One More Step: Dl Pilots Ratify Concessions

[DLFlyer31]

DL pilots overwhelmingly ratified concesssions with 79% saying yes to the 32.5% paycut (along with a slew of other cuts).

The only hurdle remaining (and probably the hardest to fix) is DL's incredible debt load. Unfortunately, progress on this front has not been so good.

http://biz.yahoo.com/prnews/041111/cgth044_1.html

 

[Vikedog64]

DL pilots overwhelmingly ratified concesssions with 79% saying yes to the 32.5% paycut (along with a slew of other cuts).

The only hurdle remaining (and probably the hardest to fix) is DL's incredible debt load. Unfortunately, progress on this front has not been so good.

http://biz.yahoo.com/prnews/041111/cgth044_1.html

[post="199871"][/post]​

Hopefully with a pilot agreement, more of the creditors will cooperate. As Jerry said, there are no winners in this. We all must do what we can to organize outside of BK.

 

[WorldTraveler]

While the debt load is huge, DL's business case is surely built around servicing that kind of debt. DL has virtually no aircraft deliveries over the next 2 years (except for RJs which can be 100% financed at this point). Much of the pension funding will be pushed back based on legislation passed this past summer.

Bottom line is that while DL has much of its assets tied up as collateral, DL has as good a chance as anyone of turning itself around as anyone with these cost cuts. And with the exception of AA, every other legacy airline has as much tied up as collateral.

It's a shame it took this long to begin the turnaround but it is now underway.

 

[NewHampshire Black Bears]

If this couragous step by DALPA is "the" thing that saved DL's bacon, all well and good.
BUT,
If "grinch-stein" EVER turns around, and then runs to BK-11, NOBODY ever will trust management again, EVER !!!!!!!!

NH/BB's

 

[flyhigh]

NHBB-

What in the heck are you talking about? Delta has said all along that this one step may not be enough to keep us from ch 11. In addition, as his note to pilots said, the goal is to do things once and do them right...however the realities of the changing industry we are in may require us to take additional steps. To think that this is Grinstein's doing is naive. This is a company that has ignored the world for too long. The last time they were faced with major change, they failed (7.5) mostly due to Allen's poor approach. The one thing Delta can say to employees is that unlike AA, UA, US, et. al. is that there is a plan to fundamentally change the business to meet the environment. Status quo is not the answer at Delta.

 

[jimmyd]

I have a question somewhat related to the topic. It was written in a previous Delta press release that there was going to be a 10% wage reduction for all non-union Delta employees. Who are the Delta non-union employees? For example, are maintenance and/or ramp personnel non-union.

 

[aislehopper]

Everybody but the pilots and the flight dispatchers are non union.

 

[luv2fly]

NHBB-

In addition, as his note to pilots said, the goal is to do things once and do them right...however the realities of the changing industry we are in may require us to take additional steps.

[post="199976"][/post]​

Ahh.. here we go. Management types already foreshadowing additional cuts.
Delta's true problem has always been its debt. As ALPA's code-a-phone stated yesterday, there is nobody left to blame.

 

[JFK777]

The UA + 1% deal is finally over. What an expensive 4 years its been for the company. I have nothing against people making money, but the deal UA gave it pilots put the airline in ch 11. That day back in 2000 provided every pilot in America with "when do we get ours". The UA raise proved too be so expensive for the pilots at UA, they lost all their ESOP. As shareholders & stakeholders the UA pilots lost the most. I hope when oil does return to normal levels, people don't forget.

 

[luv2fly]

I have nothing against people making money, but the deal UA gave it pilots put the airline in ch 11.

[post="200220"][/post]​

The United pilot contract did not put United into BK. It most certainly was more than UA could afford, but United would still be BK today even if the PWA wasn't in place. The truth of the matter is the economy sucks, and oil is too flipping expensive.

 

[DalMD88]

The United pilot contract did not put United into BK. It most certainly was more than UA could afford, but United would still be BK today even if the PWA wasn't in place. The truth of the matter is the economy sucks, and oil is too flipping expensive.

[post="200262"][/post]​

I think we had better get used to the price of oil. Production is barely keeping pace with consumption. With China becomeing an increasing consumer of oil in the future the supply will only get tighter. Even if the Middle East should become stable the supply could have a hard time meeting the new markets demands. I think the open bar oil party is over.

 

[WorldTraveler]

United's trip to bankruptcy was the culmination of a failed ESOP and a company's worth of disgruntled employees who demanded to get what they never got out of the ESOP.

DL's problem was that the Mullin era thought the airline industry is just like any other -where costs can be run up and passed along to customers. Nothing is farther from the truth.

I think history will be the judge whether DL's strategy of funding its losses through debt while waiting to see how the industry would shake out was a valid strategy or not. While the debt DL took will take many years to pay off, there is a very real cost of ending up in bankruptcy and in having to ask employees multiple times for cuts - part of the reason the outlook for United and USAirways is not good. While DL surely would like to not have that debt, they have cleared away nearly all expenditures in the next several years except debt service. Even while DL's outlook deteriorated, it continued to pay $500 million in debt. Those payments will have to rise but the size of the debt in and of itself will not force DL into bankruptcy. If it were, the debtholders would be more willing to help cut debt but they are not and probably won't. They know DL can pay the debt and will simply stretch it out over a longer period of time. DL is very unlikely to face a bankruptcy threat again. The factors that drove it this time - vastly uncompetitive costs will not happen again for a long time. DL has real airline people running the company now.

Yes, oil is an issue but the real problem is that there are way too many seats and the legacy airlines cannot pass along costs to their customers. When that problem is dealt with, the industry can handle current and even higher fuel costs.