The first of many to file chapter 11?
Delta
- Thread starter GROUCHO MARX
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No doubt.
I will be flying Delta Song this weekend, will be interesting to see what has changed in the 3 years since I was on a Delta carrier...
I will be flying Delta Song this weekend, will be interesting to see what has changed in the 3 years since I was on a Delta carrier...
Northwest, too. And United and US Airways have been in Chapter 11 for quite some time now.
Jet Blue is about to post a losing quarter for the first time.
American is the last not bankrupt( and that viability is questionable) legacy carrier with full domestic and international service.
There employees are carrying the company on their backs.
Southwest is about to begin showing stress too. And they offer no international connectivity unless ATA limited vacation travel is counted.
Amazing to me that Delta was not unionized ( except for pilots and small dispatcher group) and that management could not stem the tide. Incompetence and lack of accountability in a public company in most airline financial management is amazing.
I warn and suggest that the current administration is prepping the US for outsourced ( foreign ) airline service. Chinese and Indian companies funded under the table by US investors to bring us the "Walmart" model of air travel.
This industry is a mess and the market is heavily weighting the low quality ( read safe) option.
Air travel is a key to our economy and this does not bode well for the US.
There employees are carrying the company on their backs.
Southwest is about to begin showing stress too. And they offer no international connectivity unless ATA limited vacation travel is counted.
Amazing to me that Delta was not unionized ( except for pilots and small dispatcher group) and that management could not stem the tide. Incompetence and lack of accountability in a public company in most airline financial management is amazing.
I warn and suggest that the current administration is prepping the US for outsourced ( foreign ) airline service. Chinese and Indian companies funded under the table by US investors to bring us the "Walmart" model of air travel.
This industry is a mess and the market is heavily weighting the low quality ( read safe) option.
Air travel is a key to our economy and this does not bode well for the US.
If you follow most big US industry, you will realize that when things get commoditized, big company usually have a hard time competiting due to 1) union, 2) beaucracy, and 3) health care from the history of all employed in the past.
I suspect a lot of low volume route will get axed and the high volume route will be packed full with discount service. Maintanence services will be outsourced to canada or contractors with non-unioned workers, and seating will be trade like oil future are trade in the market between carriers.
All the back end process, like billing, IT, and stuff will be outsourced. No more meals to be served in all domestic flights.
I suspect a lot of low volume route will get axed and the high volume route will be packed full with discount service. Maintanence services will be outsourced to canada or contractors with non-unioned workers, and seating will be trade like oil future are trade in the market between carriers.
All the back end process, like billing, IT, and stuff will be outsourced. No more meals to be served in all domestic flights.
Panda, where do you see the bottom line in National security issues and air lift?
During the Teddy Roosevelt run by the current Pres to Iraq US CIVILIAN flag carriers lifted MOST the troops to IRAQ. Do you think Lufthansa, Air India, Virgin, will comply with CRAF?
During the Teddy Roosevelt run by the current Pres to Iraq US CIVILIAN flag carriers lifted MOST the troops to IRAQ. Do you think Lufthansa, Air India, Virgin, will comply with CRAF?
Maybe flight will just become too expensive for one's discretionary spending?
It might not be a bad thing. I really don't know.
It might not be a bad thing. I really don't know.
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I expect to see Delta become a international carrier and Song become their domestic low cost feed. They bought ASA in 1999 for 1.3 billion dollars and sold it off for 425 million and it was a constant source of profit. They're having to put all assets up for equity in order to give them some cash to operate on but until they get the earnings and expense ratio back in line they're just throwing good money after bad.
FowVay, I pray for the highly skilled and conscientous US Flag airline employees (whatever company), that are being wronged by their own "advocates", (corporate leaders/weak & poorly run unions/and the US government ), allowing international pressures towards socialistic commoditization under the guise of "free markets".
I predict as a Nation we will painfully regret the gutting of the industry.
Groucho, the COST of not being able to flex US military muscle is arguably the largest contribution have left to influence US foreign policy, amazing to me that some of the staunchest Hawks are contributing to that emasculation. I don't see the US military airlift growing. C17 case in point.
Once again the US voter is asleep at the voting booth tiller.
I predict as a Nation we will painfully regret the gutting of the industry.
Groucho, the COST of not being able to flex US military muscle is arguably the largest contribution have left to influence US foreign policy, amazing to me that some of the staunchest Hawks are contributing to that emasculation. I don't see the US military airlift growing. C17 case in point.
Once again the US voter is asleep at the voting booth tiller.
Terry, the COST of an airline ticket does not reflect the COST to fly a person in that aircraft.
Like the automakers, this can only last so long.
Like the automakers, this can only last so long.
Puh-lease. These mega corporations all start crying when gas goes up and uses that as an excuse or as a sterotype, then everyone starts following suit. But yet they pay all their executives, CEO's, etc. etc. MILLIONS of dollars per year plus some stock options in which they walk away with big bucks. Funny, you don't see that kind of BS going on with civil service but then everybody starts complaining how inefficient we are. So they opt to contract those services out. You want to know who gets the real big dollars from the contracts? Same thing and same circle with the coporate world. They file Chapter 11 to hide behind because they (refering to upper management) don't want to loose their salaries because they know they are raking over the coals. Like they don't plan for these contingencies as part of their operational management plan. They can all take a bite out of my arshe. And you wonder why our economy isn't "all" that.
Reorganizing under Chapter 11 means Delta and Northwest are seeking forgivness of some debts. I think these debts fall largely in the categories of purchases and loans, not operational costs, which means blue chip companies such as Boeing and GE will suffer the brunt of the domestic airline reorg effects. Since buying and leasing of planes have such long range planning implications for manufacturing and financing resources, defense manufacturing capability will be impacted severely by the wave of airline bankruptcies. As with ship building, the skilled labor force required to build planes is not easily developed.
Having a healthy and profitable domestic airline industry is just as important has having a healthy domestic energy policy, both from an economic as well as defense perspective.
Having a healthy and profitable domestic airline industry is just as important has having a healthy domestic energy policy, both from an economic as well as defense perspective.
Yes Darryl, I wholly agree. Financial health of a corporation should not be dependent of government welfare. This only leads to further mismanagement.
It is unfortunate that very decent people will feel this pain and not the guys at the top.
It is unfortunate that very decent people will feel this pain and not the guys at the top.
Things in the domestic air travel will be commoditized for sure, the pressure was on since discounter like JetBlue, SouthWest, etc started flying so much more efficiently than the big boys. I don't think they will start cutting corner in anything safety related yet, but they may outsource to Canada or non-Unioned contractors locally for maintanence (already talked about). You can cut salary in pilots and attendents, but not the numbers due to safety.
The older planes that aren't as efficients will be sold to India, Thailand, etc for sure. I don't think they will charter Indian or Chinese company for the flight due to restriction and the volume, but they may hire all foreign attendants for international flights and use only local attendants for domestic.
When I started carpooling between SF and LA 2 years ago, not too many people carpool. Now it has grown 20x and both passangers and drivers can choose each other based on location, time, price, and routes, all on craigslist. Many people I met back then were too poor to fly (students and teachers) but recently I start seeing dentists, scientists, engineers, spouses of investment bankers, etc, that were fed up with the long security check and increased cost of flying.
Some of them went with family owned, route and community specific busline that serve particular cities and ethnic minorities like a few Vietnamese owned bus lines. They charge 1/4 of flying and take 6 hours between SJ/LA instead of 3 hr (including overhead) of flying.
Look at how Greyhound and Amtrak operate now, that will be how the airlines operate tomorrow.
The older planes that aren't as efficients will be sold to India, Thailand, etc for sure. I don't think they will charter Indian or Chinese company for the flight due to restriction and the volume, but they may hire all foreign attendants for international flights and use only local attendants for domestic.
When I started carpooling between SF and LA 2 years ago, not too many people carpool. Now it has grown 20x and both passangers and drivers can choose each other based on location, time, price, and routes, all on craigslist. Many people I met back then were too poor to fly (students and teachers) but recently I start seeing dentists, scientists, engineers, spouses of investment bankers, etc, that were fed up with the long security check and increased cost of flying.
Some of them went with family owned, route and community specific busline that serve particular cities and ethnic minorities like a few Vietnamese owned bus lines. They charge 1/4 of flying and take 6 hours between SJ/LA instead of 3 hr (including overhead) of flying.
Look at how Greyhound and Amtrak operate now, that will be how the airlines operate tomorrow.
Security is going to be a tough one, either the government will pick up all the bills or the standard will be loosen. I think it will be loosen un-noticed now due to less terrorists interested in crammed discounter flight with full capacity. The terrorists uses first class seat on a least occupied flight day and time schedule, that will tell you something.
They already pull the trick once, they won't be able to pull it again as people will all defend the nation like the heros on flight 93. Risk of slipping a bomb on the plane should be about the same as before.
They already pull the trick once, they won't be able to pull it again as people will all defend the nation like the heros on flight 93. Risk of slipping a bomb on the plane should be about the same as before.
Groucho stated; "Terry, the COST of an airline ticket does not reflect the COST to fly a person in that aircraft."
Absolutely the problem. It has been since the industy began hauling mail. Guess what, the industry has never been able to make a real sustained profit. Nor can it, unless the environment of some sort of subsidy exists. Governmental usually.
For instance LUV has made money because they developed and flourished under the Wright amendment, as that airline begins to compete with the world it will find less profit.
I submit that it is too expensive for ANY current airline model unsubsidized to survive long term.
My point is that airlines are needed for a healthy economy, our economy and security longer term is in trouble if I am right.
I spent way too much time flying to ignore this issue, as a US citizen, pilot and a businessman.
Absolutely the problem. It has been since the industy began hauling mail. Guess what, the industry has never been able to make a real sustained profit. Nor can it, unless the environment of some sort of subsidy exists. Governmental usually.
For instance LUV has made money because they developed and flourished under the Wright amendment, as that airline begins to compete with the world it will find less profit.
I submit that it is too expensive for ANY current airline model unsubsidized to survive long term.
My point is that airlines are needed for a healthy economy, our economy and security longer term is in trouble if I am right.
I spent way too much time flying to ignore this issue, as a US citizen, pilot and a businessman.
No problem with subsidy per se, if that's what foreign competitors are doing (We know they are).
It's just a bad feeling given the parachutes extended to some (pun intended).
It's just a bad feeling given the parachutes extended to some (pun intended).
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