More Questions Than Answers

[emily]

This dyslexia is a bit_ _. It would put them below Northwest as well. This is using 757 rates for DAL, NWA and Continental. 737 rates for DAL and SW.

 

[WorldTraveler]

Guess what, Emily.

NW has yet to deal with its labor problems so they aren't a real basis for comparison. Since DL has much bigger equipment than WN, there really is much more salary potential at DL than at WN.

Your point does demonstrate that DL pilots will be in the league with their competitors, not vastly overpaid. I don't think anyone has a problem (I sure don't) with any airline's employees making a small premium, particularly if they are profitable.

The performance based component (stock options, profit sharing, etc) of DL's turnaround plan hasn't been revealed but I hope for the sake of the industry as a whole that it is industry leading. Part of WN's success and B6 more recently has got to be attributed to the stake that employees have in the success of the company.

 

[emily]

WORLDTRAVELER. I'd say NWA is a real basis for comparison. The two are obviously eyeing each other and will likely end up in the same ball park as far as compensation.

 

[ZMAN777]

I believe Delta has a coherent plan – one that is really not that much different from UA, US, or AA but which doesn’t require shrinking the airline as the first two are doing and which has never led to a successful airline turnaround; it is the successive growth that turns those companies around, something that AA and DL have incorporated into their turnaround plans.

[post="184077"][/post]​

World,

I disagree with your take on the "shrinking" of UA. Yes, there is some downsizing on the domestic level, although a significant increase on the International level, which I might add (especially new service to an expanding China, Pacific market...something neither DAL or AA has), adds considerably to the revenue side of the ledger.

To be sure, UAL has its work cut out for them. And I agree with Julius Maldutis that all of labor will have to be part and parcel of the reform plan or it will go nowhere. Will it be easy? No. But I'm willing to bet that just as it'll happen (eventually) at DAL, so too will it occur at the other legacy carriers. Then it'll be interesting to see how the LCC's fare in the long-term.

Cheers,
Z B)

 

[WorldTraveler]

Overall, UA is a smaller airline than it was 3 years ago - that's called shrinking. Yes, they are more international which is a good move since that is where they make the most money.

Em- NW is a valid comparison only if they choose to bring their costs down. I am concerned that they are waiting so long to get around to dealing w/ the tough issues.

 

[Fly]

Is Delta larger than it was 3 years ago?

 

[WorldTraveler]

Actually, Delta’s revenues have stayed within 4% for the 3 years ended Dec 2003. In the same three year period, UAL’s revenues shrunk by 20% (UAL’s 2003 revenues were just 80% of what they were in 2001, and 94% of what they were in 2002).

Delta has been able to hold onto its revenues largely by using RJs to grow the overall size of the company (remember about 2/3 of DL’s RJ capacity is owned) and limit the revenue shrinkage that has occurred as yields have fallen.

NW’s revenue trend is very similar to DAL’s. CAL is within 4% for the total period but took a dip in 2002. AMR is within 8%. (Data is all from corporations’ 2003 form 10K).

Yes, some airlines have weathered the revenue downturn better than others.

 

[Fly]

So how can United still be called the 2nd largest airline? Apparently that can't be true....why do they still call United 2nd?

 

[WorldTraveler]

United just had farther to fall...and based on YTD revenue, DL may probably bypass UA as the 2nd largest airline based on revenue depending on how much flying is done by the regionals and how much is done by DL.

 

[jimntx]

So how can United still be called the 2nd largest airline? Apparently that can't be true....why do they still call United 2nd?

[post="185412"][/post]​

I think the ranking of #1, #2, etc. is based more upon the physical measures, such as # of a/c or employees, miles flown, available seats rather than on whether or not these assets made any money for the company. Airlines in the best of times are notorious money losers.

 

[WorldTraveler]

The standard ranking for any company is by revenues. Airlines have specific metrics which are related to the items mentioned above.