Delta 4q Loss Widens To $2.2 Billion
- Thread starter Hatu
- Start date
Fly, what WT means is that this a Delta solution, one that works for our network. We( yes I am a DAL employee,) have 70 plus % of our network competing against LCC's where NWA has very little. Of course they will scream the loudest..they have alot to lose. Dal has decided to overhaul everything in a attempt to avoid BK. In my opinion, if all of our initiatives work close to what the exec's think, later this year and 2006 could be breakout years. I am glad that there is a plan besides slashing salaries, and I am cautiously optimistic but make no mistake about it, most of 2005 will be a transition year.Fly said:Were you a cheerleader in high school??
The fact is that if United had posted anything near that figure, you would have written an obituary. BUT, when Delta does it, it's a good thing. That's messed up.
[post="241396"][/post]
Many, but not all, airlines are flying people for less $$ than it costs to operate. This is typical for an industry at this point of evolution. It's a competitive shakeout.Fly said:
If it were true that all airlines were flying people for less than it cost for them to operate, then we'd have a very different discussion.
This is truly an absurd thing to say. An analogy would be that it should never be cheaper to send an email than to send a letter. You're using a different technology which has its own greater efficiencies. Of course it should be cheaper to fly than drive...for routes where it costs less to provide air travel than automobile travel.
I agree with fly, I should never be cheaper to fly than drive. First, it is expensive to operate an airliner (maintanence, gate leases, ground equipment, flight crew training, etc.) the list goes on and on. Second, you are getting from Fla to NY in 2.5 hours as opposed to 24 hours driving. So people should pay a premium to get there faster; just like you pay UPS more to ship overnight (by air) than you do for 3 day ground delivery (by truck and rail). It IS a very sad state of affairs when the cab ride within New York is more expensive than the plane ticket to New York. And of the 49 dollar fare to NY about 15 to 20 percent of that is taxes, so the amount the airline gets is about $40.
Of course it is. And that's why you don't see these airplanes flying around with four seats. The per mile costs are much higher for a 737. The per seat mile costs are much lower. So cut the crap.aafsc said:
You're making the wrong comparison. Between Florida and NY, a market dominated by leisure travelers, few people view the automobile as a substitute. Rather, they view going somewhere else or not going at all as substitutes. See, your comparison assumes that they must make the trip...one of the common mistakes people make in the economics of pricing.
I have several responses to that one. First of all, you're making a comparison among different products offered by the same company. They have different prices in order to segment the market and maximize revenue. Secondly, as a corollary to my first comment, the economies of scale are roughly the same across modes of package transport (i.e., lots of boxes share the same mode), so the cost differentials really exist here. Third, there are few substitutes. People don't typically choose where to send a package based on how much it costs; they only send it if they need to get something from Point A to Point B.
Why? They're different products, offering substantially different services. If you understood the economics of NYC Taxis, you'd have a much better understanding for the high fares to and from the airports.
Who has a $49 fare? I'm really tired of people quoting these one-way fares as if people never go home.
U
UAL_TECH
Guest
Fly said:
Don't worry, another $1 BILLION in concessions from DALPA will put everything 'in-line'. (after another 50% fare cut)
The 'Race to The Bottom' continues!!! :blink:
B) UT
luv2fly
Veteran
- Aug 21, 2002
- 1,187
- 0
UAL_TECH said:Don't worry, another $1 BILLION in concessions from DALPA will put everything 'in-line'. (after another 50% fare cut)Â
The 'Race to The Bottom' continues!!! :blink:
B) UT
[post="241700"][/post]
DALPA's 32%, while horrendous, hardly capitulates the race to the bottom, expcecially when compared to the disastrous concessions yielded by your very own airline. After all, UA and U hardly stand as "save the profession" beacon.
Concerning aafc's point, in addition to MWeiss' response, Southwest was built on the idea that the competition was the car--DFW-IAH by car is what, 4 hours? They wanted to get that guy out of his car, whether it was a business trip or to see Aunt Dorothy. For years, Herb used to preach that it was the auto cost he competed against, not the other airlines. When he comes into a market, it expands--and the passengers carried by the other airlines usually stays the same. Where do those passengers come from? New air travelers who took other modes or, as MWeiss said, didn't go.
The pilots at UAL were alway quick to point out how some of the other airlines were dragging the industry wages down and they avocated a just say no policy, strike for the good of all. Now that the shoe is on the other foot all you see is a tail between their legs. What a joke they are.UAL_TECH said:Don't worry, another $1 BILLION in concessions from DALPA will put everything 'in-line'. (after another 50% fare cut)
The 'Race to The Bottom' continues!!! :blink:
B) UT
[post="241700"][/post]
U
UAL_TECH
Guest
Borescope said:
Now they are in a race to save their a$$. But nonetheless, the ALPA membership throughout the 'United States' are in the same CYA mode and transference mindset. One would think that the ALPA 'collective' would make a stand at one of the failing carriers (USAir & UAL) but that will not be the case. This lunacy must stop and if one were to rely on the AFL-CIO 'strength in numbers' dogma then this should have happened yesterday.
Our 'race to the bottom' will continue as long as 'we' allow it!!!
Finger pointing and transference of blame will get us nowhere at this point.
B) UT
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #27
Sorry I have missed out on so much over the past few weeks. My whole first quarter looks horribly busy so I probably won't get to chat much....but here goes for now.
No one believes that any carrier is on the verge of failure in the first six months so we can probably all just carry on w/ what we are doing and put the airline death watch on hold. GE and others are dead set to keep airlines propped, even if it means the industry continues farther into the abyss. After all, GE makes money selling aircraft engines and providing aviation financing so doesn't really care whether the airlines make money so long as the bills to GE are paid. And GE has enough collateral to prevent getting any kind of burn.
Yes, the industry is in a race to a bottom for wages and it won't stop until the industry stabilizes...which is not likely to even begin before the fall. All of the labor groups obviously see 50% employment at 50% wages as a better prospect than 0% wages for 0% of the employees. Considering few other industries as large are as unionized, there is a huge incentive for the unions, just like GE, to keep the airlines afloat.
So... the industry fundamentals are unchanged. Overcapacity, high fuel prices, falling prices plus the threat of even higher aviation taxes. It will be up to the airlines themselves to fix their problems. I'm not ready to put money on how it will play out but I still see AA and DL probably the best protected given their regional jet holdings which are easily worth $1.5B for AMR and $2.5B for DAL. While neither wants to sell those assets in order to fund losses, you can bet they will sell their regional jet holdings before they skid into oblivion.
It is obvious that US is still target number 1 for the LCCs so it is likely that US will continue to struggle to make revenues match their already dramatically reduced expenses.
As for bankruptcy, it's obvious that airlines like AA and DL were able to get fairly significant cost cuts outside of bankruptcy so there is no incentive whatsoever to go to bankruptcy where the risk is much, much greater. Aside from pension obligations, there is nothing carriers can cut inside of bankruptcy that they can't cut outside of it. And there is no certainty that UA will be successful in eliminating its pension obligations.
Finally, for those who are fixated by DL's record annual net loss, it's quite a bit more useful to compare operating losses. Given that DL's net loss included billions of dollars in charges, DL's loss is no match to the OPERATING losses AA and UA posted in 2001 and 2002. And the size of UA and US' recent losses indicate that the concessions they are seeking from their labor groups is far from close to covering current losses... and that was before the fare structure was simplified. DL is far from on solid footing but I think there will be a lot of folks other than me who will be surprised in 10 years when the industry finally shakes out and DL is still standing - particularly since no financial results have been reported from their labor cost cuts and the changes in their fare structure and operational structure at ATL.
I'm sure we'll still be just as fixated on industry failures in 6 months so it is probably safe for me to resume my regularly scheduled life with minimal checks here and wish you all happy contrails in the meantime.
No one believes that any carrier is on the verge of failure in the first six months so we can probably all just carry on w/ what we are doing and put the airline death watch on hold. GE and others are dead set to keep airlines propped, even if it means the industry continues farther into the abyss. After all, GE makes money selling aircraft engines and providing aviation financing so doesn't really care whether the airlines make money so long as the bills to GE are paid. And GE has enough collateral to prevent getting any kind of burn.
Yes, the industry is in a race to a bottom for wages and it won't stop until the industry stabilizes...which is not likely to even begin before the fall. All of the labor groups obviously see 50% employment at 50% wages as a better prospect than 0% wages for 0% of the employees. Considering few other industries as large are as unionized, there is a huge incentive for the unions, just like GE, to keep the airlines afloat.
So... the industry fundamentals are unchanged. Overcapacity, high fuel prices, falling prices plus the threat of even higher aviation taxes. It will be up to the airlines themselves to fix their problems. I'm not ready to put money on how it will play out but I still see AA and DL probably the best protected given their regional jet holdings which are easily worth $1.5B for AMR and $2.5B for DAL. While neither wants to sell those assets in order to fund losses, you can bet they will sell their regional jet holdings before they skid into oblivion.
It is obvious that US is still target number 1 for the LCCs so it is likely that US will continue to struggle to make revenues match their already dramatically reduced expenses.
As for bankruptcy, it's obvious that airlines like AA and DL were able to get fairly significant cost cuts outside of bankruptcy so there is no incentive whatsoever to go to bankruptcy where the risk is much, much greater. Aside from pension obligations, there is nothing carriers can cut inside of bankruptcy that they can't cut outside of it. And there is no certainty that UA will be successful in eliminating its pension obligations.
Finally, for those who are fixated by DL's record annual net loss, it's quite a bit more useful to compare operating losses. Given that DL's net loss included billions of dollars in charges, DL's loss is no match to the OPERATING losses AA and UA posted in 2001 and 2002. And the size of UA and US' recent losses indicate that the concessions they are seeking from their labor groups is far from close to covering current losses... and that was before the fare structure was simplified. DL is far from on solid footing but I think there will be a lot of folks other than me who will be surprised in 10 years when the industry finally shakes out and DL is still standing - particularly since no financial results have been reported from their labor cost cuts and the changes in their fare structure and operational structure at ATL.
I'm sure we'll still be just as fixated on industry failures in 6 months so it is probably safe for me to resume my regularly scheduled life with minimal checks here and wish you all happy contrails in the meantime.
