Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
FlyingElvii
Posts: 948
Joined: Wed Dec 27, 2017 10:53 pm

Re: Delta plans to emerge a "smaller" carrier

Sat Aug 01, 2020 11:43 pm

tphuang wrote:
I think people are focusing on the wrong area when they are looking at SEA. DL is clearly very committed there. At the demand is high enough that they can keep adding things back. There are quite a few airports where they only operated from SEA when they pulled things down in April.

People should keep an eye on LGA. Business travel is way down in short haul market out of NYC. All the LCCs are chomping at the bid to get more slots there to operate to leisure spots. I'm not sure how long the slot waivers can last. If they lift the slot waivers in end of October or even early next year, DL is going to have to fly a lot of empty planes around for quite a few months if they want to keep those slots. That to me is a bigger investment than anything they have to commit in SEA. AA's solution to LGA demand is by transferring those slots to JetBlue. I don't know what UA is going to do. But DL definitely has the largest portfolio of slots to keep around. And of course, there is also JFK But I don't think there is as much urgency there as long as they can use their prime time slots.

“ Hello Skywest!
This is mother Delta. Can you have 15 CRJ’s in LGA by the end of next week?”

“ You can? GREAT! We’ll discuss compensation at Monday’s conference call. Thanks for the help, Marketing will get in touch with you.”
 
User avatar
klm617
Posts: 5114
Joined: Sat Jul 04, 2015 8:57 pm

Re: Delta plans to emerge a "smaller" carrier

Sat Aug 01, 2020 11:45 pm

nwadeicer wrote:
alasizon wrote:
klm617 wrote:

Exactly why not just add hours. In these hard times who's going to refuse extra shifts. It would be hard for me to believe that airlines are not overstaffed at the moment. With the cares package going until the end of September there shouldn't be any issue with keeping the airports staffed.


A lot of people were refusing extra hours right now, not everybody wants to work extra. Likewise speaking personally, it has been a pain in the neck getting people back to work because they were making more on unemployment.


We were explicitly told by our manager that there will be no OT.


But when you are short staffed what other option do you have. Delay flight I don't think that mindset is going to fly anymore with so much extra capacity out the the customer has choice now and if he repeatedly finds himself sitting on a plane missing connections because the operation is understaffed loyalty is going to mean nothing.
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...
 
tphuang
Posts: 5353
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Sun Aug 02, 2020 12:33 am

FSDan wrote:
There's sometimes an assumption that travelers will always choose the airline that has the biggest network out of their home airport, when that's far from the only factor. Reliability, service quality, hard product, etc. all matter in addition to network breadth and price. Even since the pandemic/recession started, I've paid extra and traveled out of my way to fly DL due to their cleaning and social distancing policies.


I will preface by saying that I actually think DL is profitable in SEA for 3 quarters of the year.

In terms of point of sale, there is really no comparison between the 2 in SEA. You are severely underestimating how strong AS's hub at SEA is. Just put things into perspective. IIRC from Q3 of last year, AS offered something like 3 times the capacity over DL on SEA-PDX. You'd think AS would depend a lot on connection to fill those seats. But it actually had lower connection % on that route than DL did. In fact, this is a trend that I remember seeing quite frequently on the routes that I looked at out of SEA. I would be very surprised if AS has higher connection % overall than DL does out of SEA. It's not easy to have sell more seats, with less connection for similar or higher fares and have no presence on the other end.

AS at SEA has probably the most pricing power out of any non-legacy hubs (so more than any WN/B6 focus cities). It gets similar or better yield (when adjusted for connection) than AA on SEA-PHX and SEA-ORD. Pretty impressive when you consider how large AA is in those markets. So AS at SEA is quite the powerhouse in margins. It has been able to run WN off so many routes out of SEA. It has been able to reduce NK to basically just token presence to LAS.

AS supporters on this forum think that I'm an AS hater. So, I have no reason to glowingly praise their SEA hub unless I'm really impressed by it.

FlyingElvii wrote:
“ Hello Skywest!
This is mother Delta. Can you have 15 CRJ’s in LGA by the end of next week?”

“ You can? GREAT! We’ll discuss compensation at Monday’s conference call. Thanks for the help, Marketing will get in touch with you.”


hmm, scope clause? What is DTW/MSP/SLC going to fly if LGA is doing 200 RJ flights a day while mainline flying reduces by 30%?

I'm sure DL is willing to continue invest in NYC. Flying 240 flights out of LGA from Q2 to Q4 when LGA business demand is stuck at 10% to 40% of pre-COVID levels means they probably won't get to cash neutral until Q4.
 
FSDan
Posts: 3340
Joined: Mon Jan 03, 2011 5:27 pm

Re: Delta plans to emerge a "smaller" carrier

Sun Aug 02, 2020 12:53 am

tphuang wrote:
I will preface by saying that I actually think DL is profitable in SEA for 3 quarters of the year.

In terms of point of sale, there is really no comparison between the 2 in SEA. You are severely underestimating how strong AS's hub at SEA is. Just put things into perspective. IIRC from Q3 of last year, AS offered something like 3 times the capacity over DL on SEA-PDX. You'd think AS would depend a lot on connection to fill those seats. But it actually had lower connection % on that route than DL did. In fact, this is a trend that I remember seeing quite frequently on the routes that I looked at out of SEA. I would be very surprised if AS has higher connection % overall than DL does out of SEA. It's not easy to have sell more seats, with less connection for similar or higher fares and have no presence on the other end.

AS at SEA has probably the most pricing power out of any non-legacy hubs (so more than any WN/B6 focus cities). It gets similar or better yield (when adjusted for connection) than AA on SEA-PHX and SEA-ORD. Pretty impressive when you consider how large AA is in those markets. So AS at SEA is quite the powerhouse in margins. It has been able to run WN off so many routes out of SEA. It has been able to reduce NK to basically just token presence to LAS.

AS supporters on this forum think that I'm an AS hater. So, I have no reason to glowingly praise their SEA hub unless I'm really impressed by it.


Agreed, SEA is a great hub for AS! I expect it to remain so. I still don't think that means there's no room for success for DL in the long run.

As a side note, I'm actually not surprised about AS getting better yields than AA on SEA-PHX and SEA-ORD. They're typically bigger than AA in both markets (AA was down to offering 3-4x daily on SEA-PHX even before the pandemic vs AS's 6x or 7x). I don't know that that means PHX-SEA and ORD-SEA are markets where AA was losing money though. How do the yields compare between AS and DL on SEA-SLC/MSP/DTW/ATL?
This is my signature until I think of a better one.
 
tphuang
Posts: 5353
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Sun Aug 02, 2020 1:13 am

FSDan wrote:
tphuang wrote:
I will preface by saying that I actually think DL is profitable in SEA for 3 quarters of the year.

In terms of point of sale, there is really no comparison between the 2 in SEA. You are severely underestimating how strong AS's hub at SEA is. Just put things into perspective. IIRC from Q3 of last year, AS offered something like 3 times the capacity over DL on SEA-PDX. You'd think AS would depend a lot on connection to fill those seats. But it actually had lower connection % on that route than DL did. In fact, this is a trend that I remember seeing quite frequently on the routes that I looked at out of SEA. I would be very surprised if AS has higher connection % overall than DL does out of SEA. It's not easy to have sell more seats, with less connection for similar or higher fares and have no presence on the other end.

AS at SEA has probably the most pricing power out of any non-legacy hubs (so more than any WN/B6 focus cities). It gets similar or better yield (when adjusted for connection) than AA on SEA-PHX and SEA-ORD. Pretty impressive when you consider how large AA is in those markets. So AS at SEA is quite the powerhouse in margins. It has been able to run WN off so many routes out of SEA. It has been able to reduce NK to basically just token presence to LAS.

AS supporters on this forum think that I'm an AS hater. So, I have no reason to glowingly praise their SEA hub unless I'm really impressed by it.


Agreed, SEA is a great hub for AS! I expect it to remain so. I still don't think that means there's no room for success for DL in the long run.

As a side note, I'm actually not surprised about AS getting better yields than AA on SEA-PHX and SEA-ORD. They're typically bigger than AA in both markets (AA was down to offering 3-4x daily on SEA-PHX even before the pandemic vs AS's 6x or 7x). I don't know that that means PHX-SEA and ORD-SEA are markets where AA was losing money though. How do the yields compare between AS and DL on SEA-SLC/MSP/DTW/ATL?


Iirc, aa was a little higher than as to ord but less to phx. I remembered at the time to really be surprised by the sea PHX numbers. Probably why aa kept cutting back on that route.

For the dl core hubs when adjusted for connection using domestic connection fares and my own very flawed calculation for breaking that down, I remember ATL dtw msp to be 10 to 20% higher for delta but delta was also using higher capacity aircraft. So if you account for the fully paid for 757s that delta was running there a lot of times, they probably had quite a bit of margin advantage. The other route delta definitely ran higher margin on was jfk. Slc was closer in yield (delta was better but not to the same degree) and there wasn't a disparity on aircraft sizes.
 
User avatar
LAX772LR
Posts: 13278
Joined: Sun Nov 09, 2014 11:06 pm

Re: Delta plans to emerge a "smaller" carrier

Sun Aug 02, 2020 7:50 am

tphuang wrote:
AS at SEA has probably the most pricing power out of any non-legacy hubs (so more than any WN/B6 focus cities).

....though you seem to be forgetting that [email protected] is a legacy hub, as AS is one of the 4 remaining mainline Legacy carriers, by definition. ;)
I myself, suspect a more prosaic motive... ~Thranduil
 
User avatar
DL747400
Posts: 967
Joined: Mon Sep 01, 2008 4:04 pm

Re: Delta plans to emerge a "smaller" carrier

Sun Aug 02, 2020 3:10 pm

adtall wrote:
I agree, it's an easier pill to swallow having an extra day off vs working the same 40 hrs but now with a pay cut. The other part is by reducing everyone to 30 hrs you create more 30 hr work, example 3 40 hr workers is equivalent to 4 30 hr workers, which helps with furloughs while payroll stays the same.


Payroll may remain the same in that case, but if these 4 30-hour workers are all eligible for DL benefits (primarily healthcare), doesn't that mean benefit expense increases?
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
MrPeanut
Posts: 175
Joined: Fri Nov 23, 2018 8:36 pm

Re: Delta plans to emerge a "smaller" carrier

Sun Aug 02, 2020 11:19 pm

tphuang wrote:
AS at SEA has probably the most pricing power out of any non-legacy hubs (so more than any WN/B6 focus cities). It gets similar or better yield (when adjusted for connection) than AA on SEA-PHX and SEA-ORD. Pretty impressive when you consider how large AA is in those markets. So AS at SEA is quite the powerhouse in margins. It has been able to run WN off so many routes out of SEA. It has been able to reduce NK to basically just token presence to LAS.

AS supporters on this forum think that I'm an AS hater. So, I have no reason to glowingly praise their SEA hub unless I'm really impressed by it.


I guess it depends on how you define it, but in 2012 before DL started to scale up, the average fare out of SEA ranked 43rd highest out of the top 100 airports. In 2019, it dropped to 69th. SEA had the 13th largest decline in average airfare out of the top 100 airports during this time period. Therefore, I don't think Alaska was able maintain much pricing power here. The entrance of DL definitely had a declining impact on average airfares in SEA.

Meanwhile JFK went from 34th to 18th and had the 24th largest increase in average airfare over this time period. I would think B6 at JFK may be the winner.
 
flyboy80
Posts: 2070
Joined: Fri Jul 13, 2001 8:10 am

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 12:17 pm

I'm most anxious to see what Delta's actual hub network looks like, near term, mid to end of 2021. There's only speculation at this point, but can Atlanta be as efficient with so many less frequencies in the system? The old consensus seemed to be "flowing" traffic over Atlanta was great because it raised its efficiency. At the end of the day, I think it was simply geographic excellence and Delta's market presence and dominance in the regions surrounding. The same can be said for MSP and DTW, the next two largest connecting hubs- their roles may have to switch too. Another consensus I hear from commentators: "everything looks the same, just smaller" and I'm not sure I can believe that. I'm not saying they need to close any hubs, but I wonder how the network can't fundamentally change, even as the core4 (ATL, DTW, SLC, MSP) connecting hubs are concerned; perhaps it reverts to a more regional hub and spoke look like the early 2000s and pre merger (outstations having less overly) The other question is Delta's Trans Atlantic business: I have no idea how well they (or the JV) does on the non-hub markets to Europe. With so many folks relocating out of the large business centers into less urban major cities, It makes me wonder if there will actually be increased point to point demand for places such as RDU and IND to CDG- and even if there is, it certainly doesn't mean it will be enough from a revenue standpoint to operate it, I certainly understand that.
 
User avatar
lightsaber
Moderator
Posts: 20332
Joined: Wed Jan 19, 2005 10:55 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 12:35 pm

DL747400 wrote:
adtall wrote:
I agree, it's an easier pill to swallow having an extra day off vs working the same 40 hrs but now with a pay cut. The other part is by reducing everyone to 30 hrs you create more 30 hr work, example 3 40 hr workers is equivalent to 4 30 hr workers, which helps with furloughs while payroll stays the same.


Payroll may remain the same in that case, but if these 4 30-hour workers are all eligible for DL benefits (primarily healthcare), doesn't that mean benefit expense increases?

Yes, DL is taking an expense for the sake of maintaining employment. For many, that is a great trade.

In the upside, DL won't have trouble recruiting. The problem is if this lasts a very long time, Delta's costs will be out of line.

Lightsaber
Winter is coming.
 
User avatar
klm617
Posts: 5114
Joined: Sat Jul 04, 2015 8:57 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 1:44 pm

flyboy80 wrote:
I'm most anxious to see what Delta's actual hub network looks like, near term, mid to end of 2021. There's only speculation at this point, but can Atlanta be as efficient with so many less frequencies in the system? The old consensus seemed to be "flowing" traffic over Atlanta was great because it raised its efficiency. At the end of the day, I think it was simply geographic excellence and Delta's market presence and dominance in the regions surrounding. The same can be said for MSP and DTW, the next two largest connecting hubs- their roles may have to switch too. Another consensus I hear from commentators: "everything looks the same, just smaller" and I'm not sure I can believe that. I'm not saying they need to close any hubs, but I wonder how the network can't fundamentally change, even as the core4 (ATL, DTW, SLC, MSP) connecting hubs are concerned; perhaps it reverts to a more regional hub and spoke look like the early 2000s and pre merger (outstations having less overly) The other question is Delta's Trans Atlantic business: I have no idea how well they (or the JV) does on the non-hub markets to Europe. With so many folks relocating out of the large business centers into less urban major cities, It makes me wonder if there will actually be increased point to point demand for places such as RDU and IND to CDG- and even if there is, it certainly doesn't mean it will be enough from a revenue standpoint to operate it, I certainly understand that.


I too am excited to see how this all plays out hub wise and what all the roles will be going forward.
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...
 
User avatar
klm617
Posts: 5114
Joined: Sat Jul 04, 2015 8:57 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 5:17 pm

lightsaber wrote:
DL747400 wrote:
adtall wrote:
I agree, it's an easier pill to swallow having an extra day off vs working the same 40 hrs but now with a pay cut. The other part is by reducing everyone to 30 hrs you create more 30 hr work, example 3 40 hr workers is equivalent to 4 30 hr workers, which helps with furloughs while payroll stays the same.


Payroll may remain the same in that case, but if these 4 30-hour workers are all eligible for DL benefits (primarily healthcare), doesn't that mean benefit expense increases?

Yes, DL is taking an expense for the sake of maintaining employment. For many, that is a great trade.

In the upside, DL won't have trouble recruiting. The problem is if this lasts a very long time, Delta's costs will be out of line.

Lightsaber


The real question is what path they are going to chose. Delta is very conservative when it comes to cash flow and I'm sure it's accountants are crunching the numbers. Another thing to consider is retaining more low wage employees and cutting everyone's hours is going to save them money as well when it comes to the high rate of pay and high rate of seniority employees.
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...
 
jagraham
Posts: 1132
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 7:01 pm

klm617 wrote:
I really don't think profit and loss is the real issue for Delta in Seattle it's a strategic hub that Delta needs to maintain in the west to stay competitive to Asia in that region. You guys are over thinking this Delta situation in Seattle way to much. Delta is in Seattle for the long haul minus SEA-KIX that one is going away.


YES to overthinking. Likewise, the Port Authority has to recognize that many of the overseas flights can't be operated because of travel bans . . DL will hold on to its slot portfolio at JFK. LAX, DL is glad to cut back and accelerate the T2 & T3 rebuild. LA is not slot limited, it's gate limited . . so unless LAWA insists DL use those gates to the contracted levels - and there are travel bans across the Pacific too - DL will hold its stake in LA. LGA is a question mark.
 
Flflyer83
Posts: 88
Joined: Tue Apr 14, 2020 4:40 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 9:48 pm

alasizon wrote:
Flflyer83 wrote:
alasizon wrote:
A lot of people were refusing extra hours right now, not everybody wants to work extra. Likewise speaking personally, it has been a pain in the neck getting people back to work because they were making more on unemployment.


Then DL or whomever they’re employed by should deny the UE claim.


It isn't a matter of denying the claim (although most of the airlines agreed to not contest any of them). It is that when they are recalled they don't show up and then you have to go back through the recall process again with another employee - it just rolls the target down the calendar.

Recall should be easier now since the extra $600/week is gone (for now at least).


Once someone is recalled, if they don’t return, they are then going to be unemployed on their own volition and are not entitled to UE benefits. If you pass up your recall, you’ve lost your chance to return. If that’s not how delta is doing it, that’s their own blunder.
 
User avatar
klm617
Posts: 5114
Joined: Sat Jul 04, 2015 8:57 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 10:54 pm

Flflyer83 wrote:
alasizon wrote:
Flflyer83 wrote:

Then DL or whomever they’re employed by should deny the UE claim.


It isn't a matter of denying the claim (although most of the airlines agreed to not contest any of them). It is that when they are recalled they don't show up and then you have to go back through the recall process again with another employee - it just rolls the target down the calendar.

Recall should be easier now since the extra $600/week is gone (for now at least).


Once someone is recalled, if they don’t return, they are then going to be unemployed on their own volition and are not entitled to UE benefits. If you pass up your recall, you’ve lost your chance to return. If that’s not how delta is doing it, that’s their own blunder.



And that's exactly how it should work. It isn't nor should it be the employee's decision if they want to be unemployed or not if they are called back to work.
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...
 
FSDan
Posts: 3340
Joined: Mon Jan 03, 2011 5:27 pm

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 11:27 pm

jagraham wrote:
LGA is a question mark.


Given the massive amount of money they are sinking into the new terminal construction, coupled with the fact that they hold almost 50% of the slots, and that NYC business travel is likely to resume (even if less than before) at some point over the coming year or so, I have to think that DL will do whatever they need to in order to protect their investment. The optimal scenario for them is obviously that the slot waiver stays in effect until travel starts meaningfully picking back up. If that doesn't happen and they're forced to utilize 80% of their slots (which would be ~220, I believe), perhaps they'll double their frequencies to leisure markets and fly the lowest CASM aircraft they can find. Rather than ceding more slots to NK, F9, etc. that could hurt their yields long term, they might prefer to fly more capacity to leisure markets themselves, even at fares that don't fully cover their costs.

Or maybe they'd just try to bog down the expiration of the slot waiver with legal action or something like that...
This is my signature until I think of a better one.
 
evank516
Posts: 2153
Joined: Wed Mar 01, 2017 12:15 am

Re: Delta plans to emerge a "smaller" carrier

Mon Aug 03, 2020 11:43 pm

FSDan wrote:
jagraham wrote:
LGA is a question mark.


Given the massive amount of money they are sinking into the new terminal construction, coupled with the fact that they hold almost 50% of the slots, and that NYC business travel is likely to resume (even if less than before) at some point over the coming year or so, I have to think that DL will do whatever they need to in order to protect their investment. The optimal scenario for them is obviously that the slot waiver stays in effect until travel starts meaningfully picking back up. If that doesn't happen and they're forced to utilize 80% of their slots (which would be ~220, I believe), perhaps they'll double their frequencies to leisure markets and fly the lowest CASM aircraft they can find. Rather than ceding more slots to NK, F9, etc. that could hurt their yields long term, they might prefer to fly more capacity to leisure markets themselves, even at fares that don't fully cover their costs.

Or maybe they'd just try to bog down the expiration of the slot waiver with legal action or something like that...


That's also assuming New York relaxes its travel advisory as well. Right now you have to quarantine when returning to New York from basically every single leisure destination in the Continental US and Alaska with the exception of the Northeast itself and whatever we classify West Virginia as part of.
 
FSDan
Posts: 3340
Joined: Mon Jan 03, 2011 5:27 pm

Re: Delta plans to emerge a "smaller" carrier

Tue Aug 04, 2020 12:00 am

evank516 wrote:
FSDan wrote:
jagraham wrote:
LGA is a question mark.


Given the massive amount of money they are sinking into the new terminal construction, coupled with the fact that they hold almost 50% of the slots, and that NYC business travel is likely to resume (even if less than before) at some point over the coming year or so, I have to think that DL will do whatever they need to in order to protect their investment. The optimal scenario for them is obviously that the slot waiver stays in effect until travel starts meaningfully picking back up. If that doesn't happen and they're forced to utilize 80% of their slots (which would be ~220, I believe), perhaps they'll double their frequencies to leisure markets and fly the lowest CASM aircraft they can find. Rather than ceding more slots to NK, F9, etc. that could hurt their yields long term, they might prefer to fly more capacity to leisure markets themselves, even at fares that don't fully cover their costs.

Or maybe they'd just try to bog down the expiration of the slot waiver with legal action or something like that...


That's also assuming New York relaxes its travel advisory as well. Right now you have to quarantine when returning to New York from basically every single leisure destination in the Continental US and Alaska with the exception of the Northeast itself and whatever we classify West Virginia as part of.


Well, I can't see the slot waiver ending before the quarantine restrictions are gone... It would be lunacy to expect airlines to operate full schedules in that environment.
This is my signature until I think of a better one.
 
MIflyer12
Posts: 8303
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta plans to emerge a "smaller" carrier

Tue Aug 04, 2020 12:31 am

FSDan wrote:
I have to think that DL will do whatever they need to in order to protect their investment. The optimal scenario for them is obviously that the slot waiver stays in effect until travel starts meaningfully picking back up. If that doesn't happen and they're forced to utilize 80% of their slots (which would be ~220, I believe), perhaps they'll double their frequencies to leisure markets and fly the lowest CASM aircraft they can find.


I'm not sure they'd go for lowest CASM - that just dumps too much capacity in already-depressed markets. It seems more probable they'd go for lowest trip cost aircraft tempered by whatever aircraft has the size and amenities (not CR2s!) to keep avg fares up. They could be heavy E75/A220/717/319/738.

But, yes, IMHO, they will do whatever is needed to keep the entire LGA slot portfolio. And if that means going to court, too, then absolutely.
 
jagraham
Posts: 1132
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta plans to emerge a "smaller" carrier

Tue Aug 04, 2020 11:57 am

FSDan wrote:
jagraham wrote:
LGA is a question mark.


Given the massive amount of money they are sinking into the new terminal construction, coupled with the fact that they hold almost 50% of the slots, and that NYC business travel is likely to resume (even if less than before) at some point over the coming year or so, I have to think that DL will do whatever they need to in order to protect their investment. The optimal scenario for them is obviously that the slot waiver stays in effect until travel starts meaningfully picking back up. If that doesn't happen and they're forced to utilize 80% of their slots (which would be ~220, I believe), perhaps they'll double their frequencies to leisure markets and fly the lowest CASM aircraft they can find. Rather than ceding more slots to NK, F9, etc. that could hurt their yields long term, they might prefer to fly more capacity to leisure markets themselves, even at fares that don't fully cover their costs.

Or maybe they'd just try to bog down the expiration of the slot waiver with legal action or something like that...


What I mean by a question mark is that since LGA is a domestic only airport, the Port Authority could end the waivers and DL would be forced to use or lose their slots. I too believe DL is committed to NYC and they can't operate a full domestic hub out of JFK, not to mention the preferences of the NYC business community. So I too believe DL will fly the minimum needed to maintain their slot portfolio. DL will fill LGA up with RJs and 717s (the A220s they have are needed elsewhere) to defend their stake at LGA.
 
tphuang
Posts: 5353
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Tue Aug 04, 2020 12:55 pm

Keep in mind DL closed their 717 NYC base.

I don't see why JFK slot waivers would allowed to continue if LGA/DCA slot waivers end. If anything, JFK with reduced traffic could very well lose its slot constraints.

Here are things to reconcile when thinking about DL's strategy for next year:
- Need to achieve cash neutral for most of the year. Which would require building back its core hubs quickly.
- Need to be at least 25% smaller
- Need to bring back SEA quickly with as many seats as possible to not lose gates to AS (presumably a lot of A220s)
- Need to fly at least the minimum to not lose LGA slots when business demand in Northeast is likely to be very low all year

There are some tough decisions need to be made.
 
Dalmd88
Posts: 3150
Joined: Fri Jul 28, 2000 3:19 am

Re: Delta plans to emerge a "smaller" carrier

Tue Aug 04, 2020 1:15 pm

klm617 wrote:
Flflyer83 wrote:
alasizon wrote:

It isn't a matter of denying the claim (although most of the airlines agreed to not contest any of them). It is that when they are recalled they don't show up and then you have to go back through the recall process again with another employee - it just rolls the target down the calendar.

Recall should be easier now since the extra $600/week is gone (for now at least).


Once someone is recalled, if they don’t return, they are then going to be unemployed on their own volition and are not entitled to UE benefits. If you pass up your recall, you’ve lost your chance to return. If that’s not how delta is doing it, that’s their own blunder.



And that's exactly how it should work. It isn't nor should it be the employee's decision if they want to be unemployed or not if they are called back to work.
These employees are not furloughed. The agreed to take a Leave of Absence from the company for an agreed length of time. It was the employees decision. Most were 1 month, 3 months, or 6 months. Delta is approaching these employees and saying do you want to come back earlier? Some are saying no. By the terms of the LOA they have that right. This is not the traditional recall rights situation. Now if the LOA time period ends and they don't come back, then the job s gone. I know some have tried to extend the length of their LOA and were denied so they came back.
 
jagraham
Posts: 1132
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta plans to emerge a "smaller" carrier

Tue Aug 04, 2020 9:33 pm

tphuang wrote:
Keep in mind DL closed their 717 NYC base.

I don't see why JFK slot waivers would allowed to continue if LGA/DCA slot waivers end. If anything, JFK with reduced traffic could very well lose its slot constraints.

Here are things to reconcile when thinking about DL's strategy for next year:
- Need to achieve cash neutral for most of the year. Which would require building back its core hubs quickly.
- Need to be at least 25% smaller
- Need to bring back SEA quickly with as many seats as possible to not lose gates to AS (presumably a lot of A220s)
- Need to fly at least the minimum to not lose LGA slots when business demand in Northeast is likely to be very low all year

There are some tough decisions need to be made.


i know DL closed their 717 NYC base. What we are saying is that if slot wavers at LGA end, DL needs to use their lowest trip cost aircraft. That means 75 seat RJs, A220s, and 717s. At this point (according to another site) DL has 29 of 31 A220s flying. So 717s are it unless they still have waivers; then pilot currency will be a major factor and some of all types will be flying.

JFK is a significant international airport with about 30 of 130 departures being international. Less than 10 of those international departures are operating. Some of the 100 domestic departures depend on the international flying. Not to mention what COVID has done to NYC flying.

I would guess that Port Authority will continue slot waivers for the duration of the crisis. If so, DL would have to do an AA and volunteer to give up slots. Why AA would do that is for another thread; I expect DL to hang on to their NYC slots. But the most likely scenario is waivers until mid 2021.
 
777Mech
Posts: 997
Joined: Sun Sep 11, 2016 10:54 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 5:48 am

Flflyer83 wrote:
alasizon wrote:
A lot of people were refusing extra hours right now, not everybody wants to work extra. Likewise speaking personally, it has been a pain in the neck getting people back to work because they were making more on unemployment.


Then DL or whomever they’re employed by should deny the UE claim.


Deny the UE claim? They're the ones filing the UE for the employees..
 
User avatar
lightsaber
Moderator
Posts: 20332
Joined: Wed Jan 19, 2005 10:55 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 1:21 pm

777Mech wrote:
Flflyer83 wrote:
alasizon wrote:
A lot of people were refusing extra hours right now, not everybody wants to work extra. Likewise speaking personally, it has been a pain in the neck getting people back to work because they were making more on unemployment.


Then DL or whomever they’re employed by should deny the UE claim.


Deny the UE claim? They're the ones filing the UE for the employees..

In the USA, employees file for unemployment, companies pay into a fund and may contest unemployment, but Delta broadcast they wouldn't.

Lightsaber
Winter is coming.
 
User avatar
NWAESC
Posts: 1604
Joined: Thu Aug 30, 2007 1:02 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 1:26 pm

lightsaber wrote:
777Mech wrote:
Flflyer83 wrote:

Then DL or whomever they’re employed by should deny the UE claim.


Deny the UE claim? They're the ones filing the UE for the employees..

In the USA, employees file for unemployment, companies pay into a fund and may contest unemployment, but Delta broadcast they wouldn't.

Lightsaber


Point of clarification: For Georgia-based employees, DL actually did file UI claims on behalf of anyone taking a leave.
"Nothing ever happens here, " I said. "I just wait."
 
PSU.DTW.SCE
Posts: 8168
Joined: Mon Jan 28, 2002 11:45 am

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 1:43 pm

jagraham wrote:
I would guess that Port Authority will continue slot waivers for the duration of the crisis. If so, DL would have to do an AA and volunteer to give up slots. Why AA would do that is for another thread; I expect DL to hang on to their NYC slots. But the most likely scenario is waivers until mid 2021.

I agree. I highly doubt any party is really going to be interested in having a debate about slot usage at LGA until Summer 2021 flying. The demand curve / recovery trajectory is way too murky and at the whims off too many external factors for anyone to try to make a push to do anything different at this point.

Airlines aren't even putting a final schedule out until 3-4 weeks out at this point.
I thought it was hilarious when WN made that big announcement in May about adding ATL flying in November.......
 
tphuang
Posts: 5353
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 2:05 pm

PSU.DTW.SCE wrote:
jagraham wrote:
I would guess that Port Authority will continue slot waivers for the duration of the crisis. If so, DL would have to do an AA and volunteer to give up slots. Why AA would do that is for another thread; I expect DL to hang on to their NYC slots. But the most likely scenario is waivers until mid 2021.

I agree. I highly doubt any party is really going to be interested in having a debate about slot usage at LGA until Summer 2021 flying. The demand curve / recovery trajectory is way too murky and at the whims off too many external factors for anyone to try to make a push to do anything different at this point.

Airlines aren't even putting a final schedule out until 3-4 weeks out at this point.
I thought it was hilarious when WN made that big announcement in May about adding ATL flying in November.......


LCCs, especially WN, will be very eager for LGA slots by March or April. Do I think WN can run a schedule of more than 35 flights a day out of LGA by then? Definitely. Do I think NK can run a schedule of more than 11 flight a day by then? definitely. WN would also be eager for more slots at DCA.

I don't see why WN would keep quiet when it is ready to run a schedule of 40 to 50 flights and other carriers are not using their slots? Maybe it won't be DL. Maybe it will be AA or UA or AC or WS losing theirs. But recovery won't be linear and some carriers will have the ability to add flights before others.
 
jagraham
Posts: 1132
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 4:03 pm

tphuang wrote:
PSU.DTW.SCE wrote:
jagraham wrote:
I would guess that Port Authority will continue slot waivers for the duration of the crisis. If so, DL would have to do an AA and volunteer to give up slots. Why AA would do that is for another thread; I expect DL to hang on to their NYC slots. But the most likely scenario is waivers until mid 2021.

I agree. I highly doubt any party is really going to be interested in having a debate about slot usage at LGA until Summer 2021 flying. The demand curve / recovery trajectory is way too murky and at the whims off too many external factors for anyone to try to make a push to do anything different at this point.

Airlines aren't even putting a final schedule out until 3-4 weeks out at this point.
I thought it was hilarious when WN made that big announcement in May about adding ATL flying in November.......


LCCs, especially WN, will be very eager for LGA slots by March or April. Do I think WN can run a schedule of more than 35 flights a day out of LGA by then? Definitely. Do I think NK can run a schedule of more than 11 flight a day by then? definitely. WN would also be eager for more slots at DCA.

I don't see why WN would keep quiet when it is ready to run a schedule of 40 to 50 flights and other carriers are not using their slots? Maybe it won't be DL. Maybe it will be AA or UA or AC or WS losing theirs. But recovery won't be linear and some carriers will have the ability to add flights before others.


The distinction here is between the LCCs and ULCCs willing to use more slots immediately, and legacy carriers who are willing to give up slots or are unwilling to use all their slots and have some slots taken away from them. Very few would argue that the LCCs and ULCCs would fly more out of LGA, JFK, and for that matter DCA, if they could. But will DL especially give up slots? The answer is NO for the forseeable future.
 
tphuang
Posts: 5353
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 4:08 pm

jagraham wrote:
tphuang wrote:
PSU.DTW.SCE wrote:
I agree. I highly doubt any party is really going to be interested in having a debate about slot usage at LGA until Summer 2021 flying. The demand curve / recovery trajectory is way too murky and at the whims off too many external factors for anyone to try to make a push to do anything different at this point.

Airlines aren't even putting a final schedule out until 3-4 weeks out at this point.
I thought it was hilarious when WN made that big announcement in May about adding ATL flying in November.......


LCCs, especially WN, will be very eager for LGA slots by March or April. Do I think WN can run a schedule of more than 35 flights a day out of LGA by then? Definitely. Do I think NK can run a schedule of more than 11 flight a day by then? definitely. WN would also be eager for more slots at DCA.

I don't see why WN would keep quiet when it is ready to run a schedule of 40 to 50 flights and other carriers are not using their slots? Maybe it won't be DL. Maybe it will be AA or UA or AC or WS losing theirs. But recovery won't be linear and some carriers will have the ability to add flights before others.


The distinction here is between the LCCs and ULCCs willing to use more slots immediately, and legacy carriers who are willing to give up slots or are unwilling to use all their slots and have some slots taken away from them. Very few would argue that the LCCs and ULCCs would fly more out of LGA, JFK, and for that matter DCA, if they could. But will DL especially give up slots? The answer is NO for the forseeable future.


I'm not saying they will give up slots, but they better be ready to fly the minimum schedule they need to fly for good chunk of next year when business demand is very low. And that will have an effect on their entire network planning as they seek to become cash neutral. I would be very surprised if WN does not end up with quite few LGA slots before all is said and done.
 
jagraham
Posts: 1132
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 4:43 pm

tphuang wrote:
jagraham wrote:
tphuang wrote:

LCCs, especially WN, will be very eager for LGA slots by March or April. Do I think WN can run a schedule of more than 35 flights a day out of LGA by then? Definitely. Do I think NK can run a schedule of more than 11 flight a day by then? definitely. WN would also be eager for more slots at DCA.

I don't see why WN would keep quiet when it is ready to run a schedule of 40 to 50 flights and other carriers are not using their slots? Maybe it won't be DL. Maybe it will be AA or UA or AC or WS losing theirs. But recovery won't be linear and some carriers will have the ability to add flights before others.


The distinction here is between the LCCs and ULCCs willing to use more slots immediately, and legacy carriers who are willing to give up slots or are unwilling to use all their slots and have some slots taken away from them. Very few would argue that the LCCs and ULCCs would fly more out of LGA, JFK, and for that matter DCA, if they could. But will DL especially give up slots? The answer is NO for the forseeable future.


I'm not saying they will give up slots, but they better be ready to fly the minimum schedule they need to fly for good chunk of next year when business demand is very low. And that will have an effect on their entire network planning as they seek to become cash neutral. I would be very surprised if WN does not end up with quite few LGA slots before all is said and done.


I believe that a coronavirus vaccine will become at least somewhat available in the first half of 2021. And for those businesses which need to travel will work to get their travelers vaccinated sooner than later. I also expect that waviers will remain until some significant portion of the traveling public is vaccinated. But if waivers do not remain, I expect DL to fill up the flying with RJs and 717s (of course routes that have more than minimal demand will be flown with larger planes). DL will do what is necessary to keep the slots they have.
 
jagraham
Posts: 1132
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 5:32 pm

DMPHL wrote:
jagraham wrote:
tphuang wrote:

I'm not saying they will give up slots, but they better be ready to fly the minimum schedule they need to fly for good chunk of next year when business demand is very low. And that will have an effect on their entire network planning as they seek to become cash neutral. I would be very surprised if WN does not end up with quite few LGA slots before all is said and done.


I believe that a coronavirus vaccine will become at least somewhat available in the first half of 2021. And for those businesses which need to travel will work to get their travelers vaccinated sooner than later. I also expect that waviers will remain until some significant portion of the traveling public is vaccinated. But if waivers do not remain, I expect DL to fill up the flying with RJs and 717s (of course routes that have more than minimal demand will be flown with larger planes). DL will do what is necessary to keep the slots they have.


Slightly off-topic, but I sincerely hope that decisions about vaccination timetables will be both strict and based on public health considerations (e.g. vaccinating healthcare workers, at-risk populations, essential workers like teachers/sanitation workers/postal workers/hospitality) and that businesses will not be able to lobby for their own employees to be vaccinated first. It's obviously a complicated set of considerations that take into account a lot of factors including effects on the broader economy, but we shouldn't have companies that jump the line because it will be more profitable to have a vaccinated workforce. I'm not saying that is what you are advocating, just that if the protocol and timetable operate most effectively in the interests of public health, it won't prioritize things like businesses who need to get their employees traveling again.


Understood. But with business, some things such as field service, are necessary. Even in warehouses, they are becoming more mechanized and the machines need to be up as much as possible. And what about the military? And defense contractors that are involved in direct support (contractor operated depot stations, contractor troubleshooting, etc)?

It is indeed a complicated set of considerations
 
User avatar
STT757
Posts: 14147
Joined: Tue Mar 28, 2000 1:14 am

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 6:34 pm

tphuang wrote:
jagraham wrote:
tphuang wrote:

LCCs, especially WN, will be very eager for LGA slots by March or April. Do I think WN can run a schedule of more than 35 flights a day out of LGA by then? Definitely. Do I think NK can run a schedule of more than 11 flight a day by then? definitely. WN would also be eager for more slots at DCA.

I don't see why WN would keep quiet when it is ready to run a schedule of 40 to 50 flights and other carriers are not using their slots? Maybe it won't be DL. Maybe it will be AA or UA or AC or WS losing theirs. But recovery won't be linear and some carriers will have the ability to add flights before others.


The distinction here is between the LCCs and ULCCs willing to use more slots immediately, and legacy carriers who are willing to give up slots or are unwilling to use all their slots and have some slots taken away from them. Very few would argue that the LCCs and ULCCs would fly more out of LGA, JFK, and for that matter DCA, if they could. But will DL especially give up slots? The answer is NO for the forseeable future.


I'm not saying they will give up slots, but they better be ready to fly the minimum schedule they need to fly for good chunk of next year when business demand is very low. And that will have an effect on their entire network planning as they seek to become cash neutral. I would be very surprised if WN does not end up with quite few LGA slots before all is said and done.


I think WN's plan when they left EWR was to put all their eggs into LGA, and to cry poverty every time slots become available. That plea for slots and their deep pockets might pay off big one day. It would be better for the Port Authority for WN to be pushing 737-800s full of travelers through their sparkling new facilities than AA or DL push folks through on a 70 seat CRJ-900.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
TropicalSky
Posts: 517
Joined: Fri May 05, 2017 1:37 pm

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 10:32 pm

It appears Payroll extension is on the way
https://www.reuters.com/article/us-heal ... SKCN2512QE
 
airtran737
Posts: 3483
Joined: Mon Apr 05, 2004 3:47 am

Re: Delta plans to emerge a "smaller" carrier

Wed Aug 05, 2020 10:47 pm

TropicalSky wrote:
It appears Payroll extension is on the way
https://www.reuters.com/article/us-heal ... SKCN2512QE


The question is, will the airlines take it? They don't need all of these employees and the CARES Act does not cover the entire salary cost. It sucks to say, but the airlines need 10/1 to get here so that they can purge the unnecessary workers until demand comes back.
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
Dalmd88
Posts: 3150
Joined: Fri Jul 28, 2000 3:19 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 12:20 am

airtran737 wrote:
TropicalSky wrote:
It appears Payroll extension is on the way
https://www.reuters.com/article/us-heal ... SKCN2512QE


The question is, will the airlines take it? They don't need all of these employees and the CARES Act does not cover the entire salary cost. It sucks to say, but the airlines need 10/1 to get here so that they can purge the unnecessary workers until demand comes back.

Airlines do not want to cut the workforce. When the demand comes back it would mean recalls and the inevitable new hires for those that don't come back. For skilled areas that is a large burden for just a few months (hopefully).

When Delta layed off AMT's back in 2004-2005, most did not come back. Many of those AMT's had just reached the point where they were fully trained in their positions. Years of experience gone.
 
FlyGuyNash
Posts: 49
Joined: Sat Jan 12, 2019 3:56 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 1:20 am

airtran737 wrote:
TropicalSky wrote:
It appears Payroll extension is on the way
https://www.reuters.com/article/us-heal ... SKCN2512QE


The question is, will the airlines take it? They don't need all of these employees and the CARES Act does not cover the entire salary cost. It sucks to say, but the airlines need 10/1 to get here so that they can purge the unnecessary workers until demand comes back.


Ed has already publicly stated if another round of grants come with a no furlough clause they will accept it.

I can't speak for other airlines but here at Delta we had about 25% of the non pilots take the early out retirement and about 18% of pilots sign up for the early out and we are currently waiting on the revocation period to end to learn final numbers. But the workforce is gonna be total 20% smaller so the amount of excess employees has really gone down and this will give Delta, and many airlines a chance to quickly build up if needed if a vaccine is proven to be effective by the end of this year or Q1 2021.
 
75driver
Posts: 129
Joined: Mon Jul 20, 2020 2:02 pm

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 2:45 am

Dalmd88 wrote:
Airlines do not want to cut the workforce. When the demand comes back it would mean recalls and the inevitable new hires for those that don't come back. For skilled areas that is a large burden for just a few months (hopefully).

When Delta layed off AMT's back in 2004-2005, most did not come back. Many of those AMT's had just reached the point where they were fully trained in their positions. Years of experience gone.


Huh? Airlines do not want to cut their workforce? Evidence to the contrary. They wouldn’t be offering massive early outs if they didn’t. I got the feeling the Kompany wanted more to accept the early outs. There was no indication in house they did not want to cut the workforce. Pretty laughable when you consider indicator after indicator, industry wide, showing long term projections are dim. Constriction is real and will be happening for some time, there is no “demand comes back” if you’re referencing pre-COVId levels. BTW...just how hurt was the Kompany when all those AMT’s vanished? Not at all from their profitability stand point. Had zero impact on the bottom line.

You had 1 in 5 pilots accept buyout, many with years left. 1 in 4 over other areas Kompany wide, many with years left. If there is no further government help the cuts don’t end here. It’s preposterous to suggest the Kompany doesn’t want to reduce the workforce. Virtually every airline in the world is doing that exactly.
 
User avatar
EA CO AS
Posts: 15747
Joined: Wed Nov 14, 2001 8:54 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 6:16 am

75driver wrote:
Huh? Airlines do not want to cut their workforce? Evidence to the contrary. They wouldn’t be offering massive early outs if they didn’t.


The early-outs, long term leaves, and other options are being offered because the CARES Act only covers about 70% of the current payroll costs, on average, and carriers would love to get to zero cash burn ASAP.
"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
 
Silver1SWA
Posts: 4705
Joined: Wed Mar 10, 2004 6:11 pm

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 7:37 am

airtran737 wrote:
TropicalSky wrote:
It appears Payroll extension is on the way
https://www.reuters.com/article/us-heal ... SKCN2512QE


The question is, will the airlines take it? They don't need all of these employees and the CARES Act does not cover the entire salary cost. It sucks to say, but the airlines need 10/1 to get here so that they can purge the unnecessary workers until demand comes back.


If one takes it, they’ll all take it. It’s hard to compete with someone getting that kind of help.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
75driver
Posts: 129
Joined: Mon Jul 20, 2020 2:02 pm

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 2:26 pm

EA CO AS wrote:
The early-outs, long term leaves, and other options are being offered because the CARES Act only covers about 70% of the current payroll costs, on average, and carriers would love to get to zero cash burn ASAP.


Well of course, that’s obviously a critical part of the equation. The other part is the airlines belief they won’t see pre-COVId traffic levels anytime soon. Virtually every airline in the world is making long term cuts with minimal regard to rehiring down the road. It doesn’t take a genius to see where this is heading. The good news is my FOB is extremely busy. I’m seeing lots of businesses moving mission critical employees via GA. I’ve been offered a tidy sum to ferry some assets around but unless I have a immediate return trip it’s not worth it. I have zero desire to sit in a remote location for several days.
 
Brickell305
Posts: 1055
Joined: Sat Jun 24, 2017 2:07 pm

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 4:53 pm

airtran737 wrote:
TropicalSky wrote:
It appears Payroll extension is on the way
https://www.reuters.com/article/us-heal ... SKCN2512QE


The question is, will the airlines take it? They don't need all of these employees and the CARES Act does not cover the entire salary cost. It sucks to say, but the airlines need 10/1 to get here so that they can purge the unnecessary workers until demand comes back.

Of course they want it. The amount they receive doesn't have to fully cover salary costs to be a benefit to the airline. Once the amount received covers more staff than the airline would have otherwise let go, it's a boon to them. Case in point, if total salaries at ACME airline is $1M and the amount received covers 70% of salary cost ($700K). If ACME keeps all staff (which the airlines didn't), it has to make up the remaining $300K. If ACME never received a bailout, it would have been able to lay off staff. Let's say ACME would have laid off 50% of staff and all were equally expensive (also not realistic as airlines are less likely to let go higher paid employees due to both training cost and seniority), that would be $500K that ACME would still have to pay out of pocket with 50% layoffs which is in and of itself a high number as I doubt any airline would have laid off that many people. In the no bailout scenario, ACME comes out $200K worse and that's assuming the following:

1. Staff expense would go down proportionally with number of staff laid off. In the real world, that would not happen as airlines would have incentive to keep their highest paid staff (pilots) on the payroll due to the cost of retraining. Also, they would have had to keep their highest paid pilots due to seniority rules.

2. An airline would have kept all its staff, which as we saw, did not happen.

3. An airline would have laid off such a high percentage of overall staff which for several reasons is not likely.

In a more realistic scenario, with no bailout, ACME airlines would have come out much worse than the $200K using the same costs.

All that to say, that yes, airlines definitely want another bailout, not just for future demand, but for their immediate cash needs.
 
Cactusjuba
Posts: 247
Joined: Thu Dec 14, 2017 8:06 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 5:27 pm

Keep in mind, the payroll support was derived from 2019 Q2-Q3 labor expenses. In 2020, labor costs have lowered with reduced hours, monthly minimum salaries, zero overtime, and 45k employees taking variable lenghts of unpaid leave. The CARES act funds will be stretched beyond OCT 1, because the 2019 Q2-3 costs will be higher than 2020's over the same period.
 
TW870
Posts: 1239
Joined: Fri Jan 25, 2013 2:01 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 5:29 pm

Agree totally with others that the whole conversation has to be about cash. Debating whether there is going to be a SEA or BOS hub going forward is pointless. Right now, the whole issue is how the airlines are going to have enough cash to operate until were are in a vaccine/recovery phase.

This is especially true for Delta and all other US airlines. In Europe and especially Asia, the airlines have access to more cash because at least some travel is returning because the virus is somewhat under control. In the US, there is basically no airline business due to the prevalence of the virus. I live in MSP, and our asymptomatic testing is gone at most HMOs even though we had it up and running a few weeks ago. We were going to try to do some business in August and September that required people to fly and would have given DL revenue, but to do so we wanted folks to get tested. Not possible now, and we pulled the plug. We cancelled everything on DL.

With this level of virus, they are going to take cash absolutely anywhere they can get it, because it is not going to come from sales.
 
Dalmd88
Posts: 3150
Joined: Fri Jul 28, 2000 3:19 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 6:02 pm

75driver wrote:
Dalmd88 wrote:
Airlines do not want to cut the workforce. When the demand comes back it would mean recalls and the inevitable new hires for those that don't come back. For skilled areas that is a large burden for just a few months (hopefully).

When Delta layed off AMT's back in 2004-2005, most did not come back. Many of those AMT's had just reached the point where they were fully trained in their positions. Years of experience gone.


Huh? Airlines do not want to cut their workforce? Evidence to the contrary. They wouldn’t be offering massive early outs if they didn’t. I got the feeling the Kompany wanted more to accept the early outs. There was no indication in house they did not want to cut the workforce. Pretty laughable when you consider indicator after indicator, industry wide, showing long term projections are dim. Constriction is real and will be happening for some time, there is no “demand comes back” if you’re referencing pre-COVId levels. BTW...just how hurt was the Kompany when all those AMT’s vanished? Not at all from their profitability stand point. Had zero impact on the bottom line.

You had 1 in 5 pilots accept buyout, many with years left. 1 in 4 over other areas Kompany wide, many with years left. If there is no further government help the cuts don’t end here. It’s preposterous to suggest the Kompany doesn’t want to reduce the workforce. Virtually every airline in the world is doing that exactly.

From the view of TechOps, no they really don't want to reduce head count for a temporary time frame. They want to reduce CASH BURN.They wanted high time AMT's to retire now, not in Dec or next year. They want people to take temp leave of absences. Finding qualified AMT's is actually pretty hard. Not many kids go into this profession. Plus once they see the off shift requirements they shy away.

It takes a couple of years to fully train a new hire. Yes there was pain when we furloughed back in 2004 -05. The trained AMT's are slowed down with the new guys and then they furlough the new guys. A few years later some are recalled but most turn into untrained new hires.

So what about the all the retirement package stuff? That obviously means the company want to reduce head count? Yes, they want to reduce the cash burn for a short while. They could have just lopped off the bottom 20% in Tech Ops and called it good. Recall and see what comes back. The issue with that was Tech Ops has had some of the highest seniority employees in the entire company. Last year 20% of the division was either eligible or very close to retirement. It's better to make a package for those AMT's to leave and retain the younger guys than furlough the younger guys and then next year 500 AMT's retire. Also you get the topped out AMT's off the payroll but keep the ones on the low end.

Want to hear the kicker, Watch for mechanics to get hired off the street next month. We need Aircraft Welders and Machinists. Both positions require special certifications that very few remaining mechanics have.
 
brilondon
Posts: 3164
Joined: Sun Aug 21, 2005 6:56 am

Re: Delta plans to emerge a "smaller" carrier

Thu Aug 06, 2020 7:33 pm

IWMBH wrote:
But, why wouldn't air traffic return to normal after the virus outbreak is over? In Europe most governments are pouring money into their economies to keep businesses 'alive' till they can reopen again after the crises. I'm sure the US economy will also get incentivises.

Normal wont be the same as before as alot of businesses are having more employees work from remote locations. Travel as before in the leisure market is almost non existent and doesn't look to be rebounding much until quarantine rules are relaxed in many countries. As the workl recovers from covid-19 not everyone will be called back right away. It's going to be a slow process. Look to 2023 as a year where the industry recovers to 2019 levels and that could be optimistic.
Rush forever Closer To My Heart
 
User avatar
DL747400
Posts: 967
Joined: Mon Sep 01, 2008 4:04 pm

Re: Delta plans to emerge a "smaller" carrier

Sat Aug 08, 2020 3:01 pm

Still waiting for details on what this new, smaller DL will look like. I suspect these changes will be more evolutionary (in reaction to the pandemic and rate of recovery in various parts of the world) rather than revolutionary.

In the meantime, here are the latest DL's Winter, 2020-21 schedule reductions:

https://www.routesonline.com/news/38/ai ... t-08aug20/

No real shockers here. Some are normal seasonal reductions, while others are clearly pandemic driven.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
TropicalSky
Posts: 517
Joined: Fri May 05, 2017 1:37 pm

Re: Delta plans to emerge a "smaller" carrier

Sat Aug 08, 2020 3:18 pm

JO'BURG/CAPETOWN pushed to DEC-not shocking
MUMBAI cancelled out from DEC-not shocking
SLC-CDG cancelled through summer '21 -a bit surprising
IND-CDG cancelled through summer '21-not shocking


DL747400 wrote:
Still waiting for details on what this new, smaller DL will look like. I suspect these changes will be more evolutionary (in reaction to the pandemic and rate of recovery in various parts of the world) rather than revolutionary.

In the meantime, here are the latest DL's Winter, 2020-21 schedule reductions:

https://www.routesonline.com/news/38/ai ... t-08aug20/

No real shockers here. Some are normal seasonal reductions, while others are clearly pandemic driven.
 
n9801f
Posts: 229
Joined: Tue Apr 13, 2004 8:29 am

Re: Delta plans to emerge a "smaller" carrier

Sat Aug 08, 2020 5:49 pm

LAX772LR wrote:
tphuang wrote:
AS at SEA has probably the most pricing power out of any non-legacy hubs (so more than any WN/B6 focus cities).

....though you seem to be forgetting that [email protected] is a legacy hub, as AS is one of the 4 remaining mainline Legacy carriers, by definition. ;)


This is debatable.

Yes, Alaska is an old, established carrier.

However when attacked by Southwest, Markair, and other LCC's in the early -90's, Alaska transformed itself profoundly and lowered its CASM 20%!

Alaska thus became the first example of a legacy carrier maintaining local market share against an LCC on a wide scale.

Today many industry experts classify Alaska as a "hybrid" carrier -- something in between a legacy and an LCC.
 
n9801f
Posts: 229
Joined: Tue Apr 13, 2004 8:29 am

Re: Delta plans to emerge a "smaller" carrier

Sat Aug 08, 2020 6:17 pm

TW870 wrote:
Agree totally with others that the whole conversation has to be about cash. Debating whether there is going to be a SEA or BOS hub going forward is pointless. Right now, the whole issue is how the airlines are going to have enough cash to operate until were are in a vaccine/recovery phase.

Yes, it's all about cash. Run out of cash and game over.

But one way airlines can conserve cash is to stop bleeding and cancel their least profitable flights. This is why the conversation turns to SEA, BOS, etc.

In good times, perhaps Delta could afford to cross-subsidize weaker, lower profitability flights (SEA?) with stronger high profitability flights elsewhere (ATL/DTW/MSP?)

But in bad times everything falls a few notches. The formerly-strong flights become weak and the formerly-weak flights become disastrous cash losers; this pressures airlines like Delta to conserve cash and cancel them. It helps Delta save the rest of the company.

Additionally, as a taxpayer, I have zero interest in paying Delta's payroll to prop up an unsustainable capacity war in SEA!

Just let the market work. Let the excess capacity (in this case probably Delta in SEA) get purged. Spend the tax dollars on something else, or not at all.

Besides, Delta would be stronger overall if it just concentrated on competing more aggressively with Southwest in Atlanta, which is slowly but steadily making inroads there.

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