Delta files for bankruptcy protection

Atlanta Journal-Constitution ^ | 9-16-2005 | Russell Grantham

[phantomworker]

Some people have no skills other than blue collar. At least they are working and aren't a burden on society. Don't they deserve as much perceived respect as those people who have control over their destiny? I think the act of standing up and demanding respect is to be admired.

[WoofDog123]

of course they say that now....any changes beyond those already put into place in the last few years will be rolled out quietly....that said, the FF programs are probably the last thing to get touched, as they have the effect of marrying travellers to one or two airlines. If you divorce your passengers, they might just decide to get an AA FF card...

[Pukin Dog]

Do you remember the 70s? That is where we are going to end up.

Lots of regionals, 2-3 Nationals, 6-7 Internationals. Thats it.

[phantomworker]

Good point. I just used some United FF and had no trouble at all.

[patton]

You ever read atlas shrugged? (ayn Rand)

[Turbopilot]

Speaking as one of 'they', we aint giving another dime.

I feel for your situation. I'd hate to be in such a position through no fault of my own, and I wouldn't want to give back another dime either.

But among other streamlining and cost reductions Delta will make in bankruptcy, they will seek more labor concession. I believe they've already hinted at another $500 million from the pilots. And if a deal isn't reached, the bankruptcy judge will unilaterally implement one.

[phantomworker]

No, what is the book about? I used to think Ann Rand's writings about Russia were communist-based. LOL

[Turbopilot]

FAs and other line employees got a 10% cut as of January 1st, and it looks like more will be coming.

[phantomworker]

Don't you think it is outrageous that these people like pilots and FA's have to take a salary cut so Delta can make a bigger profit when the bankruptcy is over?

[Pukin Dog]

Yeah, but I wont be there.

[patton]

It is about when the people with the money quit.

For instance, faced with a tax rate of 50%, I might just decide it isn't worth my time to build another house - screw it.

So that leaves ten people unemployed for a year, because I quit.

[WoofDog123]

"Don't you think it is outrageous that these people like pilots and FA's have to take a salary cut so Delta can make a bigger profit when the bankruptcy is over?"

The bondholders have rights here too, to put management in place that will let them recoup SOME of their lost capital they loaned to the company. Otherwise there is no reason for DAL to not simply stay bankrupt forever and not pay their bills forever, until suppliers quit selling to them.

HOpefully with all majors except AMR now bankrupted the industry can be remodelled in a fashion that avoids the unimpressive profit history of commercial aviation.

[Turbopilot]

The mechanics, baggage handlers, flight attendants are not unionized? I am surprised.

Nope. Delta's always been a non-union shop. All the other employees took a 10% pay cut as of January 1st - unilaterally implemented. More will come for them. And they started out making a lot less than the pilots.

The pensions are a large liability. Delta was essentially operating at a competitive disadvantage as long as UAL operated in bankruptcy, as Delta had to fund their pensions and UAL didn't. But they still aren't as big an albatross as fuel costs.

Fuel prices can easily be passed on to the consumer via ticket prices.

Except in an industry like air travel, with enormous fixed capital and labor costs, heavy competition, and an excess of supply, they can't be, at least not in the short- to medium-term. At least not without collusion, which is illegal. Most of the time when one airline has tried to raise its prices, other airlines haven't followed suit, forcing the first airline to rescind their fare hikes.

[StolarStorm]

Wrong. They always get new (and bigger) option grants after exiting bankruptcy and they also get huge "retention" bonuses during the reorg. I speak from personal experience...

[phantomworker]

How interesting. Thank you.

[You Dirty Rats]

Don't you think it is outrageous that these people like pilots and FA's have to take a salary cut so Delta can make a bigger profit when the bankruptcy is over?

You question is either sarcastic or just a sick joke, right?

[uncitizen]

Most of the time when one airline has tried to raise its prices, other airlines haven't followed suit,

I have a feeling that wouldn't be the case this time, given the extreme increase in fuel prices. Ticket prices would then be unaffordable for many and therefore, they'd suffer in that regard. Thanks for the info.

[phantomworker]

Then how would you make a living?

[patton]

I will always make a living - but you might not. :)

[Turbopilot]

Well, I certainly hope things work out for you in your future career. But can you disagree that for the vast majority of pilots with more than a couple years senority, it would be very difficult to even approach their former salaries in a non-flying career?