Delta's Chapter 11 Reinvention
- Thread starter chucky
- Start date
Rosey and nice. Right on in some areas. To say Delta hasn't used employee concessions as much as anyone else is flat wrong. In the time I was there, I saw my benefits cut each year for three years. I had the opportunity to watch people leave voluntarily and involuntarily for various lengths of time. Because Delta isn't unionized they were able to extract these costs pre-bankruptcy. Nor did employees have a bullhorn (union leader) for the press to talk to...a single voice that spoke up for what was going on. Instead, the local NBC station would interview a random employee who would say it sucks, but what do you do.
I'm not sure I'd say SLC rivals DEN given the RJ/mainline mix DL uses. Additionally, DEN is a bigger local market.
The DFW hub was closed (no mention in the article) pre-ch 11. That's a pretty drastic cut to not mention...along with the loss of employees as well.
Is Delta's right for the long term or the right now...I lean right now toward saying the right now. I stil see the fleet issues as the most pressing issue that has to be addressed. The 763's are getting old, the M80 are getting old and inefficient (plus can't make use of the IFE DL wants in its aircraft thus the 1,700 mi rule for improved service), there is no 100 seater still. ATL is improving by becoming less of a connecting hub for Florida flights, but is still somewhat overserved. Airtran continues to grow and DL is still chasing them without winning (see addition of BOS-MDW..what's up with that Glen/Bob). Lastly, I'm still not convinced Whitehurst is the best sucessor to Jerry...and I won't be until he gets the job and does well.
I'm not sure I'd say SLC rivals DEN given the RJ/mainline mix DL uses. Additionally, DEN is a bigger local market.
The DFW hub was closed (no mention in the article) pre-ch 11. That's a pretty drastic cut to not mention...along with the loss of employees as well.
Is Delta's right for the long term or the right now...I lean right now toward saying the right now. I stil see the fleet issues as the most pressing issue that has to be addressed. The 763's are getting old, the M80 are getting old and inefficient (plus can't make use of the IFE DL wants in its aircraft thus the 1,700 mi rule for improved service), there is no 100 seater still. ATL is improving by becoming less of a connecting hub for Florida flights, but is still somewhat overserved. Airtran continues to grow and DL is still chasing them without winning (see addition of BOS-MDW..what's up with that Glen/Bob). Lastly, I'm still not convinced Whitehurst is the best sucessor to Jerry...and I won't be until he gets the job and does well.
WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
- Reaction score
- 10,662
Without preciously knowing your history, Flyhigh, you have just confirmed to me that some of the most negative internet chatters about airlines are former employees. Thank you for revealing your bias. I know it’s hard to leave but just because a job didn’t turn out the way you wanted doesn’t mean the company is incapable of turning things around.
It actually is very factual that DL employees have contributed less to DL’s turnaround plan than any other airline as a percentage of employee contributions relative to the value of the total turnaround. DL planned on getting a significant amount of its turnaround plan – about 1/3 - from revenue improvements and those have come in much better than expected. DL employees certainly endured cuts but they still are paid at or above average what other recently BK airline employees make…. And that includes pension benefits which most DL employees still retain, just as I predicted 2 years ago when UA and US were hot and heavy in trying to dump theirs.
DL’s bankruptcy has been very different from any other airline BK – just as I have said. Part of it was because DL fought filing for so long that they had the opportunity to see how others turned out and part was a sheer luck in having enough hubs and long-range capable airplanes to play with to make it work.
Every US airline has an aging fleet problem. AA has 3 times more MD80s than DL and they are still doing quite respectably. The 767s are just not old. Everyone gets all excited when new technology comes around and thinks that anyone that doesn’t buy it has dates technology. The reality is DL’s oldest nonER 767s are only 15 years old on average and the 763ERs are 10 years old on average. The 764s are only 5 years old meaning it is very doubtful that any retirement of ERs will happen before the next 5 years and probably closer to 10. Further, the 3ERs are increasingly being used on routes where there is little to no competition. Even if every other connecting carrier was using the newest technology with its ability to lower costs, DL will get a revenue premium as a result of offering unique service. And the 767 is still quite competitive unless you put it up against the 787. It will take 10 years or more before there are enough 787s in the world’s fleet flying to the secondary destinations in Europe as well as to DL’s destinations in Africa and S. America.
DL has done a commendable job of turning their company around but they have done an even better job of remaking themselves. Once considered a dowty, oversized southern airline, they are well on their way to having the most expansive route system of any US airline and of having a very large and profitable domestic operation – something no airline has done together before. Of course DL still has issues to work on – it is still a US airline and not an internet company – but DL looks pretty good going into the final stretch of its reorganization.
It actually is very factual that DL employees have contributed less to DL’s turnaround plan than any other airline as a percentage of employee contributions relative to the value of the total turnaround. DL planned on getting a significant amount of its turnaround plan – about 1/3 - from revenue improvements and those have come in much better than expected. DL employees certainly endured cuts but they still are paid at or above average what other recently BK airline employees make…. And that includes pension benefits which most DL employees still retain, just as I predicted 2 years ago when UA and US were hot and heavy in trying to dump theirs.
DL’s bankruptcy has been very different from any other airline BK – just as I have said. Part of it was because DL fought filing for so long that they had the opportunity to see how others turned out and part was a sheer luck in having enough hubs and long-range capable airplanes to play with to make it work.
Every US airline has an aging fleet problem. AA has 3 times more MD80s than DL and they are still doing quite respectably. The 767s are just not old. Everyone gets all excited when new technology comes around and thinks that anyone that doesn’t buy it has dates technology. The reality is DL’s oldest nonER 767s are only 15 years old on average and the 763ERs are 10 years old on average. The 764s are only 5 years old meaning it is very doubtful that any retirement of ERs will happen before the next 5 years and probably closer to 10. Further, the 3ERs are increasingly being used on routes where there is little to no competition. Even if every other connecting carrier was using the newest technology with its ability to lower costs, DL will get a revenue premium as a result of offering unique service. And the 767 is still quite competitive unless you put it up against the 787. It will take 10 years or more before there are enough 787s in the world’s fleet flying to the secondary destinations in Europe as well as to DL’s destinations in Africa and S. America.
DL has done a commendable job of turning their company around but they have done an even better job of remaking themselves. Once considered a dowty, oversized southern airline, they are well on their way to having the most expansive route system of any US airline and of having a very large and profitable domestic operation – something no airline has done together before. Of course DL still has issues to work on – it is still a US airline and not an internet company – but DL looks pretty good going into the final stretch of its reorganization.
Not really. What current DL management neglects to mention is the hundreds of millions of savings that were enacted prior to the official restructuring. All non-contract employees endured a variety of benefit cuts, plus hefty job outsourcing from 2001 to 2004. These cuts saved DL hundreds of millions of dollars, but are not considered as part of the restructuring by current management.
You seem to forget that unless one is on the high end of the payscale, eliminating pensions make no real difference to the employee. So, DL employees took as big a hit but PBGC did pretty well. (remember the DL f/a's make LESS than big, bad UAL)
WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
- Reaction score
- 10,662
You are correct that DL initiated a round of restructuring before bankruptcy but it also included substantial cuts in other areas as well. DL says their entire restructuring since 2001 has reduced costs or increased revenues by $8B per year. DL employees have not contributed anywhere near $4B while some carriers got half or more of their restructuring benefits from employees. The total of all DL employee contributions is about $2.5B which is still about 1/3.
Fly, dear,
we go round and round on this, but I would like you or one of your little buds to explain to me why UA terminated its pension plan for FAs if the PBGC was going to pay everything UA would have paid. All 4 of UA's pension plans were underfunded which meant they not only didn't have the appropriate funding required for promised benefits but also that the PBGC would not pay what UA promised. If UA could have paid the benefits and they would have been as good as what UA offered, why did UA bother terminating them and why did the PBGC extract equity and debt from UA in exchange for taking over UA's pension obligations? Your story is just not adding up.
The reality is that for fully retired employees at non-pilot scales, there isn't much difference between what PBGC offers but for folks in the prime of their career (like you) that are - years away from normal retirement - the PBGC is not giving you what you would have made if the plans had not terminated.
If you want to convince me otherwise, PM what the PBGC says you will get. The details of UA's plan are known... I can calculate what you would have gotten.
The reality is that pension funding becomes much larger for people in their 40s and/or after 20 years of service. UA's obligation for someone like you was about to kick into high gear. They haven't paid for most of your retirement benefit you accrued up until this point... which is why the PBGC will not give you anywhere close to what you would have received if the plan had not been terminated....
and this is why UA flight attendants will not make as much as DL flight attendants even if they were paid the same.
Fly, dear,
we go round and round on this, but I would like you or one of your little buds to explain to me why UA terminated its pension plan for FAs if the PBGC was going to pay everything UA would have paid. All 4 of UA's pension plans were underfunded which meant they not only didn't have the appropriate funding required for promised benefits but also that the PBGC would not pay what UA promised. If UA could have paid the benefits and they would have been as good as what UA offered, why did UA bother terminating them and why did the PBGC extract equity and debt from UA in exchange for taking over UA's pension obligations? Your story is just not adding up.
The reality is that for fully retired employees at non-pilot scales, there isn't much difference between what PBGC offers but for folks in the prime of their career (like you) that are - years away from normal retirement - the PBGC is not giving you what you would have made if the plans had not terminated.
If you want to convince me otherwise, PM what the PBGC says you will get. The details of UA's plan are known... I can calculate what you would have gotten.
The reality is that pension funding becomes much larger for people in their 40s and/or after 20 years of service. UA's obligation for someone like you was about to kick into high gear. They haven't paid for most of your retirement benefit you accrued up until this point... which is why the PBGC will not give you anywhere close to what you would have received if the plan had not been terminated....
and this is why UA flight attendants will not make as much as DL flight attendants even if they were paid the same.
Let me try to explain it AGAIN.
The PBGC took over the pension. Therefore, when I become eligible for retirement benefits, I will receive them from the PBGC instead of United. I will receive them for the number of years I worked up until the day the PBGC took over. For the additional years I work, that will be covered by my 401k. EXACTLY like the Delta f/a's EXCEPT that Delta will pay them instead of the PBGC.
BOTH airline f/a's no longer will accrue pension benefits unfortunately.
Therefore, United f/a's make more. I know that's hard for you to handle but fortunately for everyone concerned, it isn't YOUR concern.
As for the question of why does the PBGC pay the same? Because the PBGC is an insurance company. If you insure your home for $100,000 and it burns down, they pay you $100,000. They don't pay you additional money for increased equity, they pay you the exact amount of the policy. Same as the PBGC.
BUT we all know we have explained this to you ad nauseum. Did you ride on a short bus as a kid? That could explain things here.
I know what I would have 'gotten' but that is a moot point since they don't accrue years anymore. (I know another airline that doesn't accrue years anymore too.......I'll give you a hint. Their name starts with a D, and ends with an A. LOL, I know something else that DA stands for!)
Hey WT, did you see that United added more international expansion today? Can you please advise everyone on the board why this is probably a colossal mistake on their part and how Delta would definitely be able to do it better?...and for the tricky part, can you keep the essay under 1000 words?
The PBGC took over the pension. Therefore, when I become eligible for retirement benefits, I will receive them from the PBGC instead of United. I will receive them for the number of years I worked up until the day the PBGC took over. For the additional years I work, that will be covered by my 401k. EXACTLY like the Delta f/a's EXCEPT that Delta will pay them instead of the PBGC.
BOTH airline f/a's no longer will accrue pension benefits unfortunately.
Therefore, United f/a's make more. I know that's hard for you to handle but fortunately for everyone concerned, it isn't YOUR concern.
As for the question of why does the PBGC pay the same? Because the PBGC is an insurance company. If you insure your home for $100,000 and it burns down, they pay you $100,000. They don't pay you additional money for increased equity, they pay you the exact amount of the policy. Same as the PBGC.
BUT we all know we have explained this to you ad nauseum. Did you ride on a short bus as a kid? That could explain things here.
I know what I would have 'gotten' but that is a moot point since they don't accrue years anymore. (I know another airline that doesn't accrue years anymore too.......I'll give you a hint. Their name starts with a D, and ends with an A. LOL, I know something else that DA stands for!)
Hey WT, did you see that United added more international expansion today? Can you please advise everyone on the board why this is probably a colossal mistake on their part and how Delta would definitely be able to do it better?...and for the tricky part, can you keep the essay under 1000 words?
WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
- Reaction score
- 10,662
aw, Fly, now don't get testy.
Actually, I rode the CITY BUS.
But you still haven't 'splained o me why UA would bother to terminate its plans if the PBGC was going to pay the same thing UA would have paid. Maybe for you, it worked out and I'm glad. But someone is getting shafted... the PBGC doesn't provide the same benefits UA did.
Surely you have got to have run into someone that isn't getting what they were promised.
And perhap it's because you don't KNOW what you should have accrued in pension benefits for your XX years of servie. It's easy to say that you will pick up where UA left off but you still haven't validated that what you will receive in benefits from the PBGC equalled what UA would have paid you if they had not terminated the plan.
But more importntly, why would DL and NW have bothered to have saved their plans for their groud employees and NW's pilots - except for the fact that terminating the plans is a huge hit to employees... and not just for DL and NW's employees. Funny that the US people talk freely how they paid a price for their pension terminations - not just pilot - but everything worked out for UA's employees.
I'm really not trying to rub your nose in the sand but you have yet to explain some pretty important parts of what happened in UA's BK case. Again, I'd be happy if you personally - and everyone else for that matter - lost nothing. But that is just not reality on a macro basis for UA's plans and participants. Somebody is coming up short - and it's not because they fly the A319.
BTW,
how does FCO sound to you. Should be a good summer route for UA... but that might be a lotta seats to fill in the winter. We surely don't want to see any airlines dumping excess capacity into the market. DOT statistics show that FCO is a very profitable route during the summer but it's pretty hard to fill even a 767 in Jan-March.
Tell you what. If you get on the horn to your buds in Network and tell them that WT says they should put the 777 on IAD-GRU for the US winter and the 767s on FCO, I'll tell you UA is the smartest airline that ever flew. How's that?
Actually, I rode the CITY BUS.
But you still haven't 'splained o me why UA would bother to terminate its plans if the PBGC was going to pay the same thing UA would have paid. Maybe for you, it worked out and I'm glad. But someone is getting shafted... the PBGC doesn't provide the same benefits UA did.
Surely you have got to have run into someone that isn't getting what they were promised.
And perhap it's because you don't KNOW what you should have accrued in pension benefits for your XX years of servie. It's easy to say that you will pick up where UA left off but you still haven't validated that what you will receive in benefits from the PBGC equalled what UA would have paid you if they had not terminated the plan.
But more importntly, why would DL and NW have bothered to have saved their plans for their groud employees and NW's pilots - except for the fact that terminating the plans is a huge hit to employees... and not just for DL and NW's employees. Funny that the US people talk freely how they paid a price for their pension terminations - not just pilot - but everything worked out for UA's employees.
I'm really not trying to rub your nose in the sand but you have yet to explain some pretty important parts of what happened in UA's BK case. Again, I'd be happy if you personally - and everyone else for that matter - lost nothing. But that is just not reality on a macro basis for UA's plans and participants. Somebody is coming up short - and it's not because they fly the A319.
BTW,
how does FCO sound to you. Should be a good summer route for UA... but that might be a lotta seats to fill in the winter. We surely don't want to see any airlines dumping excess capacity into the market. DOT statistics show that FCO is a very profitable route during the summer but it's pretty hard to fill even a 767 in Jan-March.
Tell you what. If you get on the horn to your buds in Network and tell them that WT says they should put the 777 on IAD-GRU for the US winter and the 767s on FCO, I'll tell you UA is the smartest airline that ever flew. How's that?
You are right about one thing -- someone is getting shafted. The PBGC (and possibly the taxpayers) and solvent pension plans that will pay higher PBGC rates.
But the UA and DL FAs are basically in the EXACT SAME BOAT. Both stopped earning any additional benefits when their respected plans were terminated/frozen. Why, oh, why do you continue to spew incorrect information? (If you're just trying to flirt with Fly in a 6th grade kind of way, why don't the two of you just get a room instead?)
Um, because the money will be coming from the PBGC's pocket instead of UA's? Just a wild guess . . .
Unbelievable.
Gee, how come you didn't point this out about all the fifth-tier European cities DL started serving this year? What do the DOT statistics say about them? ARE there even DOT statistics to such obscure places?
How does DL do to Rome in the winter? Careful -- this is a trick question. If UA will do poorly, doesn't that suggest DL does poorly too? If DL does well, doesn't that suggest UA will do well too? Oh but wait, it must be that inherent "(Solvent) UA is bad and evil and poorly managed and going broke and (insolvent) DL is good and virtuous and well-managed and makes money hand over fist wherever it goes" logic again, isn't it.
I sense a little hypocrisy. Imagine that.
You may not have noticed, but the FCO service starts in April -- i.e., in time for the summer season. It wouldn't suprise me at all if it gets downgauged to a 767 in the fall/winter. May we use this quote if/when it does?
WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
- Reaction score
- 10,662
no...there aren't DOT statistis to alot of these cities that DL is serving because there has been no US carrier service to many of them.
I know you think I'm totally negative about anything UA but if you read what I wrote you'll see that I said that UA will do well in the summer. DL does quite well in the summer and has up to 5 flights a day. In the winter, though, DL drops to as low as 1 flight per day during midweek days. And DL doesn't use the 777. I am happy to see UA coming into the routes that DL has done well in. Despite CO and US' entrance into several of DL's plum routes in Southern Europe, DL still did never well>
I know you think I'm totally negative about anything UA but if you read what I wrote you'll see that I said that UA will do well in the summer. DL does quite well in the summer and has up to 5 flights a day. In the winter, though, DL drops to as low as 1 flight per day during midweek days. And DL doesn't use the 777. I am happy to see UA coming into the routes that DL has done well in. Despite CO and US' entrance into several of DL's plum routes in Southern Europe, DL still did never well>
