- Dec 5, 2003
- 21,709
- 10,721
You obviously are terribly enjoying yourselves. You predicted a year ago that DL would disappear into oblivion. It didn’t happen. In the meantime, DL has orchestrated one of the greatest/strongest/most successful/fastest turnarounds in airline history despite your incessant desire to prove otherwise. Oh I know those are all very hard words to measure so I’ll not argue the point if you think someone else is just as good as Delta – maybe even better on anything other than quantifiable metrics. On those measures, DL is doing just fine, thank you very much.
And now along comes a wet behind the ears executive who manages to shrink two airlines in the midst of one of the strongest economies in a real long time, slash its employee wages to the lowest levels in the industry, and then proclaims that he is one of the best airline managers in the industry and therefore should be given the right to take over another airline. And you all get so excited about the prospect of wiping out a competitor that you couldn’t see clearly if your life depended on it.
I’ve read a number of your posts regarding US’ proposal and have decided that the best course of action will be to make a single consolidated final statement on the issue. Since none of us has any control over it, beating the issue senseless accomplishes nothing… and quite frankly I don’t have the time, energy, or desire to reply to your baffoonish comments. In fact, some discussion boards have cut off discussion on the issue because it has generated far more heat than light with nothing real being accomplished by continuing to discuss the topic. Instead, I’ll wait until this deal is put to rest and then measure who best understands the airline industry by who was proven wrong. I encourage each of you to review your postings from a year ago regarding DL and see how wrong most of you were – and still are. Witness the change in heart from the ever-waffling NHBB who just weeks ago admitted that the vision of a strong DL was indeed taking place.
Let me first of all thank each of you for your incredible support over all the years I have been posting on this board. Along with another forum, I have made nearly 4000 posts which you have vociferously read. More significantly, no one has defined internet discussion forums regarding a single carrier as much as I have regarding DL. It has been my pleasure to share my wisdom with you and despite your attempts, you find it possible only to argue with semantics (and then not even successfully) than the substance of what I say.
I began my “career†as an internet poster as DL slid into its darkest days. Despite a recognition that the Mullin management team didn’t get it, the damage to DL was too great for it to be turned around when Katrina sent fuel prices soaring and DL’s credit card processing agreements came up for renewal – without a trip to bankruptcy. My purpose – not surprisingly – then as it is now is to vocalize why I believe DL will emerge as a strong and viable independent carrier. There is absolutely nothing that has happened over the past 2 weeks that has made me change my mind. The irony is that DL executives would have given the company away a year ago but are not about to walk away from the hard work that has turned DL around so well today.... or to shortchange the employees who made it happen.
I suppose some of you are particularly enjoying the opportunity to lash out at Delta – and me – because of the intensity of the remarks I made about United – and that is certainly understandable. However, let’s make a few things very clear about my views regarding United. I still do not understand how United managed to get itself into such a horrible predicament despite having one of the best route systems in the world (a claim which they will be unable to make in just a few years when compared to DL’s expansive six continent spanning network). UA’s bankruptcy was still the longest and costliest in airline history (you can be assured that the threat of more takeover threats will only hasten DL’s exit out of bankruptcy). While never known for its labor-mgmt relations, UA could only turn itself around by slashing its employee’s wages second only from the bottom to USAirways. And UA just posted an industry AVERAGE profit – nearly four years after filing for BK.
For years, I have consistently told UA employees and stakeholders that if they were unhappy with the pace of UA’s reorganization that they should pressure management to do a better job. Long before UA management acknowledged that its post-BK costs were still too high, I was highly critical of UA’s costs. While the pressure has not been comfortable for UA employees, it was obviously necessary. UA is now a stronger and viable airline. And yet many of you say you still don’t support UA management. Incredible.
I have also frequently stated that UA’s Mileage Plus card is the only other frequent flyer program I belong to besides DL’s. While I have often proclaimed that DL would acquire UA’s Pacific routes in a bid to become a significant player in Asia, I am particularly pleased that DL is on the verge of expanding its presence in Asia to the point where they will at least have a reasonable presence.
Since some of you think I speak doubletalk by no longer believing there is a need for mergers or asset acquisitions, you also cannot find anywhere that I advocated that UA be stopped from using its legal right to file its own plan of reorganization. Nor have I ever advocated a hostile takeover – because airline history unequivocally shows they don’t work.
So, I’ll summarize why I don’t think the US proposal to acquire DL will work. You might also want to see what Mike Boyd says at www.aviationplanning.com. He and I are on the same page.
1. There is no need for consolidation in the airline industry now, esp. when the basis of any merger involves reducing capacity and closing hubs. The traveling public is facing higher fares and fuller planes than they have seen in years. No one outside of the financial interests that will profit from a deal will support one. Whether you want to admit it or not, airlines are still very carefully guarded businesses whose interests are more dictated by the government than Wall Street.
2. US’ assertion that antitrust issues can be worked out is laughable. DL and US completely overlap each other. There is nothing to be gained by combining the networks and a whole lot of service will be lost. Antitrust issues are not about ATL or CLT but about cities like DCA, ILM, TYS, and SCE. Those kinds of cities will face enormous loss of service and that is where the objections will come from – and they can’t be fixed.
3. DL will quite frankly present a stronger plan of reorg than US can. The only assertion that US can make is that they have a strong historical stock price – but there is no assertion that US can continue to grow profits without continuing to shrink its route system – exactly why Doug wants to do a deal. The sledding is about to get tough for US and Doug wants a way to continue to prop up US, even if it means lying through your teeth to convince everyone you aren’t eliminating a competitor. If US really wanted to expand its network and create new opportunities for its company, it would have gone after NW which is far more compatible in many dimensions. On financial terms alone, DL can just as easily offer its creditors and bondholders as good of a recovery as US is offering. There is nothing magical about US’ ability to promise something that DL cannot top.
4. DL people. While few of you will never grasp why I grew to respect and started flying DL 30 years ago, it has been and always will be the people of Delta that are distinct in the industry. It is no surprise that DL mgmt and employees are standing shoulder to shoulder in opposing this merger because they realize the DL heritage and way of life is at stake. And it’s not just emotion. DL built its restructuring around the concept that employees and mgmt would gain equity and profit sharing in the reorganized Delta. All of that would be wiped out in ANY takeover. And while you may think employees are just pawns in the hands of a few executives, I would remind you of the power of employees at airline after airline to destroy the company rather than do what management wants. In an industry where labor and management fight more than cooperate and where hostile takeovers have never worked even when mgmt and labor has been at each other’s necks for years, anyone that honestly believes that a hostile takeover can succeed against the wishes of both DL labor and management is quite frankly a fool.
History is replete with examples of people overthrowing their unwanted rulers. Wall Street will simply not put billions at risk when it is apparent that management and labor can and very likely would derail the entire plan – and that applies to ANY takeover attempts, even if US’ fails.
Does it not strike you as curious in the least that the 2 airlines that have been most ruthless in treating their employees are the ones that are most interested in turning deals in order for their executives to profit? AA, CO, and DL have all embraced a new era of cooperation in labor-management relations while UA and US and even NW still have adversarial relationships where the employees are given little opportunity to financially benefit from the turnaround which they make happen. DL's employees held onto their industry leading pay longer into the industry restructuring cycle than employees at any other airline and will recover more of it sooner - while some employees will never recover any of what they gave up.
It will be shown to be the ultimate irony of this era of industry restructuring that Delta people will have exerted greater influence over their future than have the hundreds of thousands of union represented employees who are so used to fighting with management that they couldn’t possibly work together if they had to.
You can go back and read my 18-24 to do list for DL posted in May and see that Delta is right on track with not only what I predicted then. So what’s next for Delta?
1. They will turn down US’ proposal purely on financial terms. While DL could resort to the gov’t to stop this merger, it will stand as a testament to DL’s turnaround that they defeated this and future takeover attempts solely on the financial merits which should matter. Don’t be fooled into believing that DL couldn’t take the antitrust or employee route to accomplish its goals if it needs to strengthen its defense.
2. DL will present its own POR and will have it accepted.
3. DL will continue to expand its network with service to Asia, Africa, and the Middle East using widebody aircraft since only half of the internationally deployable aircraft have been deployed for int’l use. The ex-AA 757s will be used to further strengthen DL’s presence in Latin America and Europe.
4. DL’s product will continue to be enhanced to be industry leading, a term US doesn’t even know how to spell.
5. DL employees and management will obtain the fruit of their labors – something no other airline employees will experience to the same degree.
I know this is way more than most of you can digest so I’ll stop. But as US’ proposal unwinds and DL continues its plan of reorganization and emergence as an independent airline, I’ll be particularly looking for accountability from those of you who argued a year ago and now argue for DL’s demise.
And now along comes a wet behind the ears executive who manages to shrink two airlines in the midst of one of the strongest economies in a real long time, slash its employee wages to the lowest levels in the industry, and then proclaims that he is one of the best airline managers in the industry and therefore should be given the right to take over another airline. And you all get so excited about the prospect of wiping out a competitor that you couldn’t see clearly if your life depended on it.
I’ve read a number of your posts regarding US’ proposal and have decided that the best course of action will be to make a single consolidated final statement on the issue. Since none of us has any control over it, beating the issue senseless accomplishes nothing… and quite frankly I don’t have the time, energy, or desire to reply to your baffoonish comments. In fact, some discussion boards have cut off discussion on the issue because it has generated far more heat than light with nothing real being accomplished by continuing to discuss the topic. Instead, I’ll wait until this deal is put to rest and then measure who best understands the airline industry by who was proven wrong. I encourage each of you to review your postings from a year ago regarding DL and see how wrong most of you were – and still are. Witness the change in heart from the ever-waffling NHBB who just weeks ago admitted that the vision of a strong DL was indeed taking place.
Let me first of all thank each of you for your incredible support over all the years I have been posting on this board. Along with another forum, I have made nearly 4000 posts which you have vociferously read. More significantly, no one has defined internet discussion forums regarding a single carrier as much as I have regarding DL. It has been my pleasure to share my wisdom with you and despite your attempts, you find it possible only to argue with semantics (and then not even successfully) than the substance of what I say.
I began my “career†as an internet poster as DL slid into its darkest days. Despite a recognition that the Mullin management team didn’t get it, the damage to DL was too great for it to be turned around when Katrina sent fuel prices soaring and DL’s credit card processing agreements came up for renewal – without a trip to bankruptcy. My purpose – not surprisingly – then as it is now is to vocalize why I believe DL will emerge as a strong and viable independent carrier. There is absolutely nothing that has happened over the past 2 weeks that has made me change my mind. The irony is that DL executives would have given the company away a year ago but are not about to walk away from the hard work that has turned DL around so well today.... or to shortchange the employees who made it happen.
I suppose some of you are particularly enjoying the opportunity to lash out at Delta – and me – because of the intensity of the remarks I made about United – and that is certainly understandable. However, let’s make a few things very clear about my views regarding United. I still do not understand how United managed to get itself into such a horrible predicament despite having one of the best route systems in the world (a claim which they will be unable to make in just a few years when compared to DL’s expansive six continent spanning network). UA’s bankruptcy was still the longest and costliest in airline history (you can be assured that the threat of more takeover threats will only hasten DL’s exit out of bankruptcy). While never known for its labor-mgmt relations, UA could only turn itself around by slashing its employee’s wages second only from the bottom to USAirways. And UA just posted an industry AVERAGE profit – nearly four years after filing for BK.
For years, I have consistently told UA employees and stakeholders that if they were unhappy with the pace of UA’s reorganization that they should pressure management to do a better job. Long before UA management acknowledged that its post-BK costs were still too high, I was highly critical of UA’s costs. While the pressure has not been comfortable for UA employees, it was obviously necessary. UA is now a stronger and viable airline. And yet many of you say you still don’t support UA management. Incredible.
I have also frequently stated that UA’s Mileage Plus card is the only other frequent flyer program I belong to besides DL’s. While I have often proclaimed that DL would acquire UA’s Pacific routes in a bid to become a significant player in Asia, I am particularly pleased that DL is on the verge of expanding its presence in Asia to the point where they will at least have a reasonable presence.
Since some of you think I speak doubletalk by no longer believing there is a need for mergers or asset acquisitions, you also cannot find anywhere that I advocated that UA be stopped from using its legal right to file its own plan of reorganization. Nor have I ever advocated a hostile takeover – because airline history unequivocally shows they don’t work.
So, I’ll summarize why I don’t think the US proposal to acquire DL will work. You might also want to see what Mike Boyd says at www.aviationplanning.com. He and I are on the same page.
1. There is no need for consolidation in the airline industry now, esp. when the basis of any merger involves reducing capacity and closing hubs. The traveling public is facing higher fares and fuller planes than they have seen in years. No one outside of the financial interests that will profit from a deal will support one. Whether you want to admit it or not, airlines are still very carefully guarded businesses whose interests are more dictated by the government than Wall Street.
2. US’ assertion that antitrust issues can be worked out is laughable. DL and US completely overlap each other. There is nothing to be gained by combining the networks and a whole lot of service will be lost. Antitrust issues are not about ATL or CLT but about cities like DCA, ILM, TYS, and SCE. Those kinds of cities will face enormous loss of service and that is where the objections will come from – and they can’t be fixed.
3. DL will quite frankly present a stronger plan of reorg than US can. The only assertion that US can make is that they have a strong historical stock price – but there is no assertion that US can continue to grow profits without continuing to shrink its route system – exactly why Doug wants to do a deal. The sledding is about to get tough for US and Doug wants a way to continue to prop up US, even if it means lying through your teeth to convince everyone you aren’t eliminating a competitor. If US really wanted to expand its network and create new opportunities for its company, it would have gone after NW which is far more compatible in many dimensions. On financial terms alone, DL can just as easily offer its creditors and bondholders as good of a recovery as US is offering. There is nothing magical about US’ ability to promise something that DL cannot top.
4. DL people. While few of you will never grasp why I grew to respect and started flying DL 30 years ago, it has been and always will be the people of Delta that are distinct in the industry. It is no surprise that DL mgmt and employees are standing shoulder to shoulder in opposing this merger because they realize the DL heritage and way of life is at stake. And it’s not just emotion. DL built its restructuring around the concept that employees and mgmt would gain equity and profit sharing in the reorganized Delta. All of that would be wiped out in ANY takeover. And while you may think employees are just pawns in the hands of a few executives, I would remind you of the power of employees at airline after airline to destroy the company rather than do what management wants. In an industry where labor and management fight more than cooperate and where hostile takeovers have never worked even when mgmt and labor has been at each other’s necks for years, anyone that honestly believes that a hostile takeover can succeed against the wishes of both DL labor and management is quite frankly a fool.
History is replete with examples of people overthrowing their unwanted rulers. Wall Street will simply not put billions at risk when it is apparent that management and labor can and very likely would derail the entire plan – and that applies to ANY takeover attempts, even if US’ fails.
Does it not strike you as curious in the least that the 2 airlines that have been most ruthless in treating their employees are the ones that are most interested in turning deals in order for their executives to profit? AA, CO, and DL have all embraced a new era of cooperation in labor-management relations while UA and US and even NW still have adversarial relationships where the employees are given little opportunity to financially benefit from the turnaround which they make happen. DL's employees held onto their industry leading pay longer into the industry restructuring cycle than employees at any other airline and will recover more of it sooner - while some employees will never recover any of what they gave up.
It will be shown to be the ultimate irony of this era of industry restructuring that Delta people will have exerted greater influence over their future than have the hundreds of thousands of union represented employees who are so used to fighting with management that they couldn’t possibly work together if they had to.
You can go back and read my 18-24 to do list for DL posted in May and see that Delta is right on track with not only what I predicted then. So what’s next for Delta?
1. They will turn down US’ proposal purely on financial terms. While DL could resort to the gov’t to stop this merger, it will stand as a testament to DL’s turnaround that they defeated this and future takeover attempts solely on the financial merits which should matter. Don’t be fooled into believing that DL couldn’t take the antitrust or employee route to accomplish its goals if it needs to strengthen its defense.
2. DL will present its own POR and will have it accepted.
3. DL will continue to expand its network with service to Asia, Africa, and the Middle East using widebody aircraft since only half of the internationally deployable aircraft have been deployed for int’l use. The ex-AA 757s will be used to further strengthen DL’s presence in Latin America and Europe.
4. DL’s product will continue to be enhanced to be industry leading, a term US doesn’t even know how to spell.
5. DL employees and management will obtain the fruit of their labors – something no other airline employees will experience to the same degree.
I know this is way more than most of you can digest so I’ll stop. But as US’ proposal unwinds and DL continues its plan of reorganization and emergence as an independent airline, I’ll be particularly looking for accountability from those of you who argued a year ago and now argue for DL’s demise.
Maybe his ears will be dry by then.......
