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william
Posts: 3279
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 6:35 pm

DL747400 wrote:
ShinyAndChrome wrote:
reltney wrote:
Someone big is about to loose their job at the big D. When the gov asks “what happens to all your cash” and stock buy backs are you answer, heads are rolling. Ask Dickson what happens when you botch the job...


They'd probably start with the billions invested in airport renovations, aircraft purchases, paying down debt, profit sharing, accelerated pension contributions, expanding TechOps, etc. As a proportion of the cash they had, Delta spent a good deal less on buybacks than the rest of the US4 as well as AS so I don't really know what you're getting at.

So unless the big "U", Chester, LUV, and especially the big "A" see heads rolling first (throw in most of the "S" & the "P" while you're at it), I think "D" won't have to worry in that respect at least.


Totally agree. Besides, the stock buyback mania was driven by Wall Street. They are the ones who demanded that companies do it if they wanted larger investors to step up and buy shares. So everyone who is whining about stock buybacks can send their thank you cards to Wall Street, NYC, USA.


We are all Wall Street, its called 401Ks and retirement plans. And trust me, none of us cared about stock buybacks as long as our portfolio was growing. Or some of us can be contrarian and feign outrage.
 
WidebodyPTV
Posts: 194
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 7:33 pm

WayexTDI wrote:
Well, (some) fares didn't go down: I checked a round-trip to Europe for end of June-early July and prices are what they were 2 years ago. So, whatever route is flown is not done at discounted fares.


All fares went down, but the decrease hasn't extended into late June yet.

wv399 wrote:
ATL hasn't been mentioned because it's not going anywhere. It's blessed by geography, and exceedingly low costs per enplanement. To be fair, it's flights and pax counts will definitely shrink, but it's status as Delta's preeminent hub is unquestioned.


I highly doubt anybody expects ATL to be dehubbed (if they did, then they should lose their ability to participate here), but ATL will get hit pretty hard. It's simply unavoidable, by virtue of its size and exposure to leisure traffic, particularly Florida and points south.

BTW, ATL's success has nothing to do with CPE. CPE is simply total costs charged to airlines / total enplaned passengers. Math makes ATL's CPE low. In reality, most of DL's costs are fixed, and variable costs are similar to its other hubs. If you're UA or AA... it isn't materially cheaper to operate from ATL than MSP. We really need a primer on CPE, and sticky it to this fourm...

ckfred wrote:
Ben Bernancke just said today that he sees a deep recession with a very quick recovery. When the markets collapsed in 2008, we were in a bathtub recession. We hit bottom and stayed at the bottom for quite some time, before GDP and employment numbers improved.


...and many other economists think we're headed into a longer, more painful recession/recovery period than 10 years ago. Time will tell, but projections that by next summer we'll be on pace to surpass 2019 traffic levels seem ridiculously silly at the moment.
Last edited by WidebodyPTV on Wed Mar 25, 2020 8:00 pm, edited 1 time in total.
 
Boof02671
Posts: 1794
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 7:43 pm

Delta has asked ground employees to reduce their hours to three or four days a week.

https://viewfromthewing.com/delta-reduc ... ary-leave/
 
JAMBOJET
Posts: 205
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 9:22 pm

WidebodyPTV wrote:

BTW, ATL's success has nothing to do with CPE. CPE is simply total costs charged to airlines / total enplaned passengers. Math makes ATL's CPE low. In reality, most of DL's costs are fixed, and variable costs are similar to its other hubs. If you're UA or AA... it isn't materially cheaper to operate from ATL than MSP. We really need a primer on CPE, and sticky it to this fourm...


ATL's success is three-fold. 1000+ flights/day allowing the Fixed cost to be dispersed among all those passengers, a hub very-well placed demographically to provide unique one-stop connections to nearly anywhere because it is such a massive connection hub and near so many people, and finally the fixed costs being relatively low to spread among all those passengers.

Of course part of ATL's success is CPE. If you get ~150,000+ passengers/day going through an airport, you have to build an airport to enable that. ATL isn't some gleaming pearl/palace of an airport that inefficiently disperses passengers. It's basically the same 5 long Terminals lined with runways on either side up that have been there since, at least, 1981 (just a fun satellite imagery look at 1981 from historicaerials.com ) with modest interior changes since then. Before anyone gets upset, I'm not saying it looks old, I'm simply saying it's not a gorgeous and expensive architectural project like some of the new airports in Asia are and designed to handle more pax than ATL.

ATL used to have one door (obviously a few checkpoints into that door) into the terminals, one door out; it now has 2 with the Domestic/International Terminal entrances. Contrast that to the variable expense of a place like SFO, JFK, DFW, or LAX where nearly every terminal has its own TSA, check in desks, and baggage carousels that drive up variable cost of upkeep.

Add the two international terminals built since in the same long configuration and you're left with a very low fixed cost basis, the majority of which was likely paid off long ago. Of course CPE is part of ATL's success. Delta has purposefully made sure nothing extravagant/expensive has been built there that would drive up cost without reward and most of the space in that airport has been only incrementally changed since the early 80s. And I just mean modest interior changes as opposed to tearing a lot down and rebuilding a pretty but expensive airport like O'Hare is in the process of doing.

Obviously the immense amount of passengers flowed through in that efficient space helps as well but that's all part of CPE, how many Total passengers can be flowed efficiently through the cheapest cost possible. ATL is an airport built to get as MANY people as possible through the doors/jetways in an efficient way in a Structure that's been largely paid off since the 80s or 90s with lower variable costs than other airport designs: Low-CPE.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 9:50 pm

People are talking about all these drastic scenarios of hub closures and station closures and massive swaths of route cuts, but the reality is a lot of capacity is going to come out simply in the following ways:

1) Reductions in secondary and leisure-heavy TATL flights for Summer 2020 if not longer (e.g., USA-Italy)
2) TPAC reductions, probably a lot of less-than-daily / day-of-the week flying as routes slowly resume over the next 6 months
3) Reduction of long-thin hub overflying that don't have a lot of O&D or potential for yield premium (e.g., DTW-SMF, SLC-PIT)
4) Roll-back / deferral of recently announced flying (e.g., recent BOS adds, SEA-DFW
5) Frequency reduction, particularly on routes that see more than 5-6 daily (e.g., lots of trimming opportunities all over the place at each and every hub)

Don't underestimate how much capacity DL can lop-off and still keep the core of its network intact. A lot of frequency reductions domestically, and day-of-the-week flying for TATL & TPAC.
 
evank516
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 10:43 pm

WidebodyPTV wrote:
evank516 wrote:
I'm confused by that. Business travel is already low, what's the need for the frequency?


I wasn't referring to the near term, but the recovery.


Ah okay. So you mean once this all passes?
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 11:09 pm

JAMBOJET wrote:
[Of course part of ATL's success is CPE. If you get ~150,000+ passengers/day going through an airport, you have to build an airport to enable that. ATL isn't some gleaming pearl/palace of an airport that inefficiently disperses passengers. It's basically the same 5 long Terminals lined with runways on either side up that have been there since, at least, 1981 (just a fun satellite imagery look at 1981 from historicaerials.com ) with modest interior changes since then. Before anyone gets upset, I'm not saying it looks old, I'm simply saying it's not a gorgeous and expensive architectural project like some of the new airports in Asia are and designed to handle more pax than ATL.

Obviously the immense amount of passengers flowed through in that efficient space helps as well but that's all part of CPE, how many Total passengers can be flowed efficiently through the cheapest cost possible. ATL is an airport built to get as MANY people as possible through the doors/jetways in an efficient way in a Structure that's been largely paid off since the 80s or 90s with lower variable costs than other airport designs: Low-CPE.


ATL has invested billions into expanding and modernizing, it now services more debt than DTW and MSP. Its CPE is lower simply by virtue of math -- the costs are divided amongst a large number of passengers. Of course, CPE is just a paper number. Most costs are fixed, and the cost differential between ATL, DTW and MSP is small. ATL is the hub it is because it's a huge o/d market dominated by one carrier, its proximity to the population centers and the most popular leisure destinations (Florida and points south).

Most a.net users have absolutely no idea what CPE is; I've read twice in the past week or so that SLC is getting a new airport because it has a low CPE. The reason is has a low CPE... is because its terminal facilities are paid off. It's currently on pace to borrow over $3B toward its new terminals; repayment on the first series of these bonds won't begin until after the first phase opens. Once SLC begins repaying those costs, they're passed onto the airlines... and because CPE = total costs charged / total enplanements, CPE goes up. SLC will service the most debt of the trunk hubs AND have the fewest enplanements, which means it'll have the highest CPE in the interim. Of course, much of this cost is rolled into DL's new lease agreements as fixed costs, as long as variable costs remain competitive it's virtually meaningless.

PSU.DTW.SCE wrote:
People are talking about all these drastic scenarios of hub closures and station closures and massive swaths of route cuts, but the reality is a lot of capacity is going to come out simply in the following ways:

1) Reductions in secondary and leisure-heavy TATL flights for Summer 2020 if not longer (e.g., USA-Italy)
2) TPAC reductions, probably a lot of less-than-daily / day-of-the week flying as routes slowly resume over the next 6 months
3) Reduction of long-thin hub overflying that don't have a lot of O&D or potential for yield premium (e.g., DTW-SMF, SLC-PIT)
4) Roll-back / deferral of recently announced flying (e.g., recent BOS adds, SEA-DFW
5) Frequency reduction, particularly on routes that see more than 5-6 daily (e.g., lots of trimming opportunities all over the place at each and every hub)

Don't underestimate how much capacity DL can lop-off and still keep the core of its network intact. A lot of frequency reductions domestically, and day-of-the-week flying for TATL & TPAC.


Sure, DL's core network will remain in tact but the cuts will likely be drastic and will likely require DL to reflow its network. E.g. ATW's ability to handle 3x mainline to ATL will diminish with fewer people traveling to Florida & points south, which means DL could compensate by upgauging DTW and MSP in the interim. Much of the core network flows will likely resemble that of a decade ago. Gotta remember... we're getting old, and there's plenty of young users on this forum who can't imagine a world with 320 service to Gators Creek, GA or 50x 757/321 to MCO from ATL. One of my 1040 only clients is a 22yo wine sommelier at Landy's Resturants and made over $90K (!!!) last year -- and that's just what is reportable. I warned him to put some money aside but of course he didn't listen. I told him the other day, that he can expect a major drop in income, because many of the resturant's patrons will downsize their bill or eat their less often. He asks 'so you think I'll be down to 75K or something like that.' IMO, Gen Z (and "peak" Millenials) are about to find out how bad it's going to get....

evank516 wrote:
Ah okay. So you mean once this all passes?


Yup.
 
MIflyer12
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 11:16 pm

Carriers need some frequency on typical business routes, even now. They don't want to lose passengers to a carrier with more/better timings. This may be a few dozen routes, not hundreds. DL needs to be competitive with AA on ATL-DFW, for example. DL has 8X on Friday (and surely they will not be full) but AA has eight as well. DL can't drop to 3x and expect to sustain a (relatively) rich fare mix.

Agree with post #555, point 5: There are lots of routes with heavy frequency ATL-TPA/MCO/JAX... that could cut from 14 to 11, or 11 to 8, without major impact to connectivity or business demand.
 
Elementalism
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Re: Delta plans to emerge a "smaller" carrier

Wed Mar 25, 2020 11:29 pm

None of the hubs will be closed imo. They each have their purpose and captive audience. Focus cities will be hit the hardest imo.
 
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DL717
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 12:05 am

Indy wrote:
Could the Delta comments be a way of trolling for dollars from their non hub stations? When the economy and travel recovers, I don't see them staying a smaller airline. It isn't in Delta's nature. They will want that market share back. They aren't going to sit back and let an LCC come in and start taking over their territory. They are going to do what they've always done. They are going to defend their turf. Airlines all scaled back post 9/11. Look where they were prior to the onset of COVID-19. They were bigger than ever.


No. Pax loads are a dumpster fire, think 20% or less. They are all losing their asses right now.
Welcome to Nothingburgers. May I take your order?
 
NateGreat
Posts: 463
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 1:29 am

MIflyer12 wrote:
Carriers need some frequency on typical business routes, even now. They don't want to lose passengers to a carrier with more/better timings. This may be a few dozen routes, not hundreds. DL needs to be competitive with AA on ATL-DFW, for example. DL has 8X on Friday (and surely they will not be full) but AA has eight as well. DL can't drop to 3x and expect to sustain a (relatively) rich fare mix.

Agree with post #555, point 5: There are lots of routes with heavy frequency ATL-TPA/MCO/JAX... that could cut from 14 to 11, or 11 to 8, without major impact to connectivity or business demand.

I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?
 
N649DL
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 1:38 am

NateGreat wrote:
MIflyer12 wrote:
Carriers need some frequency on typical business routes, even now. They don't want to lose passengers to a carrier with more/better timings. This may be a few dozen routes, not hundreds. DL needs to be competitive with AA on ATL-DFW, for example. DL has 8X on Friday (and surely they will not be full) but AA has eight as well. DL can't drop to 3x and expect to sustain a (relatively) rich fare mix.

Agree with post #555, point 5: There are lots of routes with heavy frequency ATL-TPA/MCO/JAX... that could cut from 14 to 11, or 11 to 8, without major impact to connectivity or business demand.

I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?


DL by far is the largest between AA and UA at MCO. They have hourly 757s between MCO-ATL and have tons of seasonal flying to various places in the Midwest. Based on the CoronaVirus maps, MCO doesn't seem that bad as FLL and MIA are getting hit much harder.

We actually have vacation time to use by May and I'm waiting to see if things die down in FL at all as DL's fares are cheap, nobody's flying, and I work remotely. We had a big jump in cases in TX today so it's really catching up to Florida levels. Then again, it was also 90+ degrees in both places today so maybe that will help.

Either way, the risk of catching the virus on a place with nobody flying right now has to be pretty low. You can easily catch the virus by standing next to someone at a supermarket just versus 12 people spread out on a 757 flying to Orlando.
 
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flymco753
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 2:35 am

DTW is in a much better position to serve the Southeastern US compared to MSP. I don't see how MSP-JAX/TPA/SRQ/RSW/MIA/FLL/PBI/MCO is in a better position than DTW considering that if we average the market size of each market in comparison from both DTW & MSP, DTW-Florida averages much larger. While ATL is the preferred gateway to the southeast, DTW serves as a great secondary.
...the carriage of liquids, gels, and aerosols are prohibited through the screening checkpoint except for travel size toiletries of 3 ounces or less...
 
NateGreat
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 2:54 am

N649DL wrote:
NateGreat wrote:
MIflyer12 wrote:
Carriers need some frequency on typical business routes, even now. They don't want to lose passengers to a carrier with more/better timings. This may be a few dozen routes, not hundreds. DL needs to be competitive with AA on ATL-DFW, for example. DL has 8X on Friday (and surely they will not be full) but AA has eight as well. DL can't drop to 3x and expect to sustain a (relatively) rich fare mix.

Agree with post #555, point 5: There are lots of routes with heavy frequency ATL-TPA/MCO/JAX... that could cut from 14 to 11, or 11 to 8, without major impact to connectivity or business demand.

I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?


DL by far is the largest between AA and UA at MCO. They have hourly 757s between MCO-ATL and have tons of seasonal flying to various places in the Midwest. Based on the CoronaVirus maps, MCO doesn't seem that bad as FLL and MIA are getting hit much harder.

We actually have vacation time to use by May and I'm waiting to see if things die down in FL at all as DL's fares are cheap, nobody's flying, and I work remotely. We had a big jump in cases in TX today so it's really catching up to Florida levels. Then again, it was also 90+ degrees in both places today so maybe that will help.

Either way, the risk of catching the virus on a place with nobody flying right now has to be pretty low. You can easily catch the virus by standing next to someone at a supermarket just versus 12 people spread out on a 757 flying to Orlando.

IIRC, Delta had a hub/focus city operation in MCO up until some point in the 2000s. That’s part of the reason why nonrevving to/from MCO, especially through ATL, is such a bear. When they closed down the MCO hub, Delta employees who resided in the Orlando area decided not to move, but rather commute to the Delta hubs for work.
 
reltney
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 3:05 am

ShinyAndChrome wrote:
reltney wrote:
Someone big is about to loose their job at the big D. When the gov asks “what happens to all your cash” and stock buy backs are you answer, heads are rolling. Ask Dickson what happens when you botch the job...


They'd probably start with the billions invested in airport renovations, aircraft purchases, paying down debt, profit sharing, accelerated pension contributions, expanding TechOps, etc. As a proportion of the cash they had, Delta spent a good deal less on buybacks than the rest of the US4 as well as AS so I don't really know what you're getting at.

So unless the big "U", Chester, LUV, and especially the big "A" see heads rolling first (throw in most of the "S" & the "P" while you're at it), I think "D" won't have to worry in that respect at least.



Actually, you are correct. 3 airports received the Delta overhaul construction for terminals and I am guessing it why we are not being shamed about the 12b in stock buy backs....

Good point.

Cheers
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OUTLAW KNIVES.

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reltney
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 3:06 am

panamair wrote:
reltney wrote:
Someone big is about to loose their job at the big D. When the gov asks “what happens to all your cash” and stock buy backs are you answer, heads are rolling. Ask Dickson what happens when you botch the job...


Delta doesn't really have much to worry about on that front since they really only spent about 20% of free cash flow on stock buybacks...50% went back into the business (aircraft and airport investments, employee profit sharing, service enhancements, technology improvement etc), and 30% went to pay down debt. That's ultimately a pretty fair distribution.



Agree100%. Thought it was worse..thanks
Knives don't kill people. People with knives kill people.
OUTLAW KNIVES.

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questions
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 5:08 am

flymco753 wrote:
DTW is in a much better position to serve the Southeastern US compared to MSP. I don't see how MSP-JAX/TPA/SRQ/RSW/MIA/FLL/PBI/MCO is in a better position than DTW considering that if we average the market size of each market in comparison from both DTW & MSP, DTW-Florida averages much larger. While ATL is the preferred gateway to the southeast, DTW serves as a great secondary.


From where?

I’ve never understood why a lot of west coast traffic flows through DTW and MSP to the Southeast vs through SLC.
 
WidebodyPTV
Posts: 194
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 8:22 am

questions wrote:
From where?


From the Central/Midwest.

I’ve never understood why a lot of west coast traffic flows through DTW and MSP to the Southeast vs through SLC.


Because SLC has a super tiny local market to the SE, which limits overall capacity. DTW & MSP are far larger, especially to snow bird destinations.
 
CRJ5000
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 10:12 am

NateGreat wrote:
I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?


I am curious what traffic returns first. I think the general consensus is that business travel will be back first, but I'm not totally certain. People will be ready to get out after doing essentially nothing for months. Obviously they need the financial means to do so, and the economic situation could well be trash, but it's yet to be seen how bad the outcome will be.
I know business travel came back last time, but more and more businesses are opening to the idea of e-conferencing and eliminating some of the non-essential business travel (My employer included.) The quality and variety of options out there for e-conferencing is light years better than it was in 2001 and 2010.
 
tphuang
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 11:23 am

CRJ5000 wrote:
NateGreat wrote:
I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?


I am curious what traffic returns first. I think the general consensus is that business travel will be back first, but I'm not totally certain. People will be ready to get out after doing essentially nothing for months. Obviously they need the financial means to do so, and the economic situation could well be trash, but it's yet to be seen how bad the outcome will be.
I know business travel came back last time, but more and more businesses are opening to the idea of e-conferencing and eliminating some of the non-essential business travel (My employer included.) The quality and variety of options out there for e-conferencing is light years better than it was in 2001 and 2010.


I haven't seen any such consensus.

I don't see why business travel will be back first. companies are suffering and will be adopting cost cutting measures. business travel is not needed in the beginning when people are still finding teleconferencing acceptable.

domestic/caribbean leisure imo should come back first. People are going to want to take their kids to disney after having them stuck in the house for a couple of months. Europe/Asia travel are likely to be down for a while
 
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flymco753
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 11:54 am

WidebodyPTV wrote:
questions wrote:
From where?


From the Central/Midwest.

I’ve never understood why a lot of west coast traffic flows through DTW and MSP to the Southeast vs through SLC.


Because SLC has a super tiny local market to the SE, which limits overall capacity. DTW & MSP are far larger, especially to snow bird destinations.
While a route like SFO-SLC-MCO might make sense, the overall traffic from the West coast is still limited compared to routing SFO-DTW-MCO or SEA-MSP-RSW considering these markets generate additional traffic based on low fare options. It's very common in high VFR domestic markets. Similarly to why flights from MSP & DTW to secondary California markets are nonexistent. DTW is in a great geographical location to connect passengers from both Asia and Europe onward to Florida which is why I expect frequencies to rebound immediately when said and done to avoid losing their share to LCC's.
...the carriage of liquids, gels, and aerosols are prohibited through the screening checkpoint except for travel size toiletries of 3 ounces or less...
 
JAMBOJET
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 1:07 pm

reltney wrote:
panamair wrote:
reltney wrote:
Someone big is about to loose their job at the big D. When the gov asks “what happens to all your cash” and stock buy backs are you answer, heads are rolling. Ask Dickson what happens when you botch the job...


Delta doesn't really have much to worry about on that front since they really only spent about 20% of free cash flow on stock buybacks...50% went back into the business (aircraft and airport investments, employee profit sharing, service enhancements, technology improvement etc), and 30% went to pay down debt. That's ultimately a pretty fair distribution.



Agree100%. Thought it was worse..thanks


Delta did return 70% of Free Cash flow (~35% of operating cash flow) to its owners through stock buybacks and dividends in 2019 and was planning to continue that practice in 2020 as recently as December, 2019.

Per Delta's CFO in December, 2019 referring to 2019: "We will continue to deploy capital to reinvest in the business and remain committed to returning 70 percent of free cash flow to our owners." In 2019, of the $4B in FCF, $2B was stock buybacks, $1B in dividends per slide 68.
Delta's Investor day PDF is here: http://d18rn0p25nwr6d.cloudfront.net/CI ... 7046cf.pdf


It's not a bad thing that Delta was providing money back to its owners, it's what public companies are supposed to do... It's money back to Teacher pension funds, 401ks, Delta employees, etc. And Delta was a well-run company back when the airlines were making money.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 1:53 pm

tphuang wrote:
CRJ5000 wrote:
NateGreat wrote:
I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?


I am curious what traffic returns first. I think the general consensus is that business travel will be back first, but I'm not totally certain. People will be ready to get out after doing essentially nothing for months. Obviously they need the financial means to do so, and the economic situation could well be trash, but it's yet to be seen how bad the outcome will be.
I know business travel came back last time, but more and more businesses are opening to the idea of e-conferencing and eliminating some of the non-essential business travel (My employer included.) The quality and variety of options out there for e-conferencing is light years better than it was in 2001 and 2010.


I haven't seen any such consensus.

I don't see why business travel will be back first. companies are suffering and will be adopting cost cutting measures. business travel is not needed in the beginning when people are still finding teleconferencing acceptable.

domestic/caribbean leisure imo should come back first. People are going to want to take their kids to disney after having them stuck in the house for a couple of months. Europe/Asia travel are likely to be down for a while

Not all business travel is equal, there is a swath of business travel that will come back pretty quickly but a portion that won't.

Operations related travel, particularly for anything related to supply chains, manufacturing, vendors, product launches, industrial facilities, maintenance, infrastructure related travel will come back quickly. There are a lot of things that are on hold, while not deemed truly essential in the short term, will be necessary to help restart the economy and operations for many industries.

Secondly there are a lot of technology / IT related projects that need on-site support for deployments, training, testing, validation etc that will come back, and any of the related consulting/professional services.

General business related travel for run-of-the mill meetings, training, conferences, trade shows is going to be slow to come back for a while.

Companies are essentially are going to be short of cash flow in the short term so naturally cost-cutting austerity measures are going to be in place for a while.

I also thing that people with large disposable incomes, and vacation destinations frequented by more wealthy travelers will bounce back quicker than those are more middle-class oriented.

The wild card is, we just don't know when that is going to be. May is very optimistic at this point, maybe June? The longer everyone is down the longer it is going to take to crawl back-up.
We probably won't even have clearer picture for another 3-4 weeks of what the path out of this looks like.
 
Indy
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 2:21 pm

DL717 wrote:
No. Pax loads are a dumpster fire, think 20% or less. They are all losing their asses right now.


Yeah they are losing their asses right now. Absolutely no disagreement there. But once things go back to normal, Delta will as well. But this is clearly an opportunity for Delta to try and get handouts from places like RDU and CVG. Those cities are going to want to preserve P2P flying and will likely offer up incentives. Just my take on it.
Indy = Indianapolis and not Independence Air
 
MIflyer12
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 2:21 pm

PSU.DTW.SCE wrote:
Not all business travel is equal, there is a swath of business travel that will come back pretty quickly but a portion that won't.

Operations related travel, particularly for anything related to supply chains, manufacturing, vendors, product launches, industrial facilities, maintenance, infrastructure related travel will come back quickly. There are a lot of things that are on hold, while not deemed truly essential in the short term, will be necessary to help restart the economy and operations for many industries.

Secondly there are a lot of technology / IT related projects that need on-site support for deployments, training, testing, validation etc that will come back, and any of the related consulting/professional services.

General business related travel for run-of-the mill meetings, training, conferences, trade shows is going to be slow to come back for a while.

Companies are essentially are going to be short of cash flow in the short term so naturally cost-cutting austerity measures are going to be in place for a while.

I also thing that people with large disposable incomes, and vacation destinations frequented by more wealthy travelers will bounce back quicker than those are more middle-class oriented.

The wild card is, we just don't know when that is going to be. May is very optimistic at this point, maybe June? The longer everyone is down the longer it is going to take to crawl back-up.
We probably won't even have clearer picture for another 3-4 weeks of what the path out of this looks like.


If you had those answers you'd be a genie worth $Billions to one of the US4 carriers. Thanks for your humility.

There is no precedent for this situation. It doesn't mirror 9/11. There wasn't a lot of air passenger traffic in 1918 with the influenza pandemic. It will be interesting to see how carriers respond, for example, do they stick to published (reduced) schedules, or do they have a lot of aircraft subs and day-of cancellations of empty flights? That would discourage people from traveling and continue to depress demand.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 2:57 pm

It be also be interesting to see how much travel reverts to automobile from air travel, particularly for leisure but also some business too.
Will people who had been flying from Michigan to Florida feel more safe driving this summer instead of flying?
Will the business traveler who used to fly DTW-PIT not either be forced via their employer to feel safer to drive?

Lots of wildcards and unknowns out there.
 
dcaproducer
Posts: 279
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 3:01 pm

PSU.DTW.SCE wrote:
It be also be interesting to see how much travel reverts to automobile from air travel, particularly for leisure but also some business too.
Will people who had been flying from Michigan to Florida feel more safe driving this summer instead of flying?
Will the business traveler who used to fly DTW-PIT not either be forced via their employer to feel safer to drive?

Lots of wildcards and unknowns out there.


From a business perspective, and owner of a business where my team travels almost weekly, travel will bounce back quickly for us.
I'd estimate this will be true for many companies as long as this doesn't drag too long.

I know it's tough, but the quicker we crack down and keep everyone home, the quicker we all get back to normal.
 
tphuang
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 3:12 pm

PSU.DTW.SCE wrote:
tphuang wrote:
CRJ5000 wrote:

I am curious what traffic returns first. I think the general consensus is that business travel will be back first, but I'm not totally certain. People will be ready to get out after doing essentially nothing for months. Obviously they need the financial means to do so, and the economic situation could well be trash, but it's yet to be seen how bad the outcome will be.
I know business travel came back last time, but more and more businesses are opening to the idea of e-conferencing and eliminating some of the non-essential business travel (My employer included.) The quality and variety of options out there for e-conferencing is light years better than it was in 2001 and 2010.


I haven't seen any such consensus.

I don't see why business travel will be back first. companies are suffering and will be adopting cost cutting measures. business travel is not needed in the beginning when people are still finding teleconferencing acceptable.

domestic/caribbean leisure imo should come back first. People are going to want to take their kids to disney after having them stuck in the house for a couple of months. Europe/Asia travel are likely to be down for a while

Not all business travel is equal, there is a swath of business travel that will come back pretty quickly but a portion that won't.

Operations related travel, particularly for anything related to supply chains, manufacturing, vendors, product launches, industrial facilities, maintenance, infrastructure related travel will come back quickly. There are a lot of things that are on hold, while not deemed truly essential in the short term, will be necessary to help restart the economy and operations for many industries.

Secondly there are a lot of technology / IT related projects that need on-site support for deployments, training, testing, validation etc that will come back, and any of the related consulting/professional services.

General business related travel for run-of-the mill meetings, training, conferences, trade shows is going to be slow to come back for a while.

Companies are essentially are going to be short of cash flow in the short term so naturally cost-cutting austerity measures are going to be in place for a while.

I also thing that people with large disposable incomes, and vacation destinations frequented by more wealthy travelers will bounce back quicker than those are more middle-class oriented.

The wild card is, we just don't know when that is going to be. May is very optimistic at this point, maybe June? The longer everyone is down the longer it is going to take to crawl back-up.
We probably won't even have clearer picture for another 3-4 weeks of what the path out of this looks like.


I think a lot of people are finding that they can work from home who did not think they can work from home before. Companies have re-examined what is "essential" or even "necessary" travel. As long as the threat of coronavirus is around and it's going to be around in the background until at least the vaccine is approved, companies are going to be traveling more than necessary.

For example, a lot of companies started the work from home and no travel policy 2 weeks before domestic cases started to really get out of control. And they had the no Asia travel policy for a month prior to that. I think at least some of that is cost concerns.

Regardless, hard to see companies relaxing corporate travel that much as long as the thread of COVID-19 coming back in fall is on CDC's advisory.
 
747megatop
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 3:35 pm

SESGDL wrote:
747megatop wrote:
onwFan wrote:
According to its CFO, Delta will emerge as a “smaller” carrier from the covid crisis.

https://thepointsguy.com/news/delta-air ... virus/amp/

Which are the focus cities and routes that can be expected to disappear from DL’s map?

1. Good news for KE. A further shift in focus from TYO to ICN is a given, unless they are not committed to the KE partnership.

2. A lot of routes from non-hubs and secondary/focus cities to CDG, AMS, LHR to disappear? AF/KL will be supported by France and the Netherlands.

3. LHR? Virgin Atlantic - will have to wait and see.

4. PVG and China Eastern - will probably come out in good shape with airline consolidation in China. Expect focus on PVG.

4. MIA hub- Is it now worth it? LATAM will probably the biggest loser, losing AA, IB and an alliance in the middle of the biggest crisis in aviation history.

5. SEA & BOS - I leave it for discussion.

Very interestingly you haven't mentioned ATL. ATL's major share is transfer traffic and DL is a huge part of it

1) DL accounted for 78% of seat capacity at ATL in 2017; i don't think much has changed in 3 years
https://centreforaviation.com/analysis/ ... ale-381488
Look under - "Delta has over three quarters of all seat capacity"

2) For FY 2016; ATL had roughly 68% connecting traffic and 32% O&D traffic.
https://www.businesswire.com/news/home/ ... t-Sr.-Revs
" However, Atlanta is the primary hub and corporate headquarters location for Delta. ATL is anchored by a large, local traffic base with 17 million O&D enplaned passengers for fiscal year (FY) 2016."

So, if DL returned a small carrier (75% smaller? 50% smaller? 60% smaller? nobody knows); for sure ATL is left very vulnerable as there will be a massive reduction in passenger flow. I would wager to guess that DL would fly the most important and profitable point to point routes 1st (LAX-JFK; JFK-LHR; SFO-JFK etc. for example). So, in a nutshell, to me ATL seems to very vulnerable in terms of massive scale back in routes AND massive scale back in hub operations leading to empty terminals in the near term. Over the long term what happens is anybody's guess. Will ATL be able to withstand the financial shocks of what is to come over the next 3 years and it's future as a mega hub over the next 5 years remains to be seen.


ATL is not unique in that aspect. DFW, IAH, ORD and all the mega hubs have considerably higher connecting traffic percentages for hub carries than O&D. CLT’s numbers are even worse. ATL works so well as a function of its massive connectivity, driven by its large O&D base, geography and proximity to other large O&D centers. Once travel returns, this advantage won’t go away, albeit at a smaller scale. Every hub will be smaller for a while, but ATL is in no way unique.

Jeremy

I was talking just in the context of Delta. In the general context of multiple carriers, yes you are right.
 
WayexTDI
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 4:39 pm

WidebodyPTV wrote:
WayexTDI wrote:
Well, (some) fares didn't go down: I checked a round-trip to Europe for end of June-early July and prices are what they were 2 years ago. So, whatever route is flown is not done at discounted fares.


All fares went down, but the decrease hasn't extended into late June yet.

So, all fares have not gone down. It would appear some (short term) fares have, others (longer term) have not.
As of right now, you can buy tickets for late June-early July at same fares that they were earlier this year (before the COVID-19 freak out) or 2 years ago; I don't call that seeing fares being discounted.
 
jayunited
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 5:16 pm

Boof02671 wrote:
Delta has asked ground employees to reduce their hours to three or four days a week.

https://viewfromthewing.com/delta-reduc ... ary-leave/



Very interesting article and letter from DL's CEO.

So it begins, airlines get their bailout from the US tax payers and on the same day the bill passes the Senate DL "ask" majority of their ground staff to reduce their work schedule to a 3 or 4 day work week from April through June. According to letter the only group DL is negotiating with is are their pilots. I thought the bailout was supposed to protect jobs and wages through August 31, 2020. But DL's move to cut hours worked equates to a 25% pay cut for majority of their ground staff.

Management employees here at UA have seen our pay cut across the board, and UA like DL has a large number of employees from all work grounds on voluntary unpaid leave. It will be interesting to see what pay concessions highly unionized airlines like UA, AA and WN get from their ground staff after DL's imposed 25% pay cut.
 
hiflyeras
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 6:27 pm

T3 at LAX being shut down.
 
Boof02671
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 7:10 pm

jayunited wrote:
Boof02671 wrote:
Delta has asked ground employees to reduce their hours to three or four days a week.

https://viewfromthewing.com/delta-reduc ... ary-leave/



Very interesting article and letter from DL's CEO.

So it begins, airlines get their bailout from the US tax payers and on the same day the bill passes the Senate DL "ask" majority of their ground staff to reduce their work schedule to a 3 or 4 day work week from April through June. According to letter the only group DL is negotiating with is are their pilots. I thought the bailout was supposed to protect jobs and wages through August 31, 2020. But DL's move to cut hours worked equates to a 25% pay cut for majority of their ground staff.

Management employees here at UA have seen our pay cut across the board, and UA like DL has a large number of employees from all work grounds on voluntary unpaid leave. It will be interesting to see what pay concessions highly unionized airlines like UA, AA and WN get from their ground staff after DL's imposed 25% pay cut.

Pilots and dispatchers are the only unionized groups, the others are all employees at will
 
N649DL
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 7:28 pm

NateGreat wrote:
N649DL wrote:
NateGreat wrote:
I know MCO is leisure based, so many people wouldn’t think MCO matters the way many of the big business traveler heavy metros do in terms of US3 reputation, but will DL still remain the biggest of the US3 at MCO, even though AA and UA will make similar cuts post-crisis?


DL by far is the largest between AA and UA at MCO. They have hourly 757s between MCO-ATL and have tons of seasonal flying to various places in the Midwest. Based on the CoronaVirus maps, MCO doesn't seem that bad as FLL and MIA are getting hit much harder.

We actually have vacation time to use by May and I'm waiting to see if things die down in FL at all as DL's fares are cheap, nobody's flying, and I work remotely. We had a big jump in cases in TX today so it's really catching up to Florida levels. Then again, it was also 90+ degrees in both places today so maybe that will help.

Either way, the risk of catching the virus on a place with nobody flying right now has to be pretty low. You can easily catch the virus by standing next to someone at a supermarket just versus 12 people spread out on a 757 flying to Orlando.

IIRC, Delta had a hub/focus city operation in MCO up until some point in the 2000s. That’s part of the reason why nonrevving to/from MCO, especially through ATL, is such a bear. When they closed down the MCO hub, Delta employees who resided in the Orlando area decided not to move, but rather commute to the Delta hubs for work.


MCO was indeed a DL hub with ASA feeder through 2005-2006 and for "Song" as well which were single-class 757s that were upgraded from retired DL Express 737-200. Some of those 757s still exist at Mainline DL today.

DL still has a somewhat large crew base in MCO. I've been on with MCO crews on LAX-MCO-LAX several times.

hiflyeras wrote:
T3 at LAX being shut down.


Good, that place is a dump. Hopefully during this downtime they can speed up DL terminal construction at LAX.
 
onwFan
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 7:49 pm

747megatop wrote:
onwFan wrote:
According to its CFO, Delta will emerge as a “smaller” carrier from the covid crisis.

https://thepointsguy.com/news/delta-air ... virus/amp/

Which are the focus cities and routes that can be expected to disappear from DL’s map?

1. Good news for KE. A further shift in focus from TYO to ICN is a given, unless they are not committed to the KE partnership.

2. A lot of routes from non-hubs and secondary/focus cities to CDG, AMS, LHR to disappear? AF/KL will be supported by France and the Netherlands.

3. LHR? Virgin Atlantic - will have to wait and see.

4. PVG and China Eastern - will probably come out in good shape with airline consolidation in China. Expect focus on PVG.

4. MIA hub- Is it now worth it? LATAM will probably the biggest loser, losing AA, IB and an alliance in the middle of the biggest crisis in aviation history.

5. SEA & BOS - I leave it for discussion.

Very interestingly you haven't mentioned ATL. ATL's major share is transfer traffic and DL is a huge part of it

1) DL accounted for 78% of seat capacity at ATL in 2017; i don't think much has changed in 3 years
https://centreforaviation.com/analysis/ ... ale-381488
Look under - "Delta has over three quarters of all seat capacity"

2) For FY 2016; ATL had roughly 68% connecting traffic and 32% O&D traffic.
https://www.businesswire.com/news/home/ ... t-Sr.-Revs
" However, Atlanta is the primary hub and corporate headquarters location for Delta. ATL is anchored by a large, local traffic base with 17 million O&D enplaned passengers for fiscal year (FY) 2016."

So, if DL returned a small carrier (75% smaller? 50% smaller? 60% smaller? nobody knows); for sure ATL is left very vulnerable as there will be a massive reduction in passenger flow. I would wager to guess that DL would fly the most important and profitable point to point routes 1st (LAX-JFK; JFK-LHR; SFO-JFK etc. for example). So, in a nutshell, to me ATL seems to very vulnerable in terms of massive scale back in routes AND massive scale back in hub operations leading to empty terminals in the near term. Over the long term what happens is anybody's guess. Will ATL be able to withstand the financial shocks of what is to come over the next 3 years and it's future as a mega hub over the next 5 years remains to be seen.

I think DL is so big at ATL that they have several ways to manage capacity there. They have numerous flights to many major cities and cuts can always be achieved through reducing frequencies with little noticeable effect based on travel demand. They will always have the flexibility to bring back capacity depending on need. Which is also one of the reasons why I ignored their fortress hubs of ATL, MSP, DTW and SLC.

I was curious to see how they will manage capacity at secondary hubs and focus cities because there are many spokes that are served once or at max twice daily. Cuts there are more tricky, and could result in potential exits from certain markets, especially international routes from spokes/focus cities. This was what I was most curious about. DL flies more such routes than any other carrier, making many such routes vulnerable... Routes like PDX-LHR/HND, MCO/TPA-AMS, IND/RDU-CDG, etc. Although we haven't necessarily heard anything more than suspensions till now, I think it is inevitable that many of these will disappear at least for a few years before they come back...
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 8:43 pm

N649DL wrote:
hiflyeras wrote:
T3 at LAX being shut down.


Good, that place is a dump. Hopefully during this downtime they can speed up DL terminal construction at LAX.


That would be nice, but if they're trying to conserve cash I'd imagine the construction schedule will move back if anything.
This is my signature until I think of a better one.
 
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NWAESC
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 9:21 pm

DL717 wrote:
No. Pax loads are a dumpster fire, think 20% or less. They are all losing their asses right now.


Depending on the route, even that might be way too high. Not sure what it looks like on system-level anymore...
"Nothing ever happens here, " I said. "I just wait."
 
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NWAESC
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 9:26 pm

jayunited wrote:
I thought the bailout was supposed to protect jobs and wages through August 31, 2020.


It does both of those, but says nothing about trimming hours, so here we are.
"Nothing ever happens here, " I said. "I just wait."
 
whywhytee
Posts: 40
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 9:53 pm

onwFan wrote:
I was curious to see how they will manage capacity at secondary hubs and focus cities because there are many spokes that are served once or at max twice daily. Cuts there are more tricky, and could result in potential exits from certain markets, especially international routes from spokes/focus cities. This was what I was most curious about. DL flies more such routes than any other carrier, making many such routes vulnerable... Routes like PDX-LHR/HND, MCO/TPA-AMS, IND/RDU-CDG, etc. Although we haven't necessarily heard anything more than suspensions till now, I think it is inevitable that many of these will disappear at least for a few years before they come back...


How about smaller planes? I know for example the RDU-CDG route was originally a 757, but is now a 767. It could be moved back to a 757, couldn’t it?
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 10:49 pm

CRJ5000 wrote:
I am curious what traffic returns first. I think the general consensus is that business travel will be back first, but I'm not totally certain. People will be ready to get out after doing essentially nothing for months. Obviously they need the financial means to do so, and the economic situation could well be trash, but it's yet to be seen how bad the outcome will be.
I know business travel came back last time, but more and more businesses are opening to the idea of e-conferencing and eliminating some of the non-essential business travel (My employer included.) The quality and variety of options out there for e-conferencing is light years better than it was in 2001 and 2010.


The death of overnight business travel has been predicted for over 20 years, and while the nature of business travel has evolved, it's as strong as ever. And it's not because of technology.
* A large chunk of business travel could never be replaced - for example, persons within the financial industry who have a specific need to visit a specific workplace or worksite. This is often required for compliance / oversight reasons. Auditors almost have to visit worksites. And many companies do not make sensitive information available beyond their internal, localized intranet.
* Within companies, it humanizes employees and enables them to build relationships that wouldn't otherwise exist electronically. Between companies, it creates networking and marketing opportunities that are essential to a business growing its reach and revenues.
* It's often an employee perk. Why do you think, over the past 20 years especially, the business/convention market has moved from its traditional home in places like Chicago to Orlando and Las Vegas?
* Old school, conservative companies still prefer face-to-face.

Most households will be hurting, and many households that weren't financially impacted (and even benefited) from this will curtail their spending. I see lots of predictions that people will flock to Disney World in doves, but if you seriously believe that, in the midst of an economic crash, people are going to pop open their wallets for a $6,000 or $7,000 one-week vacation... you belong in Fantasyland ;). Financial companies are already citing a record number of calls from people who can't even meet their monthly credit card payment... and they haven't even been off of work for a month. Sure, there's going to be a number of people who will take advantage of heavy discounts and travel, but there's going to be a lot less capacity into traditional vacation markets.

The other thing to remember, is that this is the first time "Peak Millennials" and Generation Z (in other words, people under 30) have been impacted by a recession. Many have been enjoying the fruits of spending their adulthood in a thriving economy, and overspend. Older Millennials (people in their 30s) experienced multiple recessions and tend to be significantly more conservative with their spending. Despite having significantly higher discretionary incomes, they save larger portions of their income, they're less likely to spend on luxuries, including places like Whole Foods, etc. It's quite possible that people in their 20s will get hammered, and tightened their wallets up going forward.
 
tphuang
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 11:01 pm

WidebodyPTV wrote:
The death of overnight business travel has been predicted for over 20 years, and while the nature of business travel has evolved, it's as strong as ever. And it's not because of technology.
* A large chunk of business travel could never be replaced - for example, persons within the financial industry who have a specific need to visit a specific workplace or worksite. This is often required for compliance / oversight reasons. Auditors almost have to visit worksites. And many companies do not make sensitive information available beyond their internal, localized intranet.
* Within companies, it humanizes employees and enables them to build relationships that wouldn't otherwise exist electronically. Between companies, it creates networking and marketing opportunities that are essential to a business growing its reach and revenues.
* It's often an employee perk. Why do you think, over the past 20 years especially, the business/convention market has moved from its traditional home in places like Chicago to Orlando and Las Vegas?
* Old school, conservative companies still prefer face-to-face.

None of this really adjusts to how much things have changed in the past 2 weeks.
Sure auditors may never be replaced, but that travel could be significantly downsized. You get them added to your VPN and your IT can control exactly what they can see and have access to. Believe me, all the companies have taken this time to make their WFH a lot more robust and easy to monitor.
All those consultants that need to fly in every week before this. Now, you have them fly in once a month and the rest of time, they can work from home. Why would companies continue to pay for their travel and hotel expenses on top of their consulting fees.
As for within company travel, that's the one I'm afraid going to get cut the hardest. Before, I might be able to justify getting everyone together in place to work out a problem. But once everyone has gotten used to tele-conferencing, it's going to be a lot harder to convince the bosses I need to fly last minute somewhere to do this.
As for employee perk, that's getting replaced by amazon coupons. I'm serious here.
The old school, conservative companies are going out of business if you haven't noticed. 3.3 million jobless claim this week while amazon is adding 150k jobs. The tech companies are sucking in all the money and the brick/motar establishment won't be able to recover from this.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 11:12 pm

A large number of those jobless claims in the past week are service-industry, hospitality related jobs where they were often hourly employees. That isn't "old school conservative companies" those were all the waiters, bartenders, servers, line cooks, retail workers that were abruptly laid-off. This doesn't really tie to business-related travel, but its going to but a hit on leisure travel for sure.

The salaried / white collar layoffs will certainly come. We are started to see pay reductions and the likes for such starting to come out now.

Many of the consultancies and professional services were already starting to move in that direction with less of the standard weekly Monday-Thurs travel where it made sense. This may accelerate that at bit.

Yes, I have friends already, who live in very nice houses and drive very nice cars who were living paycheck to paycheck who are already saying they can't pay next months bills.
There is a huge swath of this country that is way overleveraged and can't forgo a month without any income.
 
WidebodyPTV
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Re: Delta plans to emerge a "smaller" carrier

Thu Mar 26, 2020 11:56 pm

tphuang wrote:
None of this really adjusts to how much things have changed in the past 2 weeks.
Sure auditors may never be replaced, but that travel could be significantly downsized. You get them added to your VPN and your IT can control exactly what they can see and have access to. Believe me, all the companies have taken this time to make their WFH a lot more robust and easy to monitor.
All those consultants that need to fly in every week before this. Now, you have them fly in once a month and the rest of time, they can work from home. Why would companies continue to pay for their travel and hotel expenses on top of their consulting fees.
As for within company travel, that's the one I'm afraid going to get cut the hardest. Before, I might be able to justify getting everyone together in place to work out a problem. But once everyone has gotten used to tele-conferencing, it's going to be a lot harder to convince the bosses I need to fly last minute somewhere to do this.
As for employee perk, that's getting replaced by amazon coupons. I'm serious here.
The old school, conservative companies are going out of business if you haven't noticed. 3.3 million jobless claim this week while amazon is adding 150k jobs. The tech companies are sucking in all the money and the brick/motar establishment won't be able to recover from this.


None of the factors I mentioned will change in the near future; the old school, conservative companies dominate NYC, Boston, Chicago, Los Angeles, etc. and no, they're not going out of business. As we saw in the past, business travel will be restricted in the near future but it will rebound. E.g. instead of traveling to Orlando for corporate training and continuing education programs this year, companies may bring those programs in-house or send employees to local day programs. But those trips to Orlando, Las Vegas, etc. are considered essential toward recruitment and retention -- they'll be back.

A trip to Orlando will be completely out of reach for more than half the population for the interim -- these are the people who accounted for the lion's share of those jobless claims. As I mentioned earlier, there will be a strong faction of people who weren't even impacted by this who will choose staycations out of precaution. And it's quite possible that people under 30 will never go back to their freespending ways, just as people in their 30s did in response to the Great Recession.
 
nwadeicer
Posts: 259
Joined: Mon Aug 25, 2008 3:17 am

Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 12:08 am

Boof02671 wrote:
Delta has asked ground employees to reduce their hours to three or four days a week.

https://viewfromthewing.com/delta-reduc ... ary-leave/


LOL at "Asked"
What a coincidence, it's roughly 20%. Just like 2005!
I miss the Red Tail
 
tphuang
Posts: 4102
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 12:15 am

WidebodyPTV wrote:
tphuang wrote:
None of this really adjusts to how much things have changed in the past 2 weeks.
Sure auditors may never be replaced, but that travel could be significantly downsized. You get them added to your VPN and your IT can control exactly what they can see and have access to. Believe me, all the companies have taken this time to make their WFH a lot more robust and easy to monitor.
All those consultants that need to fly in every week before this. Now, you have them fly in once a month and the rest of time, they can work from home. Why would companies continue to pay for their travel and hotel expenses on top of their consulting fees.
As for within company travel, that's the one I'm afraid going to get cut the hardest. Before, I might be able to justify getting everyone together in place to work out a problem. But once everyone has gotten used to tele-conferencing, it's going to be a lot harder to convince the bosses I need to fly last minute somewhere to do this.
As for employee perk, that's getting replaced by amazon coupons. I'm serious here.
The old school, conservative companies are going out of business if you haven't noticed. 3.3 million jobless claim this week while amazon is adding 150k jobs. The tech companies are sucking in all the money and the brick/motar establishment won't be able to recover from this.


None of the factors I mentioned will change in the near future; the old school, conservative companies dominate NYC, Boston, Chicago, Los Angeles, etc. and no, they're not going out of business. As we saw in the past, business travel will be restricted in the near future but it will rebound. E.g. instead of traveling to Orlando for corporate training and continuing education programs this year, companies may bring those programs in-house or send employees to local day programs. But those trips to Orlando, Las Vegas, etc. are considered essential toward recruitment and retention -- they'll be back.

A trip to Orlando will be completely out of reach for more than half the population for the interim -- these are the people who accounted for the lion's share of those jobless claims. As I mentioned earlier, there will be a strong faction of people who weren't even impacted by this who will choose staycations out of precaution. And it's quite possible that people under 30 will never go back to their freespending ways, just as people in their 30s did in response to the Great Recession.


I don't know who are these old school, conservative companies in NYC that you are referring to, but all the big financial firms during this time have all their employees work from home. And frankly, all the old school sales trading type are getting a taste of working from home for the first time in their lives. A lot of them probably had to rely on their children to have it set up, but that's all set up now. These folks are getting a whole new outlook on interacting from home through technology vs at work/face to face. This has been a genie out of the bottle moment for them. This was always going to happen. Coronavirus just sped things up by probably 20 years.

You know what's essential for retention and recruitment? Flexible work schedule, short commute, assisted child care. People are finding out that working from home is ticking a lot of these boxes.

I really don't think people are going to be that excited to travel for non-essential work reasons as long as coronavirus threat is out there and that will be the backdrop for a while.
 
WidebodyPTV
Posts: 194
Joined: Fri Sep 20, 2019 9:06 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 12:37 am

tphuang wrote:
I don't know who are these old school, conservative companies in NYC that you are referring to, but all the big financial firms during this time have all their employees work from home. And frankly, all the old school sales trading type are getting a taste of working from home for the first time in their lives. A lot of them probably had to rely on their children to have it set up, but that's all set up now. These folks are getting a whole new outlook on interacting from home through technology vs at work/face to face. This has been a genie out of the bottle moment for them. This was always going to happen. Coronavirus just sped things up by probably 20 years.

You know what's essential for retention and recruitment? Flexible work schedule, short commute, assisted child care. People are finding out that working from home is ticking a lot of these boxes.

I really don't think people are going to be that excited to travel for non-essential work reasons as long as coronavirus threat is out there and that will be the backdrop for a while.


I don't know if you knew this, but in New York, California, Illinois and elsewhere, state governments have ordered non-essential workers to stay home. Businesses are subjected to heavy fines, public shaming and now Los Angeles has said they will cut the utilities off to violators. It isn't like these businesses had a choice -- either let employees work from home, or shut down. If you're saying that it will revolutionize business, I strong disagree -- companies have been attempting to do it for nearly 20 years, and most companies have abandoned the approach, because people generally aren't as productive working from home and don't learn as much from others, and often aren't as responsive to the immediate needs of the business. It's the environment, not the software. Sure, companies have become flexible in allowing employees to spend part of their time working from home -- for example, an accountant specializing in tax may go into the office during normal business hours M-F, then spend a couple additional hours, as well as the weekend, working from home -- but not as a blanket replacement. It's more accepted among certain specialties -- for example, in accounting, many bookkeppers that do merely data entry work from home, as that information isn't time sensitive nor used until a month or two after its input.

I've personally ran into these challenges, where I've allowed certain employees to send two days per week working from home, and when I get frustrated that something that should've been completed a long time ago isn't done, they try to shame me 'my kids blah blah blah and they're more important than work.' That's not my problem, and I'm paying you a fair wage in exchange for your time and talent, and you're not giving me a fair day's work.
 
CRJ5000
Posts: 27
Joined: Thu Jan 17, 2019 3:06 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 12:50 am

WidebodyPTV wrote:

Most households will be hurting, and many households that weren't financially impacted (and even benefited) from this will curtail their spending. I see lots of predictions that people will flock to Disney World in doves, but if you seriously believe that, in the midst of an economic crash, people are going to pop open their wallets for a $6,000 or $7,000 one-week vacation... you belong in Fantasyland ;). Financial companies are already citing a record number of calls from people who can't even meet their monthly credit card payment... and they haven't even been off of work for a month. Sure, there's going to be a number of people who will take advantage of heavy discounts and travel, but there's going to be a lot less capacity into traditional vacation markets.

The other thing to remember, is that this is the first time "Peak Millennials" and Generation Z (in other words, people under 30) have been impacted by a recession. Many have been enjoying the fruits of spending their adulthood in a thriving economy, and overspend. Older Millennials (people in their 30s) experienced multiple recessions and tend to be significantly more conservative with their spending. Despite having significantly higher discretionary incomes, they save larger portions of their income, they're less likely to spend on luxuries, including places like Whole Foods, etc. It's quite possible that people in their 20s will get hammered, and tightened their wallets up going forward.


I'm aware that this is highly anecdotal, but this "peak millennial" and quite a few of my friends can't wait for this to pass and borders to open up again, because we can't wait to take that trip.
I'm already planning taking the month of July off to do a multi-country trip. I'm fully prepared to push it a month or two later as this very well may not be over by then, but I will most certainly be traveling for leisure. Millennials and gen Z seem to value leisure travel far higher than previous generations - And they are also far less focused on traditions and handshakes. Business travel won't die, but it can and will likely change.
 
WidebodyPTV
Posts: 194
Joined: Fri Sep 20, 2019 9:06 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 1:17 am

CRJ5000 wrote:
I'm aware that this is highly anecdotal, but this "peak millennial" and quite a few of my friends can't wait for this to pass and borders to open up again, because we can't wait to take that trip.
I'm already planning taking the month of July off to do a multi-country trip. I'm fully prepared to push it a month or two later as this very well may not be over by then, but I will most certainly be traveling for leisure. Millennials and gen Z seem to value leisure travel far higher than previous generations - And they are also far less focused on traditions and handshakes. Business travel won't die, but it can and will likely change.


As a generalization, older Millenials are more frugal than younger/Gen Z. Obviously, that's clearly not the case for everybody, just as not everybody in their 20s will change their spending habits because of this.

But there's a large number of people in their 20s who are totally ignorant toward the breadth of the situation, and the likely devastating effects. They think this is going to "pass over" and things will be back to the way they were. That's not going to happen -- recovery will likely take years, not months. I told the story earlier of one of my 1040 clients, who's a sommelier in his early 20s and took home over $90K last year in reportable wages -- that's a sign of a heated economy, but he thinks it's normal. He's going to lean otherwise. Hopefully you won't be impacted by this, but I guarantee you that you'll have friends and family who are.
 
User avatar
acavpics
Posts: 247
Joined: Thu Dec 20, 2018 2:54 am

Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 1:17 am

CRJ5000 wrote:
WidebodyPTV wrote:

Business travel won't die, but it can and will likely change.


In what ways?
 
User avatar
acavpics
Posts: 247
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Re: Delta plans to emerge a "smaller" carrier

Fri Mar 27, 2020 1:25 am

Funny how people are hollering about finance and IT while nobody on here has mentioned the immense business related travel for the biotech/bioengineering industries after this crisis. Because, you know, a vaccine(s) should be on its way. Maybe some anti-viral treatment as well? - All that requires immense collaboration from members multiple businesses, many of whom would need to travel.
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