue Mar 23, 2004 10:52 pm

Comair and ASA aren't really as profitable as some would think. They are profitable simply because they fly a lot of routes where there is little to know low-fare competition plus DL subsidizes a good chunk of ASA's and Comair's costs.

DL's RJ strategy has its up and downs. The upside is that it has allowed DL to maintain a presence on many routes that would have otherwise been abandoned. Without RJ's, there's a good chance the DFW hub would be completely gone. The RJ's have also allowed DL to add service to a lot of new markets...in the next two months DL will start service to SGF, HVN, CMI, EUG and TVC.

The downside is that RJ's have a very high CASM and do not compete well with LCC's. DL has lost a lot of marketshare trying to compete with against LCC's with RJ's. RJ's have also driven away many of DL's previously loyal customers...lack of F class upgrades and generally poor service has been a major problem. Plus, the reduced feed by RJ's can hurt the remaining mainline flights making it harder to fill DL's large domestic widebody fleet.

If DL goes BK (and even if they don't), there's a good chance DL will eventually sell either ASA or Comair to raise cash. Also, if DL goes BK, look for DL to abandon the ACA FRJ contract as fast as possible. Right now, Comair and ASA are limited to 57 CRJ700's by the DL pilots mainline contract. However, in BK I would expect DL to push to get more CRJ700's for ASA/Comair and possibly attempt to get a 90 seater for ASA/Comair. Of course, DALPA would (and rightfully so in my opinion) fight against this.


 
Guest

RE: Delta Bankruptcy And Delta Connection

Tue Mar 23, 2004 11:47 pm

The downside is that RJ's have a very high CASM and do not compete well with LCC's.

Not true. Unit cost wise, yes. I've seen SkyWest crush SWA in several markets. It's a balance of load vs. capacity. A 50 seater 9 times a day will beet a 737 4 times a day in any small or medium hub market, or short hop high frequency route. This is why SWA doesn't make short hops like SAN-LAX.

[Edited 2004-03-23 15:48:06]
 
papatango
Posts: 375
Joined: Wed Dec 08, 1999 10:32 am

RE: Delta Bankruptcy And Delta Connection

Tue Mar 23, 2004 11:52 pm

FLYPNS why do you believe DALPA has the right to fight more 70 seaters for the connection carriers? Do you think DALPA/ALPA rghts overshadow driving the airline into BK and putting over 60000 other emp out of work? DALPA/ALPA have already curtailed any more 777's at DElta because of their high pilot cost approx 70% more than AMR and they have just about driven Delta into BK single handedly!
 
FlyPNS1
Posts: 5258
Joined: Wed Dec 01, 1999 7:12 am

RE: Delta Bankruptcy And Delta Connection

Tue Mar 23, 2004 11:54 pm

I'd love to see these markets where SkyWest has "crushed" WN. Keep in mind, I'm talking about the Delta Connection system.

Papatango,

It's not the 70 seaters, I think DALPA will really fight against. It's the 90-100 seaters that DALPA will be against. Planes this large belong at mainline and can be profitably flown by mainline. Giving planes this large to ASA would be a disaster...they can barely manage 50 seat planes.

The reason DL has so few 777's isn't solely because of the pilots...although they are certainly a part of the problem. Part of why DL had to sell the 777 deliveries was because they can't get financing for them. DL has taken on so much debt (much of it to finance RJ's), that they can't get financing for the 777's...w/o financing DL can't take the 777's.









[Edited 2004-03-23 15:59:56]
 
papatango
Posts: 375
Joined: Wed Dec 08, 1999 10:32 am

RE: Delta Bankruptcy And Delta Connection

Wed Mar 24, 2004 12:06 am

FLYPNS Wrong DALPA forced Delta into delaying 5 777 just after they had taken delivery of the first 2. DALPA basically told DELTA if you don't give us what we want we will not fly the 777 and based with this DELTA delayed the deliveries from peak season until DEC when they reached an agreement with DALPA. Just look at APLA chart on pay per aircraft type and you will see the DELTA pilots are far away the highest pay almost 70% more than AA.
 
Guest

RE: Delta Bankruptcy And Delta Connection

Wed Mar 24, 2004 12:57 am

I'd love to see these markets where SkyWest has "crushed" WN. Keep in mind, I'm talking about the Delta Connection system.


SLC-BOI
SLC-ABQ
SLC-SMF
SLC-OAK


SWA attempted to go heavy into these markets and failed.