Survey shows Delta lags behind on "brand respect"
- Thread starter Kev3188
- Start date
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #197
because they want to maintain a non-union environment which has clearly resulted in stronger financial performance both before and after deregulation.
DL is protecting a way of business and yes they are willing to throw money to do so... but you also assume that they are throwing money that is in excess of what they would spend if they had unions.
DL has repeatedly analyzed the costs of its business model and they know exactly how much it costs them to pay those labor consultants plus their higher salaries vs. the inefficiency of other airlines plus their lower wages.
I'm not even sure how you "hate" a non-person but if it is possible it might be more accurate to say that the labor movement hates DL.
DL is protecting a way of business and yes they are willing to throw money to do so... but you also assume that they are throwing money that is in excess of what they would spend if they had unions.
DL has repeatedly analyzed the costs of its business model and they know exactly how much it costs them to pay those labor consultants plus their higher salaries vs. the inefficiency of other airlines plus their lower wages.
I'm not even sure how you "hate" a non-person but if it is possible it might be more accurate to say that the labor movement hates DL.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #199
rephrasing,
Because to them there is a known price that is worth paying to maintain labor peace and a more efficient operation with employees who will support the company instead of fighting against it.
Remember, when other carriers zig, DL zags.... DL uses its largely non-union status to succeed in an industry where the majority of carriers are unionized in the same way that it buys 20 year old aircraft that have been upgraded rather than spending money on new technology.
DL doesn't hate labor unions any more than they hate Boeing or any oil company. They are suppliers, just like labor unions seek to be intermediates to labor, a resource just like fuel, but DL has figured out how to make its business model work without doing the exact same thing other carriers do - and often better.
robbedagain
Veteran
- Oct 13, 2003
- 11,125
- 2,676
not to get too sidetracked here how is that fuel refinery thingy going for them....
while delta has always long been a boeing customer its very interesting note worthy they getting airbus planes thru 2017?? but im curious as to when theyll start taking the 787-8 or 787-9 that nwa had previously ordered
while delta has always long been a boeing customer its very interesting note worthy they getting airbus planes thru 2017?? but im curious as to when theyll start taking the 787-8 or 787-9 that nwa had previously ordered
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #201
it's actually a great sidetrack because it is right down the point.
I've had the conversation with Jacobin about the refinery and I will say the same thing here....
DL identified that the crack spread was the largest uncontrollable cost to DL. Companies don't like uncontrollable costs. The crack spread for an airline is essentially the markup between what crude and jet fuel costs. Before the refinery opened, jet fuel cost significantly than diesel because jet fuel is a byproduct that refiners don't have any desire to supply in any greater volume than necessary - the airline industry is captive. DL's intention when they opened the refinery was to produce more jet fuel than an average refinery and thus force the price of jet fuel down.
The crack spread is a calculated number but if you look at the price of jet fuel vs. crude, it is very clear that the crack spread has gone down. The DoEnergy tracks all of this information for years in the past and it is very easy to calculate the result.
DL has pushed the cost of jet fuel down, even if it has also done it for its competitors. DL also said that the main reason for operational losses at Trainer in the last quarter was related to renewable fuel regulations, not the actual operation of the plant.
As has been noted before, WN actually has paid more for fuel over the past 5 years than other carriers and yet WN has consistently been more profitable precisely because companies don't like surprises. Hedging and the refinery operation add risks but it also controls costs. WN has done it better with hedging; DL has done it w the refinery. It also isn't clear long-term how the fuel situation will play out. IT is very possible that refiners could start cutting their production of jet fuel because DL is probably forcing them to lose money on it. If that is the case, then DL's position is much stronger because DL controls the source of production. The final chapter on the refinery has hardly been written.
As for Boeing, you bet it makes them mad that DL is shunning their most expensive and newest jets and buying cheaper, older technology aircraft from Airbus and in the used aircraft market at a far better price - and DL's aircraft operating costs are still lower and will remain so. Boeing helped DL with the 717 deal and now DL has turned around and ordered from Boeing.... but DL isn't out to make Boeing feel good but improve DL's bottom line. If Boeing wants to sell aircraft to DL, they have to be the best supplier.
IN the same way, the majority of DL employees see a non-union environment as best for them. If they didn't the unions would be added to DL in a minute - and I absolutely support those who keep the heat on DL and for DL employees "whining" to keep their salaries up. The strategy produces what DL employees want - which is the best salary/benefits package they can get - and just enough better than what unions could offer that they don't choose to be represented by unions.
it is the free market working at its best.... in the case of buying airplanes, the supplier is buying. In the case of DL's employees, they look at a union vs a non-union environment to see what is best.
If DL fails to deliver what they could get elsewhere, they can and should vote in a union.
I've had the conversation with Jacobin about the refinery and I will say the same thing here....
DL identified that the crack spread was the largest uncontrollable cost to DL. Companies don't like uncontrollable costs. The crack spread for an airline is essentially the markup between what crude and jet fuel costs. Before the refinery opened, jet fuel cost significantly than diesel because jet fuel is a byproduct that refiners don't have any desire to supply in any greater volume than necessary - the airline industry is captive. DL's intention when they opened the refinery was to produce more jet fuel than an average refinery and thus force the price of jet fuel down.
The crack spread is a calculated number but if you look at the price of jet fuel vs. crude, it is very clear that the crack spread has gone down. The DoEnergy tracks all of this information for years in the past and it is very easy to calculate the result.
DL has pushed the cost of jet fuel down, even if it has also done it for its competitors. DL also said that the main reason for operational losses at Trainer in the last quarter was related to renewable fuel regulations, not the actual operation of the plant.
As has been noted before, WN actually has paid more for fuel over the past 5 years than other carriers and yet WN has consistently been more profitable precisely because companies don't like surprises. Hedging and the refinery operation add risks but it also controls costs. WN has done it better with hedging; DL has done it w the refinery. It also isn't clear long-term how the fuel situation will play out. IT is very possible that refiners could start cutting their production of jet fuel because DL is probably forcing them to lose money on it. If that is the case, then DL's position is much stronger because DL controls the source of production. The final chapter on the refinery has hardly been written.
As for Boeing, you bet it makes them mad that DL is shunning their most expensive and newest jets and buying cheaper, older technology aircraft from Airbus and in the used aircraft market at a far better price - and DL's aircraft operating costs are still lower and will remain so. Boeing helped DL with the 717 deal and now DL has turned around and ordered from Boeing.... but DL isn't out to make Boeing feel good but improve DL's bottom line. If Boeing wants to sell aircraft to DL, they have to be the best supplier.
IN the same way, the majority of DL employees see a non-union environment as best for them. If they didn't the unions would be added to DL in a minute - and I absolutely support those who keep the heat on DL and for DL employees "whining" to keep their salaries up. The strategy produces what DL employees want - which is the best salary/benefits package they can get - and just enough better than what unions could offer that they don't choose to be represented by unions.
it is the free market working at its best.... in the case of buying airplanes, the supplier is buying. In the case of DL's employees, they look at a union vs a non-union environment to see what is best.
If DL fails to deliver what they could get elsewhere, they can and should vote in a union.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #203
I respect your perspective but I don't think you will find very many DL employees who say they have to "beg" for their salary. The connotations of begging and being above average compensated do not go together.
They get what they have because the company has a solid revenue generation model and manages costs well including keeping its employees working efficiently, even while being paid more than average for their peers.
The picture of begging doesn't fit real well in Peachtree City anyway.
Plus, how do you explain DL pilot salaries since they are unionized? Like WN employees, DL pilots work WITH the company to help the company accomplish what the company needs to be profitable. There are pilots this past summer who said they have worked far more than they have in months - but it is precisely because DL used its EXISTING resources well during the summer - if not hard - that they are well-positioned going into the fall and summer. The pesky RR program which you hate is all about properly matching staffing with demand. DL needed its existing employees to produce a lot - DL's capacity was up by a couple percent in August but DL's costs undoubtedly went down.
If DL people feel like they aren't getting the pay they could if they were unionized or if they are having to resort to inhuman techniques to get it, they should unionize.
Just like the 333 order, DL is using only the resources it needs... it doesn't need 773s or 789s for the flights it intends to operate on the Pacific. And it makes more money using lower cost resources. IN the case of labor, DL staffs for the peak but does not overstaff for the offpeak as typically happens with unionized airines which offer much less staffing flexibility.
The current system does work for DL and its people, even if it is the "zag" compared to other airlines' "zig".
They get what they have because the company has a solid revenue generation model and manages costs well including keeping its employees working efficiently, even while being paid more than average for their peers.
The picture of begging doesn't fit real well in Peachtree City anyway.
Plus, how do you explain DL pilot salaries since they are unionized? Like WN employees, DL pilots work WITH the company to help the company accomplish what the company needs to be profitable. There are pilots this past summer who said they have worked far more than they have in months - but it is precisely because DL used its EXISTING resources well during the summer - if not hard - that they are well-positioned going into the fall and summer. The pesky RR program which you hate is all about properly matching staffing with demand. DL needed its existing employees to produce a lot - DL's capacity was up by a couple percent in August but DL's costs undoubtedly went down.
If DL people feel like they aren't getting the pay they could if they were unionized or if they are having to resort to inhuman techniques to get it, they should unionize.
Just like the 333 order, DL is using only the resources it needs... it doesn't need 773s or 789s for the flights it intends to operate on the Pacific. And it makes more money using lower cost resources. IN the case of labor, DL staffs for the peak but does not overstaff for the offpeak as typically happens with unionized airines which offer much less staffing flexibility.
The current system does work for DL and its people, even if it is the "zag" compared to other airlines' "zig".
robbedagain
Veteran
- Oct 13, 2003
- 11,125
- 2,676
does dl have plans to open new cities like say chengdu manilla for example after they get the aircraft
metopower
Veteran
- Nov 28, 2006
- 932
- 313
As you can readily see this was not the large wide body order that was rumored. It was a good thing in my opinion only because I Am not an airbus fan.The large order concerns the replacement of the 747. 16 to 25 airplanes is my guess. The airplane that fits is 777-300er .If Anderson does as he has stated before,that he does not order airplanes twice in a row from the same builder then the only conclusion leads to the 777. A350 is first generation new tech and I do not think DL will touch it.At least for a few years.787 is scheduled for 2020.747 are scheduled to leave by 2018 but that has changed twice already.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #206
DL has said that for now they are focusing on developing the "primary" cities of China more than secondary cities. There is far more demand to the largest cities and the 333 is a fairly good sized aircraft - almost 300 seats in DL's config or almost as much as AA has on their 773s which has a much higher percentage of premium seats (along with a big walkup bar that I don't think will last long).
DL is behind UA in developing its route network outside of Japan but DL is working very quickly to make up for lost time. It is very possible that DL's hub in SEA could serve close to the same number of cities in Asia as UA does at SFO. SEA is close to an hour shorter flying time to Asia which means DL can use smaller or lighter aircraft. DL has also said that they intend to develop LAX-Asia as well... the "heavy" 333s could do LAX-Asia beyond Japan and do it at very low CASMs, essential for a US carrier trying to compete with Asian carriers.
The 333s could also free up some 777s that DL can use to add new routes beyond what the 330s and 767s can do which will form the majority of DL's west coast-Asia fleet. The 777s could be used for more Australia - which has been rumored - or to go deeper into Asia.
meto,
a whole lot of DL's fleet decisions depend on what happens with Japan and esp. NRT. If only a couple new routes are opened at decent times from the US to HND, which is the most likely scenario because there just aren't that many slots available, DL's NRT hub is not threatened and "shorter range" aircraft can be used for a lot of the flying. If NRT becomes dehubbed, then DL will have to develop China and beyond from more of its interior hubs which means heavier aircraft are likely. Boeing likely will start to more aggressively discount the 773ER in a few years but DL's 333 order says they still won't fly a heavier aircraft than they need to... DL has used the 767 for years on routes that other carriers have thought they needed bigger, more capable aircraft yet DL has had comparable passenger loads plus decent cargo.
metopower
Veteran
- Nov 28, 2006
- 932
- 313
rumor is that Philippine air is moving there flight to sfo also Singapore air is moving their flt to sfo. That said marketing is looking at lax Manila and lax sigappore.The a330 is limited by crew rest areas. DL 's configuration is for three pilots not four. Therefore only 12hrs.But that will get to most of china from sea
OP
Kev3188
Veteran
- Thread Starter
- Thread starter
- #208
They may not say it, but in the end, that's exactly what it comes down to... a point reinforced when you mentioned "whining," which IMO is all that things like FIT or surveys amount to...
They get what the company decides to give them. Period.
My guess is that the unionzed dispatchers do the same. Why are you implying that any other work group wouldn't follow suit? It's fair to say that everyone wants the company to be successful, right?
Pro labor =/= Anti company.
Aprpos of nothing, it's been interesting watching RA's comments on fleet types/ordering/etc., especially given his previous ones at NW.
Different carrier, different era, I know, but still...
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #209
How is completing a company survey about compensation different from completing a union-sponsored survey or questionnaire asking the same thing?
The process of negotiating between employees and the employer is conceptually no different than it is when a union is involved. The real difference is that labor-mgmt relations are hostile and take forever for anything to happen – which is precisely why DL “plays on” the speed with which it can increase compensation as well as touts that it listens to its people.
Equally true, you can’t say that the company gives union-represented people everything they want which means that unions get what the company wants to / is willing to give. Even if unions were really free to strike, tell me how many strikes have resulted in increased compensation in the airline industry?
I ABSOLUTELY agree with you that pro-labor can very much mean pro-company at the same time.
I also whole-heartedly agree that pro-labor doesn’t have to mean low paid.
WN is a good example that both of those thoughts are not true but so are DL pilots who are paid above average and have good working relationships with the company, frequently giving the company what it needs for it to accomplish its strategic objectives. Obviously, the non-union employees can’t “give” DL anything to help them achieve DL’s strategic objectives regarding scope (like the 50/76 RJ issue for pilots) but the employees do provide quality service to DL’s customers which is part of DL’s strategic objective.
But it is also true that there is absolutely no assurance that DL would continue with its practice of above-average compensation if they had unions at every level of the company, and many employees know that. It is just as possible that DL might choose to apply a policy to newly unionized workgroups of “industry average or worse”, including how long it takes for improvements to be seen. There are a whole lot of DL employees who recognize DL could be a lot less generous and much more contentious if it had to work w/ unions – and both of those changes could be detrimental to employees as well as an incentive to not “rock the boat.”
It is actually a testament to NW’s heritage which Anderson knew well that NW thrived as well as it did after the leveraged buyout when it had no choice but to keep its older aircraft in service and defer buying new airplanes.
I suspect it was precisely the LBO that planted the idea in other people’s heads that it is possible to make good money using current/older technology aircraft that cost a whole lot less.
I think that highlights that there are indeed growth opportunities from LAX to Asia; not every country has a strong carrier and even if there is a strong carrier, it doesn’t mean they have the resources to make every flight work from LAX.
The chances are high that the 777s will be used for more growth from LAX-Asia while the 330s will be used more from SEA-Asia and from other gateways to NRT, perhaps MSP.
Is it possible that DL is upgrading the cockpit crew rest facilities on the 330 since the new SEA-HKG route is supposed to be a 332 and is blocked at over 14 hours? Wouldn’t that require 4 pilots and per the DL-DALPA contract, there has to be lie-flat, separate crew facilities for 2 pilots? I thought DALPA gave DL a short-term waiver for DTW-HND when it was briefly a 332 but if DL is committing to using the 332 on LAX-HKG and is ordering new 330s with range for flights over 12 hours, the company has to come up with a crew rest facility that meets the contract and is similar to the 777 facility, or so it would seem.
- Banned
- #210
This has to be the dumbest statement you have ever made.
There is NO, NONE, ZERO, and ZILCH negotiations between DL and its non-union employees, they are employees at will, and DL can do whatever they want to them within the law.
WT, why dont you tell the DL non-union employees to fly to ATL and go see labor relations and tell them you want to negotiate your compensation, and tell us what would happen to you, lol!
WT, you are seriously out of the loop if you believe that.
