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Welcome to airline forums, AM.
While the discussion has largely been about network aspects of DL and WN – or perhaps as some see it DL vs. WN – it might be time to look at other aspects of DL vs. WN including labor. No one has been able to come up with valid evidence to show that DL and WN won’t coexist when all the evidence seems to show that DL and WN have managed to coexist and grow together at the expense of other carriers.
But let’s look at the labor situation you raise.
If the issue is merely whether DL is largely unionized like most of the rest of the airlines in the world, then I’m not sure there is any answer anyone will like other than that the majority of DL employees have chosen repeatedly not to outsource their labor relations…. and are receiving “services” from the company as good as if they outsourced the function of management relations and negotiation of salaries and benefits to a union.
That of course is the value proposition behind outsourcing and it applies to labor relations just as much as it does to other services.
If the issue is really the level of outsourcing that airlines do over all, let’s look at that.
As you may know, DL’s decision to outsource most of its small and medium sized domestic stations came during the mid 90s when DL launched its “leadership 7.5” program to bring costs down to 7.5 cents/ASM – not surprisingly in order to be competitive with WN.
DL maintained its level of airport outsourcing largely through BK until the NW merger – perhaps you joined DL through that merger – when it acquired a number of new small and medium sized cities.
Others know the details better than I but DL has since added DL mainline back to some of the cities where NW had mainline… I’m not sure what stations were outsourced and are now DL mainline –including PMNW personnel.
NO one can reasonably expect DL to undo overnight decisions that were made 15 years ago but they have not expanded airport outsourcing and they have brought some outsourced activities back to DL mainline employees, again including PMNW.
Where DL is bringing airport jobs back to mainline, it is using ready reserve and other reduced benefit/entry level pay jobs – not a whole lot different from what many other US consumer companies do. However, good luck finding much in the way of products at just about any US consumer goods store that are made in the USA – or even countries with comparable standards of living to the US.
What DL is doing now – distinct from every other network airline – is that DL is shrinking its Delta Connection operations and adding DL mainline jets. Just as WN dropped FL’s RJ based operation, DL recognizes that there are places where mainline makes more sense and they are doing more to bring jobs back to mainline DL than any other network carrier is doing.
DL’s addition of mainline jets includes the M90 which DL is configuring with 160 seats, 10 more than they currently fly – and which requires adding a 4th flight attendant.
In addition, IIRC, 100% of DL’s flights to/from the US are flown by US-based flight attendants while other carriers have foreign crew bases that operate flights to/from the US.
As for maintenance outsourcing, I am sure you are aware that DL Tech Ops INSOURCES a significant amount of work such that DL says they are the largest North American airline based MRO. In contrast, WN outsources a lot of maintenance but to my knowledge does little if any insourcing.
Finally, you might consider that DL employee salaries are now above average for the US airline industry as a whole… and DL employees received more profit sharing than their network airline peers. Even PMNW employees who are still governed by the pre-merger contracts did no worse than other network carrier peers.
So, yeah, DL outsources more of its total labor than WN – but it is shrinking that amount and the salary and benefits for DL employees is above average compared to other carriers….
Perhaps that is the reason why DL employees voted on multiple occasions not to outsource their labor relations….
And why DL and WN have both been able to demonstrate that what is good for the business overall usually is good for the employees… and sharing the benefits with employees is what helps develop loyalty to the company – whether there are middlemen involved in representation or not.
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You actually can compare DL and WN; there are perhaps more similarities between DL and WN than there are between DL and other network airlines with respect to domestic operations – and it is also why it is very likely that within a couple years, the majority of all US domestic passengers will fly DL or WN with every other carrier splitting the rest of the pie.
one more thing, IIRC, AS engaged in a significant outsourcing of their ramp operations not too many years ago... and in so doing took on their union. AS is one of the more respected airlines in the US and also one of the few that has been able to directly compete successfully against WN.
I'm not sure if it is necessary for a network carrier to have to outsource labor in order to successfully compete against WN - I don't really think so - but like WN, AS is a legacy airline that recognized it needed to get rid of alot of its legacy costs in order to compete against WN. WN simply does not have the same level of costs as traditional network airlines including AS who are much older - and thus have more senior people and more retirement related costs. AS is the 2nd largest airline on the west coast - after WN - and AS' west coast operations are more than twice the size of the largest nationwide network carrier - UA.
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We'll see financial statements for all airlines in a couple weeks but it wasn't too long ago that DL actually had a lower CASM (cost per available seat mile) than AS did...although if stagelength adjusted (since AS operates shorter haul flights than DL), DL would end up a couple percent higher than AS.
Still, AS is yet one more example that it is possible to effectively compete against WN but network airlines - even AS - have had to adapt their model to be able to compete against WN... but when they did, they have been able to compete quite effectively.
Others know the details better than I but DL has since added DL mainline back to some of the cities where NW had mainline… Im not sure what stations were outsourced and are now DL mainline including PMNW personnel.
they have not expanded airport outsourcing
thanks, Kev.Outsourced on both sides? NONE.
The only things that have reopened are for PMDL people, and those were staffed already by PMNW.
Yes they have.
What? Your fighting SW's battles now too, World Traveler?So was every other airline too stupid to not realize that DL and WN were in cohoots to drive the rest out of business?
Interesting theory.... I'll be waiting for the anti-trust case against DL and WN to begin.
or perhaps DL figured out a long time ago that in a commodity business - which is essentially what domestic air transportation is - that the best way to win is to have the lowest costs.... and by religiously sticking to being the lowest cost domestic network carrier, they have now ended up as being the only viable competitor to WN in most of the connecting markets... while at the same time they ended up being the largest domestic carrier in a number of large markets of their own - soon to include NYC after the slot deal - which ALL added together makes them the largest domestic network carrier - on par w/ WN - while the rest of the network carrier airlines have been in retreat in the domestic market.
nice theory... let's check back in a couple years... but you might be onto something.
maybe in 10 years DL will be the only network airline flying domestic routes... how's that for a 10 year DL and WN vs. the rest of the industry plan?
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hey Sig, one more thing,
while you are working on your 10 year plan, you might take a look back on the last 10 years....
'cause if you do, you would see that DL and WN have both managed to grow their domestic revenue share during the decade and it has largely come at the expense of other network carriers.
So much so that DL and WN now pretty much evenly split 45% of US domestic revenue; even a two year plan for the industry which will include DL's growth at LGA due to the slot deal and WN's growth on the east coast will see them together carrying more than half of all US domestic passengers between the two of them.
We'll leave a few things to imagination but it isn't too far fetched to believe that the 50-50 split between DL and WN and the rest of the industry for US domestic passengers will widen considerably in the final 8 years of your plan.
And, BTW, DL as of right now is also the #2 US int'l airline and they are still adding int'l capacity.
You see, when you look at what got us to this point in the industry, it isn't so far fetched to figure out where we go from here.
thanks, Kev.
Can you tell us where DL has increased airport outsourcing other than the cleaning functions?
thanks, Paris.
Kev,
Correct me I’m wrong but I thought the process of outsourcing cabin cleaning was started by NW before the merger.
You can remind us of what is involved with the bag room jobs… but IIRC DL insourced back to mainline employees the DCI work that was being done at ATL and I believe DTW… not sure if other hubs were involved . Not sure of the numbers involved but I would strongly bet that DL added more mainline jobs by insourcing DCI than it did by outsourcing some bagroom jobs.. . but I’d like to hear both sides.
And that would be airlines that didnt have pillage the employees, wages, benefits and pensions, like WN.
Unlike, CO, DL, AA, UA, NW and US.
What? Your fighting SW's battles now too, World Traveler?
You are obviously a bit confused, especially about me.
You confuse Gary Kelly's 10 year plan for HIS airline with my 10 year plan on retiring where airports, aircraft, transportation and commerce are not on my agenda.
You also have me confused with someone who gives a rat's @$$$ about any outcome involving airlines! Frankly my dear, I don't give a damn!
You waste an enormous amount of bandwidth just to say that Delta is going to b**ch slap Southwest unless they agree to a peaceful coexistance! The bottom line is that all your ramble seems to appease yourself.
Your one-upsmanship has no bearing on me because I work at an airport and not for an airline.
In the end you can all cancel each other out for all I care. I am just an observer(read below-Watching from outside the box) giving my opinion which is like a butthole because everyone has one...including World Traveler who believes that Delta is god!
The only one who actually seems to think that Southwest will hurt Delta badly is YOU! All I am saying is there is some good competition about to take place. And I have stated that as far as I knew, Delta was not a WN target.
You're the one who has the issues. So just make sure that yourb10 year plans include continued employment, because that is what you should really be concentrating on-How will Delta's workforce look in 10 years now that it has destroyed the unions...well the lower unions
I hear from former NWA employees who had accepted Delta that there is trouble in paradise
I know one who was happy at first but quit becauseDelta's dream turned into a nightmare fast. So continue to throw stones from your glass house, because it is the end that will justify the means!
or have to make the tough choices to eliminate unprofitable parts of their network inherited in a merger... just like what the network airlines.Fixed: "And that would be airlines that didn't pillage the employees, wages, benefits and pensions, like WN, yet" .
Wrong! In my line of work, I work at the airport division. There are other departments I can transfer to, if the airport were to be outsourced. Can you say the same, SW :blink:So in essence, your job "Depends" on the airlines ! :blink:
Wow and I heard from a current Delta FA, that it's a job in itself, just to work next to a NWA FA !