Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
tphuang
Posts: 5212
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Mar 30, 2020 4:24 pm

jordanh wrote:
jayunited wrote:
jordanh wrote:
If I read this correctly, United is paying every employee below management level their full salaries, for the next six months, even though they are flying 20% or 25% of their schedule, and their loads (again, if I am reading the other topics correctly) are around 20% to 30%? That would mean they are actually bringing in less than 10% of their usual income. How is that even financially feasible? What is their total monthly income vs. payroll? It would seem that they, rather than AA, might turn out to be the first candidate for bankruptcy.

You guys are really drinking kool aid over at Delta.


Why you quote me and say, "You guys... over at Delta" is a mystery. "Us guys" work for a carrier in South America - but if you think we can't see what is going on, you are mistaken. If your beloved UA doesn't take everything necessary to preserve its finances, then "you guys" at United may no longer... be working for United. Lots of jobs could be lost.

By the way, we - that means more than 40,000 employees - have seen our wages cut by 50%. And nobody is complaining, because we understand how serious this situation is. You brag about taking 100% from your airline, despite the airline earning about 8-10% of its usual revenue. With all the other expenses it has, in addition to payroll, I don't see how this is tenable. You can gloat about all you are making... until you head to the unemployment line in October.


This is extremely rude response to a a.net member who posts very valuable insights into how a legacy airline is thinking.

The reality is that any airline that takes bailout need to follow the conditions of the bailout.
 
MohawkWeekend
Posts: 255
Joined: Tue Jan 08, 2019 2:06 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Mar 30, 2020 4:42 pm

I don't think he was the rude one at all. Seems like a lot of people on both sides of this argument need to take a chill pill.
    300 319 320 321 707 717 720 727 72S 737 73S 734 735 73G 738 739 747 757 762 ARJ B11 C212 CRJ CR2 CR7 CR9 CV5 D8S DC9 D9S D94 D95 D10 DH8 DTO EMB EM2 E135 E145 E190 FH7 F28 F100 FTRIMTR HRN L10 L15 M80 M90 SF3 SWM YS11
     
    JAMBOJET
    Posts: 293
    Joined: Tue Dec 11, 2018 6:23 pm

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 4:47 pm

    B757Forever wrote:
    United1 wrote:
    B757Forever wrote:

    The reality of the situation for all carriers is that the passenger traffic has fallen off a cliff. April, May and June are a bloodbath for the carriers. July and August have a very small uptick in tickets sold. Delta is planning for and preparing for the time when the stimulus money runs out, which it will. Ed Bastian has been clear that DL cannot depend on extended bailouts and that DL must do everything in their power to self-help to survive this unprecedented downturn. The taxpayers and congress have little patience, especially for companies who appear to be approaching this situation without seriousness. This is the worst event the airline industry has ever seen. Sadly, it will not end well for many.


    I don’t disagree with you that every airline is going to need to adapt in order to survive. UA and to some extent DL seem to be the two airlines in the US who are reacting the most to this which is not all that surprising to me. What is mind boggling to me as a tax payer is I just spent 50 billion dollars to ensure that all of the airlines could make payroll for the next six months. So what does DL do? Cut the number of hours offered to its employees thereby creating a hardship for those same employees we gave DL money to protect. So much for that DL family...


    The four biggest US carriers combined are currently bleeding well in excess of 200M a day. Without fundamental, painful changes at each carrier, the stimulus money will do nothing but delay the inevitable. All carriers will need to drastically remake themselves if they have any expectation of surviving this event. Ed Bastian stated early on that DL would self-help and not depend on stimulus money. The action taken to reduce hours was initiated a week before the stimulus was passed due partly to a lack of confidence in our elected officials to act quickly coupled with the sobering reality that things cannot and will not be business as usual. DL is not focusing solely on making payroll through September, they are focusing on survival well past that time. I personally prefer they act sooner and more responsibly, you see it differently. That's OK.
    I've seen some huge ups and downs in my 35 years in the airline industry, this one is by far the worst I've ever seen.


    On the cusp of a bailout designed to build a bridge between drastic action today and plan for a future in six months, Delta gave its lowest-paid hourly employees two choices:

    1. Take a 25% salary cut
    2. Take a completely unpaid leave of absence.

    To the guy throwing bags barely making enough to cover rent, Delta, alone among its peers, said "either take a 25% salary cut or don't get paid at all".

    Let's assume Delta didn't know what the bailout would provide. They do now. Retroactive decisions can be made.
    None of their competitors have mandated those two choices to their lowest-paid hourly employees.
    Delta will be just as overstaffed in October as United is, but their ground employees will be 25% poorer with more accumulated debt when Delta furloughs them.
    Delta is not the only carrier thinking past September, but they are the only ones asking their hourly employees to take on the burden well in advance of September.
     
    B757Forever
    Posts: 885
    Joined: Tue May 04, 2010 3:23 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 5:27 pm

    JAMBOJET wrote:
    B757Forever wrote:
    United1 wrote:

    I don’t disagree with you that every airline is going to need to adapt in order to survive. UA and to some extent DL seem to be the two airlines in the US who are reacting the most to this which is not all that surprising to me. What is mind boggling to me as a tax payer is I just spent 50 billion dollars to ensure that all of the airlines could make payroll for the next six months. So what does DL do? Cut the number of hours offered to its employees thereby creating a hardship for those same employees we gave DL money to protect. So much for that DL family...


    The four biggest US carriers combined are currently bleeding well in excess of 200M a day. Without fundamental, painful changes at each carrier, the stimulus money will do nothing but delay the inevitable. All carriers will need to drastically remake themselves if they have any expectation of surviving this event. Ed Bastian stated early on that DL would self-help and not depend on stimulus money. The action taken to reduce hours was initiated a week before the stimulus was passed due partly to a lack of confidence in our elected officials to act quickly coupled with the sobering reality that things cannot and will not be business as usual. DL is not focusing solely on making payroll through September, they are focusing on survival well past that time. I personally prefer they act sooner and more responsibly, you see it differently. That's OK.
    I've seen some huge ups and downs in my 35 years in the airline industry, this one is by far the worst I've ever seen.


    On the cusp of a bailout designed to build a bridge between drastic action today and plan for a future in six months, Delta gave its lowest-paid hourly employees two choices:

    1. Take a 25% salary cut
    2. Take a completely unpaid leave of absence.

    To the guy throwing bags barely making enough to cover rent, Delta, alone among its peers, said "either take a 25% salary cut or don't get paid at all".

    Let's assume Delta didn't know what the bailout would provide. They do now. Retroactive decisions can be made.
    None of their competitors have mandated those two choices to their lowest-paid hourly employees.
    Delta will be just as overstaffed in October as United is, but their ground employees will be 25% poorer with more accumulated debt when Delta furloughs them.
    Delta is not the only carrier thinking past September, but they are the only ones asking their hourly employees to take on the burden well in advance of September.


    Same problem with different approaches to it. Nobody knows the right answer today. It will be much clearer in 6-12 months who took the right approach, and if there even was a right approach. Best of luck to all in the airline industry, we're gonna need it.
    The Rolls Royce Dart. Noise = Shaft Horsepower.
     
    JAMBOJET
    Posts: 293
    Joined: Tue Dec 11, 2018 6:23 pm

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 5:31 pm

    B757Forever wrote:
    JAMBOJET wrote:
    B757Forever wrote:

    The four biggest US carriers combined are currently bleeding well in excess of 200M a day. Without fundamental, painful changes at each carrier, the stimulus money will do nothing but delay the inevitable. All carriers will need to drastically remake themselves if they have any expectation of surviving this event. Ed Bastian stated early on that DL would self-help and not depend on stimulus money. The action taken to reduce hours was initiated a week before the stimulus was passed due partly to a lack of confidence in our elected officials to act quickly coupled with the sobering reality that things cannot and will not be business as usual. DL is not focusing solely on making payroll through September, they are focusing on survival well past that time. I personally prefer they act sooner and more responsibly, you see it differently. That's OK.
    I've seen some huge ups and downs in my 35 years in the airline industry, this one is by far the worst I've ever seen.


    On the cusp of a bailout designed to build a bridge between drastic action today and plan for a future in six months, Delta gave its lowest-paid hourly employees two choices:

    1. Take a 25% salary cut
    2. Take a completely unpaid leave of absence.

    To the guy throwing bags barely making enough to cover rent, Delta, alone among its peers, said "either take a 25% salary cut or don't get paid at all".

    Let's assume Delta didn't know what the bailout would provide. They do now. Retroactive decisions can be made.
    None of their competitors have mandated those two choices to their lowest-paid hourly employees.
    Delta will be just as overstaffed in October as United is, but their ground employees will be 25% poorer with more accumulated debt when Delta furloughs them.
    Delta is not the only carrier thinking past September, but they are the only ones asking their hourly employees to take on the burden well in advance of September.


    Same problem with different approaches to it. Nobody knows the right answer today. It will be much clearer in 6-12 months who took the right approach, and if there even was a right approach. Best of luck to all in the airline industry, we're gonna need it.

    very true and well said.
     
    User avatar
    Midwestindy
    Posts: 5280
    Joined: Sun Mar 12, 2017 3:56 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 6:00 pm

    Something to consider moving forward is Delta's covenant with MSP:

    "Delta elected to extend its airline lease agreement with the MAC through December 31, 2030. In addition, Delta made a significant commitment to MSP in signing a “hub covenant”. In its hub covenant, Delta agreed to maintain an annual average of 400 daily departing flights from MSP, at least 250 of which must be aircraft with greater than 70 seats and that a minimum of 30% of enplaned passengers must be connecting."

    https://metroairports.org/sites/default ... -final.pdf
    Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
     
    HVNandrew
    Posts: 550
    Joined: Tue Jan 31, 2006 1:05 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 6:07 pm

    Midwestindy wrote:
    Something to consider moving forward is Delta's covenant with MSP:

    "Delta elected to extend its airline lease agreement with the MAC through December 31, 2030. In addition, Delta made a significant commitment to MSP in signing a “hub covenant”. In its hub covenant, Delta agreed to maintain an annual average of 400 daily departing flights from MSP, at least 250 of which must be aircraft with greater than 70 seats and that a minimum of 30% of enplaned passengers must be connecting."

    https://metroairports.org/sites/default ... -final.pdf

    I don't know how much stock I would place in that. We don't know what actual terms could be in that agreement, and it's very possible something like that would have force majeure provisions or other exceptions to the general commitment.

    But it's probably not that relevant; I personally think MSP is pretty safe as a significant DL hub going forward, enforceable commitment or not (though that's just my opinion).
     
    alfa164
    Posts: 3613
    Joined: Sat Oct 06, 2012 2:47 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 6:16 pm

    tphuang wrote:
    This is extremely rude response to a a.net member who posts very valuable insights into how a legacy airline is thinking.


    And I am sure jordanh thought it was extremely rude to be referred to, "You guys... over at Delta", when there was absolutely no indication that was true - and, indeed, was false. I was impressed with the attitude he/she took regarding employment and the sacrifices that may be necessary for survival of the airlines; instead of whining about his situation (or whining about the situation at some other airline, which is what I see mostly here), he stood up and said his piece.


    MohawkWeekend wrote:
    I don't think he was the rude one at all. Seems like a lot of people on both sides of this argument need to take a chill pill.


    :checkmark: :checkmark: :checkmark:
    I'm going to have a smokin' hot body again!
    I have decided to be cremated....
     
    dlflynhayn
    Posts: 302
    Joined: Wed Apr 16, 2008 4:55 pm

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 6:40 pm

    nwadeicer wrote:
    But we're one big Delta family. You know, the Delta Difference.. As I stated before, if Delta could get away with making every front line employee a ready reserve or seasonal ready reserve they would in a heartbeat. When we merged with Delta the ratio of full time to part time/ready reserve was approximately 70/30. that number has changed to 50/50 and in some stations the ready reserves outnumber full time. This was not supposed to happen. Delta also knows what is needed to order a union vote, this is why you constantly see RR and seasonal RR positions available. Constantly changing numbers make it harder to get that 50 + 1 needed to secure a vote. These people would drop you down to RR so fast it would make your head spin if they could.


    I don't know how i made it 26 years on the ramp with DL with no Union :rotfl: .It was hard i started as a RR and worked my way up,i did work in a DL hub so getting Full-time didn't take too long.And to be straight DL is cutting a day out of our work week and lowering the hours to 7.5 hrs a day.TBH i feel we are already overstaffed if we don't start cutting even more we all may not have a job soon, but i'll put $ DL survives longer than most because of these moves don't be greedy oh thats how i lasted 26 years lol..
     
    User avatar
    STT757
    Posts: 14126
    Joined: Tue Mar 28, 2000 1:14 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 7:16 pm

    Will Delta keep the sponsorship deal they recently signed for the Olympics? They committed to $50 million per year for a sponsorship that United was paying $3 million per year. Seems like quite a wasteful expense considering the premium they're paying over the previous sponsor.

    $50 million per year could do a lot to back fill in salary for employees instead of cutting their hours and or reducing their pay. Before they take a dollar of public assistance they need to trim non critical expenses such as $50 million per year sponsorships.


    Sent from my iPad using Tapatalk Pro
    Eastern Air lines flt # 701, EWR-MCO Boeing 757
     
    nwadeicer
    Posts: 309
    Joined: Mon Aug 25, 2008 3:17 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 7:43 pm

    dlflynhayn wrote:
    nwadeicer wrote:
    But we're one big Delta family. You know, the Delta Difference.. As I stated before, if Delta could get away with making every front line employee a ready reserve or seasonal ready reserve they would in a heartbeat. When we merged with Delta the ratio of full time to part time/ready reserve was approximately 70/30. that number has changed to 50/50 and in some stations the ready reserves outnumber full time. This was not supposed to happen. Delta also knows what is needed to order a union vote, this is why you constantly see RR and seasonal RR positions available. Constantly changing numbers make it harder to get that 50 + 1 needed to secure a vote. These people would drop you down to RR so fast it would make your head spin if they could.


    I don't know how i made it 26 years on the ramp with DL with no Union :rotfl: .It was hard i started as a RR and worked my way up,i did work in a DL hub so getting Full-time didn't take too long.And to be straight DL is cutting a day out of our work week and lowering the hours to 7.5 hrs a day.TBH i feel we are already overstaffed if we don't start cutting even more we all may not have a job soon, but i'll put $ DL survives longer than most because of these moves don't be greedy oh thats how i lasted 26 years lol..


    Um, hmm, cool story bro? Thanks for your insight.
    I miss the Red Tail
     
    WayexTDI
    Posts: 1760
    Joined: Fri Sep 21, 2018 4:38 pm

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 9:06 pm

    nwadeicer wrote:
    dlflynhayn wrote:
    nwadeicer wrote:
    But we're one big Delta family. You know, the Delta Difference.. As I stated before, if Delta could get away with making every front line employee a ready reserve or seasonal ready reserve they would in a heartbeat. When we merged with Delta the ratio of full time to part time/ready reserve was approximately 70/30. that number has changed to 50/50 and in some stations the ready reserves outnumber full time. This was not supposed to happen. Delta also knows what is needed to order a union vote, this is why you constantly see RR and seasonal RR positions available. Constantly changing numbers make it harder to get that 50 + 1 needed to secure a vote. These people would drop you down to RR so fast it would make your head spin if they could.


    I don't know how i made it 26 years on the ramp with DL with no Union :rotfl: .It was hard i started as a RR and worked my way up,i did work in a DL hub so getting Full-time didn't take too long.And to be straight DL is cutting a day out of our work week and lowering the hours to 7.5 hrs a day.TBH i feel we are already overstaffed if we don't start cutting even more we all may not have a job soon, but i'll put $ DL survives longer than most because of these moves don't be greedy oh thats how i lasted 26 years lol..


    Um, hmm, cool story bro? Thanks for your insight.

    Well, it sounds like he's only one of the many DL employees who are happy to be DL non-unionized, despite what some on a.net keep saying.
     
    winginit
    Posts: 2879
    Joined: Sat Feb 23, 2013 9:23 pm

    Re: Delta plans to emerge a

    Mon Mar 30, 2020 9:16 pm

    STT757 wrote:
    Will Delta keep the sponsorship deal they recently signed for the Olympics? They committed to $50 million per year for a sponsorship that United was paying $3 million per year. Seems like quite a wasteful expense considering the premium they're paying over the previous sponsor.

    $50 million per year could do a lot to back fill in salary for employees instead of cutting their hours and or reducing their pay. Before they take a dollar of public assistance they need to trim non critical expenses such as $50 million per year sponsorships.


    Sent from my iPad using Tapatalk Pro


    So I've been wondering about that as well, but in a slightly different way. I suspect that contract with the Olympics starts either immediately after what was supposed to be the 2020 Summer Games in Japan (so say September 2020) or January 2021. Either way, with the Summer Games having now been postponed to 2021, did Delta possibly just inherit another Olympic Games under the umbrella of that sponsorship? I imagine some lawyers are having some very active conversations right now.
     
    Boof02671
    Posts: 2106
    Joined: Sun Jul 10, 2016 12:15 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 10:13 pm

    https://news.yahoo.com/leaked-memo-delt ... soc_trk=fb

    Leaked memo from Delta reveals plans to cut worker hours and pay, despite protections in the coronavirus stimulus package. United and other airlines are doing the same.
     
    slcdeltarumd11
    Posts: 4759
    Joined: Fri Jan 09, 2004 7:30 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 10:17 pm

    Yeah Olympics are a good question. Could also have given united a whole year of being the sponsor for free. Totally depends how the contract was written. Could be after the Tokyo Olympics giving united a whole year as their sponsor for free. Interesting but both airlines have way more pressing issues for survival.
     
    United1
    Posts: 4164
    Joined: Wed Oct 08, 2003 9:21 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 11:03 pm

    Boof02671 wrote:
    https://news.yahoo.com/leaked-memo-delta-reveals-plans-202411780.html?soc_src=hl-viewer&soc_trk=fb

    Leaked memo from Delta reveals plans to cut worker hours and pay, despite protections in the coronavirus stimulus package. United and other airlines are doing the same.


    That's an interesting bit of spin but not really true. UA, AA and WN are paying its F/As and Pilots their full base salaries. What they don't have the opportunity to do is pick up extra hours right now because there aren't any. DL is actually cutting people from full time hours to part time....none of the other airlines are doing that.

    "So what Ed Bastian is doing is accepting the government grants to help cover payroll but still making workers reduce hours," one ground worker for the airline told Business Insider. "It is a typical Bastian move where he sells it to employees as taking a reduction to help Delta in its time of need."

    I don't disagree with anyone that the situation is critical for all the airlines right now but this really goes against what the payroll grants from the government are designed to do. Keep everyone fully employed for at least another six months.
    I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
     
    Boof02671
    Posts: 2106
    Joined: Sun Jul 10, 2016 12:15 am

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 11:20 pm

     
    User avatar
    NWAESC
    Posts: 1583
    Joined: Thu Aug 30, 2007 1:02 pm

    Re: Delta plans to emerge a "smaller" carrier

    Mon Mar 30, 2020 11:30 pm

    Quick point of order: the “leaked memo” referenced above is an email all 90000 of us received earlier, not evidence of a conspiracy from deep within Virginia Ave. Just sayin’...
    "Nothing ever happens here, " I said. "I just wait."
     
    Ursula21
    Posts: 12
    Joined: Tue Mar 31, 2020 2:42 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 2:57 am

    Ed's memo was basically a surprise. Seems like middle management only had 30 minutes of heads up. The language in the CARES act is carefully worded, I'm sure to meet the needs of Delta and others, to enable hour cuts without cutting rates. My guess is the announcement came rushed through some backdoor political posturing.

    i agree it's totally against the spirit of the grants. It's also quite confusing because it applies to merit employees as well, and all ground employees including corporate office staff. Where it's interesting to me legally is for salary employees who are entitled to full pay if any hours are worked in FLSA. They're basically asking us to take 25% less pay and get 15-16 days off in the next 3 months, as some kind of unpaid leave that somehow is not voluntary but also not a furlough or a pay rate cut. Definitely not the right way to treat the employees.

    I do understand that the grant money won't cover the entire payroll through September, but that was never communicated well and it feels like we were betrayed by the management and the Senate deal given its intention as a form of unemployment payment.
     
    User avatar
    EA CO AS
    Posts: 15732
    Joined: Wed Nov 14, 2001 8:54 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 6:23 am

    Ursula21 wrote:
    it's totally against the spirit of the grants. It's also quite confusing because it applies to merit employees as well, and all ground employees including corporate office staff. Where it's interesting to me legally is for salary employees who are entitled to full pay if any hours are worked in FLSA. They're basically asking us to take 25% less pay and get 15-16 days off in the next 3 months, as some kind of unpaid leave that somehow is not voluntary but also not a furlough or a pay rate cut. Definitely not the right way to treat the employees.

    I do understand that the grant money won't cover the entire payroll through September, but that was never communicated well and it feels like we were betrayed by the management and the Senate deal given its intention as a form of unemployment payment.


    Totally understandable perspective, and I can't say I disagree; Congress and the Administration went into this, I believe, with the intent that all airline employees would be "made whole" from April 1st through September 30th, with the hopes that 750,000 airline employees would remain gainfully employed while also contributing to the economy.

    Now, that's not happening. You have tens of thousands of employees at various carriers signing up to take 30, 60, 90 day unpaid leaves, early retirement, etc. while non-represented merit employees and management takes anywhere from 10-30% pay cuts in the form of "You'll be required to take X number of days off unpaid per pay period," for the next several months. I get that the CEOs are typically not taking pay at all, but they're also compensated in the form of stock, whereas most of the middle management (MDs and below) are not. Definitely not what the spirit of the legislation was.
    "In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

    Comments made here are my own and are not intended to represent the official position of Alaska Air Group
     
    Lootess
    Posts: 458
    Joined: Sun May 13, 2018 6:15 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 7:11 am

    dlflynhayn wrote:
    By listening to the Finance guys on the stock market today they all said DL will be fine because of the way the company is operated,All airlines will have to deal with obstacles ahead but mentioned AA as the one to look out for to be on a downward spiral quicker than others if this virus keeps up.When this is all over who knows maybe only two of the BIG 3 remain.


    In a way DL keeping the MDs for as long as they had will once again show how smart that was, as much as the DC9 was for NW, not to mention fuel prices dropping like a rock.

    Whereas AA was drunk buying airplanes non-stop even before they went into Chapter 11, and not paying their debt down fast enough. Whereas DL kept paying it down as much as they could. One airline is certainly paying much less monthly bills for those new planes that aren't even flying than the other.
     
    alasizon
    Posts: 2598
    Joined: Sat Apr 28, 2007 8:57 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 7:42 am

    EA CO AS wrote:
    Ursula21 wrote:
    it's totally against the spirit of the grants. It's also quite confusing because it applies to merit employees as well, and all ground employees including corporate office staff. Where it's interesting to me legally is for salary employees who are entitled to full pay if any hours are worked in FLSA. They're basically asking us to take 25% less pay and get 15-16 days off in the next 3 months, as some kind of unpaid leave that somehow is not voluntary but also not a furlough or a pay rate cut. Definitely not the right way to treat the employees.

    I do understand that the grant money won't cover the entire payroll through September, but that was never communicated well and it feels like we were betrayed by the management and the Senate deal given its intention as a form of unemployment payment.


    Totally understandable perspective, and I can't say I disagree; Congress and the Administration went into this, I believe, with the intent that all airline employees would be "made whole" from April 1st through September 30th, with the hopes that 750,000 airline employees would remain gainfully employed while also contributing to the economy.

    Now, that's not happening. You have tens of thousands of employees at various carriers signing up to take 30, 60, 90 day unpaid leaves, early retirement, etc. while non-represented merit employees and management takes anywhere from 10-30% pay cuts in the form of "You'll be required to take X number of days off unpaid per pay period," for the next several months. I get that the CEOs are typically not taking pay at all, but they're also compensated in the form of stock, whereas most of the middle management (MDs and below) are not. Definitely not what the spirit of the legislation was.


    The way I understand the legislation was written is that you cannot release anyone that was on the payroll as of March 1st without just cause (attendance or performance), but that you may do anything allowed by the workgroup contract/work rules to reduce hours scheduled. Every carrier is scaling PT hours back (i.e. from 24 to 20 or 20 to 15) as a way of saving costs. That being said, the $29B in payroll grants that were offered by the Gov't is not enough to cover 100% of the payroll costs for all the airlines for six months which is why airlines are pushing the voluntary LOAs so hard. My rough back of hand calculation says that between the majors and regionals that were eligible for the payroll grants, the $29B is only a smidge under 50% of what is needed to cover 100% of the payroll as it was being paid out prior to the impact of the virus.
    Airport (noun) - A construction site which airplanes tend to frequent
     
    0newair0
    Posts: 417
    Joined: Fri Jun 01, 2007 12:21 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 9:59 am

    alasizon wrote:
    The way I understand the legislation was written is that you cannot release anyone that was on the payroll as of March 1st without just cause (attendance or performance), but that you may do anything allowed by the workgroup contract/work rules to reduce hours scheduled. Every carrier is scaling PT hours back (i.e. from 24 to 20 or 20 to 15) as a way of saving costs. That being said, the $29B in payroll grants that were offered by the Gov't is not enough to cover 100% of the payroll costs for all the airlines for six months which is why airlines are pushing the voluntary LOAs so hard. My rough back of hand calculation says that between the majors and regionals that were eligible for the payroll grants, the $29B is only a smidge under 50% of what is needed to cover 100% of the payroll as it was being paid out prior to the impact of the virus.


    How are you doing that math? For grant money, each air carrier can receive 100% of the salary, wage, and benefits expense incurred from April 1 through September 30, 2019. That should be more than enough to cover the required salary, wage, and benefit expenses for the same period of the current year considering the significant reduction in capacity. Even if the draw down in capacity isn't taken into account, the percent of payroll the grant money should cover is a lot closer to 100% than it is to 50%.

    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.
    That's not how this works! That's not how any of this works!
     
    LAOCA
    Posts: 27
    Joined: Wed Aug 21, 2019 3:18 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 12:51 pm

    Midwestindy wrote:
    Something to consider moving forward is Delta's covenant with MSP:

    "Delta elected to extend its airline lease agreement with the MAC through December 31, 2030. In addition, Delta made a significant commitment to MSP in signing a “hub covenant”. In its hub covenant, Delta agreed to maintain an annual average of 400 daily departing flights from MSP, at least 250 of which must be aircraft with greater than 70 seats and that a minimum of 30% of enplaned passengers must be connecting."

    https://metroairports.org/sites/default ... -final.pdf


    I wouldn't put much stock into agreements entered into during World 1.0.
     
    jayunited
    Posts: 2872
    Joined: Sat Jan 05, 2013 12:03 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:32 pm

    B757Forever wrote:
    Same problem with different approaches to it. Nobody knows the right answer today. It will be much clearer in 6-12 months who took the right approach, and if there even was a right approach. Best of luck to all in the airline industry, we're gonna need it.


    You are absolutely correct my only issue is the airline bailout has very specific terms protecting non-management employees pay. Delta frontline staff should still be getting paid 80 hours every two weeks because that is what the government is paying Delta Airlines. By having their ground staff take an extra day or two off unpaid means Delta get to pocket the remainder of that money which is a direct violation of the terms of the bailout. Delta is taking government funds but is not abiding by terms of the agreement, non-management employees pay is being 100% covered by the federal government until 23:59 September 30, 2020. Delta is keeping 25% of over 40,000 non-management employees pay even though Delta is not paying those employees the federal government is.

    There is a reason no other major carrier that is participating in the bailout is asking there non-management employees for a reduction in pay. If hearings are every held on Capital Hill to see if airlines abided by the terms of the bailout it will be interesting to see Delta's explanation as to what they did the the 25% they took from their frontline ground staff. None of the bailout money is to be use to support management, or executive compensation and no funds are to be used to support operational needs. So if Delta is only paying their frontline ground staff employees 75% of their pre-COVID-19 pay but receiving 100% from the government where is the other 25% going?
     
    MIflyer12
    Posts: 8068
    Joined: Mon Feb 18, 2013 11:58 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:36 pm

    Did anybody see NZ's declaration to be at least 30% smaller a year from now? So much for the 'quick dip - everything will be back to normal in a few months' line of thinking.

    https://www.reuters.com/article/us-heal ... SKBN21H3J7

    That level of downsizing, maintained that far out, is provocative. (Not to say i think they're wrong for gaming out that exercise.)
     
    MIflyer12
    Posts: 8068
    Joined: Mon Feb 18, 2013 11:58 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:42 pm

    jayunited wrote:
    There is a reason no other major carrier that is participating in the bailout is asking there non-management employees for a reduction in pay.


    I don't believe any carrier has applied for bailout funds yet. Give it a month and see what the pattern is. The Treasury has the right to claim equity or stock warrants - not just for the loan package but for grants. AA has made noises that Treasury's terms may be unacceptable. Good luck finding $10 Billion elsewhere.

    https://www.reuters.com/article/us-heal ... SKBN21E1X4
    Last edited by MIflyer12 on Tue Mar 31, 2020 1:49 pm, edited 1 time in total.
     
    panamair
    Posts: 4330
    Joined: Fri Oct 12, 2001 2:24 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:48 pm

    jayunited wrote:

    None of the bailout money is to be use to support management, or executive compensation and no funds are to be used to support operational needs. So if Delta is only paying their frontline ground staff employees 75% of their pre-COVID-19 pay but receiving 100% from the government where is the other 25% going?


    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.
     
    0newair0
    Posts: 417
    Joined: Fri Jun 01, 2007 12:21 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:51 pm

    panamair wrote:
    jayunited wrote:

    None of the bailout money is to be use to support management, or executive compensation and no funds are to be used to support operational needs. So if Delta is only paying their frontline ground staff employees 75% of their pre-COVID-19 pay but receiving 100% from the government where is the other 25% going?


    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.
    ^^ this. Delta is trying to delay furloughs. It's been said multiple times on this forum now by me and others but people keep ignoring it because it doesn't fit their agenda.


    Once again...
    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.
    That's not how this works! That's not how any of this works!
     
    User avatar
    DL717
    Posts: 2153
    Joined: Wed May 23, 2018 10:53 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:52 pm

    Midwestindy wrote:
    Something to consider moving forward is Delta's covenant with MSP:

    "Delta elected to extend its airline lease agreement with the MAC through December 31, 2030. In addition, Delta made a significant commitment to MSP in signing a “hub covenant”. In its hub covenant, Delta agreed to maintain an annual average of 400 daily departing flights from MSP, at least 250 of which must be aircraft with greater than 70 seats and that a minimum of 30% of enplaned passengers must be connecting."

    https://metroairports.org/sites/default ... -final.pdf


    I seriously doubt DL will shed MSP, but that “covenant” won’t mean squat in a bankruptcy filing. If they need to make serious reductions at MSP it will probably be adjusted by agreement or a judge.
    Welcome to Nothingburgers. May I take your order?
     
    User avatar
    DL717
    Posts: 2153
    Joined: Wed May 23, 2018 10:53 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 1:54 pm

    panamair wrote:
    jayunited wrote:

    None of the bailout money is to be use to support management, or executive compensation and no funds are to be used to support operational needs. So if Delta is only paying their frontline ground staff employees 75% of their pre-COVID-19 pay but receiving 100% from the government where is the other 25% going?


    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.


    One the airlines are doing smartly is issuing travel credits instead of a refund. Keeps cash on hand to make it through to when people can rebook.
    Welcome to Nothingburgers. May I take your order?
     
    onwFan
    Topic Author
    Posts: 438
    Joined: Wed Feb 03, 2016 4:02 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 2:05 pm

    DL717 wrote:
    panamair wrote:
    jayunited wrote:

    None of the bailout money is to be use to support management, or executive compensation and no funds are to be used to support operational needs. So if Delta is only paying their frontline ground staff employees 75% of their pre-COVID-19 pay but receiving 100% from the government where is the other 25% going?


    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.


    One the airlines are doing smartly is issuing travel credits instead of a refund. Keeps cash on hand to make it through to when people can rebook.

    Not only that, DL is even announcing international route suspensions only one or two days in advance. Till yesterday, they had been telling they will fly ATL-GRU daily for April. And then suddenly it has disappeared and mentioned somewhere in the small print. The same with LAX-HND and MSP-HND and many of their other HND routes... I remember enilria pointing this out in the OAG thread and people brushed it off. But clearly that seems to a recurring theme in DL’s plan... So much for ‘customer-centric’ strategy!
     
    onwFan
    Topic Author
    Posts: 438
    Joined: Wed Feb 03, 2016 4:02 am

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 2:09 pm

    onwFan wrote:
    DL717 wrote:
    panamair wrote:

    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.


    One the airlines are doing smartly is issuing travel credits instead of a refund. Keeps cash on hand to make it through to when people can rebook.

    Wait for people to cancel their tickets, pocket the money and give travel credit to anyone who dared not to cancel...
     
    alasizon
    Posts: 2598
    Joined: Sat Apr 28, 2007 8:57 pm

    Re: Delta plans to emerge a

    Tue Mar 31, 2020 3:19 pm

    0newair0 wrote:
    alasizon wrote:
    The way I understand the legislation was written is that you cannot release anyone that was on the payroll as of March 1st without just cause (attendance or performance), but that you may do anything allowed by the workgroup contract/work rules to reduce hours scheduled. Every carrier is scaling PT hours back (i.e. from 24 to 20 or 20 to 15) as a way of saving costs. That being said, the $29B in payroll grants that were offered by the Gov't is not enough to cover 100% of the payroll costs for all the airlines for six months which is why airlines are pushing the voluntary LOAs so hard. My rough back of hand calculation says that between the majors and regionals that were eligible for the payroll grants, the $29B is only a smidge under 50% of what is needed to cover 100% of the payroll as it was being paid out prior to the impact of the virus.


    How are you doing that math? For grant money, each air carrier can receive 100% of the salary, wage, and benefits expense incurred from April 1 through September 30, 2019. That should be more than enough to cover the required salary, wage, and benefit expenses for the same period of the current year considering the significant reduction in capacity. Even if the draw down in capacity isn't taken into account, the percent of payroll the grant money should cover is a lot closer to 100% than it is to 50%.

    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.


    If you add up all the payroll expenses (roughly) for DL, AA, UA, AS, B6, WN, HA, NK, 5X, FX, 5Y, 9S, PO, GB, F9, G4, OO, MQ, YX, 9E, YV, PT, OH, G7, EV, ZW, QX, and C5, you get roughly $10B/month. Now some of this makes some assumptions since not all of the carriers do full disclosures on their exact payroll amounts but it's a rough amount based on comparison to those that do disclose. Yes, not all the carriers are taking bailout money and some of the regional carriers get to double dip but remember, we are talking about their previous full payroll at 100% pay so all of the voluntary leaves and what not help them get closer to having that $29B cover the payroll but I see no way without layoffs that they could shrink their payroll 50% per month even with all the voluntary leaves and reductions.
    Airport (noun) - A construction site which airplanes tend to frequent
     
    United1
    Posts: 4164
    Joined: Wed Oct 08, 2003 9:21 am

    Re: Delta plans to emerge a

    Tue Mar 31, 2020 3:47 pm

    alasizon wrote:
    0newair0 wrote:
    alasizon wrote:
    The way I understand the legislation was written is that you cannot release anyone that was on the payroll as of March 1st without just cause (attendance or performance), but that you may do anything allowed by the workgroup contract/work rules to reduce hours scheduled. Every carrier is scaling PT hours back (i.e. from 24 to 20 or 20 to 15) as a way of saving costs. That being said, the $29B in payroll grants that were offered by the Gov't is not enough to cover 100% of the payroll costs for all the airlines for six months which is why airlines are pushing the voluntary LOAs so hard. My rough back of hand calculation says that between the majors and regionals that were eligible for the payroll grants, the $29B is only a smidge under 50% of what is needed to cover 100% of the payroll as it was being paid out prior to the impact of the virus.


    How are you doing that math? For grant money, each air carrier can receive 100% of the salary, wage, and benefits expense incurred from April 1 through September 30, 2019. That should be more than enough to cover the required salary, wage, and benefit expenses for the same period of the current year considering the significant reduction in capacity. Even if the draw down in capacity isn't taken into account, the percent of payroll the grant money should cover is a lot closer to 100% than it is to 50%.

    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.


    If you add up all the payroll expenses (roughly) for DL, AA, UA, AS, B6, WN, HA, NK, 5X, FX, 5Y, 9S, PO, GB, F9, G4, OO, MQ, YX, 9E, YV, PT, OH, G7, EV, ZW, QX, and C5, you get roughly $10B/month. Now some of this makes some assumptions since not all of the carriers do full disclosures on their exact payroll amounts but it's a rough amount based on comparison to those that do disclose. Yes, not all the carriers are taking bailout money and some of the regional carriers get to double dip but remember, we are talking about their previous full payroll at 100% pay so all of the voluntary leaves and what not help them get closer to having that $29B cover the payroll but I see no way without layoffs that they could shrink their payroll 50% per month even with all the voluntary leaves and reductions.


    $10 billion a month might be a little high....

    UA....which is around 15% of US capacity...spent $12 billion last year on payroll.

    UA has reduced payroll by offering voluntary leaves, early retirement, employees are not getting OT or picking up extra trips so that has cut back on payroll and management staff took anywhere from 25% to 50% paycut. Lets say that chops a third off of payroll and take into account it's only for six months...so UA needs $4 billion for payroll over the next six months. We know AA was allocated $12 billion of the $50 billion and while UA and DL are smaller they are not that much smaller so they should get a similar amount.

    There should be enough money in the package to make payroll and keep the airlines flying.
    I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
     
    alasizon
    Posts: 2598
    Joined: Sat Apr 28, 2007 8:57 pm

    Re: Delta plans to emerge a

    Tue Mar 31, 2020 5:10 pm

    United1 wrote:
    alasizon wrote:
    0newair0 wrote:

    How are you doing that math? For grant money, each air carrier can receive 100% of the salary, wage, and benefits expense incurred from April 1 through September 30, 2019. That should be more than enough to cover the required salary, wage, and benefit expenses for the same period of the current year considering the significant reduction in capacity. Even if the draw down in capacity isn't taken into account, the percent of payroll the grant money should cover is a lot closer to 100% than it is to 50%.

    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.


    If you add up all the payroll expenses (roughly) for DL, AA, UA, AS, B6, WN, HA, NK, 5X, FX, 5Y, 9S, PO, GB, F9, G4, OO, MQ, YX, 9E, YV, PT, OH, G7, EV, ZW, QX, and C5, you get roughly $10B/month. Now some of this makes some assumptions since not all of the carriers do full disclosures on their exact payroll amounts but it's a rough amount based on comparison to those that do disclose. Yes, not all the carriers are taking bailout money and some of the regional carriers get to double dip but remember, we are talking about their previous full payroll at 100% pay so all of the voluntary leaves and what not help them get closer to having that $29B cover the payroll but I see no way without layoffs that they could shrink their payroll 50% per month even with all the voluntary leaves and reductions.


    $10 billion a month might be a little high....

    UA....which is around 15% of US capacity...spent $12 billion last year on payroll.

    UA has reduced payroll by offering voluntary leaves, early retirement, employees are not getting OT or picking up extra trips so that has cut back on payroll and management staff took anywhere from 25% to 50% paycut. Lets say that chops a third off of payroll and take into account it's only for six months...so UA needs $4 billion for payroll over the next six months. We know AA was allocated $12 billion of the $50 billion and while UA and DL are smaller they are not that much smaller so they should get a similar amount.

    There should be enough money in the package to make payroll and keep the airlines flying.


    I'm not denying that the money can keep them around, my point more so is that the grants for payroll do not cover the payrolls at 100% levels for the entire six months so some reduction is necessary which is why the airlines are pushing the leaves and voluntary reductions as well as reductions in scheduled hours for hourly employees.

    The $12B that AA was allocated was $6B in payroll grants and $6B in loans so we can assume DL and UA get roughly the same. Let's take the US4, between them they spent $44.2B in wages in 2019. So 50% (six months) of that would be $22B and I assume that cutting pilots and FAs back to contractual minimums will save them about 1.5B over those six months. That leaves us with $20.5B of $29B already spent before you ever even get to the other larger carriers or regionals and I personally think that also underestimates the increase in UA's salaries as they hired up to support their planned expansion this year.
    Airport (noun) - A construction site which airplanes tend to frequent
     
    flyguy89
    Posts: 2985
    Joined: Tue Feb 24, 2009 6:43 pm

    Re: Delta plans to emerge a

    Tue Mar 31, 2020 5:12 pm

    0newair0 wrote:
    panamair wrote:
    jayunited wrote:

    None of the bailout money is to be use to support management, or executive compensation and no funds are to be used to support operational needs. So if Delta is only paying their frontline ground staff employees 75% of their pre-COVID-19 pay but receiving 100% from the government where is the other 25% going?


    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.
    ^^ this. Delta is trying to delay furloughs. It's been said multiple times on this forum now by me and others but people keep ignoring it because it doesn't fit their agenda.


    Once again...
    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.

    :checkmark: :checkmark: :checkmark:

    It's about stretching that money and keeping the greatest number employed for as long as possible
     
    hiflyeras
    Posts: 2256
    Joined: Thu Jul 14, 2011 6:48 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 5:18 pm

    DL717 wrote:
    Midwestindy wrote:
    Something to consider moving forward is Delta's covenant with MSP:

    "Delta elected to extend its airline lease agreement with the MAC through December 31, 2030. In addition, Delta made a significant commitment to MSP in signing a “hub covenant”. In its hub covenant, Delta agreed to maintain an annual average of 400 daily departing flights from MSP, at least 250 of which must be aircraft with greater than 70 seats and that a minimum of 30% of enplaned passengers must be connecting."

    https://metroairports.org/sites/default ... -final.pdf


    I seriously doubt DL will shed MSP, but that “covenant” won’t mean squat in a bankruptcy filing. If they need to make serious reductions at MSP it will probably be adjusted by agreement or a judge.


    I doubt that the MSP airport authorities would be so bold as to take DL to court if they violate the agreement. They want to keep them as a hub and their major customer...don't bite the hand that feeds you.
     
    Boof02671
    Posts: 2106
    Joined: Sun Jul 10, 2016 12:15 am

    Re: Delta plans to emerge a

    Tue Mar 31, 2020 6:30 pm

    alasizon wrote:
    United1 wrote:
    alasizon wrote:

    If you add up all the payroll expenses (roughly) for DL, AA, UA, AS, B6, WN, HA, NK, 5X, FX, 5Y, 9S, PO, GB, F9, G4, OO, MQ, YX, 9E, YV, PT, OH, G7, EV, ZW, QX, and C5, you get roughly $10B/month. Now some of this makes some assumptions since not all of the carriers do full disclosures on their exact payroll amounts but it's a rough amount based on comparison to those that do disclose. Yes, not all the carriers are taking bailout money and some of the regional carriers get to double dip but remember, we are talking about their previous full payroll at 100% pay so all of the voluntary leaves and what not help them get closer to having that $29B cover the payroll but I see no way without layoffs that they could shrink their payroll 50% per month even with all the voluntary leaves and reductions.


    $10 billion a month might be a little high....

    UA....which is around 15% of US capacity...spent $12 billion last year on payroll.

    UA has reduced payroll by offering voluntary leaves, early retirement, employees are not getting OT or picking up extra trips so that has cut back on payroll and management staff took anywhere from 25% to 50% paycut. Lets say that chops a third off of payroll and take into account it's only for six months...so UA needs $4 billion for payroll over the next six months. We know AA was allocated $12 billion of the $50 billion and while UA and DL are smaller they are not that much smaller so they should get a similar amount.

    There should be enough money in the package to make payroll and keep the airlines flying.


    I'm not denying that the money can keep them around, my point more so is that the grants for payroll do not cover the payrolls at 100% levels for the entire six months so some reduction is necessary which is why the airlines are pushing the leaves and voluntary reductions as well as reductions in scheduled hours for hourly employees.

    The $12B that AA was allocated was $6B in payroll grants and $6B in loans so we can assume DL and UA get roughly the same. Let's take the US4, between them they spent $44.2B in wages in 2019. So 50% (six months) of that would be $22B and I assume that cutting pilots and FAs back to contractual minimums will save them about 1.5B over those six months. That leaves us with $20.5B of $29B already spent before you ever even get to the other larger carriers or regionals and I personally think that also underestimates the increase in UA's salaries as they hired up to support their planned expansion this year.

    Before the VLOA AA has around 130,000 employees, DL has 88,000
     
    blockski
    Posts: 690
    Joined: Wed Jun 15, 2016 8:30 pm

    Re: Delta plans to emerge a "smaller" carrier

    Tue Mar 31, 2020 7:04 pm

    hiflyeras wrote:
    DL717 wrote:
    Midwestindy wrote:
    Something to consider moving forward is Delta's covenant with MSP:

    "Delta elected to extend its airline lease agreement with the MAC through December 31, 2030. In addition, Delta made a significant commitment to MSP in signing a “hub covenant”. In its hub covenant, Delta agreed to maintain an annual average of 400 daily departing flights from MSP, at least 250 of which must be aircraft with greater than 70 seats and that a minimum of 30% of enplaned passengers must be connecting."

    https://metroairports.org/sites/default ... -final.pdf


    I seriously doubt DL will shed MSP, but that “covenant” won’t mean squat in a bankruptcy filing. If they need to make serious reductions at MSP it will probably be adjusted by agreement or a judge.


    I doubt that the MSP airport authorities would be so bold as to take DL to court if they violate the agreement. They want to keep them as a hub and their major customer...don't bite the hand that feeds you.


    Depends on the nature of the violation.

    Will MSP sue over these COVID-related cancellations? No, of course not. Would they sue if Delta declared they were dropping MSP as a hub? Yes, absolutely.

    And even if this is something that could be discarded in bankruptcy, the point there is that MSP would be a creditor asking to be made whole as part of the bankruptcy process. And with good reason - the airport is making investments in the airport based on a long-term commitment from Delta to maintain a hub there and therefore generate the traffic required to justify that investment.
     
    User avatar
    Midwestindy
    Posts: 5280
    Joined: Sun Mar 12, 2017 3:56 am

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 12:48 am

    LAXdude1023 wrote:
    Midwestindy wrote:
    LAXdude1023 wrote:

    I specifically said long haul premium travel and yes it does. Domestically the fares are higher to MSP. DTW-Asia is MUCH bigger than MSP-Asia in O&D. DTW-Europe is also larger in O&D.

    Why do you think DL made DTW its Asia hub despite the fact that MSP has a better geographic location? How does DTW support service to NGO when no other airport in North America does? Why do DL and LH compete on DTW-FRA/MUC when they dont fly to MSP from either?


    Are you accounting for yield in your domestic number? Yes, MSP fares might be higher, but I'd venture to say the average distance flown from MSP is sizably longer than DTW due to MSP's location. It might be similar to how HNL has high fares, but accounting for distance flown means the fares aren't actually that high, relatively speaking.

    Back to the point at hand though, I think it is clear that DTW & MSP are safe from being dehubbed, it's surprising to me that people even view it as a possibility.


    Excellent point and yes, MSP and DTW are both far too valuable to give up. Every hub everywhere is going to see a reduction in flights after we recover for a bit. But I dont think we will see any core airline hubs done away with. Focus cities are a different matter.


    Late response, but I came across this data, although it is from 2017 the market dynamics in both markets are relatively the same.

    Image

    blockski wrote:
    hiflyeras wrote:
    DL717 wrote:

    I seriously doubt DL will shed MSP, but that “covenant” won’t mean squat in a bankruptcy filing. If they need to make serious reductions at MSP it will probably be adjusted by agreement or a judge.


    I doubt that the MSP airport authorities would be so bold as to take DL to court if they violate the agreement. They want to keep them as a hub and their major customer...don't bite the hand that feeds you.


    Depends on the nature of the violation.

    Will MSP sue over these COVID-related cancellations? No, of course not. Would they sue if Delta declared they were dropping MSP as a hub? Yes, absolutely.

    And even if this is something that could be discarded in bankruptcy, the point there is that MSP would be a creditor asking to be made whole as part of the bankruptcy process. And with good reason - the airport is making investments in the airport based on a long-term commitment from Delta to maintain a hub there and therefore generate the traffic required to justify that investment.


    :checkmark: :checkmark:
    Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
     
    Ursula21
    Posts: 12
    Joined: Tue Mar 31, 2020 2:42 am

    Re: Delta plans to emerge a

    Wed Apr 01, 2020 3:29 am

    flyguy89 wrote:
    0newair0 wrote:
    panamair wrote:

    But there are enough checks to ensure it doesn't go towards other things which are not permitted. People with an agenda are jumping to conclusions. Truth is we don't know. Maybe they're trying to prolong the time they will have before they need to announce furloughs. Other airlines are saying furloughs will most likely be needed starting in October; maybe if Delta thinks that if they save some more now, they can keep people employed longer than the other carriers, hoping there will be some turnaround then which could limit the number of layoffs. Let's wait and see before we jump to conclusions.
    ^^ this. Delta is trying to delay furloughs. It's been said multiple times on this forum now by me and others but people keep ignoring it because it doesn't fit their agenda.


    Once again...
    The reason why the leaves are being offered and the hours are being reduced is simply to conserve the grant money and extend its use for as long as practical. There was never any requirement for the money to be spent within a six month period. If congress wanted that, they could have added a simple sentence to the legislation.

    :checkmark: :checkmark: :checkmark:

    It's about stretching that money and keeping the greatest number employed for as long as possible


    From the airline's perspective, maybe, but number employed is a terrible metric if they're not actually working. The bill clearly mentions no furloughs but with one simple trick employees can be cut to 1 hour per month without a pay rate cut or being furloughed, complying with the letter of the law.

    What they're really doing is strategizing on how to be profitable come October 1 and how to beat the competition by having the best business positions. That's fine, but the taxpayer grant that no other industry received, earmarked for payroll, should be used in a way that benefits the taxpayers the most not the shareholders. Instead it's being used in a way that reduces short term consumer spending power in order to maximize the long term value to the airline. Layoffs will happen on October 1 if needed regardless of how much grant balance is remaining. Why wouldn't they?
     
    User avatar
    EA CO AS
    Posts: 15732
    Joined: Wed Nov 14, 2001 8:54 am

    Re: Delta plans to emerge a

    Wed Apr 01, 2020 4:27 am

    Ursula21 wrote:
    What they're really doing is strategizing on how to be profitable come October 1 and how to beat the competition by having the best business positions.


    Accurate. While this is a tragedy of epic proportions, to be sure, every airline c-suite in the U.S. is also planning on "not letting a good crisis go to waste," and using it as a tool to accelerate retirements of old aircraft, simplify their fleets, pare back "strategic" yet money-losing operations, and so on. They'll get to do in 2-6 months what would have taken 3-5 years or more otherwise.
    "In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

    Comments made here are my own and are not intended to represent the official position of Alaska Air Group
     
    JAMBOJET
    Posts: 293
    Joined: Tue Dec 11, 2018 6:23 pm

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 3:00 pm

    I'm curious what Delta's long term international strategy will be. They've built much of their international strategy based on the ability to heavily influence partners with equity stakes, sometimes near-controlling stakes.

    KE: Not 49% by any means, but Delta's stake was required in conjunction with the controlling family's stake to fight off activist investors, so in a way, a VERY influential stake: https://asia.nikkei.com/Opinion/Seoul-m ... amily-feud It's certainly not any surprise that KE will need some amount of money to survive: https://skift.com/2020/03/09/korean-air ... -business/ Korean already has a massive debt load and a loan from the Korean government would help but an equity injection seems like it would be more helpful at this point. How would the government balance an equity investment that could take away control from the current controlling Chaebol and Delta tethering its side to that Chaebol? The current government seems to have a stated interest in doing just that.

    VS: 49% stake by Delta but SRB owns the 51% so Delta doesn't have effective control. Hasn't made money in a few years. And it's now begging for a bailout. https://news.sky.com/story/coronavirus- ... t-11966892

    AM: 51% "non-controlling" stake by Delta per Delta's 10-K (I thought it was 49% but Delta says otherwise in their 10-K); Lost money the last few years: https://www.prnewswire.com/news-release ... 03335.html

    AF/KL: 9% equity stake in AF/KL The news about them is all over the map but: Recapitalization & nationalization seem to come up a lot among other topics.

    LA: 20% stake in LATAM. It's not controlling, but the stake is very helpful for the Cueto family to maintain a large plurality equity control. http://www.latamairlinesgroup.net/ownership-structure And, given the heavy Brazilian presence/reliance of LATAM, you have to wonder how a government bailout would even work: Would Brazil help bail out a largely-Chilean company (the old Amaro Brazilian ownership appears to be down to 2%), if necessary? Does Chile have the ability to bail out such a large company, if necessary? And all this in the middle of realigning their network to be with Delta. Not to say Delta/LATAM couldn't be great together in the future, but it's certainly a very rough time to be transitioning partners.

    VA: No equity position by Delta, but a JV with VA. VA doesn't seem likely to survive the crisis based on latest headlines: https://www.afr.com/politics/federal/vi ... 401-p54fv6


    All carriers across the globe are struggling massively and these comments aren't meant to diminish that or say that only those local carriers mentioned are hurting or will go bankrupt. Delta, however, has built much of its international strategy on the influence that equity stakes provide them and no other US carrier aside from United (small stake in Azul and an accidental ownership of AV due to a loan gone awry) has any similar current equity positions. Which prompts three questions:

    1. How will foreign governments look at bailouts that stand to financially benefit a foreign carrier, Delta? Will that influence them not to provide a bailout, at all? Will it sway them toward equity stakes that diminish Delta's ownership/benefit?

    2. Just to look at two carriers, AM and VS, two carriers that went into the red under Delta's influence (both were certainly in the red, at times, before that, as well) during the best of flying times. If local governments chose equity stakes that diminish Delta's control, would that cause local carriers to change their strategies/reliance on Delta?

    3. I can't imagine they possibly could right now, but would Delta inject cash into their flailing partners? If, for instance, the UK government didn't help VS? Delta would stand to lose access to a lot of Heathrow slots if VS went under. You'd have to imagine those slots would go to debt holders first (or Heathrow? Beats me how those slots work), not an equity holder like Delta. How could Delta inject equity if they took the bailout money from the US government. Using their own cash to help foreign airlines while receiving a cash injection from the US government would seem, unusual, at best.

    I bring it up since so much of Delta's international strategy has been built around the ability to sway the boardroom and, at least, some of that equity could be diluted in the current environment or go away entirely in the event of liquidation.
     
    onwFan
    Topic Author
    Posts: 438
    Joined: Wed Feb 03, 2016 4:02 am

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 4:13 pm

    JAMBOJET wrote:
    I'm curious what Delta's long term international strategy will be. They've built much of their international strategy based on the ability to heavily influence partners with equity stakes, sometimes near-controlling stakes.

    KE: Not 49% by any means, but Delta's stake was required in conjunction with the controlling family's stake to fight off activist investors, so in a way, a VERY influential stake: https://asia.nikkei.com/Opinion/Seoul-m ... amily-feud It's certainly not any surprise that KE will need some amount of money to survive: https://skift.com/2020/03/09/korean-air ... -business/ Korean already has a massive debt load and a loan from the Korean government would help but an equity injection seems like it would be more helpful at this point. How would the government balance an equity investment that could take away control from the current controlling Chaebol and Delta tethering its side to that Chaebol? The current government seems to have a stated interest in doing just that.

    VS: 49% stake by Delta but SRB owns the 51% so Delta doesn't have effective control. Hasn't made money in a few years. And it's now begging for a bailout. https://news.sky.com/story/coronavirus- ... t-11966892

    AM: 51% "non-controlling" stake by Delta per Delta's 10-K (I thought it was 49% but Delta says otherwise in their 10-K); Lost money the last few years: https://www.prnewswire.com/news-release ... 03335.html

    AF/KL: 9% equity stake in AF/KL The news about them is all over the map but: Recapitalization & nationalization seem to come up a lot among other topics.

    LA: 20% stake in LATAM. It's not controlling, but the stake is very helpful for the Cueto family to maintain a large plurality equity control. http://www.latamairlinesgroup.net/ownership-structure And, given the heavy Brazilian presence/reliance of LATAM, you have to wonder how a government bailout would even work: Would Brazil help bail out a largely-Chilean company (the old Amaro Brazilian ownership appears to be down to 2%), if necessary? Does Chile have the ability to bail out such a large company, if necessary? And all this in the middle of realigning their network to be with Delta. Not to say Delta/LATAM couldn't be great together in the future, but it's certainly a very rough time to be transitioning partners.

    VA: No equity position by Delta, but a JV with VA. VA doesn't seem likely to survive the crisis based on latest headlines: https://www.afr.com/politics/federal/vi ... 401-p54fv6


    All carriers across the globe are struggling massively and these comments aren't meant to diminish that or say that only those local carriers mentioned are hurting or will go bankrupt. Delta, however, has built much of its international strategy on the influence that equity stakes provide them and no other US carrier aside from United (small stake in Azul and an accidental ownership of AV due to a loan gone awry) has any similar current equity positions. Which prompts three questions:

    1. How will foreign governments look at bailouts that stand to financially benefit a foreign carrier, Delta? Will that influence them not to provide a bailout, at all? Will it sway them toward equity stakes that diminish Delta's ownership/benefit?

    2. Just to look at two carriers, AM and VS, two carriers that went into the red under Delta's influence (both were certainly in the red, at times, before that, as well) during the best of flying times. If local governments chose equity stakes that diminish Delta's control, would that cause local carriers to change their strategies/reliance on Delta?

    3. I can't imagine they possibly could right now, but would Delta inject cash into their flailing partners? If, for instance, the UK government didn't help VS? Delta would stand to lose access to a lot of Heathrow slots if VS went under. You'd have to imagine those slots would go to debt holders first (or Heathrow? Beats me how those slots work), not an equity holder like Delta. How could Delta inject equity if they took the bailout money from the US government. Using their own cash to help foreign airlines while receiving a cash injection from the US government would seem, unusual, at best.

    I bring it up since so much of Delta's international strategy has been built around the ability to sway the boardroom and, at least, some of that equity could be diluted in the current environment or go away entirely in the event of liquidation.

    My hunch is that DL is going to silently sit and wait to see the fate of all its investments - I don’t see them investing a penny in any of them. Based on which of them remain, they will revise their international route strategy.

    Of the lot, I am least optimistic about VA and VS.

    LA just invited trouble. I expect LA to shrink considerably to probably only Chile, Peru and Brazil (their international cuts recently have also suggested that) - In retrospect, LA would have been in far better position to resurge from this crisis if it were in oneworld, with support from AA and IB to all their relevant markets.

    AF/KL and AM are going nowhere, they are here to stay. In fact, they are the only partners that DL can hope to rely on.
     
    delimit
    Posts: 840
    Joined: Fri Jan 09, 2009 8:08 pm

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 4:19 pm

    1. The point of the bailouts isn't to save the companies; it's to save the things they represent: jobs, global connectivity, trade, etc. Ownership structure should not really be a consideration; assuming it's all legal.

    2. Government stakes when used to collateralize tend to be temporary. The government isn't buying someone else's postion. As the loans are repaid, the shares are retired and the original ownership structure returns. Do you feel like VS and AM's performance is somehow relevant here? I'm not seeing what point you;re trying to make by bringing them up.

    3. Delta will, rightly, take care of Delta before it takes care over airlines it has minority interest in.

    Pont 1 is the most important. Governments aren't bailing out airlines to bail out airlines; they are working to preserve the things those airlines provide them.
     
    hiflyeras
    Posts: 2256
    Joined: Thu Jul 14, 2011 6:48 pm

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 4:52 pm

    JAMBOJET wrote:
    I bring it up since so much of Delta's international strategy has been built around the ability to sway the boardroom and, at least, some of that equity could be diluted in the current environment or go away entirely in the event of liquidation.


    Great post, JAMBO. I've been wondering the same thing. Their strategy of throwing money around throughout the world could end being a huge mistake if it all goes to bust. Foreign government bailouts will likely not include any help for DL and their share could be worthless if they all reorganize...IF they even still exist. I can't imagine a world without KE or AM but not so sure about the rest.
     
    JAMBOJET
    Posts: 293
    Joined: Tue Dec 11, 2018 6:23 pm

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 4:58 pm

    delimit wrote:
    2. Do you feel like VS and AM's performance is somehow relevant here? I'm not seeing what point you;re trying to make by bringing them up.


    Point is: Should companies that were, at best, struggling pre-pandemic be saved?
    If a company can't make money in the best of times, why should the government bail it out when it stands to significantly benefit a foreign carrier's P&L (and obviously those locally employed as well)? As it pertains to Delta, if the government bails a local carrier out and dilutes Delta's ownership, should the company stay as closely aligned with Delta given a move toward negative earnings in that relationship. We can all argue whether it would've been worse for VS and/or AM profitability absent the Delta relationship, but the fact remains that in the most profitable flying period in a long time, AM and VS were losing money pre-pandemic and their profit/loss seemed to be a negative trajectory in the midst of that Delta relationship.
     
    jagraham
    Posts: 1104
    Joined: Sun Jul 17, 2016 11:10 pm

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 5:06 pm

    With respect to all sides, can any of the US3 survive with 10% passengers? No. How fast will traffic come back after 9/30? It appears that DL's projections are more dire than UA's and so DL is taking more drastic action to preserve some cash. Who will be right? It's hard to say right now. But in the fall we shall see. And the $64000 question - if this bailout isn't enough (wages are about 1/4 of total expenses) how many rounds is the federal government good for? I think that is at the core of the difference between DL's and UA's approaches.
     
    delimit
    Posts: 840
    Joined: Fri Jan 09, 2009 8:08 pm

    Re: Delta plans to emerge a "smaller" carrier

    Wed Apr 01, 2020 5:23 pm

    JAMBOJET wrote:
    delimit wrote:
    2. Do you feel like VS and AM's performance is somehow relevant here? I'm not seeing what point you're trying to make by bringing them up.


    Point is: Should companies that were, at best, struggling pre-pandemic be saved?
    If a company can't make money in the best of times, why should the government bail it out when it stands to significantly benefit a foreign carrier's P&L (and obviously those locally employed as well)? As it pertains to Delta, if the government bails a local carrier out and dilutes Delta's ownership, should the company stay as closely aligned with Delta given a move toward negative earnings in that relationship. We can all argue whether it would've been worse for VS and/or AM profitability absent the Delta relationship, but the fact remains that in the most profitable flying period in a long time, AM and VS were losing money pre-pandemic and their profit/loss seemed to be a negative trajectory in the midst of that Delta relationship.

    They were not, "at best, struggling". That's overly reductive. And that's up to their governments, because of my first point. In AM and KE's case; you would be chunking out a huge amount of each country's capacity. Do you think either country wants gaping holes in their air network?

    Popular Searches On Airliners.net

    Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

    Military Aircraft Every type from fighters to helicopters from air forces around the globe

    Classic Airliners Props and jets from the good old days

    Flight Decks Views from inside the cockpit

    Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

    Cargo Aircraft Pictures of great freighter aircraft

    Government Aircraft Aircraft flying government officials

    Helicopters Our large helicopter section. Both military and civil versions

    Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

    Night Photos Beautiful shots taken while the sun is below the horizon

    Accidents Accident, incident and crash related photos

    Air to Air Photos taken by airborne photographers of airborne aircraft

    Special Paint Schemes Aircraft painted in beautiful and original liveries

    Airport Overviews Airport overviews from the air or ground

    Tails and Winglets Tail and Winglet closeups with beautiful airline logos