tpaewr
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CO V DL Interesting Story

Sun Mar 26, 2006 3:19 am

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
 
gift4tbone
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 3:26 am

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 

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Top 3 airports: PVD 23.9%(138 flights), PHL 14.7%(85 flights), PHX 10.2%(59 flights)
 
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SLCUT2777
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 4:22 am

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.
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ikramerica
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 4:36 am

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.
 
rwsea
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 4:46 am

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
 
diesel33
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 4:52 am

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?
 
airwave
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 5:18 am

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.
 
incitatus
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 5:19 am

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.
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worldtraveler
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 5:39 am

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.
 
MalpensaSFO
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 5:57 am

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...
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ikramerica
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 6:02 am

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.
 
diesel33
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 6:17 am

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.
 
Tornado82
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 6:25 am

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.
 
sllevin
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 6:30 am

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
 
airwave
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 7:17 am

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.
 
incitatus
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 11:46 am

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.
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db373
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 11:59 am

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
 
worldtraveler
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 12:56 pm

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.
 
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STT757
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 2:46 pm

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
 
Cubsrule
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 3:23 pm

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.
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stirling
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 3:25 pm

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.
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airwave
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RE: CO V DL Interesting Story

Sun Mar 26, 2006 4:02 pm

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.
 
MalpensaSFO
Posts: 1110
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RE: CO V DL Interesting Story

Mon Mar 27, 2006 2:06 pm

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.
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Cubsrule
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RE: CO V DL Interesting Story

Mon Mar 27, 2006 2:49 pm

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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