Delta Unveils Its Transformation Plan

[RDU Jetblast]

RDU,

I understand what you are saying, and for the most part I agree. I do not consider myself a union coold aid drinker. To a degree I understand what management is proclaiming, and I see the ALPA's side as well. Both have very valid points. Obviously the name of the game is to compromise to the extent possible. Both sides have a history of abusing their relative powers.
I believe that the full effects of deregulation are just now being felt. It is certainly an unprecedented time in aviation.

[post="177659"][/post]​

Yup. It's unprecedented alright. The solution will have to be as well.

 

[WorldTraveler]

JetBlast,
explain how I am putting you down for being a non-union kool-aid drinker - which isn't my intent (and I'm not sure I consider you a kool-aid drinker)

Hotel,
The news will continue to be decidedly negative about DL until there is a pilot agreement - which is all Wall Street wants so it will begin the flood of other cost reductions - items that were all absent from yesterday's announcements. Incidentally, I think DL did a poor job of communicating the value of all the network changes they made yesterday which may be part of the reason why the perception hasn't improved. Nonetheless, there are tons of people coming out of the woodwork calling themselves experts and touting their doomsday prophecies about all of the legacy airlines. Very few of them have any experience to back up their talk nor do they really understand the difference between the issues at each of the carriers.
In three weeks, this will all be settled and I still expect it to be resolved outside of bankruptcy unless a host of pilots jump ship - something I consider relatively unlikely since DL's demands have been known for several months.

 

[Fly]

We already know that World...you tell us everyday, sitting there, pretending to be an airline guru, adjusting your rose colored glasses. Do you personally know any Delta pilots? I do, in fact, I have someone very close to me who flys the 767-400 to HNL, and he says things are just a weeeee bit different than you seem to see them. (But I bet you know more about how the senior pilots at Delta think then he does, huh?)

 

[WorldTraveler]

Actually, yes I do REALLY know Delta pilots and, with the exception of the most senior (like your 764 Capt. friend) all agree that it is in their personal best interest to work w/ Delta rather than push it over the edge. DL is facing the challenge every carrier has in that the most senior employees who are close to retirement are not about to do anything that will take away from their expected retiremement. In fact, news is that Delta is willing to provide a phased out approach to the current defined benefit plan while preserving current benefits (very similar to what was done to non-pilot personnel).
Now tell me, Miss Fly, is your company willing to protect your hard-earned accrued pension benefits? I didn't think so and precisely why I believe UA will head down the path of oblivion due partly to a lack of loyalty to the company that will inevitably result from a loss of everything UA employees have worked for. DL appears to be taking a much more enlightened approach and will not only be around for decades to come, but may very well be buying UA assets to bolster its network in the not-too-distant future.

Oh, and I surely am an airline guru. If one of your captains can get a job writing for the Steet.com belching inaccuracies, the standard of guru is obviously low enough that most anyone should be able to qualify. Thankfully, some of us really do have knowledge to bring to the table.

What kind of sauce do you like w/ your crow?

 

[Fly]

lol....I'm supposed to eat crow cuz you know some junior pilot who is willing to take it in the shorts told you this? FYI - Most pilots don't trust Delta (which is painfully obvious to anyone being objective here), which is the reason they haven't agreed to paycuts. They don't believe them anymore then most airline employees trust their management teams. They can tell the pilots anything they want and then turn right around and eliminate the pension plans (which is exactly what they will do).

But, hey, no hard feelings...I know you have this very unmasculine attraction to this company (and yes dear, it is only a company...so one must not cry about this) and you wish to see her prevail. Good luck!

 

[mrfish3726]

FLY,

Anyone that I befriended at UAL is already on the street, never to be re-called again. I work hard at trying to get them on at F9 were they will see the difference between night and day. They won't be in the dark, feel alianated, or harassed by anyone here!

World,

I've tried to get off the UAL board, "BUT THEY STARTED IT" . Thinking that TED is all high an mighty (NOT) ROFFL! I will watch my P'S and Q'S B) ! Keep FLY on her toes, remember she really doesn't need the job! You have some of the most intelligent posts on any of these threads. :blink:

 

[WorldTraveler]

Thanks, Fish. Did you give Rico authorization to use your trademark fish for his avatar?

Ms. Fly,
Thought I'd share a couple quotes about DL's transformation from a couple of REAL airline analysts (not the kind that popped out of the woodwork to cover the Sept from hell in the industry):
Michael Boyd: It's well thought out. It's aggressive. It clearly wasn't developed by a consultant and Grinstein believes in it."
Darryl Jenkins: "What Grinstein has suggested today is as good a plan as I've seen for Delta going into the future... But this is the worst environment I can remember in 30 years of watching this business. If the economy hiccups, you're in Chapter 11 anyway."
I think both are dead on...that's not rose-colored but it does recognize Delta's historically smart management team (except for the past 10 years worth).

 

[Cosmo]

Thought I'd share a couple quotes about DL's transformation from a couple of REAL airline analysts ...

But it's not unanimous -- read this AP article which quotes other "experts" who believe that Delta is simply "setting itself up for how it will survive after a likely Chapter 11 filing."

Some quotes from the article:

"Those of us looking at it from an objective perspective are assigning a low probability of that plan being realized outside of bankruptcy," said James Owers, a Georgia State University corporate restructuring expert.

"The airline needs more than just concessions from pilots," said William Rochelle, an airline bankruptcy lawyer in New York. "They also need to restructure their business fundamentally and they have to re-negotiate aircraft financing. The latter two are very difficult to accomplish without the clout of Chapter 11."

Philip Baggaley, an airline analyst at Standard & Poors, said that if Delta can get the concessions from pilots it is seeking, that would go a long way in helping to avert bankruptcy.

But, he said in the context of the turnaround plan, "They also know that may not be possible and they are preparing for Plan B as well."

The main reason for these comments is that "key elements of [Delta's] broad turnaround plan will take months if not years to implement ... [but] by the Atlanta-based airline's own admission, however, time is running out."

As the article notes:

Delta said Wednesday that a bankruptcy filing could come as early as three weeks from now if it can't head off a mass exodus of pilots. Worried about their pensions, several hundred Delta pilots have retired early in recent months, and more have threatened to do so, the company says.

The pilots, meanwhile, have said they would be more eager to stay if Delta promised to preserve their accrued retirement benefits. Such a promise would be very unlikely and perhaps not even possible without setting up an expensive pension trust fund, observers say.

As for the $1 billion in pilot concessions the airline says it needs quickly to help avoid bankruptcy, the pilots union said last week it doesn't expect an agreement in the near future.

So while Delta appears to have a little more time than US Airways does to get its house in order so it can avoid a potential bankruptcy filing, and it is in a much stronger position if it does file, we're still talking about only a matter of weeks. IMHO, it will be very difficult for Delta to avoid entering Chapter 11.

 

[Cosmo]

So, to cut to the chase:

While Delta's plan may be a good start at fixing its problems (and I agree that it is), for a variety of reasons -- the plan's full implementation time being measured in years, ALPA's reluctance to agree to cuts totaling $1 billion, greater leverage over vendors and lessors while in bankruptcy, etc. -- it probably is not enough by itself to keep the carrier out of Chapter 11. JMHO.

 

[Fly]

:down:

 

[luv2fly]

Yup. It's unprecedented alright. The solution will have to be as well.

[post="177663"][/post]​

Your right, but it should not be solely at the expense of the employee groups. The only consistent thing these airline managments have demonstrated is their ability to layoff thousands of employees and call it a "plan". I call it pathetic.

 

[LiveInAHotel]

Because the pilots are smart, the pilots WILL give concessions to help the company. (Hell, they've already offered $700 million a year! That equates to $93k per year per pilot!) Because the pilots are smart, the pilots WILL require that concessions are also given by creditors, lessors, vendors, etc.

"It's obvious you have no idea how labor negotiations work."

[post="177639"][/post]​

Yes, I know they made DL an offer of 23%. DL is so greedy they said no. They will only except 30% and nothing less. The pilots will probably get a better deal in BK. DL still doesn't have a great plan in place to file BK.

It's really sad to see that all of you who drink the Kool-Aid (especially CS, CD aislehopper) believe that Delta will save you and get it from the pilots. All I can say is SUCKERS!

 

[WorldTraveler]

Cosmo,
When did you ever hear a union say that there is a deal in hand before it hasn't been signed? Never because it doesn't work that way. DL and ALPA are both going to tell you there is no deal until both get what they want in its entirety.

Of the analysts you quote, who covers airlines on a regular basis? Do you think a bankruptcy lawyer and a restructuring "expert" have any ongoing knowledge of the airline industry? Philip Baggaley is the only analyst there who understands the airline business and I happen to agree with him. It would be foolish for DL not to have a contingency plan but that doesn't mean that it will end up using it. There is nothing DL has announced so far that wouldn't work in bankruptcy but it will also go a long ways to keeping them out of bankruptcy.

Tell me, Cosmo, knowing what you now know, would you have worked a little harder with UAL to keep them out of bankruptcy? How has your life improved since UAL entered bankruptcy? UAL's prebankruptcy demands look pretty tame compared to the position you are in now, don't they?

 

[Fly]

Cosmo isn't an employee, he's a customer.

Here's the rumor: Delta is going to offer the senior pilots their lump sums if they agree to stay an additional 120 days to give them time to train replacements.

Too bad they've waited so long to try to work with the pilots. The pilots agreed to paycuts ages ago but Delta chose to be ignorant to the facts and now management (and management alone) have now put Delta into this situation with a very small chance of pulling out of it.

 

[WorldTraveler]

thanks for the clarification... I believe Cosmo did say he was a customer once before.

DL is also supposedly talking to ALPA about having pilots come back as contractors too so several possibilities are present. Given that DL undoubtedly wants to accelerate a freeze of the non-pilot pension, I expect DL does not want to provide a long phase out period for the current DB plan. Either way, DL and ALPA are talking about alternatives that may meet the pension needs of the company which appears to be the sticking point - all the more reason for me to be confident that DL will get an agreement outside of bankruptcy and then the debt restructuring will fall into place as well.
We also don't know the degree of paycuts which have supposedly been agreed to but I'm quite certain they aren't the 23% cuts which ALPA proposed a couple months ago. Based on rough estimates, DL pilots will still be the highest paid pilots among carriers with restructured contracts (NW excluded and factoring in the likely continued cuts UA pilots will face). That is really not a bad place for a DL pilot to end up in - esp. given that w/ cost concessions and a viable debt restructuring, DL has a very good chance of emerging as a long-term, viable player.

I've enjoyed our discussion, Fly; let's keep it up.