International Expansion

[Bear96]

... First, DL had about $4B in unsecured debt on its balance sheet going into BK - more than 4X what UA had. DL's balance sheet is much lighter. Even though DL's employees will be paid comparable to if not higher than UA's employees (remember that DL domestic flight attendants will make more than their UA counterparts), DL's costs are much lower and closer to the true low cost carriers (did you notice that DL's 2nd quarter ex-fuel costs were only 1 cent higher than WN and FL's ex-fuel costs?). And DL is aiming to drive them even lower which means DL is well positioned to compete not only against US LCCs but also international carriers. The Europeans are scared to death at the cost advantage that US airlines are gaining in bankruptcy and are especially scared of Delta because it has lots of domestic capacity that can be easily redeployed to Europe. DL will be a quality operator w/ lower costs than any other major scheduled carrier across the Atlantic. And because they are diversifying their international growth across many countries, it is pretty unlikely that it will all fail at the same time, even if there are external events that pressured all of the industry.

There is no Koolaid, Fly. ...

Gee, things sound so great at DL, and it sounds like such a well-run, forward thinking company that is ready for anything, I wonder why they are insolvent?

 

[whodoyouthinkyouare]

Would you support US-flagged carriers having these same rights within Europe -- i.e., permitting DL to carry local traffic between, say, London -- CPH?

Not apples for apples, international carriage rights are different from domestic. However, I see no reason to disallow it. Of course then the carriers wouldn't be competing against just BA or Virgin, they would be competing against EasyJet and Ryanair on European flights.

Air India has rights to fly to NYC from London so I don't see under the right conditions we wouldn't allow US carriers to do the same in reverse (5th freedom rights?).

 

[Bear96]

Not apples for apples, international carriage rights are different from domestic. However, I see no reason to disallow it. Of course then the carriers wouldn't be competing against just BA or Virgin, they would be competing against EasyJet and Ryanair on European flights.

Air India has rights to fly to NYC from London so I don't see under the right conditions we wouldn't allow US carriers to do the same in reverse (5th freedom rights?).

I was trying to compare the US domestic market with the EU "domestic" one, not with long-haul routes like India. Certainly you would agree letting KLM fly domestic routes within the US in exchange for allowing US-flagged carriers to fly domestic routes only within the Netherlands isn't really apples to apples.

Of course, EU carriers would be competing against Southwest and JetBlue domestically in the US, as US carriers would be competing with EasyJet and Ryanair within the EU.

I am glad to hear you wouldn't have a problem with it though.

 

[WorldTraveler]

No Cosmo,
And you have yet to prove that DL or any other airline could serve these JFK/LAX/ORD. And telling me that NW serves DTWLGW doesn't prove anything because no US airline serves LHR from there. what's hauntingly obvious is that you are as hell bent on proving me wrong as I am that you are wrong and you simply cannot provide the evidence to prove your point.

What's apparent is that you and your buds are simply trying to protect a system that restrains trade and solely benefits your company and its friends. It should also be apparent that Bermuda 2 is on its last leg or British aviation will become very isolated. Bermuda 2 is no longer defensible.... every document that has been produced about it says that. The EU wants more of the US than the status quo and everyone except the British have long since recognized that the restraining trade only harms economies. So, regardless of the history or what can or cannot be done at LHR or LGW now, London's airports will be viably opened to new airlines or the British airlines will pay the very high price of being isolated from their continental counterparts.

 

[FWAAA]

All I know about Bermuda II is that its restrictions are difficult to summarize. And that LGW is not completely open-skies, despite erroneous assertions to the contrary. Any airline can serve LGW, but not from any USA airport it chooses. Bermuda II restricts LGW flights, albeit not to the extent it limits LHR flights.

USA-UK do essentially have an open-skies agreement, if you exclude LHR and LGW.

B747-437B has done a yeoman's job at explaining it in the past, both on Flyertalk and Airliners.net.

Gotta agree with Cosmo: Flights from JFK or BOS to LGW are gonna tend be moneylosers, since the high-yield traffic tends to go to LHR.

 

[WNrforlife]

Delta - What a bunch of losers. :down:

 

[Cosmo]

And you have yet to prove that DL or any other airline could serve these JFK/LAX/ORD. And telling me that NW serves DTWLGW doesn't prove anything because no US airline serves LHR from there. what's hauntingly obvious is that you are as hell bent on proving me wrong as I am that you are wrong and you simply cannot provide the evidence to prove your point.

Well, right back at ya! You can't prove your point either without a copy of the actual bilateral agreement, which apparently is not available on the Internet.

You're trying to argue that the absence of Delta's JFK-LGW service proves that it is prohibited, which you can't support with any documentation. But you're forgetting the almost certain lack of profitability for such LGW flights in markets with large numbers of LHR flights, like JFK and ORD, given that premium passengers usually prefer LHR when they have a clear choice. You also conveniently ignore unquestionable instances where LGW services have been provided by U.S. carriers at airports also receiving U.S. carrier service to LHR at the same time, such as at EWR and BOS a few years ago. It turns logic on its head for you to suggest that the bilateral agreement allows for LGW services in smaller, less competitive U.S.-LHR markets but not in three of the largest and more competitive ones. And I'm not sure that LAX is even one of the top three U.S.-LHR markets -- IAD-LHR is almost certainly larger, and BOS-LHR might be as well.

But I apparently can't convince you with my arguments, and you certainly haven't convinced me with yours, so we'll just have to agree to disagree about this until we can see the actual wording of the bilateral agreement.

What's apparent is that you and your buds are simply trying to protect a system that restrains trade and solely benefits your company and its friends.

You know nothing about me beyond what I've posted on this site. You have no idea how far off-base you really are with comments such as these. The facts are: (1) I don't work for United (or any other airline); and (2) I believe that the Bermuda 2 agreement is an abomination that the U.S. never should have signed in the first place back in the mid-1970s and, despite that, should have been junked years ago. Indeed, if the E.U. convinces any of its member states that they should abrogate their Open Skies bilateral agreement with the U.S., I believe the U.S. should immediately abrogate the U.S.-U.K. agreement in retaliation (although I understand that, in both cases, a year's notice is required).

And BTW, who are these "buds" of mine that you keep referring to?

It should also be apparent that Bermuda 2 is on its last leg or British aviation will become very isolated. Bermuda 2 is no longer defensible.... every document that has been produced about it says that. The EU wants more of the US than the status quo and everyone except the British have long since recognized that the restraining trade only harms economies. So, regardless of the history or what can or cannot be done at LHR or LGW now, London's airports will be viably opened to new airlines or the British airlines will pay the very high price of being isolated from their continental counterparts.

Would it surprise you to learn that I agree with your comments directly above? In the future, it would be better if you didn't simply "create" other people's positions on various issues when you don't really know where they stand.

 

[WorldTraveler]

let's not get too touchy, now. in this case, buds refers to the apparent pro-British party earlier in this post. Although we spar on occassion, Cosmo, you know I do respect you and know you generally are on target. And I do appreciate the insight you bring to the board instead of the emotions which are prevalent in aviation today.
The reason why BDA 2 is not decipherable to any of us is because it is the most convoluted, caveat entwined document that has probably ever been created. Even if we could read it, we probably could not understand it. And it has been amended many times to create new market opportunities such as for People's Express which is where the EWR service originated. However, I do not buy your arguments above because all of the restrictions - market access, frequency, and carriers are intertwined. Even if it appears access is permissible under one section, there are conditions in other sections that preclude service in another section. It is the restraint of growth in BDA 2 that is most onerous in BDA 2 and the largest markets and the most restrained. On the other hand, CVG, CLE, and MSP for instance do just fine w/ 1 flight/day and probably won't ever need much more than that. That is apparently why DL cannot serve NYC-LON - the frequency restrictions effectively knock out any LGW service. You might also check your statistics on the size of LAX-LON vs WAS-LON. Given that AA and BA are partners, even though they do not codeshare on beyond services, they do dump a significant amount of their capacity onto each other's network just as NW and KLM do to large degrees; none of that was anticipated when BDA 2 was created.

And to further expand what I have said ... I have talked with people in Delta's international strategy group and they tell me that DL could not fly JFK to either LGW or LHR if it wanted to. The fact that DL has never attempted to fly NYC-LON, these comments from people at DL who should know, and the opinion of aviation law people which I have cited are the basis by which I do not believe is capable of currently serving LON from NYC.

Relax... we are friends even though we do spar on occassion.

Incidentally,
CO's traffic statistics for Oct which were released today indicate that they and probably other carriers will have a hard time during the off-peak season filling all of the capacity that has been and will be added.

 

[Vikedog64]

Delta - What a bunch of losers. :down:

You are an idiot... :down:

 

[JFK777]

If the two new airlines EOS adn Maxjet can fly from JFK to Stansted then DL can too. ITS wrong not too and just shows how bad the Management in Atlanta is seeing things. London may have BA, Virgin and AA but then every one goes to the UK when going to Europe as compared to any other place across the pond. If Delta wants to be number 1 to Europe it can't be last in its first market. The "southern good ole boys" have to stop playing poker and drinking bourbon with every stakeholders fate. IT time to hire Wolf or Crandall out of reirement or Gordon Bethune, he saved Continental why not Delta? We need a real airline CEO.

 

[WorldTraveler]

STN is part of the de facto open skies agreement between the US and UK so, yes, DL could fly there. AA and CO have served STN and pulled their services. STN has grown alot and I believe will be part of the solution to LON airport overcrowding but I don't think DL, CO, and NW should be forced to fly out of a new airport just so BA can invest in US airlines. US airlines have equal access to every other airport in Europe; LHR should be no exception.

 

[whodoyouthinkyouare]

STN is part of the de facto open skies agreement between the US and UK so, yes, DL could fly there. AA and CO have served STN and pulled their services. STN has grown alot and I believe will be part of the solution to LON airport overcrowding but I don't think DL, CO, and NW should be forced to fly out of a new airport just so BA can invest in US airlines. US airlines have equal access to every other airport in Europe; LHR should be no exception.

How do you feel about a US government agency (the PBGC) owning substantial percentages of US airlines as a result of allowing them to dump their pension obligations? It's going to be taking a whopping 35% stake in United, 7% in US Airways and similar with NW and DL once they emerge from bankruptcy. So, not only do you have the Wright Amendment stifling competition in Texas you have much greater potential for government interference in the running of the airlines through the federal agency. We'd be fools not to believe it's going to happen either. It's been reported in the WSJ so the source is reliable.

So, the airlines have been allowed to screw over the creditors, the employees, and better run domestic and international competitors and now they get the compliant and friendly US goverment to take a stake in them.

Perhaps you should get your own house in order before slinging any more mud whining about slots at LHR.

 

[WorldTraveler]

the PBGC is likely to dump its equity stakes in the airlines it deals with just about as fast as the market will support it. But let's not get real elated about a US gov't agency taking a piece of the airlines in an effort to minimize their losses which are far greater than the relatively small equity stake they are getting. There simply is no comparable equivalent responsibility that European airlines have been able to push onto their governments.

And for the record, I think the whole pension dumping process needs to be stopped dead in its tracks. I have stated repeatedly that I think Congress needs to realistically provide the relief necessary to allow companies to restructure but then also require that if pensions are dumped it comes w/ significant penalties including issuance of debt, equity, and penalties. It's one thing to assume responsibilities if a company fails to restructure and goes out of business but it's quite another if the company is simply going through C11.

As for Wright, I think it's WRONG and should be dumped. Problem is, I'm not sure there are enough gates at Love Field to accomodate all of the players that would want to move there. Unless DAL can accommodate other carriers or build gates, then Wright has to stay and WN has to be forced to live with the special provisions they sought 30 years ago even if it cripples their future N. Texas revenue prospects.

Hiding behind someone else's flaws in order to keep from addressing your own is hypocritical and not the way I operate. I call 'em as I see 'em, regardless of who gets in the way.

 

[Bear96]

Hiding behind someone else's flaws in order to keep from addressing your own is hypocritical and not the way I operate. I call 'em as I see 'em, regardless of who gets in the way.

You mean like blaming all of DL's woes on the pilots (i.e., "hiding behind someone else's flaws") and giving DL management a free pass (i.e., "to keep from addressing your own"), the way you are doing on another thread right now?



You call 'em as you see 'em, alright. Except the problem is that your glasses are covered in mud. Or some sort of brown substance.

 

[Fly]

Here's how I see it:

The only airport all the US carriers are pining over is LHR.

The EU airlines want ALL of the US airports.

Basically, it would be very irresponsible for the US to open the skies to the EU carriers. For about 20 - 30 LHR slots, the US would be giving up so much more. I hope it doesn't happen. It would be the final nail in the US Airline coffin.