Originally Posted by
Bucking Bar
Marketing and Network run the "brand." They decide which division or partner will create their productive capacity. Their decisions are driven by revenue and cost. They don't particularly care if it is a Delta 747 or an Air France A380. Neither do they care whether it is a 757, or a NextGen CRJ. None are old school Delta. None have the nostalgic sensibilities that cloud our judgement. Their considerations are mathematical, pure and simple.
In 2007 Delta did reconnect to the core values to power their way out of bankruptcy. However shareholders demanded a deal and the deal they got was entirely rational from an economic perspective. Delta moved further towards becoming a brand management company ... . Try to find a pair of Levi's made in San Francisco ... the only reason the odds are better for finding a Delta pilot flying Delta passengers is because of ALPA and because of scope.
Bar,
I pretty much agree with your post but have a question on the math: Did their math include the billions dollars of writing off near worthless 50 seat less RJs less than 10 years after purchase? Or to but it another way - what amortization schedule did they use for the 50 seaters - I doubt it was billions to worthless in 10 years.
I'm sure they will make it up with a billion dollar write-off of "Goodwill" or whatever accounting sophistry works at the time.
Scoop