delta2ual
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 4:56 pm

I know most of what we read on here is opinion, but I am curious as to the current state of Delta. Where do they make their money? I ask, because over the past several weeks on this site, I have read that (paraphrasing):
-DL loses a billion dollars a year in NYC
-DL can’t compete with AA & UA in Latin America
-DL loses money in SLC & LAX
-DL has inferior hubs vs. AA & UA (I would argue that UA does have the best hubs in the US)
-DL’s Asian portfolio is inferior to UA’s
-DL's "split-hub" operation in NYC is a mistake
-DL's JFK facilities are 3rd world (they kinda are); and even when they are done with the upgrades, they will still be inferior

How, then did DL earn $768 million in 3Q? (Net income was $1Billion). Is all this from ATL? Is it all from fees and services? The oil refinery? Codeshares? I really am curious. Living in Chicago, I fly AA & UA more now, but as a former employee of both DL & UA, I tend to want them to do well! (Don’t get me wrong, I do like AA too). It’s difficult sometimes to separate fact from “fanboyism” on this site. Interested in hearing other’s views.
From the world's largest airline-to the world's largest airline. Delta2ual
 
SESGDL
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 5:17 pm

Much of what is said on this site is hearsay, plain and simple. DL is doing the best of the major carriers in this country, something that many on this site don't like. There's a large and vocal clan of people here who dislike DL and chime in whenever possible to dismiss any accomplishments DL makes. I decided I'd respond to the things you listed with what my knowledge of the issues are:

-DL loses a billion dollars a year in NYC

If this is indeed the case then it's likely that AA, B6, and even UA are all losing substantial amounts of money as well. The market is so huge and so competitive that it's hard for airlines to make money in NYC, just look how much lower fares are in competitive markets from NYC compared to other large metropolitan areas. And somehow, in spite of these enormous losses, DL continues to expand in the market and invest billions building and improving their facilities. For the US carrier that made the most money last year and this year, thus far, that doesn't add up. If it doesn't add up it's not true.

-DL can’t compete with AA & UA in Latin America+

And AA can't compete to the Asia/Pacific region. Every carrier has its weaknesses and can't be all things to all people. DL has the smallest presence in Latin America, but serves nearly all of the major markets. DL doesn't need to have a hub in MIA to operate into South America, bigger is not always better.

-DL loses money in SLC & LAX

DL makes money in SLC, as told by their executive team at many investor relations meetings, so unless they're lying, which is criminal, that is simply false. Who knows about LAX, but like NYC, it's too important a market for DL, or any airline, to let go of, and thus losses could mount and DL would continue to provide ample service.

-DL has inferior hubs vs. AA & UA (I would argue that UA does have the best hubs in the US)

This is stated over and over by armchair CEOs, and it's false. DL's ATL hub is the envy of the US airline industry, and extremely profitable. DL's MSP hub is also one of the highest margin hubs in the country, while DTW has also may headway in recent years. Stats were posted here not too long ago that showed DL's MSP and DTW hubs (individually) provide almost identical revenues to AA's ORD hub and are on par with UA's ORD hub, but with higher yields. Is it better to control two medium sized markets or to share one large market? I'd choose the former.

-DL’s Asian portfolio is inferior to UA’s

And? DL still has a large presence in the market and has competed effectively. Again, bigger isn't better.

-DL's "split-hub" operation in NYC is a mistake

This is yet to be seen, and according to DL's executive team, NYC has beat their expectations so far.

-DL's JFK facilities are 3rd world (they kinda are); and even when they are done with the upgrades, they will still be inferior

This will all be changing next year. And in terms of being inferior, in what way? They'll have a clean, modern, efficient operation to serve their customers. This is the United States, not Dubai.

Jeremy
 
rwy04lga
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 5:25 pm

Quoting delta2ual (Thread starter):
-DL loses a billion dollars a year in NYC

We are? As long as we make it up elsewhere.

Quoting delta2ual (Thread starter):
-DL can’t compete with AA & UA in Latin America

AA is nowhere to be found in Africa, only 4 places in Asia, and 9 in Europe. UA is in one place in Africa, 10 in Europe. Can't AA and UA compete there? Please make any necessary corrections

Quoting delta2ual (Thread starter):
-DL loses money in SLC & LAX

They do? Sources please.

Quoting delta2ual (Thread starter):
-DL has inferior hubs vs. AA & UA (I would argue that UA does have the best hubs in the US)

ATL is hardly an inferior hub, MIA will be ours eventually...and EWR should be recoded EWW.

Quoting delta2ual (Thread starter):
-DL’s Asian portfolio is inferior to UA’s

Doesn't DL serve more Asian cities than UA? How's UA's South American, African, European portfolio compared to Delta's?

Quoting delta2ual (Thread starter):
-DL's "split-hub" operation in NYC is a mistake

I certainly don't think so. The others WISH thay had as big an operation at LGA or JFK.

Quoting delta2ual (Thread starter):
-DL's JFK facilities are 3rd world (they kinda are); and even when they are done with the upgrades, they will still be inferior

Nolo contendere. But they're better than UA's at JFK. And when DL gobbles up AA assets at MIA and JFK, what will you say then?

Bottom line (and that's where it really counts), DL is doing just fine.
Just accept that some days, you're the pigeon, and other days the statue
 
slcdeltarumd11
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 5:31 pm

I think the answer here is fortress hubs.......and Delta has very strong following and loyalty in smaller/medium markets near its hubs. Some markets like IDA, BOI, SUN, JAX, SAV, FAR etc etc and many more all cities where Delta does very well and just feeds people to its hubs all small but when you add all those up its great money. These cities are all much higher fare than ORD, DEN, LAX etc so they can be very profitable even if they are so much smaller they are making more per passenger.

SLC is the best example its smaller but is consistently profitable and i am sure they are much happier there with a consistently profitable hub rather than fighting it out in Denver for example or they are happier in DTW and in MSP than ORD. Delta is clearly doing things right in this tough industry.

NYC probably is loosing alot of money right now but thats all temporary it takes time to win people over and pay for all the expenses of a new hub and advertising. Give NYC time i think both DL and US got what was best in the end and it was a fantastic deal for both. It is just going to take them some time to develop and see what works/fails thats all.

Quoting SESGDL (Reply 1):
-DL's JFK facilities are 3rd world (they kinda are); and even when they are done with the upgrades, they will still be inferior

This one is totally 100% accurate. It is a dump. To put a positive spin they are going to totally replace it so its only for a limited amount of time we have to deal with that dump.



Quoting delta2ual (Thread starter):
DL loses money in SLC & LAX

LAX is not a hub so it cant really loose/make that much and they fill the planes with people coming from the Delta hubs/historically strong delta markets. They loose money when they try to fill planes with LAX origin passengers but they have abandoned all those markets for the most part. I cant see it loosing that much its just not killing it either they wont rehub it, they clearly are more interested in a little city in the pac-northwest along the coast for international possibilities.


[Edited 2012-11-11 09:42:47]
 
andygarrett
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 5:44 pm

They are now doing a lot right. For what started out as Huff Daland Dusters, Incorporated is now a dominate global airline. C. E. Woolman should be proud.

On my flight back to ATL from BRU they served a fillet steak that would have been very difficult to grill better in the backyard.

If the economy doesn't fall off the cliff again, which many economists are predicting, delta should be on very solid ground in a couple of years as often mentioned investments really begin to pay off.

Anderson and Bastien have taken some huge risks and made some big bets in the past 5 years and I see them really paying off now and the future.
 
DualQual
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 5:58 pm

My opinion? Delta is trying to run an actual airline with a product you want to buy. Are they perfect? Of course not, no entity is. But they seem to display leadership and some innovative thinking. That alone will hit more often than miss. While others seem more focused on spreadsheets and data, DAL is trying to work on the actual product.
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mayor
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What Is Delta Doing Right? Your opinion please?

Sun Nov 11, 2012 6:07 pm

Quoting delta2ual (Thread starter):

Most of this should probably be considered flame bait, which proves that you can discount at least half of what you see & hear, here on A.net if these are indeed the facts you've gleened from reading on this forum.


I think I could probably name the members that may have brought up each of these individual points, but I think you know who they are. You can almost guarantee that their names will be on any post, disparaging DL and whatever they do.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
AA94
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 7:27 pm

Quoting SESGDL (Reply 1):


  

I agree with all of your points, with the exception of one.

DL's facilities in JFK are not up to par. Granted, they will be in the next couple of years, but the facility is very dated, the layout is somewhat non-conducive to running an operation like they run, and the amount of space in the terminal is in no way proportional to the amount of people traveling through it. This is really the only thing I can fault DL on, and I think it's minor in the grand scheme of things.

Quoting DualQual (Reply 5):
My opinion? Delta is trying to run an actual airline with a product you want to buy. Are they perfect? Of course not, no entity is. But they seem to display leadership and some innovative thinking. That alone will hit more often than miss. While others seem more focused on spreadsheets and data, DAL is trying to work on the actual product.

Agreed. DL is doing a lot of things very well. They don't need to do everything. It's better to be good at what you do than try to do everything and let quality suffer.
If you can't take the heat, you best get out of the kitchen
 
Cubsrule
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 7:31 pm

Quoting SESGDL (Reply 1):
-DL can’t compete with AA & UA in Latin America+

And AA can't compete to the Asia/Pacific region.

I'd argue that AA is better positioned in Asia than either UA or DL because it doesn't have the dead weight of an unprofitable NRT hub. BKK and SIN aren't making or breaking things for UA or DL.

Quoting SESGDL (Reply 1):
Is it better to control two medium sized markets or to share one large market? I'd choose the former.

Me too (and your argument applies equally if not more strongly to SLC versus DEN), but that ignores the fact that I'd rather control MIA than deal with FL/WN at ATL, and I'd rather control EWR or PHL than deal with a split hub at JFK/LGA. Wouldn't you?
I can't decide whether I miss the tulip or the bowling shoe more
 
masseybrown
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 7:59 pm

Delta is managing their costs, debt, and capital expenses brilliantly. Right now, it's costing them in terms of share price, but it will pay off in a few years. The refinery purchase may or may not work, but that wasn't a bet-the-company transaction.

Obviously, they hope NYC will pay off, too. I think we'll have to wait and see about that part.
 
NWAESC
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 8:00 pm

Q: What is Delta doing right?

A: Network Planning & Revenue Management. Everything else flows from there.
"Nothing ever happens here, " I said. "I just wait."
 
sxf24
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 8:19 pm

Quoting Cubsrule (Reply 8):
I'd argue that AA is better positioned in Asia than either UA or DL because it doesn't have the dead weight of an unprofitable NRT hub. BKK and SIN aren't making or breaking things for UA or DL.

Your point only makes sense if there was space for new participants. In reality, AA doesn't have the infrastructure or assets to compete against incumbent carriers and there are very few - if any - ex-US markets to Asia in need of additional competition.

A NRT hub in and of itself is not a great asset. However, the slots, history, and presence in every major Asian market gives DL and UA a distinct advantage. UA has already de-emphisized ex-NRT connections and DL will follow down the same path. DL has already deployed more NRT slots to beach markets with significant success.
 
OOer
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 8:37 pm

What is Delta doing right?

This is easy...

Delta is making a boatload of money when the world economy is in a recession. In 2-3 years when Europe climbs out of their hole Delta will be a cash cow.

How's that for an answer?
 
seatback
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 9:13 pm

I think overall, DL's doing great. But what I think is interesting is when we talk about hubs, there's no mention of CVG and MEM. Two very week hubs, which brings down their portfolio in comparison to it's competitors. AA doesn't have hubs in second tier markets and UA has by far the best hub markets (with maybe the exception of CLE).

From a service perspective, I'd like to see DL work on their domestic premium product. First Class and SkyClub offerings are pretty bad.

Quoting rwy04lga (Reply 2):
Nolo contendere. But they're better than UA's at JFK. And when DL gobbles up AA assets at MIA and JFK, what will you say then?

Sorry, but who can take you seriously when you say things like this? Things are looking in the right direction for AA. Their new cost structure along with its cornerstone hubs and a boat-load of new airplanes are a huge threat to Delta (not to mention the potential hook up with US to make them #1 in size.)

Now, AA just needs to take a page from DL's book, and sharpen their marketing, brand and become more aggressive internationally.
 
ca2ohHP
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 10:43 pm

What is Delta doing right? Employee relations are among the best in the industry, definitely better than AA. Heck even during bankruptcy, DL employees were 110% behind management. Also, when it comes to aircraft modifications (especially painting), they get it done quick. Look how long it took US to re-configure 9 A330's with sleeper seats (almost 2 years). I'd personally love to work for Delta, and would jump ship in a minute.
 
rwy04lga
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 10:45 pm

Quoting seatback (Reply 13):
Sorry, but who can take you seriously when you say things like this?

Apology accepted, but I couldn't care less if you take me seriously. Just wishful thinking on my part. Feel free to bypass any of my posts, you'll have less to apologize for.
Just accept that some days, you're the pigeon, and other days the statue
 
SESGDL
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 10:48 pm

Quoting Cubsrule (Reply 8):

I'd argue that AA is better positioned in Asia than either UA or DL because it doesn't have the dead weight of an unprofitable NRT hub. BKK and SIN aren't making or breaking things for UA or DL.

I disagree completely. It's much easier to re-shift and/or rightsize a market operation than it is to grow organically. If BKK and SIN don't make money for DL and UA, then they can stop serving these markets. It's easier and cheaper to end service then it is to start service. It would take a decade or more for AA to grow its own Pacific operation to equal what UA and DL currently have, which is something DL also was incapable of doing prior to the merger with NW. The role of ATI and JVs has diminished this tremendously, but in the absence of this AA would really struggle in the market. Still, NRT serves as the centerpiece of all three major's Asia/Pacific operations, something that, while changing, will continue throughout the foreseeable future.

Quoting Cubsrule (Reply 8):

Me too (and your argument applies equally if not more strongly to SLC versus DEN), but that ignores the fact that I'd rather control MIA than deal with FL/WN at ATL, and I'd rather control EWR or PHL than deal with a split hub at JFK/LGA. Wouldn't you?

MIA and ATL really don't compare. DL's ATL hub is more than three times the size of AA's MIA and serves as DL's main hub as well as the world's largest. MIA serves as the gateway to Latin America but can never function as a giant continental connection hub the way that ATL does nor can it serve as a good connecting point to Europe and Asia. DFW vs. ATL would be a more apt comparison, and I'd take ATL over any functioning US hub, the economies of scale are simply too large to ignore. But to your other points, yes, I'd take one large hub at PHL or EWR over the split operation at JFK/LGA, although all of the aforementioned markets are heavily competitive. However, the jury is still out on this one; let's see where DL stands with a hub at JFK and LGA (something that's never been done fully to the extent that DL has) in a few years once the dual hub strategy has matured.

Jeremy
 
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enilria
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 11:04 pm

Quoting delta2ual (Thread starter):
-DL loses a billion dollars a year in NYC
Quoting delta2ual (Thread starter):
-DL's "split-hub" operation in NYC is a mistake

The Wall Street view is that it is losing that much and I don't doubt it. I'm not sure you can say that the split hub is a mistake as there is no other option for having a viable domestic and int'l operation. I *DO* think DL would be smart to start lobbying the Port of NY/NJ to eliminate the perimeter rule and start allowing transcons at LGA. DL has the most to gain from that.

Quoting delta2ual (Thread starter):
Where do they make their money?

ATL/DTW/MSP, probably in that order. I think all three are fabulously profitable. ATL is probably lower margin that the other two, but more in absolute profit due to size. I suspect with WN taking apart ATL, DL will now mint even more money in ATL and all three hubs will have margins of ~15%.

Quoting delta2ual (Thread starter):
-DL loses money in SLC & LAX

SLC is around breakeven, again from Wall Street coverage. LAX is purportedly losing a good chunk of what NYC loses. I don't think that is surprising. They are flying tons of RJs up against Southwest and LCCs. They have fiercely competitive long-hauls and I think they are probably losing a ton on transcon which is why they are upgrading the product.

Quoting delta2ual (Thread starter):
-DL has inferior hubs vs. AA & UA (I would argue that UA does have the best hubs in the US)

DL's successful hubs are not in the "sexy" cities, but the "sexy" cities are VERY competitive and that's why they are losing money in those cities. Any hub that is massively profitable isn't inferior.

Quoting delta2ual (Thread starter):
-DL's JFK facilities are 3rd world (they kinda are); and even when they are done with the upgrades, they will still be inferior

Yes, they are horrible. I think it's an embarrassment for America to welcome the poor huddled masses yearning to be free into the country through that disaster. Hopefully the new terminal fixes it.

I think the best thing Delta has done in the last couple of years is to vastly reduce the tit-for-tat retaliatory flying they did every time somebody entered one of their markets. It seems like once WN came into MSP they just gave up on such things. Retaliatory flying loses lots of money. I think DL is now being much smarter about that.
 
deltal1011man
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 11:05 pm

Quoting slcdeltarumd11 (Reply 3):
They loose money when they try to fill planes with LAX origin passengers but they have abandoned all those markets for the most part.
SFO/SAN/PHX/LAS/SMF/IND/RDU/CMH/LIH/KOA/OGG/SYD/HNL/HND/MCO/TPA/MIA are Delta hubs?

Jeesh i would nearly pay you to look at a timetable before you post about Delta and LAX.

and if they loose money in all those markets above....1) prove it. Please I beg you to prove me wrong. You have been speaking this crap for years....so prove it. So me that data. 2) why has nearly all of LAX's growth....up nearly 40% over the last few years....been in non-hub markets?

as normal i think you have no idea what your talking about.




Quoting enilria (Reply 17):

The Wall Street view is that it is losing that much and I don't doubt it. I'm not sure you can say that the split hub is a mistake as there is no other option for having a viable domestic and int'l operation. I *DO* think DL would be smart to start lobbying the Port of NY/NJ to eliminate the perimeter rule and start allowing transcons at LGA. DL has the most to gain from that.


this "wall street view" what is that? what does that mean? do they have P&Ls on wall street.

me thinks its people talking out of their a**es.




Quoting enilria (Reply 17):
ATL/DTW/MSP, probably in that order.


ATL/MSP/SLC/DTW/NYC......




Quoting enilria (Reply 17):
SLC is around breakeven, again from Wall Street coverage


*sigh* go ahead and explain this one too.


I can see this thread as nothing but bad. I personally think 99% off it will be people talking out of their butts with no real proof of anything they say.

[Edited 2012-11-14 20:36:27 by SA7700]
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SESGDL
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 11:18 pm

Quoting enilria (Reply 17):

ATL/DTW/MSP, probably in that order. I think all three are fabulously profitable. ATL is probably lower margin that the other two, but more in absolute profit due to size. I suspect with WN taking apart ATL, DL will now mint even more money in ATL and all three hubs will have margins of ~15%.

1. ATL 2. MSP 3. Everything else after that is questionable. DL has stated repeatedly that MSP is its highest margin hub, while ATL pulls the highest numbers. DTW was actually unprofitable following the merger; DL has gained a lot of traction in DTW, with DL recently reporting that DTW is now making money.

Jeremy
 
Mir
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 11:44 pm

Quoting delta2ual (Thread starter):
DL's JFK facilities are 3rd world (they kinda are)

Not "kinda". They definitely are.

Quoting rwy04lga (Reply 2):
But they're better than UA's at JFK.

First of all, no they're not - T7 is better than T2/T3. And second of all, why are you comparing the JFK facilities when you should be comparing DL and JFK and UA at EWR (and where UA still comes out ahead, despite having the very inconvenient terminal setup).

-Mir
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pu
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RE: What Is Delta Doing Right? Your Opinion Please?

Sun Nov 11, 2012 11:52 pm

I think most of this story is a little less about Delta and a little more about the rationalisation of the American airline market.

Two competitors disappeared: CO and NW. Is it certain that UA and CO combined are worse for Delta than those competitors remaining unmarried? I don't think so! In the legacy world, the tendency is to stake out territory but let the legacy competitors have THEIR fiefdoms almost without challenge. Delta works best as hub-and-spoke entrants decline in number.


United made 500 million in the quarter, and this is with their integrtion problems. Their upside is higher.


Pu
 
commavia
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 12:23 am

Quoting SESGDL (Reply 16):
It's easier and cheaper to end service then it is to start service. It would take a decade or more for AA to grow its own Pacific operation to equal what UA and DL currently have

It's true - it definitely takes longer, and costs more, to grow organically. But it's not impossible. And if the major economies of Asia grow in the coming decades as convention wisdom projects they will (and by the way, I don't think they will), then AA should be able to get in there and grow some more organically.

So it's true that now, today, and even in the future after AA grows further organically, they will not reach the critical mass that DL and especially UA already have. No argument. Although I would argue that AA doesn't really need to.

As it is now, today, AA's nonstop U.S.-Asia network ex-Japan is already approaching broad competitiveness with Delta. And Japan is largely taken care of by the JAL JBA. Excluding the flights from NRT, AA has now or soon will have as many or more flights nonstop from U.S. gateways to ICN and PVG each week as DL, and PEK is 7 vs DL's 14, so no drastic differentiation like both of them vs UA. Beyond that, every single other point DL serves in Asia is served via NRT, anyway, and none of those (HKG, TPE, MNL, BKK, SIN) except HKG would ever be places AA would be able to fly anyway - too low-yielding, too much competition from foreign flags. (And of course all of this is before the "right-sizing" occurs with DL's NRT operation, which I suspect is coming at some point.) With JAL they don't need to - they benefit from the same feed, and the same ability to coordinate schedules and optimize pricing, as DL can do over its own network, only AA gets to do it at a fraction of the capital cost and with far more flexibility.

There are drawbacks, certainly, to not having your own plane flying into these big Asian markets. The local DL (and UA) brand presence in those markets helps DL (and UA) relative to AA, and AA is unlikely to ever catch up to that in some markets. But again, they don't need to. It's similar to the situation in South America - which is substantially more dominated by AA than any other world region is by either DL or UA or any other U.S. carrier. AA is so far out ahead of everybody else that it's unlikely DL or UA will ever catch up. But do they need to? Are DL and UA still doing fairly well and holding their own in Latin America even despite the fact that AA is essentially as big as DL and UA combined? There is nothing to say AA can't do the same in Asia - AA will never be nearly as big as DL or UA, but I think they'll be "big enough" to be competitive.

[Edited 2012-11-11 16:26:28]
 
deltal1011man
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 12:55 am

Quoting commavia (Reply 23):
too low-yielding, too much competition from foreign flags. (And of course all of this is before the "right-sizing" occurs with DL's NRT operation, which I suspect is coming at some point.)

but even with any right sizing, the cities you list will be staying around in the Delta network. I do think TPE will end up with a Delta flight from the US....mainly due to the SkyTeam hub at TPE.

MNL/BKK/SIN will keep its NRT flights....along with SPN/GUM. Any slots Delta gets from dumping...say PEK....will likely end up going to other beach markets....which are making Delta tons of money right now.
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mayor
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 12:59 am

Quoting Mir (Reply 21):
And second of all, why are you comparing the JFK facilities when you should be comparing DL and JFK and UA at EWR (and where UA still comes out ahead, despite having the very inconvenient terminal setup).

Because the original statement was about DL's facilities at JFK, not EWR.

Quoting SESGDL (Reply 20):
1. ATL 2. MSP 3. Everything else after that is questionable.

Unless I'm mistaken, SLC was 2nd in profitability until the NW merger.

Quoting pu (Reply 22):
Their upside is higher.

Not if they don't get their integration problems ironed out.
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PHX787
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 1:10 am

DL is doing one thing right, if anything: focusing older aircraft which can be acquired and maintained for cheap and outfitting them with the most modern interiors known to man, (or at least known to Americans    ) and focusing them on routes/airports that make the most money. Simple
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deltal1011man
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 1:11 am

Quoting mayor (Reply 25):
Unless I'm mistaken, SLC was 2nd in profitability until the NW merger.

Your not. SLC makes money. MSP just makes more(which is the general idea when you have 200-300 more flights a day)
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Max Q
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:08 am

They just have good management, probably the best in the American airline industry.


They actually believe in running a successful airline by treating employees well, planning for the future and thinking out of the box.


Like I've said before, I wish we had their management at UA.
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warren747sp
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:20 am

Make it impossible to book standard awards on almost any international flights especially business class to Asia!
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Cubsrule
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:27 am

Quoting SESGDL (Reply 20):
DTW was actually unprofitable following the merger; DL has gained a lot of traction in DTW, with DL recently reporting that DTW is now making money.

DL has done many things right at DTW since the merger, but bear in mind also that the merger happened almost right at the bottom of the recession, and this was a particularly large issue in DTW. A strong automotive industry helps DTW's numbers tremendously.

Quoting SESGDL (Reply 16):
However, the jury is still out on this one; let's see where DL stands with a hub at JFK and LGA (something that's never been done fully to the extent that DL has) in a few years once the dual hub strategy has matured.

I think DL at least has a shot at succeeding with the dual hub, but I can't argue with a straight face that a dual hub is preferable to a single hub of similar size.
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spiritair97
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:33 am

Quoting Mir (Reply 21):

I was gonna say that, but I didn't wanna offend anybody. I fly out of T7 quite often and find it a very enjoyable experience, whereas flying DL out of JFK is annoying and tedious. Last time I flew out of JFK on DL, it involved a two hour delay (which wasn't DL's fault, but still annoying), and upon showing up to our assigned gate, we waited 25 minutes while the gate displays said "Santo Domingo" instead of "Atlanta". We then overheard an announcment saying that all ATL passengers on our flight (DL269), had to go to another part of the terminal and get the shuttlebus to terminal 4. The 10 minute walk that exshausted my 85 year old grandfather who was traveling with us found us waiting in line for 10 minutes for the shuttle to take us across the airport. They blamed the terminal change on the fact that the flight arrives from BOG, but they should know this beforehand, eliminating the need for the trudge across the airport.

What I'm saying is, yes DL's facilities are WAAY inferior to UA's @ JFK. Though this will probably change when the new terminal is finished.
 
neveragain
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:42 am

Quoting SESGDL (Reply 1):
If this is indeed the case then it's likely that AA, B6, and even UA are all losing substantial amounts of money as well.

A bit simplistic. DL's domestic yields underperform AA and UA's in many markets from NYC.

Quoting Deltal1011man (Reply 19):
this "wall street view" what is that? what does that mean? do they have P&Ls on wall street.

While they don't have access to DL's own figures, you can bet that the analysts have models that generate estimates of route and hub profitability (and probably pretty decent ones) using data published in DL financial statements and the U.S. DoT and other databases. It's part of what they're paid to do.
 
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 3:44 am

Quoting DualQual (Reply 5):
While others seem more focused on spreadsheets and data, DAL is trying to work on the actual product.

Agreed. The new website they just rolled out speaks volumes for what they are trying to deliver. It looks clean and it's very functional.

I'd also say that the expansion of Economy Comfort is something they are doing right. Premium economy offerings are becoming very popular, DL's is a good value and people want to buy it.

Quoting rwy04lga (Reply 2):
and EWR should be recoded EWW.

You're not kidding. I spent the night in the terminal a while back...totally miserable experience. So while DL at JFK has crappy facilities it's not like UA has a huge advantage there.

And for all the whining people do about JFK, the Delta Terminal at LGA is quite nice IMHO, especially compared to the crappy CTB. And then there's the Marine Air building and the shuttle operation as a whole- top notch. The terminal feels more like a nice FBO, no line at security, free beer on the plane. While trains have largely replaced planes on NYC-BOS, the market to Chicago is huge and DL unquestionably offers the best product on the route.
 
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 4:02 am

Quoting commavia (Reply 23):

by the JAL JBA

Neither relying on BA in London to serve customers going to Europe nor relying on JAL in Tokyo to serve customers going to Asia will EVER beat Delta serving destinations themselves, (who collect revenue without having to share with a partner.)

...of course the messianic love affair with AA and everything failed AA management "explains" about the world airline market prevents (for some) any thought about Delta except that it is inferior to AA's code-share philosphy.



Pu
 
aa777lvr
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 4:51 am

Allright, here goes for what many may perceive as an unpopular opinion on what DL is doing right........

IMO, one of the best things DL has going for it was it's ability to hold off unionized labor in many of it's workgroups. Richard Anderson was a genius in merging 2 airlines with complimentary strengths and dismantling the labor unions that were a stronghold at PMNW. DL did well to get rid of many expensive PMNW (historically very pro-union) folks prior to the union voting a couple of years ago in favor of the more anti-union PMDL folks. Anderson took the planes, routes and hubs that were complimentary to building DL and shed the unions that would have hindered the merger (example - UA/CO).

The ready reserve program, while a revolving door of entry-level labor for above wing and below wing operations, is a genius maneuver to keep labor costs low. They pay these folks ~$11 an hour plus flight benefits and avoid the expense of offereing them health insurance, 401K, etc.

DL I feel was also ahead of the ball in seeing that investing in in-flight technology (WiFi) was a better bet than investing in enhanced in-flight entertainment. Several years ago some carriers were putting dollars into new entertainment systems instead of equipping their fleets with WiFI which is what both business and leisure travellers are demanding. Carriers now are attempting to play catch-up to equip their mainline and regional aicraft.

Their upgrade policy is genius (IMO) as well. They upgrade their premium folks based on a combination of status and fare (not just status as with many airlines). Therefore, for many it seems to level the playing field in terms of the potential for upgrade (low status, high fare = you may just get upgraded after-all). I would venture to say even for the HVC who didn't get upgraded they assume someone with a lower status probably had a more expensive ticket. In the end, it's a more equitable system of handing out upgrades.

Service disruptions are another way DL handles things well. DL is one airline that tries to minimize the impact of service failures (delays, cancellations) at the FPOC. Instead of telling a customer "just write into our consumer relations department" they actually will give a meal voucher or a voucher for $50 off your next flight (based on severity). This gives customers less time to "brew" about their inconvenience. While many never use the food voucher (in the event of a minor delay) it still makes it appear as though DL cares and wants to make ammends for the issue. Many airlines don't approach customer service issues this way. The experience has more time to "fester" in these cases where front-line employees brush off the issue to an anonymous web link on the company website for logging complaints.

Anywho...just my opinions.

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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 5:02 am

Quoting Cubsrule (Reply 30):

I think DL at least has a shot at succeeding with the dual hub, but I can't argue with a straight face that a dual hub is preferable to a single hub of similar size.

I agree...but I think if can be made to work....NYC is about the only city that it can be done in....

Quoting neveragain (Reply 32):

While they don't have access to DL's own figures, you can bet that the analysts have models that generate estimates of route and hub profitability (and probably pretty decent ones) using data published in DL financial statements and the U.S. DoT and other databases. It's part of what they're paid to do.

and i have yet to see anyone on wall street post a single thing about SLC losing money anyways....but still. They don't have anymore info than we do.
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 5:19 am

Quoting slcdeltarumd11 (Reply 3):

DL has a huge number of routes that rely on O&D traffic at LAX. They clearly don't just make money at LAX by shuttling people to their hubs. You say that LAX is a lower-fare market compared to smaller cities, but consider how many passengers DL has coming into and out of LAX every day (both on O&D and connecting flights). I mean, they have 9 or 10 daily flights from ATL alone! They clearly see LAX as a lucrative market, somewhat for connections, but mostly for O&D traffic because the L.A. metropolitan area is such a popular destination.
 
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 5:22 am

Quoting aa777lvr (Reply 35):
DL did well to get rid of many expensive PMNW (historically very pro-union) folks prior to the union voting a couple of years ago in favor of the more anti-union PMDL folks.

Unions are gone, most of the people are still there.
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deltal1011man
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 5:52 am

Quoting aa777lvr (Reply 35):
DL did well to get rid of many expensive PMNW (historically very pro-union) folks prior to the union voting a couple of years ago in favor of the more anti-union PMDL folks.

huh? who did Delta "get rid of"?
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Max Q
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 8:07 am

Quoting aa777lvr (Reply 35):
Anderson took the planes, routes and hubs that were complimentary to building DL and shed the unions that would have hindered the merger (example - UA/CO).

Er, what, he 'shed the unions' ?!!!


Please explain this. I won't even start on how unions have 'hindered' the CO/UA merger.... yet.
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 10:21 am

Quoting neveragain (Reply 32):
A bit simplistic. DL's domestic yields underperform AA and UA's in many markets from NYC.

I would like to see a breakout of this. There are many different categories here:

- Point-to-Point JFK flying (JFK-AUS/CMH)
- Competitive Point-to-Point LGA flying (LGA-IAH/CLT)
- Non-Competitive Point-to-Point LGA flying (LGA-CAE/MHT)
- JFK Transcontinental Routes (JFK-LAX/SFO)
- Domestic LGA/JFK Connect Markets (LGA-DTW-OKC)
- International Connect Traffic (JFK-CDG-WAW)
- International O&D Nonstop Traffic (JFK-DUB/GRU/NRT)
- International Hub Traffic Using JFK Nonstops (CMH-JFK-DUB)

To get a clearer picture of what, exactly, is not profitable, it would be best to break out markets by competitive set. I don't think saying that all of DL's operations underperform its competitors really means much until you look at the numbers and identify where the problem areas are.
 
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 12:09 pm

Quoting Max Q (Reply 40):
huh? who did Delta "get rid of"?



I'm referring to early-out programs....voluntary separations from the company (NW).

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neveragain
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 12:54 pm

Quoting Deltal1011man (Reply 36):
They don't have anymore info than we do.

They probably do, but even if they don't, they probably have it organized a hell of a lot better than anywhere on here not working in DL network planning or finance (i.e., those who have the "real" answer) does.

I have not read anything about SLC, but I wouldn't be surprised if it was one of the poorer-performing hubs.

Quoting aa777lvr (Reply 35):
Their upgrade policy is genius (IMO) as well. They upgrade their premium folks based on a combination of status and fare (not just status as with many airlines).

How does DL's upgrade policy differ from UA's or US's?

Quoting usdcaguy (Reply 41):
I would like to see a breakout of this.

Be my guest:

http://www.transtats.bts.gov/DL_Sele...rigin%20and%20Destination%20Survey

(International data are not publicly available.)
 
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 1:01 pm

Quoting RamblinMan (Reply 33):
I'd also say that the expansion of Economy Comfort is something they are doing right. Premium economy offerings are becoming very popular, DL's is a good value and people want to buy it.

Thanks for pointing that out. Do any airlines really make money flying people from A to B or is it from ancillary fees and upsells like Economy Comfort? Do airlines break it down like that? I'd be interested to see that.
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airliner371
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:02 pm

Quoting rwy04lga (Reply 2):
Nolo contendere. But they're better than UA's at JFK. And when DL gobbles up AA assets at MIA and JFK, what will you say then?
Quoting rwy04lga (Reply 2):
MIA will be ours eventually...

As much as you think this may happen, you should hold off on saying this type of thing because you lost a lot of credit for it. If you are in an AA Bankruptcy thread go for it but when you are trying to be serious and bring facts it just ruins your post.
 
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:29 pm

Quoting Deltal1011man (Reply 19):
this "wall street view" what is that? what does that mean? do they have P&Ls on wall street.
Quoting Deltal1011man (Reply 19):
ATL/MSP/SLC/DTW/NYC......
Quoting Deltal1011man (Reply 19):
*sigh* go ahead and explain this one too.

You do realize that Delta releases all its revenue data down to the O&D level? They also release fairly detailed cost data. The only piece of data not publicly available is Delta's operating cost at each airport, but that is fairly easily estimated within 1.5 margin points. The reason why *you* can't do it is because you need to be an analyst to get access to the detailed international revenue data. It is not publicly available. It is very easy to completely recreate Delta's entire network profitability...or any U.S. airline. You weren't aware of this. Just go over to bts.gov and start downloading it. It is free.

...and yes, NYC is awful.

Quoting SESGDL (Reply 20):
DL has stated repeatedly that MSP is its highest margin hub, while ATL pulls the highest numbers.

Delta's stage adjusted average fare is $2 higher in DTW than MSP in the most recent quarter. LF is virtually the same. They should have a margin that is nearly identical. Also, in the last four quarterly calls they have said "both are doing very well". If MSP is higher it is only by 1 margin point or less. Public data and public statements from the company support this.
 
Cubsrule
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:41 pm

Quoting enilria (Reply 46):
Delta's stage adjusted average fare is $2 higher in DTW than MSP in the most recent quarter. LF is virtually the same. They should have a margin that is nearly identical.

Are facilities costs or debt service (related to the McNamara terminal) significantly higher at DTW?
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csavel
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 2:44 pm

Quoting slcdeltarumd11 (Reply 3):
Quoting SESGDL (Reply 1):
-DL's JFK facilities are 3rd world (they kinda are); and even when they are done with the upgrades, they will still be inferior

This one is totally 100% accurate. It is a dump. To put a positive spin they are going to totally replace it so its only for a limited amount of time we have to deal with that dump.

Agree, am a big Delta fan and it sucks. But, frankly, I think the quality of a terminal factors in much, much, less in people's decisions that we at A.net think. After all most people want to be in a terminal, any terminal *for as little time as possible!*. Thus while being stuck in a delay at T3 in JFK is a lot worse than, say T4 or T1 or most other terminals anywhere, people won't care. They *will* care if they are stuck with delays a lot in *any* terminal. My company (based in NY) has made many decisions on which airline to do their corporate travel business. Factors include price, where they fly to (We go to Africa a lot), and scheduling. I can tell you the relative niceness of dumpy T3 vs. American's terminal or UAL's EWR terminal has never, EVER, come up.

Bottom line, yeah it stinks, yeah they are finally working on it, but it's factor on the bottom line is less than you think.

PS We've been Delta people for a long time, mostly because of the KLM/AF code share since we do a lot of work in Africa. If UAL or AA had better alliances and connections to Africa we'd probably use them. (We did almost switch to AA because of BA's African network, but AF KLM's combo was and still is better, IMHO)

Quoting Deltal1011man (Reply 36):
Quoting Cubsrule (Reply 30):

I think DL at least has a shot at succeeding with the dual hub, but I can't argue with a straight face that a dual hub is preferable to a single hub of similar size.

I agree...but I think if can be made to work....NYC is about the only city that it can be done in....

What should be done is take the Airtrain, extend it to LGA, and then have "sealed trains" that go from JFK to LGA, bypassing Jamaica - have a cart for luggage. SO transferring from LGA to JFK is like transferring between terminals. You might have to do security again, but still muy conveniente!
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rwy04lga
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 3:27 pm

Quoting airliner371 (Reply 45):

Who said I was trying to be serious? Again, wishful thinking. Feel free to bypass my posts.
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neveragain
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RE: What Is Delta Doing Right? Your Opinion Please?

Mon Nov 12, 2012 3:40 pm

Quoting enilria (Reply 46):

...and yes, NYC is awful.

That certainly jibes with what I have heard, although everyone should take that with a grain of salt.

I think everyone will note in public statements that DL is very careful when it talks about its performance in New York. While the situation may be constantly improving, that does not mean it's improving from an initial position of profitability.

It must also be stated that anything the analysts produce will be an estimate, and there will probably be some disagreement among them on the specifics due to different cost allocation algorithms and methodologies. But they do undertake such calculations, as evidenced by the analyst who claimed AA was losing money on JFK-LHR, ORD-DEL, and JFK-EZE (or was it MIA-EZE)? There were a couple others.

Quoting Cubsrule (Reply 47):
Are facilities costs or debt service (related to the McNamara terminal) significantly higher at DTW?

The residual business deal in DTW is more advantageous to DL than the deal in MSP, with PFCs fully leveraged, the airlines getting essentially all nonairline revenues, and virtual control over the operating budget (not to mention strong influence over parking rates and business terms for concessionaires).

I don't have a recent CPE to compare, but I wouldn't be surprised if they were fairly close, even with the new terminal at DTW.