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Eugene Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:35 PM
Original message
Delta memo fans bankruptcy fears
http://news.bbc.co.uk/2/hi/business/4723007.stm

Last Updated: Wednesday, 27 July, 2005, 22:13 GMT 23:13 UK

Delta memo fans bankruptcy fears

Shares in troubled US carrier Delta Air Lines have sunk on reports
that its boss does not believe its restructuring plan is enough to
save the business.

The comments came in an internal memo from chief executive Gerald
Grinstein, dated 26 July, reports said. Delta was unavailable for
comment.

Analysts said the memo reinforced fears Delta could be heading for
bankruptcy.

<snip>

"In light of what we have accomplished together so far, there can be
no doubt that Delta's transformation plan is delivering results.
What is also clear is that they are not enough," his memo said.

He added that the cost of interest on the firm's massive debts and
rising fuel bills meant further cuts were needed.


more...
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LissaM Donating Member (144 posts) Send PM | Profile | Ignore Thu Jul-28-05 03:38 PM
Response to Original message
1. Call me a cynic, but...
I guess after working the the greedier than thou airline industry I really don't feel sorry for when major carriers "go bankrupt". It seems like half the time, they do it to get cheaper labor out of their hard working employees so CEO can take a large kick back. Delta may be crying "woe is me" but I wouldn't really believe it.. NWA is doing the same thing, threatening their employees with bankruptcy.

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phusion Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:44 PM
Response to Reply #1
2. Yep...
Going bankrupt while smart companies like Southwest and Frontier see decent profits...

The airline industry has changed -- these companies need to change with it or they will lose.
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pitohui Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:48 PM
Response to Reply #2
6. days of southwest turning a profit at an end
southwest does not turn a profit on selling seats to fly places

it turns a profit on fuel hedging

in other words, gambling

the contracts are coming to an end and southwest will be profitable no more

i am not aware of any change the industry can make and service international flights and small towns as opposed to picking and choosing the most profitable routes only

it is comparing ups to the postal service, postal service must deliver mail to everyone, ups can decide not to service your area if it's too out of the way

when we're all flying southwest, i guess we will have to walk across the ocean

southwest is no example of anything except in their own propoganda

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LissaM Donating Member (144 posts) Send PM | Profile | Ignore Thu Jul-28-05 04:00 PM
Response to Reply #6
8. If there is a reasonable
Edited on Thu Jul-28-05 04:04 PM by LissaM
future in the airline industry, it is not going to be nearly as "cheap" as carriers like SWA or Frontier like to masquerade around as. In the end, they'll have contract negotiations, and lo and behold their profits will decline, decline, decline. SWA makes their FA's clean the planes between flights. Pathetic, since the Flight Attendants are not even getting paid (pilots and flight attendants ONLY get paid when the door to the aircraft is closed to when it is opened again. There is a VERY small per diem, but not worth it to pick up sick bags and nasty trash that lazy people cannot throw away when the FAs come around with trash).

Regional airlines are another place for the airlines to make money. You've probably flown on them if you live in the middle of nowhere USA. They fly a small, cramped jet out to NowhereVille and then connect you in a bigger city. Passengers often think they are flying on the bigger carrier, but in reality it is another company that flies jets owned by the larger company (for example, United owned Atlantic Coast Airlines for a while before it became I-Air. The passenger thought that they were flying on United). Right now, regionals get away with paying their employees next to nothing. Did you know a PILOT on these airlines only make around $17,000/yr? Why is this acceptable?

Sorry for the rant and rave. I guess it all boils down to the fact that upper management sucks and the people that are actually providing the service are getting their asses handed to them.
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wakeme2008 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 07:04 PM
Response to Reply #6
9. Sorry I guess you were not paying attention in Bus 101
Southwest believed the fuel prices would go up and signed a contract to lock the price in... Delta did not lock the price in and has to pay the higher price...

Now which business did the smart thing.

IMHO SWA will continue to do well because they are a better run business


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Ravenseye Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:51 PM
Response to Reply #2
7. Yep....all without Unions
It's the only major carrier that doesn't belong to a national pilots union. Their pilots get paid about the same, but they fly a hell of a lot more.

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pitohui Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:45 PM
Response to Reply #1
3. bankruptcy is a tactic
the employees and the stockholders are cheated in a bankruptcy

ceo gets his millions right on schedule

major airlines do not actually turn a profit, probably can't be profitable and service all comers

i think they should be nationalized and managers paid a price more in line with their worth instead of millions of dollars for adding zero value
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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:47 PM
Response to Reply #3
5. I like your comments
You have a fine way of thinking. Reminds me a bit too much of myself I suspect.

:toast: Cheers!

:kick:

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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-28-05 03:45 PM
Response to Reply #1
4. I agree
I have no sympathy NONE for these greedy SOBs. I hope they all rot in hell where they belong.

:kick:

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