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

Thu Jul 09, 2020 10:43 pm

DALMD88—

I’m sorry to see that. I hope everyone lands on their feet. Definitely the right move by DL to let them know ahead of the EO close. I don’t know if they’re planning to close/outsource any ACS stations, but it’d be nice if they gave us the same consideration.
"Nothing ever happens here, " I said. "I just wait."
 
MAH4546
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Re: Delta plans to emerge a "smaller" carrier

Thu Jul 09, 2020 10:50 pm

With regards to the LATAM venture and Delta's future expansion at Miami, in their application submitted to DOT yesterday, Delta claims they remain committed to expanding in Miami, even past what has already been announced (and subsequently delayed). Unfortunately the public version redacts what they plan to add.

https://thepointsguy.com/news/delta-sti ... rtnership/
a.
 
alfa164
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Re: Delta plans to emerge a "smaller" carrier

Thu Jul 09, 2020 10:56 pm

onwFan wrote:
I can definitely tell you one that is easy to flip - LATAM - they came to DL for the money, they will definitely go wherever there is more money.


Well... LATAM yesterday just threw egg on that contention:

http://www.frequentbusinesstraveler.com ... t-venture/
I'm going to have a smokin' hot body again!
I have decided to be cremated....
 
onwFan
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Re: Delta plans to emerge a "smaller" carrier

Thu Jul 09, 2020 11:39 pm

FSDan wrote:
onwFan wrote:
ShinyAndChrome wrote:

Per your own words, if LATAM only cares about where they can find more it's not like UA or any other potential JV partner would be in any better financial position than DL.

I get that you hate DL and I get that the $2B they put into LATAM might be a wash, but no one has actually offered a reason why LA or AM or VS, assuming they come out the other end of this would have any reason to walk away from JVs that, by all accounts, work well enough.

Yeah, you are right - the JVs work so well that almost every single one of those JV partners are not able to make profits even in the best of times.


Any evidence that they were struggling because of the JVs, and not in spite of them? And remember that correlation is not causation. We're looking for prove of causation here.

If you take VS, an overwhelming majority of their operations was into the US (with DL). That itself is evidence. Clearly they were not able to make important markets in the US work despite the JV. Plus, if the JV was reaping profits & the remainder of their operation was the only unprofitable part, then why were they recently trying hard to expand into GRU, TLV, etc.?
 
onwFan
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Re: Delta plans to emerge a "smaller" carrier

Thu Jul 09, 2020 11:43 pm

alfa164 wrote:
onwFan wrote:
I can definitely tell you one that is easy to flip - LATAM - they came to DL for the money, they will definitely go wherever there is more money.


Well... LATAM yesterday just threw egg on that contention:

http://www.frequentbusinesstraveler.com ... t-venture/


So? Did I say they won’t file for a JV? No one has shown more money yet - till that they’re stuck.
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 12:14 am

onwFan wrote:
FSDan wrote:
onwFan wrote:
Yeah, you are right - the JVs work so well that almost every single one of those JV partners are not able to make profits even in the best of times.


Any evidence that they were struggling because of the JVs, and not in spite of them? And remember that correlation is not causation. We're looking for prove of causation here.

If you take VS, an overwhelming majority of their operations was into the US (with DL). That itself is evidence. Clearly they were not able to make important markets in the US work despite the JV. Plus, if the JV was reaping profits & the remainder of their operation was the only unprofitable part, then why were they recently trying hard to expand into GRU, TLV, etc.?


That's not proof that VS was struggling because of the JV. How do we know their finances weren't more heavily impacted by long running issues with RR engines on the 789 fleet that caused excessive grounding, or by unfavorable Pound-Dollar exchange rates for VS? The fact that they were predicting a return to profitability late this year (earlier than their initial estimate of 2021) before COVID hit calls into question whether the JV was really what caused their problems...
This is my signature until I think of a better one.
 
onwFan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 12:24 am

FSDan wrote:
onwFan wrote:
FSDan wrote:

Any evidence that they were struggling because of the JVs, and not in spite of them? And remember that correlation is not causation. We're looking for prove of causation here.

If you take VS, an overwhelming majority of their operations was into the US (with DL). That itself is evidence. Clearly they were not able to make important markets in the US work despite the JV. Plus, if the JV was reaping profits & the remainder of their operation was the only unprofitable part, then why were they recently trying hard to expand into GRU, TLV, etc.?


That's not proof that VS was struggling because of the JV. How do we know their finances weren't more heavily impacted by long running issues with RR engines on the 789 fleet that caused excessive grounding, or by unfavorable Pound-Dollar exchange rates for VS? The fact that they were predicting a return to profitability late this year (earlier than their initial estimate of 2021) before COVID hit calls into question whether the JV was really what caused their problems...

If so, what is the proof that the JV was working well for them? If anything, SRB not selling stake to AF/KL after all the equity swap hoopla never struck the right tone...
 
ShinyAndChrome
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 12:47 am

n9801f wrote:
ShinyAndChrome wrote:
but no one has actually offered a reason why LA or AM or VS, assuming they come out the other end of this would have any reason to walk away from JVs that, by all accounts, work well enough.

The reason these carriers are easy to flip is that Delta wasn't a great network fit for them to begin with and now they're freed to remarry

For instance LA needs a partner who is strong in MIA, AM needs a partner with a hub in Texas, and VS would prefer a partner with LHR slots of its own
AA and UA have stronger networks with hubs in larger O-D markets that these and other partner prefer

Knowing this, Delta paid a hefty "dowry" to attract partners
And in exchange for the dowry, Delta gets lots of say in the JV

Now that Delta's ownership stake is likely to be taken by the bankruptcy court and given to creditors, Delta will lose influence and its former brides will be able to find more attractive suitors


LATAM already wanted a JV with AA, but that got nixed by the Chilean authorities so you can throw that example out the window.

Second, unless you work at VS, I don't know how much stock I can put in what you think they'd would prefer. I could just as easily say that since their network leans heavily towards leisure travel to places like Florida, having a partner that can give them lots of 1-stop connectivity to Florida and other leisure destinations from London is crucial. Maybe both are true, not that either of us can say for sure.

And for the record, if the DL stake gets washed and UA comes in with $1.5 billion to spare, I don't doubt VS would turn. Of course, that's all just an academic excercise as far as I can see.
 
ShinyAndChrome
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 12:56 am

onwFan wrote:
ShinyAndChrome wrote:
pitbosflyer wrote:

It can also be argued VS was on the road to recovery, bolstered mostly by the gained efficiencies from their DL - AFKL JV for transatlantic traffic. They were estimating to turn a profit in 2021 before the corona-virus. https://www.reuters.com/article/us-virg ... SKCN1RM1GT


Of course. One could even argue that VS might not have even made it to 2020 without that very same DL relationship and the benefits it brings.

That is so not true. If they were not a DL partner, they might have been in a JV with UA, whose network was so much better of a fit for VS. DL bying the VS stake blocked out UA, just like they did with G3. With a UA partnership they would have been able to even sustain more relevant business destinations like EWR and ORD (and made more money) instead of ATL or DTW.


Note that I'm saying "might" and you're making the bolder claim. When SQ put their VS stake on the market, UA was either unwilling or unable to play ball and they probably wouldn't have been in a situation to do so for a few years afterwards.

And this whole notion of whose network makes a better fit for VS just as much of a reach. I could just as easily say that tying up with DL gave VS a footprint and a revenue slice in smaller, less competitive markets rather than bigger ones where they'd have to deal with AA/BA's stronger schedules and market presence. At least that claim could be borne out by looking at carriers' revenue data.
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 1:27 am

onwFan wrote:
FSDan wrote:
onwFan wrote:
If you take VS, an overwhelming majority of their operations was into the US (with DL). That itself is evidence. Clearly they were not able to make important markets in the US work despite the JV. Plus, if the JV was reaping profits & the remainder of their operation was the only unprofitable part, then why were they recently trying hard to expand into GRU, TLV, etc.?


That's not proof that VS was struggling because of the JV. How do we know their finances weren't more heavily impacted by long running issues with RR engines on the 789 fleet that caused excessive grounding, or by unfavorable Pound-Dollar exchange rates for VS? The fact that they were predicting a return to profitability late this year (earlier than their initial estimate of 2021) before COVID hit calls into question whether the JV was really what caused their problems...

If so, what is the proof that the JV was working well for them? If anything, SRB not selling stake to AF/KL after all the equity swap hoopla never struck the right tone...


After having a JV exclusively with DL for a few years, VS then worked with DL to be added to the much larger DL-AF-KL JV. If their first JV experience with DL had been terrible, I don't see why they would have jumped into another one with them right away.

Also, there was plenty of evidence of DL helping VS reshape their network, with the benefits of the flexibility afforded by ATI on clear display. MAN-ATL warrants an upgauge? Move it from a DL 767 to a VS A330. MAN-BOS not working well 2-3x weekly on VS? Let DL try it daily with a smaller 757. LHR-ORD losing money? Redeploy capacity to add frequency in markets where DL is stronger like LAX and BOS.
This is my signature until I think of a better one.
 
n9801f
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 2:05 am

@Lootess

Stay on facts.

Like it or not, bankruptcy judges can - and sometimes do - overrule management recommendations.

Therefore Delta could lose not only its investments, but also its JVs.

The judges should be impartial and decide things based on the quantified financial interests of creditors, not wishful thinking.
 
onwFan
Topic Author
Posts: 437
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 2:44 am

FSDan wrote:
onwFan wrote:
FSDan wrote:

That's not proof that VS was struggling because of the JV. How do we know their finances weren't more heavily impacted by long running issues with RR engines on the 789 fleet that caused excessive grounding, or by unfavorable Pound-Dollar exchange rates for VS? The fact that they were predicting a return to profitability late this year (earlier than their initial estimate of 2021) before COVID hit calls into question whether the JV was really what caused their problems...

If so, what is the proof that the JV was working well for them? If anything, SRB not selling stake to AF/KL after all the equity swap hoopla never struck the right tone...


After having a JV exclusively with DL for a few years, VS then worked with DL to be added to the much larger DL-AF-KL JV. If their first JV experience with DL had been terrible, I don't see why they would have jumped into another one with them right away.

Also, there was plenty of evidence of DL helping VS reshape their network, with the benefits of the flexibility afforded by ATI on clear display. MAN-ATL warrants an upgauge? Move it from a DL 767 to a VS A330. MAN-BOS not working well 2-3x weekly on VS? Let DL try it daily with a smaller 757. LHR-ORD losing money? Redeploy capacity to add frequency in markets where DL is stronger like LAX and BOS.

Well, there you go! The constant reshuffling every season is enough evidence that they have been having trouble making it work!
 
ShinyAndChrome
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:14 am

onwFan wrote:
FSDan wrote:
onwFan wrote:
If so, what is the proof that the JV was working well for them? If anything, SRB not selling stake to AF/KL after all the equity swap hoopla never struck the right tone...


After having a JV exclusively with DL for a few years, VS then worked with DL to be added to the much larger DL-AF-KL JV. If their first JV experience with DL had been terrible, I don't see why they would have jumped into another one with them right away.

Also, there was plenty of evidence of DL helping VS reshape their network, with the benefits of the flexibility afforded by ATI on clear display. MAN-ATL warrants an upgauge? Move it from a DL 767 to a VS A330. MAN-BOS not working well 2-3x weekly on VS? Let DL try it daily with a smaller 757. LHR-ORD losing money? Redeploy capacity to add frequency in markets where DL is stronger like LAX and BOS.

Well, there you go! The constant reshuffling every season is enough evidence that they have been having trouble making it work!


You could just as easily cite cases like SEA-LHR switching from a DL 767 to a VS A330 a few years ago, freeing that aircraft for DL's seasonal PDX-LHR flight.

I have to say, it's quite the reach trying to spin the flexibility of a JV as evidence that it's somehow not working.
 
n9801f
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:42 am

When something is highly successful, you don’t change it.

So lots of churn is usually a sign that something is floundering and needs to be fixed.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:43 am

Actual for Thu 7/9: (2)
1 A320 SBD-CLT (N360NW)
1 B752 SBD-ATL (N670DN)
(A320 N325US SBD-MIA cancelled)


Total aircraft returned from storage through Thu 7/9:
4 A359 (All A359s out of storage and returned to service)
12 A320
36 A321
6 B738
44 B739
7 B752
10 B753
4 B763
2 A333
----
128 Total


Planned for Fri 7/10: (7)
1 B752 SBD-MCO (N665DN)
1 A320 SAL-ATL (N366NW)
1 A319 SAL-ATL (N363NB)
1 A319 SAL-ATL
1 B739 MZJ-CVG
1 B739 MZJ-BOS
1 B739 MCI-SEA (delayed from Thu)

Planned for Sat 7/11:
1 A319 SAL-ATL (N359NB)

*Does not include reactivation of aircraft that had been parked or stored at hub locations

12 B753s have returned to service
N584NW, N585NW, N586NW, N587NW remain still in storage/maintenance

12 A320s have been removed from storage:
N326US, N334NW, N349NW, N350NA, N352NW, N355NW, N359NW, N360NW, N361NW, N363NW, N364NW, N365NW
 
ShinyAndChrome
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 2:47 pm

n9801f wrote:
When something is highly successful, you don’t change it.

So lots of churn is usually a sign that something is floundering and needs to be fixed.


I'm trying to think of new ways to call something a reach but this thread is really pushing me.
 
bkflyguy
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:03 pm

Josh76040 wrote:
FSDan wrote:
Josh76040 wrote:
Even with the equity stakes in some of these airlines now likely worthless (or close to it), the benefits of synergies/corporate contracts/foreign point of sale aren't off the table until 1) the JVs and/or codeshares are terminated, or 2) the airlines are dissolved in bankruptcy. In other words, DL's "worthless" investments may actually have gained some long term benefit for DL - we likely can't make that call until 2+ years down the road at the earliest. But if VS comes out of administration and DL+VS are able to remain a solid #2 in the U.S.-LHR market, if AM comes out of Ch 11 and remains the largest Mexican airline and biggest slot holder at MEX, and if LA comes out of Ch 11 and DL+LA are able to move forward with their JV and be very competitive in the U.S.-South America market, then it's less important that DL's equity stakes are diluted/gone.


Multiple investments gone bad with billions in equity just evaporated. There’s no way to put lipstick on this pig. The new entities...under new Post-restructuring management...have no allegiance to Delta and could easily be swayed to another alliance. “Long-term benefit”? Hardly. More like “Delta praying for a miracle.”


FSDan

You’re incorrectly ascribing preferences of pre-BK managements in place at LA, AM, VS, etc. to the new management of a post-BK reorganized entity In each case. New management might have a different vision than the old management. The BKs not only wipe out DL’s equity but they also potentially wipe out loyalty to DL...and to business models and relationships that didn’t work.

Very troubling times ahead for DL.


There is no requirement for management to change under US Bankruptcy law. CEOs often change, but not always. Steeland and Anderson were CEOs of both pre- and post- bankruptcy NW and DL, for example. The "new" management could be the same as the "old" management.
 
bkflyguy
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:08 pm

FSDan wrote:
Josh76040 wrote:
FSDan

I guess I see the chance of new management having a different opinion on these JVs as way less likely than you do. Dissolving existing JVs, reversing course on alliance membership, etc. aren't exactly free and easy decisions to make and execute...


You keep saying this, but there is no requirement for management to change. And, I would argue, that because the bankruptcy was precipitated by a global pandemic that destroyed global air travel demand and was beyond management's control, the odds of most, if not all, of the current management being retained is high. There may be some shuffling, some near retirement may take this opportunity to go, but I am willing to bet the majority of "new" managment will be the "old" management.
 
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klm617
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:13 pm

ShinyAndChrome wrote:
onwFan wrote:
FSDan wrote:

After having a JV exclusively with DL for a few years, VS then worked with DL to be added to the much larger DL-AF-KL JV. If their first JV experience with DL had been terrible, I don't see why they would have jumped into another one with them right away.

Also, there was plenty of evidence of DL helping VS reshape their network, with the benefits of the flexibility afforded by ATI on clear display. MAN-ATL warrants an upgauge? Move it from a DL 767 to a VS A330. MAN-BOS not working well 2-3x weekly on VS? Let DL try it daily with a smaller 757. LHR-ORD losing money? Redeploy capacity to add frequency in markets where DL is stronger like LAX and BOS.

Well, there you go! The constant reshuffling every season is enough evidence that they have been having trouble making it work!


You could just as easily cite cases like SEA-LHR switching from a DL 767 to a VS A330 a few years ago, freeing that aircraft for DL's seasonal PDX-LHR flight.



I have to say, it's quite the reach trying to spin the flexibility of a JV as evidence that it's somehow not working.



For me I see the JV's working just fine for Delta again the health of the JV parts means little to Delta. They ability to be able to exert control over the situation that works best in their favor is what matters to Delta and it's management the most. I think for all intense purposes the current Delta situation with their alliances and JVC partners is working just as planned.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
bkflyguy
Posts: 232
Joined: Wed Dec 05, 2012 6:25 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:14 pm

n9801f wrote:
@Lootess

Stay on facts.

Like it or not, bankruptcy judges can - and sometimes do - overrule management recommendations.

Therefore Delta could lose not only its investments, but also its JVs.

The judges should be impartial and decide things based on the quantified financial interests of creditors, not wishful thinking.


Creditors want their money. So if the JV is generating revenue, what do you think the creditors will want? There would have to be some unmined gold elsewhere for them to want to ditch something that makes the return of their investment more likely. But since none of us have the numbers for the JVs, we will just have to wait and see.
 
bkflyguy
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:17 pm

klm617 wrote:
ShinyAndChrome wrote:
onwFan wrote:
Well, there you go! The constant reshuffling every season is enough evidence that they have been having trouble making it work!


You could just as easily cite cases like SEA-LHR switching from a DL 767 to a VS A330 a few years ago, freeing that aircraft for DL's seasonal PDX-LHR flight.

I have to say, it's quite the reach trying to spin the flexibility of a JV as evidence that it's somehow not working.


For me I see the JV's working just fine for Delta again the health of the JV parts means little to Delta. They ability to be able to exert control over the situation that works best in their favor is what matters to Delta and it's management the most. I think for all intense purposes the current Delta situation with their alliances and JVC partners is working just as planned.


The JV partners share revenue and losses. So it can't just work for one side. And typically, DL likes to push marginal routes to the partners with lower costs to improve the economics of the flight. Which is good for both partners. One could argue that by tying planes and slots to the JV the partner is missing other revenue opportunities, but without the data we really don't know.
 
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klm617
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 3:43 pm

bkflyguy wrote:
klm617 wrote:
ShinyAndChrome wrote:

You could just as easily cite cases like SEA-LHR switching from a DL 767 to a VS A330 a few years ago, freeing that aircraft for DL's seasonal PDX-LHR flight.

I have to say, it's quite the reach trying to spin the flexibility of a JV as evidence that it's somehow not working.


For me I see the JV's working just fine for Delta again the health of the JV parts means little to Delta. They ability to be able to exert control over the situation that works best in their favor is what matters to Delta and it's management the most. I think for all intense purposes the current Delta situation with their alliances and JVC partners is working just as planned.


The JV partners share revenue and losses. So it can't just work for one side. And typically, DL likes to push marginal routes to the partners with lower costs to improve the economics of the flight. Which is good for both partners. One could argue that by tying planes and slots to the JV the partner is missing other revenue opportunities, but without the data we really don't know.


So what pain does Delta feel when VS or another partner's operation doesn't turn a profit.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
DMPHL
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 4:01 pm

klm617 wrote:
bkflyguy wrote:
klm617 wrote:

For me I see the JV's working just fine for Delta again the health of the JV parts means little to Delta. They ability to be able to exert control over the situation that works best in their favor is what matters to Delta and it's management the most. I think for all intense purposes the current Delta situation with their alliances and JVC partners is working just as planned.


The JV partners share revenue and losses. So it can't just work for one side. And typically, DL likes to push marginal routes to the partners with lower costs to improve the economics of the flight. Which is good for both partners. One could argue that by tying planes and slots to the JV the partner is missing other revenue opportunities, but without the data we really don't know.


So what pain does Delta feel when VS or another partner's operation doesn't turn a profit.


If the JV is such that everyone is an equal partner, then they all feel the same pain. They'll feel that pain (or pleasure, but that doesn't sound quite right?) in accordance with their stake in the JV. Whatever percentage of the profits, whatever percentage of the costs, whatever percentage of the losses.
 
ShinyAndChrome
Posts: 280
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 4:32 pm

DMPHL wrote:
klm617 wrote:
bkflyguy wrote:

The JV partners share revenue and losses. So it can't just work for one side. And typically, DL likes to push marginal routes to the partners with lower costs to improve the economics of the flight. Which is good for both partners. One could argue that by tying planes and slots to the JV the partner is missing other revenue opportunities, but without the data we really don't know.


So what pain does Delta feel when VS or another partner's operation doesn't turn a profit.


If the JV is such that everyone is an equal partner, then they all feel the same pain. They'll feel that pain (or pleasure, but that doesn't sound quite right?) in accordance with their stake in the JV. Whatever percentage of the profits, whatever percentage of the costs, whatever percentage of the losses.


Within the context of the terms of the JV I'd add. If I recall correctly, before incorporating them into the AFKL JV, DL and VS split revenues and costs specifically on flying between the US and UK. If, say VS is unprofitable overall because of losses in other areas or because of non-flying related costs, that won't affect the JV performance.
 
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klm617
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 4:56 pm

ShinyAndChrome wrote:
DMPHL wrote:
klm617 wrote:

So what pain does Delta feel when VS or another partner's operation doesn't turn a profit.


If the JV is such that everyone is an equal partner, then they all feel the same pain. They'll feel that pain (or pleasure, but that doesn't sound quite right?) in accordance with their stake in the JV. Whatever percentage of the profits, whatever percentage of the costs, whatever percentage of the losses.


Within the context of the terms of the JV I'd add. If I recall correctly, before incorporating them into the AFKL JV, DL and VS split revenues and costs specifically on flying between the US and UK. If, say VS is unprofitable overall because of losses in other areas or because of non-flying related costs, that won't affect the JV performance.



Exactly so it makes no difference to Delta whether it's JV or alliance partners turn a profit. Sure the expense and profits of the JV routes is shared but if they company operating them doesn't turn a profit it's not Delta's problem. Delta likes to be in a position of dictating who flies where and when and that's all the really matters to them. Where cost are low and profits are high Delta takes on those routes and where costs are high and profits are marginal they let their partners fly those routes.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
freakyrat
Posts: 2011
Joined: Fri Aug 22, 2008 1:04 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 5:19 pm

PSU.DTW.SCE wrote:
Actual for Thu 7/9: (2)
1 A320 SBD-CLT (N360NW)
1 B752 SBD-ATL (N670DN)
(A320 N325US SBD-MIA cancelled)


Total aircraft returned from storage through Thu 7/9:
4 A359 (All A359s out of storage and returned to service)
12 A320
36 A321
6 B738
44 B739
7 B752
10 B753
4 B763
2 A333
----
128 Total


Planned for Fri 7/10: (7)
1 B752 SBD-MCO (N665DN)
1 A320 SAL-ATL (N366NW)
1 A319 SAL-ATL (N363NB)
1 A319 SAL-ATL
1 B739 MZJ-CVG
1 B739 MZJ-BOS
1 B739 MCI-SEA (delayed from Thu)

Planned for Sat 7/11:
1 A319 SAL-ATL (N359NB)

*Does not include reactivation of aircraft that had been parked or stored at hub locations

12 B753s have returned to service
N584NW, N585NW, N586NW, N587NW remain still in storage/maintenance

12 A320s have been removed from storage:
N326US, N334NW, N349NW, N350NA, N352NW, N355NW, N359NW, N360NW, N361NW, N363NW, N364NW, N365NW


9 OO CRJ900 Delta Connection jets have been removed from storage at SBN and have been returned to service.
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 6:58 pm

klm617 wrote:
ShinyAndChrome wrote:
DMPHL wrote:

If the JV is such that everyone is an equal partner, then they all feel the same pain. They'll feel that pain (or pleasure, but that doesn't sound quite right?) in accordance with their stake in the JV. Whatever percentage of the profits, whatever percentage of the costs, whatever percentage of the losses.


Within the context of the terms of the JV I'd add. If I recall correctly, before incorporating them into the AFKL JV, DL and VS split revenues and costs specifically on flying between the US and UK. If, say VS is unprofitable overall because of losses in other areas or because of non-flying related costs, that won't affect the JV performance.



Exactly so it makes no difference to Delta whether it's JV or alliance partners turn a profit. Sure the expense and profits of the JV routes is shared but if they company operating them doesn't turn a profit it's not Delta's problem. Delta likes to be in a position of dictating who flies where and when and that's all the really matters to them. Where cost are low and profits are high Delta takes on those routes and where costs are high and profits are marginal they let their partners fly those routes.


I wish you were joking, but I know you're not... Of course DL cares about the financial health of their JV partners. Partnering with an airline where DL sees no potential for stability or profitability in the future makes no sense. In each of their JVs they are bringing in their expertise in running a profitable airline and sharing their network planning practices with their partners. At the same time they are benefiting from their partners' experience in, and knowledge of, their home markets. If DL were operating high revenue/low cost routes while handing off low revenue/high cost routes to their JV partners... they would still be on the hook for the low performing routes because of the profit/loss-sharing nature of the JV! It's of absolutely 0 benefit to DL to do that! What is helpful for both carriers is being able to shuffle routes around based on brand recognition/point-of-sale advantage, aircraft gauge and efficiency, etc. Hence why you see DL flying a route like IND-CDG (brand recognition + best fit aircraft gauge) and VS taking over SEA-LHR (brand + aircraft efficiency).
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FSDan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 7:01 pm

onwFan wrote:
FSDan wrote:
onwFan wrote:
If so, what is the proof that the JV was working well for them? If anything, SRB not selling stake to AF/KL after all the equity swap hoopla never struck the right tone...


After having a JV exclusively with DL for a few years, VS then worked with DL to be added to the much larger DL-AF-KL JV. If their first JV experience with DL had been terrible, I don't see why they would have jumped into another one with them right away.

Also, there was plenty of evidence of DL helping VS reshape their network, with the benefits of the flexibility afforded by ATI on clear display. MAN-ATL warrants an upgauge? Move it from a DL 767 to a VS A330. MAN-BOS not working well 2-3x weekly on VS? Let DL try it daily with a smaller 757. LHR-ORD losing money? Redeploy capacity to add frequency in markets where DL is stronger like LAX and BOS.

Well, there you go! The constant reshuffling every season is enough evidence that they have been having trouble making it work!


No, it's just proof that what each airline was flying initially wasn't optimal.
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FSDan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 7:14 pm

n9801f wrote:
When something is highly successful, you don’t change it.

So lots of churn is usually a sign that something is floundering and needs to be fixed.


In an industry where the dynamics are constantly shifting, it's insane to view change as a sign of weakness. One of the primary purposes of metal-neutral JVs is precisely to allow this sort of flexible interchange between airlines as demand conditions warrant. What the heck is the point of a JV where both airlines combine their ops/revenues/costs and then make no adjustments?

Was AA handing a MIA-LHR frequency over to BA proof that the route wasn't successful for AA? Absolutely not. How about LH planning to take FRA-YOW over from AC? Not a problem in my book.
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bkflyguy
Posts: 232
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 8:08 pm

klm617 wrote:
bkflyguy wrote:
klm617 wrote:

For me I see the JV's working just fine for Delta again the health of the JV parts means little to Delta. They ability to be able to exert control over the situation that works best in their favor is what matters to Delta and it's management the most. I think for all intense purposes the current Delta situation with their alliances and JVC partners is working just as planned.


The JV partners share revenue and losses. So it can't just work for one side. And typically, DL likes to push marginal routes to the partners with lower costs to improve the economics of the flight. Which is good for both partners. One could argue that by tying planes and slots to the JV the partner is missing other revenue opportunities, but without the data we really don't know.


So what pain does Delta feel when VS or another partner's operation doesn't turn a profit.


It would depend on what part of the operation isn't turning a profit. The DL-VS JV, for example, covers flights between the US and UK. Think of DL's and VS's UK-US operation as a standalone airline. If that makes money, DL and VS share (there may be a formula based on ASMs or some other metric, but let's assume 50-50). But even if the JV is profitable, it doesn't mean that VS as a whole is profitable because it could lose money on routes outside the JV. So if the JV turns a 1 billion profit, but VS's non-JV routes lose 2 billion, DL makes 500 million from the JV while VS has, overall, lost 1.5 billion (I am making these numbers up for simplicity). DL is only affected by VS's over all loss because DL owns 49% of VS. If VS as a whole loses money, DL sees that in a likely negative return on their investment, just like any shareholder. The same is true for Aeromexico (DL owns 49%) but less true for KL/AF/KE since DL owns less of those airlines.
 
onwFan
Topic Author
Posts: 437
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 8:08 pm

FSDan wrote:
n9801f wrote:
When something is highly successful, you don’t change it.

So lots of churn is usually a sign that something is floundering and needs to be fixed.


In an industry where the dynamics are constantly shifting, it's insane to view change as a sign of weakness. One of the primary purposes of metal-neutral JVs is precisely to allow this sort of flexible interchange between airlines as demand conditions warrant. What the heck is the point of a JV where both airlines combine their ops/revenues/costs and then make no adjustments?

Was AA handing a MIA-LHR frequency over to BA proof that the route wasn't successful for AA? Absolutely not. How about LH planning to take FRA-YOW over from AC? Not a problem in my book.

Clearly, the number of changes/swaps happening every season between DL/VS far exceeds the number of adjustments you see with DL/AF/KL or AA/BA. As you said, without proof it is just the way you want to see it. You may interpret it to mean that those routes were working so well that they got ambitious and changed it all together to earn evern more money. To me, it was not meeting their expectations and they keep adjusting it to make it work.
 
bkflyguy
Posts: 232
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 8:11 pm

klm617 wrote:
ShinyAndChrome wrote:
DMPHL wrote:

If the JV is such that everyone is an equal partner, then they all feel the same pain. They'll feel that pain (or pleasure, but that doesn't sound quite right?) in accordance with their stake in the JV. Whatever percentage of the profits, whatever percentage of the costs, whatever percentage of the losses.


Within the context of the terms of the JV I'd add. If I recall correctly, before incorporating them into the AFKL JV, DL and VS split revenues and costs specifically on flying between the US and UK. If, say VS is unprofitable overall because of losses in other areas or because of non-flying related costs, that won't affect the JV performance.



Exactly so it makes no difference to Delta whether it's JV or alliance partners turn a profit. Sure the expense and profits of the JV routes is shared but if they company operating them doesn't turn a profit it's not Delta's problem. Delta likes to be in a position of dictating who flies where and when and that's all the really matters to them. Where cost are low and profits are high Delta takes on those routes and where costs are high and profits are marginal they let their partners fly those routes.


Except where DL owns 49% of the company (VS and AM), DL feels the pain in a lower return or a loss on investment. I would think DL would like to see profitable operations and payment of a dividend. Then again, they can also sell shares for a loss to harvest tax loses to offset income (when they were actually making money).
 
ShinyAndChrome
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 8:20 pm

onwFan wrote:
FSDan wrote:
n9801f wrote:
When something is highly successful, you don’t change it.

So lots of churn is usually a sign that something is floundering and needs to be fixed.


In an industry where the dynamics are constantly shifting, it's insane to view change as a sign of weakness. One of the primary purposes of metal-neutral JVs is precisely to allow this sort of flexible interchange between airlines as demand conditions warrant. What the heck is the point of a JV where both airlines combine their ops/revenues/costs and then make no adjustments?

Was AA handing a MIA-LHR frequency over to BA proof that the route wasn't successful for AA? Absolutely not. How about LH planning to take FRA-YOW over from AC? Not a problem in my book.

Clearly, the number of changes/swaps happening every season between DL/VS far exceeds the number of adjustments you see with DL/AF/KL or AA/BA. As you said, without proof it is just the way you want to see it. You may interpret it to mean that those routes were working so well that they got ambitious and changed it all together to earn evern more money. To me, it was not meeting their expectations and they keep adjusting it to make it work.


Clearly we'll all just have to agree to disagree then. Certain people will always try to interpret anything related to certain airlines as negatively as possible.
 
onwFan
Topic Author
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 8:28 pm

ShinyAndChrome wrote:
onwFan wrote:
FSDan wrote:

In an industry where the dynamics are constantly shifting, it's insane to view change as a sign of weakness. One of the primary purposes of metal-neutral JVs is precisely to allow this sort of flexible interchange between airlines as demand conditions warrant. What the heck is the point of a JV where both airlines combine their ops/revenues/costs and then make no adjustments?

Was AA handing a MIA-LHR frequency over to BA proof that the route wasn't successful for AA? Absolutely not. How about LH planning to take FRA-YOW over from AC? Not a problem in my book.

Clearly, the number of changes/swaps happening every season between DL/VS far exceeds the number of adjustments you see with DL/AF/KL or AA/BA. As you said, without proof it is just the way you want to see it. You may interpret it to mean that those routes were working so well that they got ambitious and changed it all together to earn evern more money. To me, it was not meeting their expectations and they keep adjusting it to make it work.


Clearly we'll all just have to agree to disagree then. Certain people will always try to interpret anything related to certain airlines as negatively as possible.

LOL... Certainly not as negatively as certain other people try to interpret anything related to certain other airlines.
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 8:33 pm

onwFan wrote:
Clearly, the number of changes/swaps happening every season between DL/VS far exceeds the number of adjustments you see with DL/AF/KL or AA/BA. As you said, without proof it is just the way you want to see it. You may interpret it to mean that those routes were working so well that they got ambitious and changed it all together to earn evern more money. To me, it was not meeting their expectations and they keep adjusting it to make it work.


You're misrepresenting my position. I'm not in any way saying DL/VS are making changes because things were perfect and they just got ambitious. I'm saying that it's silly to claim that ongoing optimization of routes between carriers is proof of a failed JV.
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jagraham
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 10:13 pm

If you look at KE, DL worked with them to make them profitable. The same appeared to be going on with VS. The others were too new to be sure. But what DL is known for is killing all delusions of grandeur and focusing those they invest in on the things that can make both DL and the JV partner money. Like with VS where DL had them stop flying all over the place and focus half of what they had on NY and a few other eastern cities.
 
wnflyguy
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 10:25 pm

With JetBlue pulling out of LGB on October 6 Will Delta apply for more Slots? As of now Delta Is only planning on 5 daily flights of it 12 total slots to SLC this winter.

Flyguy
Last edited by wnflyguy on Fri Jul 10, 2020 10:32 pm, edited 1 time in total.
My Wings are clipped just another Retired Airline person. The Ultimate Armchair out of the loop airline industry geek. Aloha Mr Hand!
 
n9801f
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Re: Delta plans to emerge a "smaller" carrier

Fri Jul 10, 2020 10:25 pm

FSDan wrote:
I'm saying that it's silly to claim that ongoing optimization of routes between carriers is proof of a failed JV.


Not sure you understand "optimization" very well. It's not a buzzword or a cool PowerPoint word. It's a formal university science.

By its very definition, "ongoing optimization" implies something is not working as well as it could. Because in optimization, you continuously delete a "worse" thing and replace it with a "better" thing until there are no more possibilities to improve.

So if changes are necessary, then something was wrong to begin with. And if you see heavy churn, there were a lot of mistakes to begin with.
 
VictorKilo
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 12:07 am

n9801f wrote:
FSDan wrote:
I'm saying that it's silly to claim that ongoing optimization of routes between carriers is proof of a failed JV.


Not sure you understand "optimization" very well. It's not a buzzword or a cool PowerPoint word. It's a formal university science.

By its very definition, "ongoing optimization" implies something is not working as well as it could. Because in optimization, you continuously delete a "worse" thing and replace it with a "better" thing until there are no more possibilities to improve.

So if changes are necessary, then something was wrong to begin with. And if you see heavy churn, there were a lot of mistakes to begin with.


Ongoing optimization happens because we do not live in a static world. If demand grows in one city and shrinks in another and the JV swaps a VS plane and a smaller DL plane between the cities, it's doesn't mean the JV is broken - if anything it is more profitable because it is optimizing to a changed environment. If the DL JV at LHR sees more churn than CDG or AMS it is because LHR is a point to point route only rather than one that also has hub connecting traffic.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 12:12 am

This statement about optimization is ludicrous. Tell me about any airline that had never made any changes anywhere due to external market conditions, competition, or macro economic conditions?

Not to mention whatever happened in the past is irrelevant as the global aviation industry is currently in the midst of the biggest, most disruptive, black swan event ever and is going to look very different over the next decade than it did before.
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 12:30 am

n9801f wrote:
FSDan wrote:
I'm saying that it's silly to claim that ongoing optimization of routes between carriers is proof of a failed JV.


Not sure you understand "optimization" very well. It's not a buzzword or a cool PowerPoint word. It's a formal university science.


Indeed, I learned about the formal university science of optimization at university as I earned a degree in industrial engineering. :bigthumbsup:

n9801f wrote:
By its very definition, "ongoing optimization" implies something is not working as well as it could. Because in optimization, you continuously delete a "worse" thing and replace it with a "better" thing until there are no more possibilities to improve.

So if changes are necessary, then something was wrong to begin with. And if you see heavy churn, there were a lot of mistakes to begin with.


"No more possibilities to improve" simply doesn't apply in the world of commercial aviation. Demand is always ebbing and flowing, competitive forces are ever-changing, facility constraints come and go, fleets are under near-constant renewal/replacement... need I go on?
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evank516
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 12:47 am

wnflyguy wrote:
With JetBlue pulling out of LGB on October 6 Will Delta apply for more Slots? As of now Delta Is only planning on 5 daily flights of it 12 total slots to SLC this winter.

Flyguy


I saw a link in the thread about jetBlue's shift to LAX saying that their slots were just offered to DL, HA, and WN.
 
n9801f
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 12:59 am

FSDan wrote:
"No more possibilities to improve" simply doesn't apply in the world of commercial aviation. Demand is always ebbing and flowing, competitive forces are ever-changing, facility constraints come and go, fleets are under near-constant renewal/replacement... need I go on?


Many of these changes are cyclical. It's easy to anticipate seasons, deliveries, etc., effective airline managers anticipate them in optimization scenarios.

The point remains that chronic, herky-jerky schedule changes are a sign of non-optimality, either in the schedule itself or weak management methods.

You don't typically see AA in JFK-LHR one month and out the next, nor UA on SFO-TYO. nor DL on JFK-LAX. That's because these operations are successful.

The things that get churned around are usually the weaker things, as you know from your background in optimization.
 
Sightseer
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 2:55 am

n9801f wrote:
FSDan wrote:
"No more possibilities to improve" simply doesn't apply in the world of commercial aviation. Demand is always ebbing and flowing, competitive forces are ever-changing, facility constraints come and go, fleets are under near-constant renewal/replacement... need I go on?


Many of these changes are cyclical. It's easy to anticipate seasons, deliveries, etc., effective airline managers anticipate them in optimization scenarios.

The point remains that chronic, herky-jerky schedule changes are a sign of non-optimality, either in the schedule itself or weak management methods.

You don't typically see AA in JFK-LHR one month and out the next, nor UA on SFO-TYO. nor DL on JFK-LAX. That's because these operations are successful.

The things that get churned around are usually the weaker things, as you know from your background in optimization.

How many individual DL JV routes can you point to as having excessive "churn", meaning that they are constantly getting tweaked from one year to the next? Obviously on a network-wide level we saw a lot of that with DL/VS, but I'd say that, by and large, that was a result of the transformative effect that the VS partnership had on DL's network. People have pointed to ATL/BOS-MAN upthread, and I suppose ATL isn't an unreasonable example, but BOS-MAN was a brand new route for the JV, so it makes sense that we'd see some tweaks made there.
 
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millionsofmiles
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 3:37 am

jagraham wrote:
But what DL is known for is killing all delusions of grandeur and focusing those they invest in on the things that can make both DL and the JV partner money.


How’d THAT work out for Delta?
 
n7371f
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 3:53 am

This just sucks.

Unfortunately it's just the beginning. There are going to be numerous stations above and below that go from DAL to 3rd party. Think cities like BOI and TUS.

Dalmd88 wrote:
DL announced the closing of three line mtc stations this week. All are relatively small with less than 20 AMT each, BDL, CHS, and SAV. No firm date announced, just by the end of the year.

They made the announcement before the retirement/early departure window closes which was a nice move. BDL is the more senior of the three and I suspect many are close to retirement window and would now elect to take the package over a move through the realignment bid that will be coming.

The memo said to expect many more small line stations to see numbers cut to become single shift operations. I personally was expecting more to be completely than just three.
 
FSDan
Posts: 3321
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 4:53 am

n9801f wrote:
FSDan wrote:
"No more possibilities to improve" simply doesn't apply in the world of commercial aviation. Demand is always ebbing and flowing, competitive forces are ever-changing, facility constraints come and go, fleets are under near-constant renewal/replacement... need I go on?


Many of these changes are cyclical. It's easy to anticipate seasons, deliveries, etc., effective airline managers anticipate them in optimization scenarios.


Exactly! DL's and VS's network planners are anticipating demand, accounting for fleet replacement and refurbishment, and adjusting accordingly. One result is the occasional hand-off of a frequency from one airline to the other.

If you want real examples of chronic "herky-jerky" network planning, look to F9, not DL-VS.
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klm617
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 10:21 am

Sightseer wrote:
n9801f wrote:
FSDan wrote:
"No more possibilities to improve" simply doesn't apply in the world of commercial aviation. Demand is always ebbing and flowing, competitive forces are ever-changing, facility constraints come and go, fleets are under near-constant renewal/replacement... need I go on?


Many of these changes are cyclical. It's easy to anticipate seasons, deliveries, etc., effective airline managers anticipate them in optimization scenarios.

The point remains that chronic, herky-jerky schedule changes are a sign of non-optimality, either in the schedule itself or weak management methods.

You don't typically see AA in JFK-LHR one month and out the next, nor UA on SFO-TYO. nor DL on JFK-LAX. That's because these operations are successful.

The things that get churned around are usually the weaker things, as you know from your background in optimization.

How many individual DL JV routes can you point to as having excessive "churn", meaning that they are constantly getting tweaked from one year to the next? Obviously on a network-wide level we saw a lot of that with DL/VS, but I'd say that, by and large, that was a result of the transformative effect that the VS partnership had on DL's network. People have pointed to ATL/BOS-MAN upthread, and I suppose ATL isn't an unreasonable example, but BOS-MAN was a brand new route for the JV, so it makes sense that we'd see some tweaks made there.



DTW-LHR is another. replacing VS with DL then going from 14 weekly to 7 weekly then going from 7 weekly to 10 weekly back to 7 weekly to 14 weekly.
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jetlanta
Posts: 1664
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 4:30 pm

PSU.DTW.SCE wrote:
This statement about optimization is ludicrous. Tell me about any airline that had never made any changes anywhere due to external market conditions, competition, or macro economic conditions?

Not to mention whatever happened in the past is irrelevant as the global aviation industry is currently in the midst of the biggest, most disruptive, black swan event ever and is going to look very different over the next decade than it did before.


I've taken a long break from here, knowing what is shitshow it would be in this environment. It is as I expected.

You said it correctly, as usual. People have not idea how transformational this COVID disaster and recession are going to be to this industry. It didn't have to be this way.
 
jagraham
Posts: 1104
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Re: Delta plans to emerge a "smaller" carrier

Sat Jul 11, 2020 5:12 pm

millionsofmiles wrote:
jagraham wrote:
But what DL is known for is killing all delusions of grandeur and focusing those they invest in on the things that can make both DL and the JV partner money.


How’d THAT work out for Delta?


London to NY is the largest and most profitable city pair by any measure except raw flights (some Asian commuter pairs have more flights, but much shorter route and smaller planes). DL was a non factor in this very significant market. But DL + VS have 8 departures each way now versus 12 for BA+AA. And DL still flies between LHR and 8 other cities while VS flies between LHR and 11 other cities (note - they both fly from LHR to BOS and ATL; also, one of VS other flights from LHR is to EWR). viewtopic.php?f=3&t=1426927#p21510531

BA grosses over $1 billion on this route alone https://www.cnbc.com/2019/08/18/british ... outes.html But Forbes noted that 2019 revenue was down 10% on this route for BA, no doubt due to increased competition.

DL was a non factor in the biggest revenue and profit city pair in the world. They found a way to compete via VS. And as long as VS doesn't collapse, DL/VS will continue to be competitive on this route.

That's what DL got out of their VS investment.

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