NW/DL Merger "Real Possibility"

“Research†can be had for just about any price and to support just about any position, esp. when no comparable quantifiable measure is used as the basis of comparison.

How about instead let’s use industry average revenues? In that metric, DL has been underperforming the industry for a number of years but it is entirely driven by the amount of capacity they have had on the domestic system, esp. for connecting traffic to/from Florida. Given that DL has removed a substantial amount of capacity from Florida, DL’s average revenues have soared. FlyHigh seemed to be trying to tell me the obvious about DL’s capacity moves and validating what I have posted before). And DL’s average fares in international markets (outside of N. America) have been comparable with the industry for a number of years. If a carrier gets comparable revenues to its peers, then it is clearly not second tier.

Let’s also look at the metric of frequent flyer members. DL is in the same camp with AA and UA in having over 20 million members in its frequent flyer program; they are probably the only 3 airlines in the world with that many frequent flyer members.

There is absolutely no quantifiable metric that substantiates a statement that DL is second tier on a revenue basis. On a network basis, AA and UA have greater access to the top business markets in the world than any of the other US airlines. Yet, somehow, DL manages to generate comparable revenues from its pitiful route network that is heavily concentrated in continental Europe and Latin America which up until this month DL served exclusively from Atlanta which is far from being one of the top Latin markets.

If AA doesn’t pay attention to DL, then you have just validated my point made several times that AA is on the verge of being pushed into obsolescence in NYC as a distant also ran behind CO and DL along w/ B6. What has AA done to enhance its NYC presence in light of rapid expansion by all three of those carriers?

And DL’s pension plans have been FROZEN, not terminated. There is indeed a very big difference. Under a freeze, accumulated benefits are protected and the sponsor (Delta) still assumes responsibility for the plan. Under a termination, the PBGC assumes responsibility for the plan and benefits are based on their requirements and not the sponsor. There are a lot of airline employees like Fly that will never see the full benefit that her airline promised because they did not meet full service and age requirements as defined by the PBGC.

I would be curious to see a comparison of the DL vs UA pilot compensation based on the likely termination of DL’s pilot pension plan. Given the bond that DL has already agreed to give ALPA and the fact that DL pilots still get a higher current salary that do UA pilots, I’m betting DL pilots still will fare better than UA’s.
 
12,

What airport would that be that both AA & DL have megahubs? If you're talking about JFK, neither would consider that a mega-hub. If you are talking about their comparative NYC presence, then I can assure that AA runs the table there. That's why when they started LGA-BOS/DCA service they were able to quickly grab share from both US & DL...they have the leverage with the largest corporate clients to do so. Conversely, DL's strategy is to offer the shuttle at very low fares for market share purposes. These are realities, not opinion. Delta is a good company, but not one in the lead of the industry...

Actually world, DL has less than 20 million active members while AA & UA have closer to 30 million actives each.

If you really want to use average revenue, then use on competitive routes and find that AA has SUBSTANCIALLY higher average revenue over DL. Why...they don't have to discount corp travelers as much as DL does. Regarding the research...it was all Delta internal research or syndicated industry results...no reason to really bias against the company that point. I'm not bashing Delta, just calling what's out there. There's a reason Delta's product changes aren't built to mimic AA/UA...it's because they realize thos carriers catter to a different, higher paying, clientele...
 
Interesting...this came up on Yahoo News just a bit ago:

1. American Airlines AAdvantage: 52 million members

2. United Airlines Mileage Plus: 40 million members

3. Delta Air Lines Inc. SkyMiles: 38 million members

4. Continental Airlines OnePass: 30 million members

5. Northwest Airlines WorldPerks: 30 million members

6. US Airways Dividend Miles: 28 million members

7. Japan Airlines JAL Mileage Bank: 17.35 million members

8. Air France/KLM Flying Blue: 10 million members

9. Korean Air Skypass: 9.7 million members

10. All Nippon Airways ANA Mileage Club: 9 million members

I can assure you with great certainty that Delta considers less than 20 million of them active. Additionally, AA considers somewhere near 30 million active in their program...interesting stats though...
 
And DL’s pension plans have been FROZEN, not terminated. There is indeed a very big difference. Under a freeze, accumulated benefits are protected and the sponsor (Delta) still assumes responsibility for the plan. Under a termination, the PBGC assumes responsibility for the plan and benefits are based on their requirements and not the sponsor.


don't know about the rest of the employees, but Delta has in fact filed to terminate the pilots pension plan.
 
12,

What airport would that be that both AA & DL have megahubs?

My bad. I meant to type AA/UA since you said they worry about each other. It is obvious which megahub the two of those carriers share.

Actually world, DL has less than 20 million active members while AA & UA have closer to 30 million actives each.

...yet you refute this with your own data in your subsequent post. I would say that a difference of 2 million pax (DL=38 and UA=40) is not a relevant difference, wouldn't you?

And thus we get back to your unsubstantiated claims. Perhaps you have an ax to grind with DL due to maybe being rejected for a sales job there in the past? Unsubstantiated claims such as those that you try to pass as fact come off as being jaded attacks. Cite source already. And who cares if AA/UA get corporate contracts out of NYC? DL will find them easier to come by when serving international businesses nonstop. And it may be difficult for you to understand since you are apparently in or have something to do with corporate sales...but this area will not single-handedly make or break an airline. That is how it used to be but when business travel began to shrivel a year or so prior to Sept. 11. Costs, efficiency, and midrange (non corporate) passengers became the prime focus of airlines). Businesses do not have the loyalty they once had and will go for the largest discount that you give them. So...more contracts often means you're giving more discounts. And if you don't continue to slice the price, they will go elsewhere. I know that is your world but you have to realize that # of corporate contracts is not the driver of a successful modern airline. That was the 80's and 90's.


I can assure you with great certainty that Delta considers less than 20 million of them active. Additionally, AA considers somewhere near 30 million active in their program...interesting stats though...

flyhigh-

I can assure you with great certainty that only 19 members are still active for AA while UA actually has 72 gadzillion active members. Most of NW's members prefer the color green and the pope wears smurf under-roos. And b/c I stated it, that substantiates it.

You lose credibility very quickly by continuously posting - an trying to pass as fact - your jaded opinions. A tip for you...when you have data to post, stop there. Adding commentary that greatly contradicts your own data is the wrong way to go.
 
...thos figures don't necessarily refute my point. Those are the total number of people who've signed up for skymiles. Do you really believe everyone of them is still actively engaged in the program. Nobody dies, moves, etc???

Delta's a good company and I enjoyed working there while I did. I'm a realist though. I'm not into sugar coating things. It's a company that has not performed particularly well against its peers. They also missed many key opportunities and made many mis-steps. It''s because of their history that (...working on getting back on topic here) I don't see combining them with NW as a winning solution. Nor do I see Delta coming out the survivor in a combination with UA. Not that UA hasn't made mistakes, but the reality is, they do have better overall brand recognition.

The int'l expansion has helped, but they've yet to really solve the domestic problem. Delta is in deperate need of a 100 seat aircraft. The inability to decide on what to buy will only allow the problem to fester. As that happens, we'll continue to seee the United's and USAirways of the world capitalize on thier product advantage relative to Delta's (especially in the West where SLC is a weak hub comparatively).

Cheers!
 
now we have it. another disgruntled airline employee who turns to the internet to get out their frustration.

You can pick apart a route or two and compare them if you want but IN TOTAL Delta gets industry average revenues on its international route network when year over year operations are considered and is moving very quickly and successfully to close the gap in its domestic revenue shortfall. Average revenue on a system and regional basis is an industry accepted measure for comparing revenue between companies in any industry - whether it be sales per square foot in the retail industry or RASM in the airline industry. AA probably does get better revenue performance in the JFK transcons and in some of its transcons - they should since the federal government handed rights to those routes to AA and UA decades ago - but I can assure you that DL does better than AA in the markets DL competes with to and from its hubs as well as with the Shuttle (you're really foolish if you think AA is a credible player in the LGA Shuttle markets; DL certainly doesn't think its the preferred carrier in DCA-BOS up against US). Your feeble attempts at trying to rewrite the rules of world business practices is hopelessly flawed.

Go see a therapist. Delta is the past for you. It's time to move on. Go do a better job at your next employer.
 
I can assure you that DL does better than AA in the markets DL competes with to and from its hubs as well as with the Shuttle (you're really foolish if you think AA is a credible player in the LGA Shuttle markets; DL certainly doesn't think its the preferred carrier in DCA-BOS up against US). Your feeble attempts at trying to rewrite the rules of world business practices is hopelessly flawed.
Sounds like DL is whoopin' some AA a$$! Yay DL!

Wait a minute. Remind me again which of the two is INSOLVENT and which is not?
 
AA probably does get better revenue performance in the JFK transcons and in some of its transcons - they should since the federal government handed rights to those routes to AA and UA decades ago -
Ummm, what planet are you on? We haven't had domestic route authorities for almost 30 years now. DL can enter any JFK transcon market that it likes. Wait, DL does serve those markets! And guess what, both AA and UA have a large revenue premium over DL.

You really need to get your facts right before you blindly spout off from your rose-colored view of DL.
 
...actually World, I'm not disgruntled at all. I'm just using the same metrics the company uses. The same ones I would use when reporting things to mgmt. The same metrics other carriers I worked for use. It's pretty standard in the industry. There's nobody at Delta mgmt who's thinking they are a premium carrier, thus the shift to a more leisure oriented product that protects/defends their share of business traffic.

As for AA being considered credible on the Shuttle routes...while you may not consider them, both US & DL do. They've been able to garner a significant share with an inferior product and schedule.

I know you may not like to hear people refute your theories, but there's no reason to downgrade to such personal attacks. I don't recall having done so myself and would appreciate the same. It's a debate. I have beliefs based on my experience at Delta which I enjoyed and learned a great deal from. Not everyondy who left the industry is disgruntled.
 
...thos figures don't necessarily refute my point. Those are the total number of people who've signed up for skymiles. Do you really believe everyone of them is still actively engaged in the program. Nobody dies, moves, etc???

And once again you are using an argument but only applying it to DL. Are you saying that DL customers die and move more frequently than do AA/UA customers? THAT would be a statistic. "Fly DL and you are more likely to die (not related to the flight but to your loyalty to DL) therefore there is more attrition in DL's program than the others". You're grasping b/c that is exactly what your argument is regarding your own numbers you posted above. I would tend to be a logical thinker (call me crazy) and say that the same mortality/relocation rates apply to all carriers therefore the figures would go down for ALL carriers...not just DL.
 
...not saying that at all 12. I know from working with the SkyMiles program and through colleagues who work in AAdvantage and MileagePlus that their respective programs have a larger percentage of actives than Delta. While Delta's program looks to be only 2 million customers less than UA's, their number of active customers is actually much smaller, in the range of 7-10 million.
 
...not saying that at all 12. I know from working with the SkyMiles program and through colleagues who work in AAdvantage and MileagePlus that their respective programs have a larger percentage of actives than Delta. While Delta's program looks to be only 2 million customers less than UA's, their number of active customers is actually much smaller, in the range of 7-10 million.

Once again...unsubstantiated opinions being passed along as fact. I hate to say it, but your colleagues are not going to say that they have an inferior product. They are sales people making their pitch (which is often unsubstantiated opinions being passed along as fact). Truth is that unless there are some serious breeches in confidential company data, nobody has all of the numbers necessary to make these allegations. For you to do so and continue to pass opinion as fact is clearly irresponsible.

Elvis and Helen Keller are alive, married, and living in Nome, AK.
 
We haven't had domestic route authorities for almost 30 years now.

And you somehow forget that the airline industry was regulated for its first 50 or so years of existence. The backbone of AA’s route system under the regulated era was the transcontinental markets via Chicago. AA had a 50 year running head start in serving those markets.

But this isn’t just about AA. It’s about any responsible business that has had a 50 year head start on its competitors. AA has and should have a revenue premium in the markets which it pioneered. Just as DL has and does have a revenue premium in its core markets. No legacy airline has grown to a dominant position in another airline’s key markets without an acquisition.

To repeat, the point is not whether AA is getting more revenue than DL in any particular market but whether AA or DL is getting a premium over each other on their comparable route systems. On that basis, DL does very well.

AA isn’t on the verge of collapse but they find themselves in the position now of having higher than average costs in the industry and not generating the revenue premiums to offset. As I’ve said many times, AA is a well run company but they face a significant challenge against 5 other legacy competitors that have had the benefit of using the very legal process and government blessed process of bankruptcy to restructure themselves.

Ch. 12,
don't make too much of flyhigh. He/she clearly didn't perform to the expectations necessary to remain at Delta. If he/she had this info, they were a merit employee. DL has released employees based on PERFORMANCE or more appropriately lack thereof.
 
Gee WT, you're just getting nastier and nastier as DL's bankruptcy drags on and on with no end in sight. Getting a little frustrated since they obviously have no plan (as evidenced by the fact they recently extended their stay in the Chapter Eleven Hotel)? It is very unbecoming to take out your frustrations about DL's hapless situation and management on others.

Cheer up, l'il buckaroo! DL will pull through! Sure it may be several years still, and it'll most likely be smaller and weaker, but something at the other end of the journey will have the widget on its tail and fly a lot out of ATL!
 

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