IT WAS JUST A MATTER OF TIME !

[700UW]

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.

 

[uniquelyAM]

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.
.
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.
.
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.

 

[Kev3188]

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.

Outsourced on both sides? NONE.

The only things that have reopened are for PMDL people, and those were staffed already by PMNW.

they have not expanded airport outsourcing

Yes they have.

 

[WorldTraveler]

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.

thanks, Kev.
Can you tell us where DL has increased airport outsourcing other than the cleaning functions?

 

[signals]

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? 🙂


---

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.

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! 😛

 

[Kev3188]

thanks, Kev.
Can you tell us where DL has increased airport outsourcing other than the cleaning functions?

Cleaning system wide and bagroom functions in a few hubs to start.

 

[does this plane go to paris]

"You waste an enormous amount of bandwidth"

I like WT and love his passion, but I see his reply and quickly scroll. If it's a 200 page/word response, IGNORE. If he/she can say something in a paragraph with a little bit of grammar, I take a look and read and go. I've actually responded many more times and been just as wordy, but when I type the response and then read and re-read before I post it, I shake my head and wonder if it's worth it.

"The only one who actually seems to think that Southwest will hurt Delta badly is YOU!" We have met the enemy and it is us. OR I have met the enemy and it is I.

 

[WorldTraveler]

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.
Signals,
Thanks for identifying your position in this discussion.
Whether you care about whether DL is harmed by WN or not seems to be contradicted by your desire for WN to inflict damage on other carriers. Not sure why you believe that but if that is your wish, so be it.
I post lengthy, data-filled responses because they answer questions which involve a right or a wrong. For example, the question of who or what is the largest of anything is measurable. In the same way, the question of who will be harmed by WN can be answered based on 30 plus years of history and data between WN and the network airlines.
Of course fact-filled responses cut to the heart of people’s opinions when their opinions are contrary to fact. Not surprisingly, many people don’t like what I post for that reason.
Yet, regardless of the conclusions, many do in fact learn from the research I do regarding the industry because they, like me, want to learn. For them my contributions are valuable – and they tell me so.
There are plenty of people who want WN to inflict damage on DL – and they have said it.
There are also plenty of people who have held WN up as something that destroys everything in its path – despite the fact that WN has a history of going into markets where it sees opportunity and doesn’t engage in battles to establish itself. The network airlines have left plenty of opportunities for WN, whether it be because they closed hubs they no longer needed or were unable to defend them due to their own cost structure. The point still remains that a number of network airlines have closed hubs and/or given up the local markets where they previously had hubs to low fare carriers, including WN. The revenue is no longer in the hands of that network carrier and if they haven’t replaced it with comparable revenue elsewhere , then it is no surprise to see the low fare carriers gaining and network carriers losing.
WN is a very well run airline – always has been. They know what they do best, do only that, and do it very well.
Let’s also be clear that WN became a force in national aviation – outside of its limited Texas operation – AFTER deregulation. The definition of legacy airlines is of an airline that existed prior to deregulation – when airlines were viewed as utilities, competition was limited, and the airlines asked the government for permission to raise fares and add service – creating little incentive to keep costs down.
Prior to deregulation, airplane travel was largely an experience of the wealthy and privileged. Today it is the intercity version of mass transit.
WN has no vestiges of the regulated era of aviation and has had to break no promises or get rid of costly parts of its network or business plan that no longer work in the current environment.
Lucky for them AND their customers AND their employees.
But WN’s simple – but well executed model –cannot begin to provide the level of air service which many people need.
.
I and most rational people see no conflict between WN and the existence and success of other network airlines. I am also quite certain that WN recognizes full well that there will be network airlines that survive and thrive alongside WN – as well as other low fare and sometimes low cost carriers.
That leaves it to figure out who among the network carriers will survive and thrive against WN.
I have laid out quite clearly that DL – and its merger partner NW – for years have understood the threat to their business models of low cost carriers and both have vigorously maintained cost structures which allow them to compete with other carriers.
The simple fact is that DL has maintained more of its network footprint and given up less of its network to low fare carriers than any other network carrier. Whether you like it or not doesn’t change the reality.
I am thus quite comfortable – based on reams of data and pages of aviation history – to show that DL will continue to grow its domestic network – the region in which low fare/low cost carriers compete – while other network carriers will lose domestic revenue and market share.
We can indeed check back 10 years or more from now – but I don’t expect the situation will be any different.
….
As for the PMNW people who you say you have met and talked with, I can only say that it is incredibly unfortunate that the labor representation aspects of the merger have not been resolved three years after the merger was announced – and nearly three years after it closed. As you know ALPA came up with a working agreement prior to the merger and Flight Ops is operating as one airline – with the exception of the few large aircraft carveouts which will be winding down in the next couple years.
For those PMNW who are awaiting resolution of the labor representation issues, they say they feel like second class citizens and I can clearly understand why.
My desire for them remains resolution and for them to be able to integrate fully into DL if that is what they wish to do.
The NW merger was DL’s largest and in my mind, the most significant in transforming them into the global airline they are now.
NW brought a huge amount to DL – not the least of which are some incredibly great people. My travels of late have taken me more through PMNW hubs than PMDL. NW built great hubs, I love the Airbuses NW brought to the “marriage” alongside DL’s Boeings, but most of all I appreciate the PMNW people.
Combined, I am more confident as ever that the new DL – strengthened by the PMNW people and resources – will accomplish whatever DL believes is necessary for it to “win” in the industry.

 

[Kev3188]

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.

Cabin cleaning was only outsourced in palces where AMFA had done it prior to their strike. In most line stations, NW employees handled it until about 1 year ago.

I'm not taking your bet on numbers; I'm refuting the claim that they aren't "expanding airport outsourcing."

 

[southwind]

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.

Fixed: "And that would be airlines that didn't pillage the employees, wages, benefits and pensions, like WN, yet" .

 

[southwind]

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! 😛

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 ! 😱

 

[WorldTraveler]

Fixed: "And that would be airlines that didn't pillage the employees, wages, benefits and pensions, like WN, yet" .

or have to make the tough choices to eliminate unprofitable parts of their network inherited in a merger... just like what the network airlines.

Coinciding with the WN PR drive for FL employees:
"Some workers in departments at AirTran's corporate center in Altanta, meanwhile, are making decisions about whether to move to Dallas to join Southwest or leave the company.

Operationally, Southwest is preparing to combine the two airlines' schedules and cut some flights, chief executive Gary Kelly said in a message to employees.

"We just have a lot of flights that aren't profitable and with these fuel prices, there's obviously now way to change these economics," Kelly said.

http://www.ajc.com/business/southwest-spreads-luv-to-1012760.html

Apparently it is ok for WN to cut routes - even of their merger partners due to high fuel prices but if a network airline did it, they would be raping and pillaging their employees and their communities.

Perhaps all those promises from WN post-merger (but obviously before gov't approval) may not pan out quite the way it was promised....

It was just a matter of time... before WN began acting just like the network airlines that they tried so hard to convince everyone they were not.

 

[eolesen]

I don't recall WN or FL needing a state funded bailout. There are promises & commitments, and there are obligations.

DL chose to walk away from both, apparently.

 

[700UW]

Ok WT,

US filed bankruptcy the first time in 2002 and got $1.2 billion a year in concessions just from the employees, I forgot how much from vendors and how much was wiped out, but yet less than two years later they filed Chapter 11 once again.

Inept management, inept judge.

 

[signals]

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 ! 😱

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: