Of course you have a right to be critical.... however, I point to Mike Boyd, who is one of the most respected analysts on the industry - whether you like what he is saying or not.
He says that DL and NW's problems can really be tied to stratospherically high fuel prices that hit very early in both airlines recovery plans. However, both NW and DL have plans to become more profitable carriers.
With all due respect, how long did it take UA and US to come up with a business plan? Delta's creditors committee hasn't even been seated and they are announcing the turnaround plan (which was shared with the creditors as evidenced by their willingness to provide $2.0 B in DIP financing). The reality is that Delta couldn't have come up with a transformation plan in one week but had one going into bankruptcy. They will simply use BK to accelerate the transformation and will cut some costs deeper using the tools that are available in BK.
Given how quickly NW is moving to shore up its fleet, I expect they will move just as fast. My only concern for NW is that I believe they have much more opportunities to cut costs than to reallocate assets; because much of DL's transformation plan is built around reallocating assets and improving revenue at the same time that they cut costs, I expect they will be more successful, faster.
Finally, I'd have to go back and check the numbers but I believe Delta was the most profitable legacy airline on a margin basis in the late 90s. It isn't at all difficult to believe DL could reassume that position and leapfrog past some LCCs in the process. (You might have read that JetBlue says high fuel costs may bring their string of profits to an end).
Here's Mike Boyd:
That's pretty much the best way to describe much of the media frenzy in the wake of the Northwest and Delta bankruptcy filings. Rarely in the history of aviation have so many, with so little knowledge, pontificated so much and so inaccurately on a subject matter about which they basically know diddly.
Again, wrong. The causes for Continental to file in the 1990s, for TWA to file more than once, and United's filing, are very different than the reasons for DL and NW going the C-11 route. Again, look at the specifics of each incident, and there are few common threads beyond them all being airlines.
If fuel had stayed where it was projected to in early 2004, we would not be now bombarded by the dogmatic idiocy being spit out by a whole circus of sudden experts on the airline industry.
http://www.aviationplanning.com/asrc20.htm
Oh and Fly,
I hope it's not wrong to report profits while in bankruptcy...after all UA has done it.
and I might remind you that UA has terminated alot more than just the supplemental pensions that DL is suspending. Since they come directly from the corporate treasury, there is no way they could continue when cash is critical.
As of this writing, Delta employees STILL have their basic pensions, Fly. Provided by their company.
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