Monkey See, Monkey Doo-doo

Derg

Cap, Roci
Staff member
Delta Air: Delta Will Expand Fleet With 100-Seat Planes
Tuesday June 10, 1:23 pm ET
By Ann Keeton, Of DOW JONES NEWSWIRES


CHICAGO (Dow Jones)--Delta Air Lines Corp. President Fredrick Reid said low-cost competitor JetBlue Airways Corp. (NasdaqNM:JBLU - News) "has an enormous amount of upside" in the industry, but that the carrier's surprise announcement Tuesday that it will order as many as 200 smaller planes from Embraer "isn't hugely material" to the nation's third-largest air carrier.
Reid told analysts at a conference Tuesday that the scramble to meet competition from low-cost carriers will continue. Stiff competition shifting the "balance of power" in the industry may result in liquidation or more bankruptcies among the six major U.S. airlines in the two years before JetBlue takes delivery on its new aircraft.

With its strong balance sheet and healthy cash flow, Delta won't be one of the airlines in trouble, Reid said.

The planes JetBlue will buy fill a niche between smaller regional jets and big mainline aircraft, Reid said. He said Delta's next change to its fleet will include adding 100-seat planes. He didn't say how soon the carrier will add the new aircraft.

Reid said Delta's own low-cost venture, Song Air, launched this spring, is doing better than expected. He said the airline's cost efficiency depends heavily on Delta's ability to cut labor costs. Using non-union employees, Delta has been able to increase productivity between 12% and 18%, he said. Song will operate 36 aircraft by November.

Reid expects Delta's pilots, the only major unionized work group at the airline, will vote this week to open their current contracts for renegotiation.

He said that's essential because Delta is cost-competitive with other airlines in most ways, but that "most of the cost differential is in employment cost."

Reid said Delta hopes to keep wages "relatively attractive" for its non-union workers, which comprise 52,000 of its total workforce of 60,000.

Delta's long-term goal is to cut unit costs, or cost per seat mile, by 15% by 2005, bringing Delta's revenue and cost structure back to the same level it enjoyed in 2000.

Reid said $2 billion of the $2.5 billion cost cutting plan has already been identified. By Ann Keeton, Dow Jones Newswires; 312-750-4120; ann.keeton@dowjones.com
 

pilot602

If specified, this will replace the title that
I only have one question (and this doesn't apply to JetBlue and the reason why will become obvious):

Where the hell are all these "bankrupt and nearly bankrupt .. we can't go on without gutting our employees paychecks" airlines getting the money to buy 100s of *new* aircraft? Aircraft that are completely new to the given company thereby requiring all sorts of training all the way around in addition to hiring more staff?

Just a question.
 

Derg

Cap, Roci
Staff member
Because most of the airlines are doing a lot better than they're leading onto.

In one breath Fred Reid says that we're a sinking ship and need concessions, but in another statement, we're cash flow positive and have a great operating profit.

It's basically the ATA's last opportunity to erase any contractural leverage and gains that pilots have gleaned over the past 10 years.
 

pilot602

If specified, this will replace the title that
[ QUOTE ]
It's basically the ATA's last opportunity to erase any contractural leverage and gains that pilots have gleaned over the past 10 years.


[/ QUOTE ]

I love how people blast unions then a) fail to realize or b) conveniently forget that airlines themselves have, for all practical purposes, a union.
 

Derg

Cap, Roci
Staff member
The ATA is TOTALLY a union.

You can't believe some of the outright bickering amongst the group when Leo gave us a raise.
 

Tim

New Member
I know here in ATL at the Widget its amazing to hear pilots talking about what the union should or shouldnt do. This is probably the first time in 12 yrs here that I have heard some inside squabbles. As a ramp rat its kind of interesting because we know it all comes down to the most important thing the VOTE. I see both sides, ALPA and Delta, but to me Delta jumped the gun on Song without getting some cost down somewhere. I mean the flight crews are making the same and cities where there is Delta ramp those cost are still the same. Not sure what the were hoping for, maybe for the pilots to just give up the raises freely. I know we lost a contract for engine mtx for SWA when that announced Song. We were going to get all of the engine work. They announced Song a few days before signing the SWA deal. Guess you know what happened there. So much for that income. I just hope that that ALPA and Delta get coming worked out before it gets ugly and it can in a hurry.
 
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