DL Sees Possible Job Cuts Ahead

[UAL777flyer]

DLflyer,

Abusing the bankruptcy system? Please explain how. US Airways didn't write the bankruptcy code and other laws that are on the books for corporate America. If you want to complain, write your Senators and Congressmen. US Airways is merely using the lawful system to its' advantage. Remember that bankruptcy is a means by which a failing company can reorganize. It isn't merely about liquidation of a failed entity. History is loaded with many corporations who became successful after they were allowed to reorganize in bankruptcy. If the shoes were reversed, you can bet that your employer would do the very same thing. But there is no way you can support an argument that US Airways is abusing the bankruptcy system.

 

[Diesel8]

I am sorry, but U is CH.11, that means that someone or something got messed up along the way. Really does not make any difference who, or what or where. But the fact remains, this is the only way U can compete, does not say much does it now?

For Mr. Munn to now chastise Delta is a little much, IMHO, they have not taken the easy road yet (CH.11). They are still paying their bills on time, taking care of their finacial obligations. Of course, DAL/NWA/CO is an attempt at being very competetive, but by golly so is U/UAL. There is no difference and the DOJ should either allow both or deny both.

U is dragging down the major carriers and before long, someone else will have to go the same route, namely CH.11, the question is who and where will U competetive advantage be then?

 

[UAL777flyer]

Diesel8,

It's not that simple. You cannot simply approve one codeshare because you approve the other. Each one must be judged on its' own merits because the implications are different. The market share of a CO/NW/DL alliance is much larger than that of a UA/US alliance. The route overlap is different. So the carve outs required will be different. How will the carriers serve hub to hub flying? Will the alliance cover strictly connecting traffic or will local traffic be allowed? These are just a couple of the things that must be looked at. The bottom line is that each codeshare deal is different and must be judged independently of others.

 

[CRJ/CAPT]

Considering this first to worst scenario that U and UA are in, isn't U just trying to do what DL has already done? Isn't DL already 300+ rjs ahead of U?
MAA=COM/ASA

 

[sfb]

Chip-

I believe that some of the information in your description of the DL/NW/CO alliance proposal is inaccurate. First of all, NWAC no longer holds a significant equity investment in CAL. That arrangement ended in January, 2001; NWAC now holds a single share of preferred stock in CAL (a golden share, if you will) which allows them to block change-of-control transactions involving CAL. Moreover, the proposed codeshare between DL, NW, and CO will indeed be similar to the UA/US agreement; Delta has stated that the carriers will operate independently and compete vigorously, including in the areas of pricing, scheduling, capacity decisions and revenue management.

I don't think it should be surprising that DAL would be behind a movement to change the loan guarantee program; after all, Delta is ineligible to access the program (considering it does indeed still have access to the capital markets). Delta is, however, disadvantaged by the loan program, given that carriers able to access the full faith and credit of the U.S. government will likely receive lower financing rates than carriers who must rely on their own credit ratings.

Why would DL seek to codeshare with NW and CO? Well, clearly, an alliance with AA would result in a similar-sized share of the market to DL/CO/NW *and* raise even greater concerns about antitrust at DFW, LGA/JFK, and BOS. DL would gain little, if anything, from a codeshare with HP. And there are very few other options for DL, CO, or NW as a response to the behemoth which would be created by a UA/US codeshare. I think it's clear that Delta had to respond to the competitive threat posed by a UA-US codeshare; after all, the lion's share of the additional revenue expected by US and UA clearly would come from Delta. Moreover, the market concentration of DL and CO at NYC would certainly be no worse than US and UA at WAS (DCA/IAD).

I think it is clear that Delta (along with CO and WN) has benefited from US Airways' missteps and failures in the past. Both DL and CO have been very aggressive with their deployment of RJ's, while US management unfortunately allowed its pilots to dictate the number of RJ's the airline would be able to operate. Consequently, both were able to poach a significant number of high-revenue passengers from US in smaller markets given passenger preferences for jets over turboprops. And they've both also had far lower costs than US.

It seems disingenuous or naive for Siegel to expect that Delta would do nothing in response to actions which directly target its business.

 

[mking78]

DLflyer

I would like to know why you think U is abusing the process of chapter 11? So far, management's use of this tool (and it is that) is a wonder to behold (but then, I have a little more at stake here than you do!) As to thinning the herd based on bad management..we would have been put down a long time ago. However, we are a nation at war. Saying we should let U go down in flames because of PAST bad management is like saying an underperforming brokerage house who was based in the North Tower should deserve to fail. That comparison is a little severe, but that is what has gone on here...the near destruction of our air traffic system in slow motion. I found Dr. Evil's rants over the last few months about destroying U to be in bad taste, in fact a little offensive. I would prefer no other airline has to go through what U is going through, and that all survive in some way in a robust economy. Good luck Dlflyer.

 

[Imamec.itsmyfault]

I may be a sourpuss, but I don't have my head in the clouds!

 

[Imamec.itsmyfault]

You guys are all wasting your time, arguing over any competition between U and Delta. There may be a future battle between UAL/U, and Delta, but comparing U by itself is a joke. U is now at best a major FEEDER, in reality it is no more than a large commuter. U's days of being considered a major are over! Good old Dave said from the beginning that he wanted the largest RJ fleet in the industry, and that is all he's shooting for. We will never recover to major status, and if you think differently, you're deluding yourself.

 

[oldiebutgoody]

[blockquote]
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On 9/19/2002 8:09:18 PM Imamec,itsmyfault wrote:

You guys are all wasting your time, arguing over any competition between U and Delta. There may be a future battle between UAL/U, and Delta, but comparing U by itself is a joke. U is now at best a major FEEDER, in reality it is no more than a large commuter. U's days of being considered a major are over! Good old Dave said from the beginning that he wanted the largest RJ fleet in the industry, and that is all he's shooting for. We will never recover to major status, and if you think differently, you're deluding yourself.
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[/blockquote]
Gee, I wonder which way sourpuss voted....

 

[CRJ/CAPT]

Who will U be a feeder or regional for? Could it become another midway? I do believe you are right though, U will never be a major again.
Steve

 

[Imamec.itsmyfault]

Oh by the way... If you are unwilling to take my word on what Dave has in mind for us, may I remind you that the reason he gave us for needing to get rid of the parity formula was, we cannot have our payroll tied to that of competitors the size of AA, DL, and UAL!

 

[oldiebutgoody]

[blockquote]
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On 9/19/2002 8:32:48 PM Imamec,itsmyfault wrote:

Oh by the way... If you are unwilling to take my word on what Dave has in mind for us, may I remind you that the reason he gave us for needing to get rid of the parity formula was, "we cannot have our payroll tied to that of competitors the size of AA, DL, and UAL!"
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[/blockquote]
Dave was right. Until U is the size of those others with a similar revenue base (U's collapsed prior to Sept 11, 2001, when business yields began their decline), they can't spend the same and stay in business. It's simple math, you don't even need a calculator or to go to business school to figure that out. What did you want? Another Rakesh lying to us about how rosie everything is? You finally get a straight talkin', common sense guy on your side and you choose to not believe him. That's why there were so few NO voters; people finally started seeing the reality of the situation. I feel a whole lot better about U's chances of survival now than I did two days ago. In fact, I believe we're gonna make it! U could be the next airline succes story; the first of the 21st century!

 

[oldiebutgoody]

[blockquote]
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On 9/19/2002 9:30:38 PM Imamec,itsmyfault wrote:

Also, I never said we weren't going to make it. I said we were never going to be a major again!
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[/blockquote]
And I think you are wrong. Again! If all the major carriers had done what they said after 9/11 and downsized approximately 20%, the industry would be thriving today. Instead, after announcing 20+ percent decreases, most only reduced 5-10 percent, and only U reduced to the 25-30% range. This KILLED revenues, but Delta, AMR and others WERE COUNTING ON picking up the pieces of U and controlling more markets. Didn't work like they thought, and NOW the big hurt is a comin'. Shoulda come about a year ago. Once U gets back on it's feet, which I believe will be within a year, it can begin to recapture it's markets using the RJs as feed (although I'm still rather skeptical of the economic viabilities of such a huge RJ fleet). Maybe I'm dreamin', but I've been in this business a while, and just about ANYTHING can happen! I even think that SW may be worried at what U may look like after it emerges from chapter 11, with costs which rival them (theirs are going up quickly), and service to much better, closer in airports

 

[Imamec.itsmyfault]

Also, I never said we weren't going to make it. I said we were never going to be a major again!

 

[Imamec.itsmyfault]

Tell you what, I'll concede this game for now, and we'll let time decide the winner. Print it out though, so a few years down the road you can remember to apologize.