New Delta capacity cuts
 

This sorta sounds like another ER displacement or even worse....

Delta Responding to Worsening Global Economy: Financial News - Yahoo! Finance

Slinky
:eek:

Please stop. You're scaring the women, children, animals, and those near the bottom of the list.

ACL??? Furloughs??? I can't see how there wouldn't be.:( Please save me before I jump to conclusions. :(

I don't know why anyone would be concerned about furloughs at DAL. The DAL (& NWA) pilots have "furlough protection." Anderson and Steenlan are honorable guys. They are always concerned about the well-being of their pilots, and will always follow the contract provisions to the letter of the law.

[/sarcasm]

Shift to domestic yields which are doing better than expected.....pull down will be temporary....

Your username fits you well. I guess you're bitter at AA. You can keep that over there with your APA buddies. Maybe you should ask for 60%. :rolleyes:

Yeah, I was thinking that. Hopefully that is the case.

Stand by to see more how this is distributed. Fall will precede SOC. Atlantic pull down suggests Delta, Pacific suggests Northwest. Doing anything out of seniority order will be a mess.

Also, the most recent Delta displacement was pretty deep. Was any of the fall pull back already accounted for? I'm guessing this is additional, but as of Tuesday, the Delta side was "happy" with their staffing after the last bid.

There are parts of this puzzle still needed in order to jump the correct direction on conclusions.

At least on the Delta side, it seems they like to paint airplanes and park them in VCV. Hope the 747 repaint wasn't the first step in preparing them for storage. Looking at the numbers my SWAG would be they would be phased out of Asia in favor of something with lower seat mile costs. Flights like the service to MNL are full, but Japan Airlines pulled out all together. I'm guessing the 767 would be a sure fire money maker in that market.

Increasing connectivity could improve the Asian operation as well. More flights a day with smaller aircraft could increase staffing requirements, better serve passengers and make more money. There are a lot of 4 to 6 hour connections in NRT that passengers would like to reduce, but when you see the international travel banks (I think there are only two) you understand why it is that way.

The other problem Delta has in Asia is the restrictions on US Transit Visa issuance. Many Asians can not travel on US Airlines because they can not get Visas from our screwed up Homeland Security Department and now the rules require a Visa even if a passenger walks across the concourse from one connecting flight to the other without ever stepping out of the secured area. It is a stupid law and the reason why many other flag airlines can get another couple hundred dollars a ticket, to avoid the hassle of the Transit Visa. The Canadian flag carriers do well by exploiting the hassle factor of flying through a US hub.

Like I said last week there is some promising numbers for the mid 2010 timeframe. That MIGHT mitigate furloughs. They stated as late as last week that there were no plans for furloughs.
That said a 10% capacity pull down in the international arena equates to about 15% if it was domestic. With the use of augmented crews international pull down hits the pilot and flight attendant ranks harder. More bodies with out flights. It equates to about an 8% reduction if it was domestic.
Personally, I do not see how we will not furlough 200-300. It just makes sense. They were looking at Sept numbers to be the determining factor. I guess they determined that they warranted a deep cut. The only bright lights is that there is a lot of metal showing up, and we need bodies to fill em. Those 777's will need pilots, as will the "narrow body" lift that they are looking at. It makes furloughing a hard variable to determine.

I think this is only the tip of the iceberg to come. Companies are still downsizing. Until this stops, we will not see any growth in our industry.

Heyas,

It will be extremely interesting to watch the excuse tap dance if furloughs do happen, considering that the ink is still wet on the latest 'no furlough' agreement.

Nu

Agreed. But I would rather be here than anywhere else. We potentially will have $7b at the end of '09. Contrast that with say UAL who is under $3 b in cash on hand and that has few options. LCC is in worse shape. If these airlines fail only two things can happen, the gov't can try and use the "to big to fail" argument and a bailout, or they will let the marketplace decide.

Well, those same furloughs could be mitigated by not relaxing our Scope language and bringing those 76 seaters on to DAL property. There is a lot of chatter right now on RAH buying Compass. If that happened, would that negate the flow through?

Except for the airplanes that we have being delivered. :rolleyes:

Am I the only one who thinks you guys are being rather naive?

Unemployment is at 8% ... and is forecasted to go much higher. Who cares if DAL buys a new 777 here or there. They'll just park older aircraft.

Our no furlough clauses aren't going to hold if the economy does as forecasted.

I sure hope this doesn't happen. Being in the bottom 300, the Compass flow is VERY important to me. Not just because of the cost associated furlough protection that it provides. but because if I do get furloughed, I will have a place to go. But it seems like with the current financial environment, it would be very hard for anyone to get financing to buy a regional airline.

Did anyone else get the telephone survey from ALPA? They called me over the weekend - I made a big deal about how important scope protection was to me.

No, what did ALPA ask you?

Heyas,

No, a Compass divestiture does not affect the flow. The only way the flow changes is if BOTH parties agree.

I don't think the flow, as it stands, would survive at RAH. Failure to maintain the flow would result in draconian 70 seat cuts, which I don't think mama DAL would be willing to deal with right now.

It's interesting to note, though, that DALs most serious competitors, AMR, CAL, and SWA have little or no 70 seat feed, and I've heard serious talk that the whole 70 seat program is being re-considered along the same lines as the 50 seat program. The are BIG DCI cuts coming, and I've heard that this time next year there will be at least one less wholly owned.

Nu

Be careful.... I was accused of being "bitter" because I brought up this same point.

YES. But I guess it hurts less if you hope for the best & expect the worst.


Just like the old DC9s that have come out of the desert?

It was a survey conducted by a third party company. They asked a bunch of questions about how I felt about the company and DALPA. Most of the answers were in the strongly agree - strongly disagree type format, but some were in my own words. I took every opportunity to bring up the topic of scope :cool:

It was an overall "how do you think the MEC is doing and what are your most important issues going forward" survey conducted by the Wilson Polling Center, standard ALPA stuff.

At every opportunity I told them of my dissatisfaction with the relaxation of Scope and how that was my number one priority going forward.

No one is being naive. We are directly tied to the health of the economy. I do think other carriers are in a worse position so it will be interesting to see what they do going forward.

Yes, Nu and we know how that would be. The 76 seat market is a money looser. All those first class seats to is allow mile upgrades. Not too many people actually pay for the FC seats these days. It is bad business, DCI loses money.
Now what does that mean? In this economy I see it meaning continued pressure from DAL management to give the DCI carriers the 100 seat market. Why? Well they have contracts that they need to fill. We need to hold the line no matter how many they threaten to put on the street.
That said, there is a lot going on. Nu did you talk to the DAL-N contract administrator and see what he inferred by the four possible outcomes of CPS in the LEC 1 meeting?
DCI is going to get cut, and a lot. It was to happen this year, but they decided to wait until we had more lift to augment it. Why? Because we do not want to lose market share.
A lot is going on.
This decision on the cuts was just made, and it might not be the last. Like I said, we are really right on the line of whether or not it is cost advantageous to furlough. If we do I see 200-300.

They are, we will recover a lot quicker than the others. If this continues I see UAUA, AMR, or LLC in 11 or 7 by this fall.

BRIEF-Delta says still has firm order book on 787
By: AFX | 10 Mar 2009 | 11:49 AM ET
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ATLANTA, March 10 (Reuters) - Delta Air Lines Inc: * In remarks at J.P. Morgan conference, finance chief says Delta still has firm order book on Boeing 787 aircraft * Says has made no announcements, decisions yet about changing course on Boeing 787 * Says needs to improve unit revenue in New York market * Says it would be difficult to dispose of regional subsidiary in current market conditions ((Atlanta Equities; tel: +1 404 493 3656)) (For more news about Delta Air Lines Inc click here:) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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UPDATE 2-Delta to cut international capacity
By: AFX | 10 Mar 2009 | 11:08 AM ET
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ATLANTA, March 10 (Reuters) - Delta Air Lines, the world's largest carrier, said on Tuesday it would cut its international capacity by an additional 10 percent starting in September as the global economic downturn batters the industry. The airline also indicated it may need to cut more jobs, and its shares were up more than 3 percent in morning trading. Delta said its cuts would target its Atlantic and Pacific networks, which have seen the most revenue weakness. The cuts are in addition to a systemwide capacity decrease announced late last year. "While flying held up somewhat in the second half of last year, it was just a matter of time until the rest of the world started to slow down," said Basili Alukos, a Morningstar analyst. "From the international perspective, most of the airlines are just late to the game," he added. Delta said its trans-Atlantic capacity this winter would be down 11 percent to 13 percent compared to the winter of 2008, while its trans-Pacific capacity would be down 12 percent to 14 percent. The airline industry is grappling with weaker travel demand as economies sag around the world. Carriers slashed seat capacity in the second half of 2008 to compensate for volatile fuel prices and falling demand, and analysts have been expecting further cuts. Delta, which merged last year with Northwest Airlines, said in December its domestic capacity would fall 8 percent to 10 percent in 2009, and international capacity would fall 3 percent to 5 percent. Systemwide, that meant a reduction of 6 to 8 percent. The new round of downsizing means Delta must "reassess our staffing needs," the company said in a memo to workers. The carrier has eliminated 2,100 jobs through voluntary exit programs and hopes to achieve its next target also through voluntary separation. Delta has more than 70,000 employees. Delta also said it expects its first-quarter operating margin to be down 6-7 percent and breakeven pretax earnings at current fuel prices. Excluding one-time items, the carrier said it sees its first-quarter operating margin down 5 percent to 6 percent. Delta said it expects to end the first quarter with a liquidity position of $4.4 billion. Delta's shares were up 13 cents at $4.30 in morning New York Stock Exchange trading after earlier climbing as much as 8 percent. (Reporting by Karen Jacobs in Atlanta and Kyle Peterson in Chicago, editing by Dave Zimmerman) Keywords: DELTA/ ([email protected]; + 1 404 493-3656; Reuters Messaging: [email protected]) COPYRIGHT Copyright Thomson R

ACL,
200-300 doesn't make sense to me. If you consider the Compass flowback training costs they max out at 300 no? Its seems that once you reach the training costs of 300 type rides, wouldn't it make more $ sense to do at least 500-1000? 300 of the lowest paid guys in the company sounds like too few to be worth it (for the company), and 500-1000 may be too many to fly the remaining metal. Maybe that's what keeps them from doing any at all. Thoughts?
Philly

There are other ways to do capacity cuts. Aircraft will start flying through each others' markets starting next month.

For example:
747-400 (403 seats) replaced by a 777, 767 or Airbus in Asia (217 to 285 seats)
757-ER back fills the 767
E175, 737, MD88, MD90 and DC9 and Airbus Back Fill for 757's
CRJ, ERJ backfill for DC9 and MD88

Domestic is "right sized now" according to Ed Bastian today in the conference call. Demand is "not getting worse" and "revenue is stable."

Overall, the international capacity change results in a 5% gross cut. To the extent that flying is back filled with the extra Boeings there will not be a staff cut. On the routes that get "seasonal" service there will be cuts and more of the remaining flying will be on the weekend.

I am not saying that we are more over staffed than 300. What I am saying is that they need to furlough 1000 or just enough that they can guarantee that they will be out two plus years. They will have to pay for everyone to flow in to compass on the front end or the back end of their furloughs as there really are no other jobs out there. They know this. The goal would be to furlough just the number of pilots that can be on the street long enough to pay for their furlough at CPS.

make sense.
I do not have official numbers this is just an educated guess.

Correct. It will not just be flights but gauge. I am working on getting those numbers and total number of flights that will be axed. Also working on manning block hr reductions. FWIW, I do not think they have been crunched yet.

all they need to do is open up the SIL program with various options as to what the pay/benefits will be. Every mil guy I know would be all over it, even without benefits. I know, don't give them any ideas, but it would seem if a large percentage of the union wanted this something could be done.

Today the market is up and the CFO gave many reasons for optimism in his briefing. Part of being a leader will be moving back into the market as demand returns.

The 747's are very expensive jets. In this market a 777 or 'Bus might make more sense.

Today they said they would be anxious to get the 787 if it was flying today. I actually agree with that statement, the airplane is the perfect size for right now (and the 767-300 with winglets is really close to that size but can't go nearly as far).

Deliveries coming:

• 6 777 2009
• 2 777 2010
• "handful" of regional jets

Not really expensive if you fill up with 50,000 lbs of cargo and 403 passengers...no???:cool:

Nice to know that a guy like acl always seems to hope to move up by some other folks going down.

No genius, it is about liquidity and they are having issues with both of these companies. It is not about be stepping on someone else's back to get ahead.

Bucking/ACL

Your dead on about the gauge. IMO why the old NWA did better on the Asia rim than United did was we took the 757 out there to run "thin" routes and beach resorts. Then, the A330s for all but MSP and DTW to NRT. Off the top of my head, the only whale trip south is NRT & Nagoa to MNL (someone correct this). The transitions to other jets is taking place now, and we are waiting for 767s to come out now. IE, NRT to BNK is now a 757 vs an A330 so we need a 767 there for sure. So, we'll see......I like the way we think!

I know it is spring break and I was doing spring break places, but I was full full full every leg between MSP and Ft Myers, Tampa and Phoenix.

Ferd

If any of you guys get furloughed will you choose to flow back to compass, or to mesaba?

Okay genius, be careful what you hope for.

Probably, though unlikely.