Survey shows Delta lags behind on "brand respect"

[Kev3188]

Kev,
the "riding the coattails" argument is a nice soundbite for the labor movement but it is COMPLETELY unsupported by any sort of data.

You yourself said that DL employees can and do complain to get what they want w/o the "fuss" of actually having a union.

You also agreed that they have paid (and are paying) what they do with the idea of keeping organized labor at bay. Since the comparison is based on what unions negotiate, it is perfectly logical to state that DL employees are absolutely enjoying the benefits of what other aviation workers have fought for. If there was no floor set, what do you think DL would be offering in pay/benefits?

If DL employees were riding the coattails of their union counterparts, DL employees would have to be/have been making LESS THAN their union counterparts. That has almost NEVER happened for any consistent period of time.

To argue that they're NOT would be to completely ignore history & today's reality both.

They used to pay just a touch more to keep unions at bay. Today they use "industry standard." So we make MORE than some, but also LESS than others.

...And lets also keep in mind that the figures they use are always for TOS employees. The disparity is often wider on the lower steps of the scale.

I'm glad that you are committed to your cause and I want you to keep believing in it, but I can't let you say publicly that DL employees are being PULLED UP by labor unions at other airlines when the evidence clearly supports the complete opposite.

Good thing I don't need your permission, then...

...And again, even by your admission, it's no secret that DL offers what it does mainly in an attempt to keep unions out. Reality is that were it not for unionized employees at other carriers, DL employees would not see anywhere near what the earn now. To claim otherwise would mean that one believes the company ignores both industry standard(s), and history.

As for the size of UA's operation, my primary intent is to know if their handling is for their entire operation or if it constitutes some small subset of the operation, as US does at CLT.

It is a sizeable operation w/hundreds of employees working it.

You asked for an example, and you got one.

.

 

[WorldTraveler]

thank you for your honest but yet pragmatic approach, Kev.

It is precisely because you don't try to hide behind 10 year old data and refuse to make competitive comparisons that you are the one of the best hopes that the labor movement has to turn around its continuing slide into obsolescence - and your sharp mind and outstanding communication abilities only serve to make you more effective at what you do.

I respect what you stand for and the work you do because I respect you as a person and that respect has nothing to do with whether we believe the same things or not.

We agree on the reality of the DL-labor dynamic... I'm not sure I would say that DL employees are riding the coattails of their unionized peers since DL employees make more on average but rather that DL employees are able to continue to leapfrog past them by holding out for more pay using the threat of unionization. Whatever terms are used doesn't matter because DL employees get what they want w/o a union. The company gets more flexibility and employees have one less thing to worry about - labor issues.

I'd still like to know if the UA mainline ramp working UAX is for the entire operation or a subset - but you did provide an example which I don't think has been mentioned before.

It also doesn't change that even if some of UA's ramp/pax service employees are saving their jobs despite UA's very heavy reliance on outsourced flying, the pilots and FAs are still watching more and more of UA's network go to large RJ operators while DL is bringing those jobs back home to DL employees.

 

[Glenn Quagmire]

Get laid.
Smoke a cigar and and relax.

That is priceless.

I might actually take that advice.

 

[JFK Fleet Service]

How's the JV with Korean coming along?

 

[WorldTraveler]

How's the JV with Korean coming along?

I presume that question is part bait but DL is not giving any indication that they want a JV with KE. Their addition of SEA-ICN in addition to DTW-ICN would seem to say they intend to serve ICN with their own aircraft twice per day even after the withdrawal of the NRT-ICN service.

KE is probably not terribly thrilled that DL is expanding its China routes as aggressively as they are since KE's reach into China is precisely what they want to be able to offer DL. DL seems much more interested in developing relations with its Chinese partners and for them to distribute DL's passengers beyond PEK and PVG. We saw with the Asiana crash how dependent the Korean airlines are on US-China traffic for their existence.

It is also likely that a JV just involving S. Korea is not of interest to DL; UA went after a multi-national Pacific JV undoubtedly to keep one partner from playing itself against the rest of the alliance. At the same time, DL still has a very large operation in Japan (larger than the Korean local market) that it does not need KE's help to market even if KE would like to have a piece of it.

It also doesn't help that KE is discounting aggressively across the Pacific (esp. to China) and apparently wants DL to fly domestic passengers to KE's gateways at prices lower than what DL could get for carrying those passengers on a local basis. DL also has its own Pacific system so has little incentive to carry passengers just to KE's gateways and then turn them over without DL gaining a significant amount of KE's Pacific revenues, which compete with DL's own network.

Not sure what this has to do with brand respect or reputation or labor issues but we might as well take another detour in the thread.

 

[eolesen]

Oh, there's little question that DL's choice of partners in Asia has an impacting the brand respect, as does the way that DL's treating them.

First, there's the service levels. They're not all up to the same standard, which is all I need to say about that.

Second, DL has successfully implemented a four tier caste system for their partners with regard to FFP credit, and has seriously marginalized KE in the process.

If you buy a full fare business class ticket on CZ or MU, you get a whopping 75% EQM credit in Skymiles.

If you buy a full fare business class ticket on KE? You now earn 0% EQM and EQP credit in Skymiles. Zero. Zilch. Nada.

(see http://www.delta.com/content/www/en_US/skymiles/earn-miles/earn-miles-with-partners/airlines.html)

Throw in the spend requirement coming in 2014, and you'll see why some people have a negative view, even if the service is good.

WT's right that the discounting their partners are involved in is likely behind their moves, but in the process, DL is also alienating travelers who are tied to corporate travel policies that require taking the lowest available fare.

If DL is concerned about KE, then they need to get worried about the Chinese carriers next. They're starting to discount more aggressively than KE has been, particularly where they think they can provide an alternative to Emirates. There are quite a few A380's that are underutilized in China right now, and once they figure out how to implement more advanced revenue management than what they've been using up until now, it's gonna get ugly on Europe-APAC yields.

And bringing this back around, this all does start to weigh on how people view DL. Even kids in middle school start to realize that the company you keep impacts your reputation...

 

[WorldTraveler]

Profit motivated companies don’t have friends because they “look good” next to someone else.

They develop business partnerships based on the ability of the partner companies to increase profits.

Business doesn't run by the rules of the school playground.

There is no value to a company to develop a partnership “just for looks.”

DL is challenging KE because DL is in a position where they are not interested in being pushed around by KE – serving as a feeder to KE’s flights at prices lower than what DL could get if they sold those fares at US low fare carrier competitive fares.

Other Skyteam carriers do not have as strong of a partnership with KE as other Asian and European carriers in other alliances have – for the same reasons.

KE might have a better service level but if they expect everyone else to bow down to them, they will become isolated pretty quickly.

No one else wants KE either. DO you think oneworld wants KE when KE is the largest foreign airline in Japan and carries more Japanese passengers out of Japan other than in Tokyo?

DL can push on KE because KE has no strategic options to fight back. KE’s network and business model is built around sucking passengers out of Japan and China, predominantly connecting passengers between the two or to N. America.

While the Chinese carriers don’t have the same reputation as KE, they are not near as large either and it is a whole lot more valuable for DL to partner with Chinese carriers in their home country than to depend on KE to gain traffic in yet another country.

Reputation for a company is determined by how much people are willing to pay you for your products and services. By that metric, DL’s reputation is strong in Asia – driven by its strength in Japan – and increasing in other parts of Asia. DL wouldn’t be spending billions of dollars on new aircraft to expand beyond Japan if they didn’t believe they could make money increasing their network. Since BK, DL has a pretty strong track record of knowing whether they can profitably grow and not wasting resources in places where they cannot. They also have a far stronger record of profitability driven by continually increasing their revenues. If customers didn't think DL's reputation was strong enough, they wouldn't be spending more and more money to fly on Delta.

 

[eolesen]

Translated: DL doesn't need anyone else; everyone else needs DL.

 

[WorldTraveler]

nope... DL is smart enough not to develop relationships that are mutually beneficial.

DL doesn't have the same relationship with all of its partners, nor should they. DL has had a partnership with Aeroflot for decades but DL and SU will never have the same level of partnership as they have with AF/KL.

The issue with KE is simply that KE doesn't really want a partnership with another int'l carrier. They want a domestic carrier to feed them. That's what B6 does. AA, DL, and UA don't have any interest in an alliance relationship with a carrier that won't treat them as equals.

 

[eolesen]

Hmmmm, maybe you've been away too long.

Brett Snyder has a good write up of the DL-KE spat in today's Cranky Flyer.

I know, you consider yourself more informed than he is on anything DL... But he's obviously got a far more balanced view on this.

 

[WorldTraveler]

thanks for sharing his post and I don't disagree with what he says other than him making the assumption (I see no facts) that DL was trying to force KE into a JV.
There are way too many people, and perhaps him, that think this has large consequences to both DL and KE. It doesn't. They'll both be fine.

If KE needs for its passengers to be able to gain DL Skymiles, then they are sunk. But that is not the case.

I don't disagree with a number of things that Cranky says but no one should try to read more into what he says or doesn't say.

Even if DL wanted a JV, I am certain it would have been a multi-carrier JV just like UA and Star have. He isn't willing to say that DL would have been content with a single nation JV because I am sure they would not. KE wants a piece of DL's Japan operation and DL would probably be willing to give part of it to them if DL also got a piece of what KE carries from the US to China and Japan. I doubt if KE is willing to give DL as much as they want from DL.

Remember that S. Korea's market won't be growing near as large as China's and isn't as large as what Japan is today. KE is boxed in and that puts DL, not KE, in the driver's seat.

Korean is an oversized carrier in a relatively small market that will be hurt when the countries around S. Korea develop air service proportionate to their size.

KE doesn't have a JV with any airline, IIRC, even though S. Korea has had open skies with the US for years.

It is also very likely that the Chinese gov't is close to signing open skies with the US which would allow joint ventures between the US and China.

DL either wants KE in on the JV with the Chinese or it doesn't want to be involved with KE at all. They are too big to allow them privileged access without reciprocal benefits.

It also doesn't change that KE routes its passengers on the lowest priced connections, even if that is not the alliance partners. Nearly all int'l carriers have standard interline ticketing agreements for that purpose. Standard interlining comes at different prices and doesn't provide the same benefits such as FF miles and synched inventory.

The imbalance in the relationship is highlighted exactly by what Cranky rights here:
"One thing is clear. Delta can certainly benefit from Korean’s network, and I can understand why they’d want a joint venture. Meanwhile, Korean is huge in the US and should also want to benefit from Delta’s loyal base and connecting options. When both sides receive clear benefits from a relationship, you can only hope that they come to their sense and resolve their issues. But as we know, these fights don’t always end the way they should."

DL doesn't want to provide its customer lists and provide feed to another airline. Nor is it interested in supporting another airline's int'l network without that other carrier doing the same for DL's INTERNATIONAL network.

KE will be fine regardless... they are the Emirates of Northern Asia. But there aren't a whole lot of carriers that want to partner with Emirates nor does EK really want a true partner with much of anyone else. They want carriers to feed traffic to them, ala what B6 does for EK.

DL will be fine and will develop its Pacific network and use carriers with whom it can develop somewhat mutual business relationships. KE isn't interested in that.

And more significantly, in a couple years, DL could well be in a position where they are a true rival in terms of size and scope to UA in the top markets in Asia, including outside of Japan. Considering that NW handed DL a very strong presence in Japan but very little presence nonstop to the US from other points, DL has made great progress in developing its Asian network and the Yen crisis is only pushing DL further forward. The NRT hub is not dead and there are no signs that DL is pulling it down; DL is adding new China service every year. UA has no choice but to start adding secondary cities; from where else in the US are they going to add service to HKG, PEK, or PVG? DL can still add secondary service to China as well - but they are focused on the largest markets with plenty of west coast growth.

DL doesn't need KE to accomplish that. If KE can buy seats on other US carriers, which they probably can, they get what they want. No other alliance wants them or will take them.

DL and KE are both well-run companies. They've both thought this through.

 

[700UW]

 

[700UW]

Delta Employee Profit Sharing Reinstatement Petition

On March 20, 2007, Delta announced a new comprehensive compensation package for employees that would take effect shortly after our emergence from bankruptcy in May 2007. One component of the new package was a profit sharing program. The announcement read: “Delta’s profit-sharing plan will pay out at least 15% of Delta’s annual pre-tax profit.” As of January 01, 2013, Delta reduced our profit sharing pool to 10% of annual pre-tax profit, and is no longer honoring the commitment made to Delta employees for the vigilant efforts and repeated sacrifices we made starting in 2002 and ending with our emergence from bankruptcy in 2007.

It has been repeatedly stated by Delta executive leadership that the reason for the one-third profit sharing pool reduction was “it was what you said you wanted in the 2012 Delta Employee Survey.” While the full survey results are not available for employees to view (as is a common business practice), a summary was released, which includes no mention of any desire by employees to have our profit sharing pool reduced. In fact, there is no mention of the employee profit sharing program anywhere in the summary.

One of the five core values of Richard's "Rules of the Road" is "Always keep your deals - Integrity." Delta as an organization is not following its own "Rules of the Road" set forth by our CEO in 2007 and updated as recently as February 2013. We employees have made countless sacrifices and worked vigilantly for years to return Delta to profitability. We’re not asking for anything extra or new. We’re only asking that Delta keep its deal with its employees and reinstate the profit sharing pool to 15% of Delta’s annual pre-tax profit.

For this petition to be successful, we will need broad support across all Delta employee workgroups, and we are counting on you to share this petition with as many colleagues as possible. Flight attendants, pilots, reservations & gate agents, ramp, maintenance & administrative personnel are all affected by this decision to reduce the profit sharing pool. This petition is a vehicle for you to personally tell Delta executive leadership what you want, as opposed to having them tell you what you want.

Thank you for your support.

http://petitions.moveon.org/sign/delta-employee-profit.fb31?source=s.fb.ty&r_by=8727182

 

[Kev3188]

Petitions are nice & all, but I'll hold out for a CBA, thanks...

 

[WorldTraveler]

I take it your post, 700, was defensive since we all know that the numbers you post do not include profit sharing. If you include the profit sharing, the rates above move up quite a bit- not surprisingly, in line with what the company posted above.

BTW, estimates are that DL's profit will be up by 129% which will more than offset a 33% cut in the percentage of profit sharing.
And DL employees did get pay raises in exchange for the reduced profit sharing - and they'll still get more next year.