abrelosojos
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Re: Delta Buys a 4.3% Stake in Korean Air

Wed Sep 11, 2019 1:18 pm

enilria wrote:
KSAAirliner wrote:
I think Delta here is trying to create its own empire by getting closer to many airlines in their JVs, !!!

I wonder if the future of this industry will rely on such practice! those who don't belong to any groups wouldn't survive the competition!

We are really seeing the formation of a new SkyTeam from the inside-out with Delta as King and peripheral airlines like Aeroflot and Saudia locked out. I expect Delta to take a lot more control than the stake implies.

I disagree this is just keeping up with JL/NH, I think they will leapfrog them. The NRT/HND situation makes it very difficult for JL/NH to grow. ICN is the premier gateway to connect and can grow.


= If ICN was such a premier gateway, KE would have been in the black - and, so would OZ. Despite their economic success, ICN remains #2 to NRT to generate business demand, and premium leisure demand. True, KE has been a basket case of management, and DL will help here, but I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China. I am sure JL/NH/UA/AA are more than happy with DL/KE being the dominant carrier on the US-MNL itinerary ...

Saludos,
Alex
Live, and let live.
 
EddieDude
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Re: Delta Buys a 4.3% Stake in Korean Air

Wed Sep 11, 2019 4:15 pm

JAMBOJET wrote:
Asia: ...They can't do one in China

They do have a very strong relationship with MU at PVG. The DL-KE alliance excludes mainland China, so MU serves that purpose. MU and DL have invested together in AFKL. DL is also an investor in MU.
Upcoming flights:
May: AM MEX-CUN 73H (Y), AM CUN-MEX 73W (Y).
August: KL MEX-AMS 74M (J), KQ AMS-NBO 788 (J).
 
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enilria
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Re: Delta Buys a 4.3% Stake in Korean Air

Wed Sep 11, 2019 4:27 pm

abrelosojos wrote:
enilria wrote:
KSAAirliner wrote:
I think Delta here is trying to create its own empire by getting closer to many airlines in their JVs, !!!

I wonder if the future of this industry will rely on such practice! those who don't belong to any groups wouldn't survive the competition!

We are really seeing the formation of a new SkyTeam from the inside-out with Delta as King and peripheral airlines like Aeroflot and Saudia locked out. I expect Delta to take a lot more control than the stake implies.

I disagree this is just keeping up with JL/NH, I think they will leapfrog them. The NRT/HND situation makes it very difficult for JL/NH to grow. ICN is the premier gateway to connect and can grow.


= If ICN was such a premier gateway, KE would have been in the black - and, so would OZ. Despite their economic success, ICN remains #2 to NRT to generate business demand, and premium leisure demand. True, KE has been a basket case of management, and DL will help here, but I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China. I am sure JL/NH/UA/AA are more than happy with DL/KE being the dominant carrier on the US-MNL itinerary ...

Saludos,
Alex

ICN routinely wins awards as the world's best large airport. I don't know if you have visited both, but it isn't a close race. Great facilities do not create local business traffic (which is quickly moving from NRT to HND), so I don't understand your argument.

>I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China
Tokyo is now split over two airports to the USA . HND offers massively inferior connecting options to both NRT and ICN. Every city that switches to HND from NRT gains local business traffic, but loses connectivity to SE Asia. "especially with no China" means what? SkyTeam/DL has China Eastern with an ownership stake and kinda China Southern although that is unwinding. How is that inferior to Star or OW on any level? Seems like a nonsensical statement.
 
ITSTours
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Re: Delta Buys a 4.3% Stake in Korean Air

Wed Sep 11, 2019 11:35 pm

abrelosojos wrote:
enilria wrote:
KSAAirliner wrote:
I think Delta here is trying to create its own empire by getting closer to many airlines in their JVs, !!!

I wonder if the future of this industry will rely on such practice! those who don't belong to any groups wouldn't survive the competition!

We are really seeing the formation of a new SkyTeam from the inside-out with Delta as King and peripheral airlines like Aeroflot and Saudia locked out. I expect Delta to take a lot more control than the stake implies.

I disagree this is just keeping up with JL/NH, I think they will leapfrog them. The NRT/HND situation makes it very difficult for JL/NH to grow. ICN is the premier gateway to connect and can grow.


= If ICN was such a premier gateway, KE would have been in the black - and, so would OZ. Despite their economic success, ICN remains #2 to NRT to generate business demand, and premium leisure demand. True, KE has been a basket case of management, and DL will help here, but I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China. I am sure JL/NH/UA/AA are more than happy with DL/KE being the dominant carrier on the US-MNL itinerary ...

Saludos,
Alex


Image

ICN is almost as twice large as NRT...
 
Waterbomber2
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Re: Updated: Delta increases stake in Korean Air parent

Thu Sep 12, 2019 7:16 am

JAMBOJET wrote:
ElroyJetson wrote:
I think any reasonable person who is an av geek has to stand back in awe of DL's strategic decisions. They never miss a beat. There were many who have said DL 's partnership with KE will pale in comparison to the UA and AA alliances in Japan.

The reality in NRT is not really Tokyo and Haneda is a tightly slot constricted airport with very limited opportunities for growth.

An alliance with KE is a masterstroke in that KE has one of the best route networks in Asia with one of the best transfer airports in the world in ICN. Anyone who speculated DL was not poised for growth in Asia has not been paying attention.

KE and DL now fly from virtually every major city in North American to ICN with convenient one stop connecting to almost anywhere in Asia.

As so often with DL a brilliant move imho.


Delta makes a lot of great decisions, including their strategic investments, but I don't know that anyone would stand in awe of it... Delta is forced to make these investments because Skyteam is so weak relative to partners in OneWorld and Star.

South America: Only Delta Partner was the mess, Aerolineas Argentinas, so Delta buys (invests in) another mess, GOL, and tries to keep them financially alive. AA has LATAM. United has AV and now Azul. Neither needed to do what Delta did

Mexico: Delta has no IAH or DFW to go into the interior of Mexico and also has no other South American partner outside of GOL and Aerolineas Argentinas so they invest 49% and send a team to MEX to reorient the network to help Delta's weakness. AA can use DFW and MIA to serve North American customers to Mexico easily. UA can use IAH. Neither needed to do what Delta did. Still a great move by Delta to do that though and shore up a weakness to MEX.

Oceania: Delta literally has no partner whatsoever so they do a JV with Virgin Australia to help make things slightly better. AA has QF. UA has their strong Oceania position already + NZ.

Asia: Try to buy JL into Skyteam: Fail. Try to buy the other failing Japanese carrier with the two a380s (forgot the name): Fail. So Delta does a JV with the one carrier in Skyteam where they can: KE. They can't do one in China and I doubt they'd want to risk doing one with a Taiwanese carrier (they can't even call it Taiwan on their website without angering China) but who knows... And, all the while, they push one of the Chinese sky team carriers into American's waiting arms. AA has JL which was clearly Delta's first choice all along and CX. UA has basically every other premier Asian airline in Star.
Delta's bid for JAL makes it rather obvious that KE wasn't their first choice for a partner in Asia. Not to mention their well-documented attempt at forcing the Japanese government to allow the Delta Narita hub to move to Haneda. They wanted a hub in HND, not ICN. And their investment in KE's holding company has been mentioned on this thread as an attempt to hold off activist investors in Korea.

Europe: KLM is a great airline and partner. AF is a disaster. Delta is growing in NYC (years ago) but barely flies to the most important market from there, LHR, so they buy Singapore's failing position in Virgin and Delta turns Virgin into Delta Atlantic and reorients most, but not all, of Virgin toward supporting Delta North American fliers. UA already had a strong position in LHR given their history and has an extremely strong partner in LH Group. AA has the biggest partner in the most slot controlled airport in the world, LHR & BA + IAG with MAD to complement their MIA hub well.

Canada: Westjet seems like a coup for DL relative to AA. But UA obviously already had AC.

I just don't know that it's so much of a "Wow Delta!!!" but more of a they kind of had to... but props to Delta for shoring up weaknesses.



Very interesting analysis, it does makes sense.
I wonder what AA/JL and NH/UA will do about the situation.

I also wonder why DL hasn't tried harder to acquire Skymark or even bail out the CEO/founder before Airbus forced it into bankruptcy. With the slots that Skymark hold in HND and the slots that DL now got, they could have built their own hub in HND.
Heck, with the slots available at night they could be running a decent hub.
I also don't understand how a non-customer like NH could convince Airbus more than a super-customer like DL. In the end NH also ordered B779's rather than A350's and left Airbus in the cold.

I think that DL made quite a mistake there letting that deal go. If I were DL I would have taken up the entire Skymark A380 order book and set up a night hub with a bank departing Asian cities to HND in the evening and arriving in Asian cities in the morning. The A380 would have been perfect for a reverse hub fleet to JFK, LAX, ATL, DTW with hubs at both ends.
Perhaps they could even have combined it with a day bank in NRT, giving them not one, but two hubs in Tokyo.

Perhaps DL regret that and that's why they have decided to make this unorthodox move into KE.
A good move, but Skymark would have been better as it would have been much more than a joint venture and given them direct access to the most lucrative market in Asia.
 
JAMBOJET
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Re: Updated: Delta increases stake in Korean Air parent

Thu Sep 12, 2019 12:48 pm

Waterbomber2 wrote:
JAMBOJET wrote:
ElroyJetson wrote:
I think any reasonable person who is an av geek has to stand back in awe of DL's strategic decisions. They never miss a beat. There were many who have said DL 's partnership with KE will pale in comparison to the UA and AA alliances in Japan.

The reality in NRT is not really Tokyo and Haneda is a tightly slot constricted airport with very limited opportunities for growth.

An alliance with KE is a masterstroke in that KE has one of the best route networks in Asia with one of the best transfer airports in the world in ICN. Anyone who speculated DL was not poised for growth in Asia has not been paying attention.

KE and DL now fly from virtually every major city in North American to ICN with convenient one stop connecting to almost anywhere in Asia.

As so often with DL a brilliant move imho.


Delta makes a lot of great decisions, including their strategic investments, but I don't know that anyone would stand in awe of it... Delta is forced to make these investments because Skyteam is so weak relative to partners in OneWorld and Star.

South America: Only Delta Partner was the mess, Aerolineas Argentinas, so Delta buys (invests in) another mess, GOL, and tries to keep them financially alive. AA has LATAM. United has AV and now Azul. Neither needed to do what Delta did

Mexico: Delta has no IAH or DFW to go into the interior of Mexico and also has no other South American partner outside of GOL and Aerolineas Argentinas so they invest 49% and send a team to MEX to reorient the network to help Delta's weakness. AA can use DFW and MIA to serve North American customers to Mexico easily. UA can use IAH. Neither needed to do what Delta did. Still a great move by Delta to do that though and shore up a weakness to MEX.

Oceania: Delta literally has no partner whatsoever so they do a JV with Virgin Australia to help make things slightly better. AA has QF. UA has their strong Oceania position already + NZ.

Asia: Try to buy JL into Skyteam: Fail. Try to buy the other failing Japanese carrier with the two a380s (forgot the name): Fail. So Delta does a JV with the one carrier in Skyteam where they can: KE. They can't do one in China and I doubt they'd want to risk doing one with a Taiwanese carrier (they can't even call it Taiwan on their website without angering China) but who knows... And, all the while, they push one of the Chinese sky team carriers into American's waiting arms. AA has JL which was clearly Delta's first choice all along and CX. UA has basically every other premier Asian airline in Star.
Delta's bid for JAL makes it rather obvious that KE wasn't their first choice for a partner in Asia. Not to mention their well-documented attempt at forcing the Japanese government to allow the Delta Narita hub to move to Haneda. They wanted a hub in HND, not ICN. And their investment in KE's holding company has been mentioned on this thread as an attempt to hold off activist investors in Korea.

Europe: KLM is a great airline and partner. AF is a disaster. Delta is growing in NYC (years ago) but barely flies to the most important market from there, LHR, so they buy Singapore's failing position in Virgin and Delta turns Virgin into Delta Atlantic and reorients most, but not all, of Virgin toward supporting Delta North American fliers. UA already had a strong position in LHR given their history and has an extremely strong partner in LH Group. AA has the biggest partner in the most slot controlled airport in the world, LHR & BA + IAG with MAD to complement their MIA hub well.

Canada: Westjet seems like a coup for DL relative to AA. But UA obviously already had AC.

I just don't know that it's so much of a "Wow Delta!!!" but more of a they kind of had to... but props to Delta for shoring up weaknesses.



Very interesting analysis, it does makes sense.
I wonder what AA/JL and NH/UA will do about the situation.

I also wonder why DL hasn't tried harder to acquire Skymark or even bail out the CEO/founder before Airbus forced it into bankruptcy. With the slots that Skymark hold in HND and the slots that DL now got, they could have built their own hub in HND.
Heck, with the slots available at night they could be running a decent hub.
I also don't understand how a non-customer like NH could convince Airbus more than a super-customer like DL. In the end NH also ordered B779's rather than A350's and left Airbus in the cold.

I think that DL made quite a mistake there letting that deal go. If I were DL I would have taken up the entire Skymark A380 order book and set up a night hub with a bank departing Asian cities to HND in the evening and arriving in Asian cities in the morning. The A380 would have been perfect for a reverse hub fleet to JFK, LAX, ATL, DTW with hubs at both ends.
Perhaps they could even have combined it with a day bank in NRT, giving them not one, but two hubs in Tokyo.

Perhaps DL regret that and that's why they have decided to make this unorthodox move into KE.
A good move, but Skymark would have been better as it would have been much more than a joint venture and given them direct access to the most lucrative market in Asia.

Yeah. It'll be interesting to see how it all turns out. I think DL/KE could end up being a great JV and potentially better than UA/NH & AA/JL (not sure on what measurement though... easily connectivity). My only point was that it clearly wasn't Delta's first choice, they wanted to move the Narita hub to Haneda. They tried all potential avenues to do that until ending up with KE.

ICN seems a bit like an Asian AMS: not the #1 business destination in Eastern Asia but a really good one and a better-built connecting airport than the regional competition like HND and NRT.

In the far future, ICN could potentially suffer a degree from the same problem as NRT: There's a preferred airport closer to downtown, GMP, that if South Korea ever opened up again (to more international traffic and moved curfew times) like Japan did with Haneda, could hurt ICN. You literally stop by on it on the way to ICN from downtown Seoul.
That does seem highly remote. However, GMP is still an active commercial airport and so many cities/countries have gradually reopened flights at closer-in airports after building beautiful airports far in the suburbs.
 
Waterbomber2
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Re: Delta Buys a 4.3% Stake in Korean Air

Thu Sep 12, 2019 1:20 pm

ITSTours wrote:
abrelosojos wrote:
enilria wrote:
We are really seeing the formation of a new SkyTeam from the inside-out with Delta as King and peripheral airlines like Aeroflot and Saudia locked out. I expect Delta to take a lot more control than the stake implies.

I disagree this is just keeping up with JL/NH, I think they will leapfrog them. The NRT/HND situation makes it very difficult for JL/NH to grow. ICN is the premier gateway to connect and can grow.


= If ICN was such a premier gateway, KE would have been in the black - and, so would OZ. Despite their economic success, ICN remains #2 to NRT to generate business demand, and premium leisure demand. True, KE has been a basket case of management, and DL will help here, but I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China. I am sure JL/NH/UA/AA are more than happy with DL/KE being the dominant carrier on the US-MNL itinerary ...

Saludos,
Alex


Image

ICN is almost as twice large as NRT...


I think that the metric of "international passengers" skews the facts.
For instance, AMS is right up there but given AMS's positioning, international flights also include a huge number of 1 hour flights to nearby cities.
Also in terms of demand, very few of those people actually O&D to/from AMS, so you are counting many pax twice, while NRT is a major O&D airport first and a connecting hub second.

About the same can be said about ICN. A lot of international pax but mostly connecting and few O&D, so you count everything twice.

Aso, if you look at the busiest routes from ICN, you already have 3 routes to Japan in the top 5 accounting for some 9 million pax and that's without GMP across the beach where most of the Japan-Seoul O&D is.

If we have to compare NRT/ICN, for an operator like DL, it makes more sense to have an Asian hub with a max. amount of O&D to each of their U.S. hubs as a first priority, second priority would be pax originating at that Asian hub and connecting in a DL hub to other destinations within the Americas. Pax originating at the DL hubs are best served with direct flights to their Asian destinations rather than via ICN on KE. Pax originating in the America's outside the DL hubs are also best served by direct flights, otherise we are talking about 2-stop itineraries.
In that sense, ICN will fall short because Seoul isn't much of a destination and as an origin market it's meeeeh.

When landing in NRT in the morning, I always see 6 or 7 Delta tails parked at the satellite.
Soon that action will move to HND, but while ICN will have significance in the DL network especially for the secondary destinations that DL doesn't operate, I think that DL is increasing the minority stake as a defensive move because they just doesn't want to see KE change management and strategies from being a Delta and Skyteam partner. That would unfold as a nightmare for DL but also AF/KLM.

I would be surprised if DL isn't thinking about buying AA or UA someday and merging into OW. At their current rate of profits, they are dwarfing both so I'm sure that the thought is crossing their minds.
 
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DL747400
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Re: Updated: Delta increases stake in Korean Air parent

Thu Sep 12, 2019 1:45 pm

Waterbomber2 wrote:
I think that DL made quite a mistake there letting that deal go.


DL never had that deal to begin with, so there was nothing to "let go" of in the case of Skymark or JAL.

Waterbomber2 wrote:
If I were DL I would have taken up the entire Skymark A380 order book and set up a night hub with a bank departing Asian cities to HND in the evening and arriving in Asian cities in the morning. The A380 would have been perfect for a reverse hub fleet to JFK, LAX, ATL, DTW with hubs at both ends.Perhaps they could even have combined it with a day bank in NRT, giving them not one, but two hubs in Tokyo.


It would be difficult for me to imagine a more disastrous business decision that this ^ ^ ^ ^ ^ one. DL is a fiscally conservative company that is focused on achieving a good ROI, so for them to join the conga line of airlines salivating to have their logo and livery on the A380 would have been inconsistent with their business philosophy.
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enilria
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Re: Delta Buys a 4.3% Stake in Korean Air

Thu Sep 12, 2019 4:51 pm

Waterbomber2 wrote:
ITSTours wrote:
abrelosojos wrote:

= If ICN was such a premier gateway, KE would have been in the black - and, so would OZ. Despite their economic success, ICN remains #2 to NRT to generate business demand, and premium leisure demand. True, KE has been a basket case of management, and DL will help here, but I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China. I am sure JL/NH/UA/AA are more than happy with DL/KE being the dominant carrier on the US-MNL itinerary ...

Saludos,
Alex


Image

ICN is almost as twice large as NRT...


I think that the metric of "international passengers" skews the facts.
For instance, AMS is right up there but given AMS's positioning, international flights also include a huge number of 1 hour flights to nearby cities.
Also in terms of demand, very few of those people actually O&D to/from AMS, so you are counting many pax twice, while NRT is a major O&D airport first and a connecting hub second.

About the same can be said about ICN. A lot of international pax but mostly connecting and few O&D, so you count everything twice.

Aso, if you look at the busiest routes from ICN, you already have 3 routes to Japan in the top 5 accounting for some 9 million pax and that's without GMP across the beach where most of the Japan-Seoul O&D is.

If we have to compare NRT/ICN, for an operator like DL, it makes more sense to have an Asian hub with a max. amount of O&D to each of their U.S. hubs as a first priority, second priority would be pax originating at that Asian hub and connecting in a DL hub to other destinations within the Americas. Pax originating at the DL hubs are best served with direct flights to their Asian destinations rather than via ICN on KE. Pax originating in the America's outside the DL hubs are also best served by direct flights, otherise we are talking about 2-stop itineraries.
In that sense, ICN will fall short because Seoul isn't much of a destination and as an origin market it's meeeeh.

When landing in NRT in the morning, I always see 6 or 7 Delta tails parked at the satellite.
Soon that action will move to HND, but while ICN will have significance in the DL network especially for the secondary destinations that DL doesn't operate, I think that DL is increasing the minority stake as a defensive move because they just doesn't want to see KE change management and strategies from being a Delta and Skyteam partner. That would unfold as a nightmare for DL but also AF/KLM.

I would be surprised if DL isn't thinking about buying AA or UA someday and merging into OW. At their current rate of profits, they are dwarfing both so I'm sure that the thought is crossing their minds.

Nope.

NRT hasn't even been in the Top 50 airports in the world in terms of total passengers since 2017. ICN is #13. HND has 3x the volume of NRT.

https://en.wikipedia.org/wiki/List_of_b ... er_traffic
 
ITSTours
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Re: Delta Buys a 4.3% Stake in Korean Air

Thu Sep 12, 2019 6:45 pm

Waterbomber2 wrote:
ITSTours wrote:
abrelosojos wrote:

= If ICN was such a premier gateway, KE would have been in the black - and, so would OZ. Despite their economic success, ICN remains #2 to NRT to generate business demand, and premium leisure demand. True, KE has been a basket case of management, and DL will help here, but I don't think KE/DL can successfully challenge JL/AA or UA/NH, especially with no China. I am sure JL/NH/UA/AA are more than happy with DL/KE being the dominant carrier on the US-MNL itinerary ...

Saludos,
Alex


Image

ICN is almost as twice large as NRT...


I think that the metric of "international passengers" skews the facts.
For instance, AMS is right up there but given AMS's positioning, international flights also include a huge number of 1 hour flights to nearby cities.
Also in terms of demand, very few of those people actually O&D to/from AMS, so you are counting many pax twice, while NRT is a major O&D airport first and a connecting hub second.

About the same can be said about ICN. A lot of international pax but mostly connecting and few O&D, so you count everything twice.

Aso, if you look at the busiest routes from ICN, you already have 3 routes to Japan in the top 5 accounting for some 9 million pax and that's without GMP across the beach where most of the Japan-Seoul O&D is.

If we have to compare NRT/ICN, for an operator like DL, it makes more sense to have an Asian hub with a max. amount of O&D to each of their U.S. hubs as a first priority, second priority would be pax originating at that Asian hub and connecting in a DL hub to other destinations within the Americas. Pax originating at the DL hubs are best served with direct flights to their Asian destinations rather than via ICN on KE. Pax originating in the America's outside the DL hubs are also best served by direct flights, otherise we are talking about 2-stop itineraries.
In that sense, ICN will fall short because Seoul isn't much of a destination and as an origin market it's meeeeh.

When landing in NRT in the morning, I always see 6 or 7 Delta tails parked at the satellite.
Soon that action will move to HND, but while ICN will have significance in the DL network especially for the secondary destinations that DL doesn't operate, I think that DL is increasing the minority stake as a defensive move because they just doesn't want to see KE change management and strategies from being a Delta and Skyteam partner. That would unfold as a nightmare for DL but also AF/KLM.

I would be surprised if DL isn't thinking about buying AA or UA someday and merging into OW. At their current rate of profits, they are dwarfing both so I'm sure that the thought is crossing their minds.


Transit passenger / Total passenger in 2018
ICN: 8.02M / 67.68M (11.8%)
NRT: 3.73M / 35.35M (10.5%)

Actually transit pax ratio is not so much different.
For being an Asian "gateway," large total int'l pax number and transit pax number are both important.
 
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Re: Updated: Delta increases stake in Korean Air parent

Thu Sep 12, 2019 7:51 pm

ElroyJetson wrote:
I think any reasonable person who is an av geek has to stand back in awe of DL's strategic decisions. They never miss a beat. There were many who have said DL 's partnership with KE will pale in comparison to the UA and AA alliances in Japan.

The reality in NRT is not really Tokyo and Haneda is a tightly slot constricted airport with very limited opportunities for growth.

An alliance with KE is a masterstroke in that KE has one of the best route networks in Asia with one of the best transfer airports in the world in ICN. Anyone who speculated DL was not poised for growth in Asia has not been paying attention.

KE and DL now fly from virtually every major city in North American to ICN with convenient one stop connecting to almost anywhere in Asia.

As so often with DL a brilliant move imho.

ICN is quite the hub opportunity when paired with DL.

Japan effectively made NRT a limited opportunity, so instead of NRT or another Japanese hub being the gateway to Asia, ICN has that chance. Kimpo needs to be merged into ICN, perhaps fast rail into the city? Split hubs water down connectivity. Hopefully Korea learns from the lesson Japan decided to teach themselves.
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MIflyer12
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Re: Updated: Delta increases stake in Korean Air parent

Thu Sep 12, 2019 7:58 pm

enilria wrote:
DL747400 wrote:
It would be difficult for me to imagine a more disastrous business decision that this ^ ^ ^ ^ ^ one. DL is a fiscally conservative company that is focused on achieving a good ROI, so for them to join the conga line of airlines salivating to have their logo and livery on the A380 would have been inconsistent with their business philosophy.

Put another way, DL is all about constraint of capacity to drive up fares. The A380 is anathema to that strategy.


A carrier can certainly chase passenger counts. (Emirates, as an example.) A carrier can use a bunch of small aircraft to chase yields (by high frequency to appeal to business passengers, or by serving very thin routes where enough passengers will pay a price for nonstops). Look at UA's still-extensive use of E145s and CR2s (compared to AA or DL). DL seems to find a better balance - compare its margins to UA or Emirates.

What do people think is the better measure of success for a capitalist business - passenger counts, TRASM, or Return on Invested Capital (among others)?
 
ITSTours
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Re: Updated: Delta increases stake in Korean Air parent

Thu Sep 12, 2019 8:34 pm

lightsaber wrote:
ElroyJetson wrote:
I think any reasonable person who is an av geek has to stand back in awe of DL's strategic decisions. They never miss a beat. There were many who have said DL 's partnership with KE will pale in comparison to the UA and AA alliances in Japan.

The reality in NRT is not really Tokyo and Haneda is a tightly slot constricted airport with very limited opportunities for growth.

An alliance with KE is a masterstroke in that KE has one of the best route networks in Asia with one of the best transfer airports in the world in ICN. Anyone who speculated DL was not poised for growth in Asia has not been paying attention.

KE and DL now fly from virtually every major city in North American to ICN with convenient one stop connecting to almost anywhere in Asia.

As so often with DL a brilliant move imho.

ICN is quite the hub opportunity when paired with DL.

Japan effectively made NRT a limited opportunity, so instead of NRT or another Japanese hub being the gateway to Asia, ICN has that chance. Kimpo needs to be merged into ICN, perhaps fast rail into the city? Split hubs water down connectivity. Hopefully Korea learns from the lesson Japan decided to teach themselves.


The Korean government (hopefully) knows well about the failure of NRT.
GMP will be restricted to domestic and shorthaul routes as it has been since ICN opened.
Some want more international, mid-/longhaul routes from GMP while others prefer total elimination of international routes.
The government will balance out these contrasting opinions--which means they will do nothing.
While GMP-CJU is the busiest route in the world, that's almost entirely domestic O&D travels so there's no need to move that traffic to ICN.
The other domestic routes are not that significant. The express trains (KTX & SRT) already dominate them.

I agree that there is a need for the fast rail to the city, and it is already in the plan.
The maximum speed of AREX (Airport Railroad Express) from ICN to Seoul Station will be increased from 110km/h to 150km/h. In 2023.
Another plan is to operate a through service between AREX and Line 9 to directly connect ICN and Gangnam. Also in 2023.
 
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DL747400
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 2:39 am

MIflyer12 wrote:
A carrier can certainly chase passenger counts. (Emirates, as an example.) A carrier can use a bunch of small aircraft to chase yields (by high frequency to appeal to business passengers, or by serving very thin routes where enough passengers will pay a price for nonstops). Look at UA's still-extensive use of E145s and CR2s (compared to AA or DL). DL seems to find a better balance - compare its margins to UA or Emirates.

What do people think is the better measure of success for a capitalist business - passenger counts, TRASM, or Return on Invested Capital (among others)?


Very good question and points! But don't bother trying to change the minds of the anti-capitalist, anti-free market crowd that lurks on this site. Their posts demonstrate that they hate success in any form and right now that success is DELTA. Their posts demonstrate that they view the world through fogged glasses, believing that it is a basic human right that all of mankind is entitled to $49 fares whenever and wherever they want to travel. Your attempts won't change their minds and will will only serve to annoy the Socialists. In the meantime, DL continues to focus on ROIC, reinvest in their business and their global partnerships, improve their product, support the communities they serve and STILL manage to generate handsome profits while doing so. And they HATE that.
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abrelosojos
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 4:38 am

My point has nothing to do with the size of ICN's international traffic or the split of traffic at TYO. All I am saying is that if ICN provided the economics to be a super hub, the home carriers (KE and OZ) would be consistently profitable. Sure, ICN has a lot of traffic - but, what's the point of having traffic without providing profit to airlines based there. Sure, ICN, and KE can provide DL feed -- but, as Asia grows and key premium traffic bypasses hubs, what role does a KE/DL JV that excludes China really bring?

Let's see how things go. So far, I do not see a single DL investment having made money - VS is still in the red; AM has gone from being solidly black to being break even best; AF has not turned around.

Again, let's see. Ed and Glen make a whole lot more money than I do.

Saludos,
Alex
Live, and let live.
 
FromCDGtoSYD
Posts: 327
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 5:17 am

ITSTours wrote:
lightsaber wrote:
ElroyJetson wrote:
I think any reasonable person who is an av geek has to stand back in awe of DL's strategic decisions. They never miss a beat. There were many who have said DL 's partnership with KE will pale in comparison to the UA and AA alliances in Japan.

The reality in NRT is not really Tokyo and Haneda is a tightly slot constricted airport with very limited opportunities for growth.

An alliance with KE is a masterstroke in that KE has one of the best route networks in Asia with one of the best transfer airports in the world in ICN. Anyone who speculated DL was not poised for growth in Asia has not been paying attention.

KE and DL now fly from virtually every major city in North American to ICN with convenient one stop connecting to almost anywhere in Asia.

As so often with DL a brilliant move imho.

ICN is quite the hub opportunity when paired with DL.

Japan effectively made NRT a limited opportunity, so instead of NRT or another Japanese hub being the gateway to Asia, ICN has that chance. Kimpo needs to be merged into ICN, perhaps fast rail into the city? Split hubs water down connectivity. Hopefully Korea learns from the lesson Japan decided to teach themselves.


The Korean government (hopefully) knows well about the failure of NRT.
GMP will be restricted to domestic and shorthaul routes as it has been since ICN opened.
Some want more international, mid-/longhaul routes from GMP while others prefer total elimination of international routes.
The government will balance out these contrasting opinions--which means they will do nothing.
While GMP-CJU is the busiest route in the world, that's almost entirely domestic O&D travels so there's no need to move that traffic to ICN.
The other domestic routes are not that significant. The express trains (KTX & SRT) already dominate them.

I agree that there is a need for the fast rail to the city, and it is already in the plan.
The maximum speed of AREX (Airport Railroad Express) from ICN to Seoul Station will be increased from 110km/h to 150km/h. In 2023.
Another plan is to operate a through service between AREX and Line 9 to directly connect ICN and Gangnam. Also in 2023.


Furthermore if you are connecting in ICN you can still get to KIX, PEK and HND (although with less frequencies). SHA and TSa are the only one only accessible from GMP but there are tons of flights to PVG and TPE from ICN.

The government has also been very reluctant to open up more potential routes from GMP it was only when they were faced with an empty airport once ICN opened that they decided to allow flights to Japan and China. Most domestic airports only have flights to GMP and CJU anyway so if people are gonna fly they have to through GMP/ICN anyway.

Lastly, the bus from ICN to GMP is about 20 mins and the train is about the same. Its so short that they discontinued the express train as there was little to no gain and it actually diluted the value proposition for people going from Seoul Station to ICN
 
ITSTours
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 5:56 am

abrelosojos wrote:
My point has nothing to do with the size of ICN's international traffic or the split of traffic at TYO. All I am saying is that if ICN provided the economics to be a super hub, the home carriers (KE and OZ) would be consistently profitable. Sure, ICN has a lot of traffic - but, what's the point of having traffic without providing profit to airlines based there. Sure, ICN, and KE can provide DL feed -- but, as Asia grows and key premium traffic bypasses hubs, what role does a KE/DL JV that excludes China really bring?

Let's see how things go. So far, I do not see a single DL investment having made money - VS is still in the red; AM has gone from being solidly black to being break even best; AF has not turned around.

Again, let's see. Ed and Glen make a whole lot more money than I do.

Saludos,
Alex


JAL went downright bankrupt just several years ago despite having so many high-yield loyal business travelers.... Profitability is a very different animal.

And KE is still operationally profitable. (Net loss mainly due to currency)
 
jbs2886
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 7:55 am

abrelosojos wrote:
My point has nothing to do with the size of ICN's international traffic or the split of traffic at TYO. All I am saying is that if ICN provided the economics to be a super hub, the home carriers (KE and OZ) would be consistently profitable. Sure, ICN has a lot of traffic - but, what's the point of having traffic without providing profit to airlines based there. Sure, ICN, and KE can provide DL feed -- but, as Asia grows and key premium traffic bypasses hubs, what role does a KE/DL JV that excludes China really bring?

Let's see how things go. So far, I do not see a single DL investment having made money - VS is still in the red; AM has gone from being solidly black to being break even best; AF has not turned around.

Again, let's see. Ed and Glen make a whole lot more money than I do.

Saludos,
Alex


1) GOL is turning a profit and it’s share price has risen dramatically
2) your premise is an investment hasn’t made money, yet as evidence use profit...while they may be related, they’re different
3) you are looking at investments in isolation - perhaps VS value hasn’t increased but DL may have more than made that up by the benefits
 
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DL747400
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 1:54 pm

People (cough, cough.... pilots) need to open themselves to the idea that there are alternate ways to define successes within the scope of airline JVs.

Many people forget that the USA is considered a mature air travel market. That's not to say that there will not be growth, but it is already exceptionally well served compared to the rest of the world. Global airline JVs are funneling new customers into a mature air travel network which otherwise would not see them. And guess what? Those new customers are coming from your foreign JV partners and are originating their travel outside of the USA. Those JV partners which the unions despise are actually bringing new customers to fill seats on YOUR traditional core domestic and international markets.

People question why DELTA is so successful and so profitable. Could it be related to the fact that DELTA currently has a much deeper level of cooperation with AF/KL, VS, AM, (soon to include G3 and WS) than UA and AA enjoy with their respective partners?
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enilria
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 4:20 pm

MIflyer12 wrote:
enilria wrote:
DL747400 wrote:
It would be difficult for me to imagine a more disastrous business decision that this ^ ^ ^ ^ ^ one. DL is a fiscally conservative company that is focused on achieving a good ROI, so for them to join the conga line of airlines salivating to have their logo and livery on the A380 would have been inconsistent with their business philosophy.

Put another way, DL is all about constraint of capacity to drive up fares. The A380 is anathema to that strategy.


A carrier can certainly chase passenger counts. (Emirates, as an example.) A carrier can use a bunch of small aircraft to chase yields (by high frequency to appeal to business passengers, or by serving very thin routes where enough passengers will pay a price for nonstops). Look at UA's still-extensive use of E145s and CR2s (compared to AA or DL). DL seems to find a better balance - compare its margins to UA or Emirates.

What do people think is the better measure of success for a capitalist business - passenger counts, TRASM, or Return on Invested Capital (among others)?

Profit margin is the best measure of an airline's financial success. Passenger counts and TRASM are fairly meaningless as stand-alone metrics. Speaking about Emirates, they are not a public company. A private company is free to chase whatever measures of success the owner thinks are important. Being profitable is usually a goal, but if the owner also "owns" a vacation destination, they are free to prioritize passenger volume more highly because it generates more economic value on the whole of the owner's assets. IF Disney owned an airline, they might manage it to a loss if it meant that overall margins at their theme parks/hotels when combined with the losses at the airline increased from baseline. Loss-leading on one product to support another is a business model as old as time. But when you are a public company you have fewer options.
 
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ElroyJetson
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 4:37 pm

DL747400 wrote:
People (cough, cough.... pilots) need to open themselves to the idea that there are alternate ways to define successes within the scope of airline JVs.

Many people forget that the USA is considered a mature air travel market. That's not to say that there will not be growth, but it is already exceptionally well served compared to the rest of the world. Global airline JVs are funneling new customers into a mature air travel network which otherwise would not see them. And guess what? Those new customers are coming from your foreign JV partners and are originating their travel outside of the USA. Those JV partners which the unions despise are actually bringing new customers to fill seats on YOUR traditional core domestic and international markets.

People question why DELTA is so successful and so profitable. Could it be related to the fact that DELTA currently has a much deeper level of cooperation with AF/KL, VS, AM, (soon to include G3 and WS) than UA and AA enjoy with their respective partners?



Wow, excellent points imho. It is not so much the breath of your alliance partners but the depth. Back in the NW days they had an outstanding relationship with KLM. That relationship has carried over beautifully with KLM\AF. The VS stake was simply a move by DL to get a strong foothold in one of worlds premier business hubs in LHR where they were relatively weak. A brilliant move imho.

GOL shored up South America and the KE stake shored up Asia in order to replace a failing NRT hub. AM shored up another weakness in Mexico and central America.

But your central point remains. The depth of cooperation with DL's alliance partners is generally very strong. AA certainly has nothing like it, including with BA.

I would argue the UA\LH partnership is very strong, but that is the only major alliance i can think of that rivals DL.
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enilria
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Re: Updated: Delta increases stake in Korean Air parent

Fri Sep 13, 2019 4:44 pm

DL747400 wrote:
People (cough, cough.... pilots) need to open themselves to the idea that there are alternate ways to define successes within the scope of airline JVs.

Many people forget that the USA is considered a mature air travel market. That's not to say that there will not be growth, but it is already exceptionally well served compared to the rest of the world.

Your definition of "mature" requires a lack of competition because that is what stifles growth and makes the market "mature". It's a circular argument.

For what it is worth, 30% of all 7,500 routes served non-stop in the USA have competition. 70% are one carrier.
The population of Europe is almost exactly double the USA, but they have 20,000 non-stop routes, nearly 3x the USA. 35% have competition, so that's 7,000 competitive routes to only 2,250 in the USA and even adjusting for the population the USA is much less competitive.

In Asia there is competition in 42% of markets served non-stop. So, I'd argue the USA is now the least competitive market in the world. I think the "exceptionally well served" meme is 15-20 years out of date.
 
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DL747400
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Re: Updated: Delta increases stake in Korean Air parent

Sat Sep 14, 2019 7:10 pm

enilria wrote:
Your definition of "mature" requires a lack of competition because that is what stifles growth and makes the market "mature". It's a circular argument.


No, actually it doesn't. Demand is elastic, not static. Competition is only one or many factors influencing price elasticity. Even investors know that the U.S. air travel market is considered a mature yet still evolving market when viewed against history and a global backdrop. It's no longer 1985.

Mature doesn't require a lack of competition at all. Mature means that those companies who have been around for a long time have learned a great deal about what works and what doesn't, what is profitable and what isn't. Mature means that it is a well understood market that has achieved an exceptionally high degree of safety as well as operational and (more recently) financial stability, even as it continues to evolve by the presence and growth of LCCs and ULCCs.

enilria wrote:
The population of Europe is almost exactly double the USA, but they have 20,000 non-stop routes, nearly 3x the USA. 35% have competition, so that's 7,000 competitive routes to only 2,250 in the USA and even adjusting for the population the USA is much less competitive.


Totally disagree. Travel demand and patterns within and between the ~44 European COUNTRIES cannot be credibly held up as being anywhere near equivalent to travel demand and patterns within and between 50 United STATES. There are so many things wrong with that argument I don't even know where to begin.

enilria wrote:
In Asia there is competition in 42% of markets served non-stop. So, I'd argue the USA is now the least competitive market in the world. I think the "exceptionally well served" meme is 15-20 years out of date.


Again, I totally disagree. See above. Within the context of your argument, Asia is not equivalent to the U.S.. I stand by my assertion that the U.S. is an exceptionally well served air travel market. We enjoy flight options and frequency which are unheard of in many other parts of the world. Time to stop beating the tired old "there's not enough competition" drum.
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Cactusjuba
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Re: Updated: Delta increases stake in Korean Air parent

Sun Sep 15, 2019 12:58 am

DL747400 wrote:
People (cough, cough.... pilots) need to open themselves to the idea that there are alternate ways to define successes within the scope of airline JVs.

Many people forget that the USA is considered a mature air travel market. That's not to say that there will not be growth, but it is already exceptionally well served compared to the rest of the world. Global airline JVs are funneling new customers into a mature air travel network which otherwise would not see them. And guess what? Those new customers are coming from your foreign JV partners and are originating their travel outside of the USA. Those JV partners which the unions despise are actually bringing new customers to fill seats on YOUR traditional core domestic and international markets.

People question why DELTA is so successful and so profitable. Could it be related to the fact that DELTA currently has a much deeper level of cooperation with AF/KL, VS, AM, (soon to include G3 and WS) than UA and AA enjoy with their respective partners?


Classic strawmen argument. Can you find any ALPA pitch that argues for the elimination of JVs? You argue the benefits, as if pilots don't understand that benefits exist. Not the case. Yes, increased network reach, increased flow of PAX, thus beefing up the gauge/frequency of domestic flights. But what about the primo international flying? The argument has been for equitable growth, that's it. As in, "We can be excited about this JV if it means future growth is shared". Yet, minimum contractual floors on TATL JVs are the norm, and have historically been asked to be lowered (and have been). KE, AM, and WS have no tailored agreements, and negotiations have stalled. Ex: negotiations on AM, the table position has been for DL pilots to accept a 33% ratio of flying of trans-border US-MEX.
Less flying = less jobs. And in a seniority based system, even if you retain your job = less relative seniority. Pilots have had the entirety of their careers to witness method after creative method of outsourcing. Put ink on the paper guaranteeing equal growth between both JV partners, and pilot's will be more than happy to cheerlead the positives of JVs.
 
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DL747400
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Re: Updated: Delta increases stake in Korean Air parent

Sun Sep 15, 2019 2:32 am

Wow.... Where to start. OK, Pilots were hired to fly the planes! Nowhere was there ever any promise, either written or implied, that you are entitled to “primo destinations.” Your employer is in business to make a profit. End of story. Overall a rather weak and disappointing argument based on fear of fewer jobs rather than focusing on a bigger pie, which benefits everyone. HINT: That means more profit sharing if you work for DELTA.
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Cactusjuba
Posts: 192
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Re: Updated: Delta increases stake in Korean Air parent

Sun Sep 15, 2019 5:53 am

DL747400 wrote:
Wow.... Where to start. OK, Pilots were hired to fly the planes! Nowhere was there ever any promise, either written or implied, that you are entitled to “primo destinations.” Your employer is in business to make a profit. End of story. Overall a rather weak and disappointing argument based on fear of fewer jobs rather than focusing on a bigger pie, which benefits everyone. HINT: That means more profit sharing if you work for DELTA.


With all due respect, I never said primo destinations. Reread. In fact, variety of destinations are irrelevant to the discussion. I was merely referencing that flying longhaul international for pilots represents the highest step in the career. A threat to future WB growth is impactful not only on earning potential, but seniority movement throughout all steps of the pilot list. For this reason many pilots feel threatened by JVs. Not inherently by the JVs themselves, but if agreements are structured to shift future flying away from mainline. This also affects flight attendants, mechanics, ACS, you name it. Just like how the profit sharing, which you reference, came about because the pilots negotiated for first.

Yes, DL is in business to make a profit. DL is entitled to run the business the way they see fit within the Scope agreements that they've voluntarily agreed to. Pilots are entitled to bargain collectively for improvements to said scope agreements. We understand the shareholder rational, but you misrepresented the pilot/frontline employee stakeholder rational. All parties want a profitable company.
 
jagraham
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Re: Updated: Delta increases stake in Korean Air parent

Sun Sep 15, 2019 2:38 pm

As others have said, KE is now operationally (cash flow) positive. The family succession thing is most interesting, and materially significant. We will have to see how that works out.

The point of a ICN or AMS is twofold; first, a major region is within a few hours of the hub, and second, there is capacity to bring in a bunch of flights from USA. AMS makes it easy for DL passengers to get everywhere in Europe (and a chunk of Africa, but that's another story), and ICN makes it easy for DL passengers to get (almost - for political reasons) everywhere in China. As well as being reasonable to Indonesia, Malaysia, and Indochina if necessary. Far from being a disadvantage, location, location, capacity, is what makes those hubs work.

It is particularly significant with US - China politics making JVs in China unstable.
 
IPFreely
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Re: Updated: Delta increases stake in Korean Air parent

Sun Sep 15, 2019 5:21 pm

Cactusjuba wrote:
I was merely referencing that flying longhaul international for pilots represents the highest step in the career. A threat to future WB growth is impactful not only on earning potential, but seniority movement throughout all steps of the pilot list. For this reason many pilots feel threatened by JVs. Not inherently by the JVs themselves, but if agreements are structured to shift future flying away from mainline. This also affects flight attendants, mechanics, ACS, you name it.


You have a good point. Looking at airlinepilotcenteral.com, Delta's outsourcing means they offer little opportunity for pilots who wish to advance to crew the highest paid widebody planes.

The top paying pilot gig at United is $352/hr for 777, 787, and 767-400 captains. United has 139 planes with crews making the top possible rate.

The top paying pilot gig at American is $342/hr for 777 and 787 captains. American has 100 planes with crews making the top possible rate.

The top paying pilot gig at Delta is $354/hr for 777 and A350 captains. Delta has a measly 31 planes with crews making the top possible rate.
 
SteelChair
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Re: Updated: Delta increases stake in Korean Air parent

Sun Sep 15, 2019 6:58 pm

IPFreely wrote:
Cactusjuba wrote:
I was merely referencing that flying longhaul international for pilots represents the highest step in the career. A threat to future WB growth is impactful not only on earning potential, but seniority movement throughout all steps of the pilot list. For this reason many pilots feel threatened by JVs. Not inherently by the JVs themselves, but if agreements are structured to shift future flying away from mainline. This also affects flight attendants, mechanics, ACS, you name it.


You have a good point. Looking at airlinepilotcenteral.com, Delta's outsourcing means they offer little opportunity for pilots who wish to advance to crew the highest paid widebody planes.

The top paying pilot gig at United is $352/hr for 777, 787, and 767-400 captains. United has 139 planes with crews making the top possible rate.

The top paying pilot gig at American is $342/hr for 777 and 787 captains. American has 100 planes with crews making the top possible rate.

The top paying pilot gig at Delta is $354/hr for 777 and A350 captains. Delta has a measly 31 planes with crews making the top possible rate.


Care to compare the profitsharing (not just the % but the profits also)?
 
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DL747400
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Re: Updated: Delta increases stake in Korean Air parent

Tue Sep 17, 2019 1:09 am

IPFreely wrote:
Cactusjuba wrote:
I was merely referencing that flying longhaul international for pilots represents the highest step in the career. A threat to future WB growth is impactful not only on earning potential, but seniority movement throughout all steps of the pilot list. For this reason many pilots feel threatened by JVs. Not inherently by the JVs themselves, but if agreements are structured to shift future flying away from mainline. This also affects flight attendants, mechanics, ACS, you name it.


You have a good point. Looking at airlinepilotcenteral.com, Delta's outsourcing means they offer little opportunity for pilots who wish to advance to crew the highest paid widebody planes.

The top paying pilot gig at United is $352/hr for 777, 787, and 767-400 captains. United has 139 planes with crews making the top possible rate.

The top paying pilot gig at American is $342/hr for 777 and 787 captains. American has 100 planes with crews making the top possible rate.

The top paying pilot gig at Delta is $354/hr for 777 and A350 captains. Delta has a measly 31 planes with crews making the top possible rate.


Perhaps one element of DELTA's financial success is NOT acquiring and operating as many of the highest paid widebody planes versus AA and UA?

DL seems to be focusing on the next tier down (A330ceo/A339763/764) for most of their international widebody needs and has been very successful doing so for quite some time now. Why have a larger fleet of the largest and most expensive aircraft types than you need, especially if your network doesn't require it?

While I will admit that this disparity versus AA/UA may be due in part to DL management responding to DALPA's ongoing demands for ridiculously large step increases in hourly pay rates (particularly on the largest/heaviest fleet types), I am simultaneously hard-pressed to find any real evidence that DELTA currently NEEDS more 777 and A350-sized aircraft.

Lastly, I promise you that DELTA management is not thinking, "We really need to buy more 777s and A350s so that a larger number of our most senior (expensive) pilots can have the opportunity to fly our largest aircraft on long, prime routes."
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jbs2886
Posts: 2147
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Re: Updated: Delta increases stake in Korean Air parent

Tue Sep 17, 2019 2:25 am

SteelChair wrote:
IPFreely wrote:
Cactusjuba wrote:
I was merely referencing that flying longhaul international for pilots represents the highest step in the career. A threat to future WB growth is impactful not only on earning potential, but seniority movement throughout all steps of the pilot list. For this reason many pilots feel threatened by JVs. Not inherently by the JVs themselves, but if agreements are structured to shift future flying away from mainline. This also affects flight attendants, mechanics, ACS, you name it.


You have a good point. Looking at airlinepilotcenteral.com, Delta's outsourcing means they offer little opportunity for pilots who wish to advance to crew the highest paid widebody planes.

The top paying pilot gig at United is $352/hr for 777, 787, and 767-400 captains. United has 139 planes with crews making the top possible rate.

The top paying pilot gig at American is $342/hr for 777 and 787 captains. American has 100 planes with crews making the top possible rate.

The top paying pilot gig at Delta is $354/hr for 777 and A350 captains. Delta has a measly 31 planes with crews making the top possible rate.


Care to compare the profitsharing (not just the % but the profits also)?


This is a false equivalency. The pilot categories have nothing to do with "outsourcing." DL also has 764s (even more than UA), but have a different pilot category. Same for A330s. Moreover, AA and UA have the same type JVs.
 
JAMBOJET
Posts: 91
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Re: Updated: Delta increases stake in Korean Air parent

Sat Sep 21, 2019 5:49 pm

toobz wrote:
I think their Asian network is just fine actually with KE. If not amazing. Skyteam...well thats an opinion i suppose.

A widely shared opinion, apparently.

https://viewfromthewing.com/2019/09/19/ ... -carriers/
 
SteelChair
Posts: 1153
Joined: Fri Aug 25, 2017 11:37 am

Re: Updated: Delta increases stake in Korean Air parent

Sat Sep 21, 2019 7:38 pm

jbs2886 wrote:
SteelChair wrote:
IPFreely wrote:

You have a good point. Looking at airlinepilotcenteral.com, Delta's outsourcing means they offer little opportunity for pilots who wish to advance to crew the highest paid widebody planes.

The top paying pilot gig at United is $352/hr for 777, 787, and 767-400 captains. United has 139 planes with crews making the top possible rate.

The top paying pilot gig at American is $342/hr for 777 and 787 captains. American has 100 planes with crews making the top possible rate.

The top paying pilot gig at Delta is $354/hr for 777 and A350 captains. Delta has a measly 31 planes with crews making the top possible rate.


Care to compare the profitsharing (not just the % but the profits also)?


This is a false equivalency. The pilot categories have nothing to do with "outsourcing." DL also has 764s (even more than UA), but have a different pilot category. Same for A330s. Moreover, AA and UA have the same type JVs.


Not really. The argument was that Delta pilots earnings suffer because they don't have as many large widebodies as AA and UAL.

In comparison to UAL and AA, DAL 1) is much more profitable, and 2) has a much higher profitsharing formula. These combine for a much higher bottom line pay. Would they really rather trade places with the pilots at UAL and AA? Also, some here may not be aware that many Delta pilots have enough seniority to hold a large widebody but choose not to bid it for quality of life reasons. So why the whining about not enough large planes?

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