KJP you're sooooooooo not the bad guy!

 

this was posted in the Ohio Business and Economy thread (http://www.urbanohio.com/forum2/index.php?topic=5069.0) earlier today!

 

Sorry to spoil your fun!  :-P

Delta cuts a blow to local economy

By Bob Driehaus and Alexander Coolidge

Post staff reporters

 

It will cost Greater Cincinnati's economy an average of $1,000 for every visitor to the region lost because of Delta Air Lines' cuts to service at Cincinnati/Northern Kentucky International Airport.  That's the sober reality restaurants, hotels and, especially, businesses at the airport face as they prepare for life after a 26 percent cut in service planned by the airport's dominant carrier. 

 

Airport Finance Director Sheila Hammons burned the midnight oil Wednesday rewriting the 2006 budget numbers in light of the Delta cuts.  The airport's various departments, including police, fire, communications and human resources, had recently submitted proposed budgets for the coming year when Delta's news hit on Wednesday.  Ted Bushelman, airport spokesman, said Hammons sent the budgets back to department heads with instructions to identify expenses that could be trimmed

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050909/NEWS01/509090336

Here's something to think about...

 

According to study done by the University of Cincinnati, the Cincinnati/Northern Kentucky International Airport pumps an estimated $4.5 BILLION into the local economy. Even with the recently announced cuts by Delta, the local economic impact will still be in the billions. An independent study commissioned by the Columbus Regional Airport Authority found that Port Columbus International Airport contributed over $2.3 BILLION to the local economy. This is just two airports. There are about 600 commercial airport in the United States. People, the airline industry is a lot larger and has a far broader economic impact than you think. I know most of you would bust a nut watching the industry collapse and the U.S. going to a system of high-speed trains. It ain't happening before this country hits a depression worse than anything seen in the 1930s, because when the airline industry collapses, so will everything else.

No one is looking for the airline industry to crash & burn (sorry).  The point that many of us are trying to make is that our federal government has fostered a transportation funding system that is fundamentally skewed toward highways (first), airlines (second) and everything else (a very distant third).  If it were more balanced it would certainly be more competitive between modes and ecnourage better pricing for consumers.  The plus for the airlines, if a good passenger rail system were built, is that they would be able to dispense with much of their short-haul air routes and concentrate on long-haul travel, where flying is most efficient. 

 

But Washington, especially under the current administration, has done nothing but throw good money after bad with little or no accountability or visible return.  Even noted investor Warren Buffet has been critical of this kind of bailout, noting that the neither the airline industry as a whole or as individual airlines have ever turned a profit... witrh the possible exception of Southwest Airlines.  And yet Washington will throw more $$$ at the industry without blinking and our beloved Sec. of Transportation Mineta will dump all over Amtrak for being unprofitable? This is nothing more than hypocrisy.

 

 

 

    It's been said that the airline industry is a pet project of members of Congress since they are always using it, travelling back and forth from home to Washington, D.C.

 

    The airline industry is not going to last forever. In fact, based on projections for oil production, I would expect it to be practically gone in 100 years or less. What happens between now and then I don't know, but I would not be surprised if the airline industry, measured in passenger miles per year, is at it's all time high right now. It only makes sense that the industry has to start downsizing.

 

   

 

       

 

   

I went ahead and merged the topics and moved them here.

I think Noozer makes an important point. When someone advocates for rail investment, a strange thing happens in some people. I don't know if it's because they're accustomed to transportation monopolies (first railroads, now highways), but they seem to think we rail advocate want to swing the pendulum back to the other extreme. I think the goal is to get the pendulum as close to the center as we can, where a mix of interconnected modes of transportation are available so each can serve travelers in the most economically efficient way.

 

I will never suggest that high-speed trains will replace airplanes over distances of 400 miles or more -- because they can't. But the only reason why there are six or seven daily round-trip flights between cities like Cleveland and Columbus is due to the lack of a federal development program for passenger rail. If we had such a program, airlines would book their connecting passengers on trains over such routes (like Continental does to/from the Newark NJ Airport station, from/to points all along Amtrak's Northeast Corridor).

 

As you know, such short-haul flights are loss-leaders for the airlines. I did an estimate last year which showed that, if an airline tacked its own rail car to a 100-plus mph passenger train on a populous, short-haul route and connected its passengers directly with its flights at an airport rail station, the worse that the airline would do is break-even. On the high-end, the airline could earn a profit of up to $2 million per year in the scenario I envisioned. The reason why is the incremental cost to both the airline and the railroad for adding just one more car to a train is very small.

 

I fear the airlines are getting into the same marketing myopia that hurt the railroads in the middle of the 20th century. The railroads saw their mission as running trains, rather than serving customers' needs. Now, the railroads own trucking companies, barge lines and communications operations, all of which is still connected to their core business. IMHO, the airlines need to make a similar re-evaluation of their marketing mix and determine how best to serve their customers best while achieving the greatest return for their shareholders. I suspect that, when they look at their balance sheets, NYMEX energy futures, the proximity of rail lines to a number of major airports, and talk to their customers about what they want when it comes to travel, they will expand their horizons to form partnerships with their one-time arch rivals -- the rail industry.

 

KJP

From the 9/10/05 Enquirer:

 

 

Commitment to hub remains

Exec reassures business group

By James Pilcher

Enquirer staff writer

 

COVINGTON - Delta Air Lines remains committed to keeping its hub at the Cincinnati/Northern Kentucky International Airport operational and viable, an executive told a local business group Friday.  This week's announced cutbacks were a way to ensure that happens over the long run, he said.  Airport and airline officials also said that despite the 26 percent cut in service that goes into effect Dec. 1, the $200 million runway set to open later that month will be needed more than ever.

 

"There is no denying that there will be a reduction in service, but the most important message I want to give to you today is that Delta and Comair are wholeheartedly committed to the hub we have built here, and this will remain our second-largest hub behind Atlanta," Doug Blissit, formerly Delta's vice president of network planning and now the vice president for public affairs, told the government forum of the Northern Kentucky Chamber of Commerce.  "We intend to keep this hub vibrant and growing going forward, and these moves were a way of helping ensure that," he said.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050910/BIZ01/509100326/1076/rss01

 

Wednesday, September 14, 2005

Wounded Delta bleeding cash

Without money, Chapter 11 imminent

By James Pilcher

Enquirer staff writer

 

Delta Air Lines could file for Chapter 11 bankruptcy protection as soon as today. Here are some of the expected effects:

 

Passengers: Delta expects to continue operations as normal, as did United Airlines and US Airways, both of which are still in bankruptcy. Last week, a Delta official told a local business group that it would not default on its SkyMiles frequent-flier program in bankruptcy. But over time, flights and destinations could be reduced if the airline cuts operations.

 

Employees: The airline's 52,000 workers, including 4,000 who are locally based, and another 4,000 who work locally for subsidiary Comair, could see their pay and benefits cut even further. The pilots gave up $1 billion annually last fall, and the airline is asking for more. Non-union workers' pay was cut 10 percent Jan. 1, and more cuts also could be coming there. In addition, the airline could default on its pension, as did United, leaving workers with pennies on the dollar for their expected benefits. And more job cuts could be on the way.

 

Investors: Delta stock would essentially become worthless in a bankruptcy, since it is an unsecured debt, meaning that any shareholders left would lose any value. This creates a double-barreled impact for Delta workers who have 401(k) plans that include Delta stock.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050914/BIZ01/509140311

Delta asks pilots to accept pay cuts

Airline might declare bankruptcy before union responds

By James Pilcher

Enquirer staff writer

 

Delta Air Lines has officially asked its pilots' union for pay cuts it says are needed to ensure the company's survival and for what union officials Tuesday called a new "deeply concessionary contract."  The cuts likely won't stop there. Experts expect Atlanta-based Delta to soon announce pay and benefit cuts for non-union workers.  The non-union workers took a 10 percent pay cut Jan. 1.

 

The carrier could file for bankruptcy as soon as today or Thursday, according to industry experts and representatives of interests that would be involved if Delta were to file for Chapter 11 protection.  "It's our understanding from talking with people around the situation that it could happen (tonight) or soon thereafter," said Dean Booth, an Atlanta-based lawyer who represents the airline's 5,000 retired pilots.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050914/BIZ01/509140328

You know, I'm about at the point where I say these bastards should be allowed to fail.  Northwest is declaring bankruptcy too.

 

These poorly-run companies are allowed to exist year after year, to screw the customers, to lay off massive amounts of people in the lean times, and then receive billions of dollars in bailouts as well as a painless bankruptcy.  How much sense does that make?

I have always said the government should stop funding all of these airlines and let them go away one by one.  Then the government should run Airline, or Glorious Airline #1 and every city over 50,000 should get service.  It would cost less annually than the war in Iraq.

Not much. Like I said in an earlier message, these guys sound like the railroads in the 1950s-60s. The difference is, when the railroads were shooting themselves in the foot, there were other modes coming up to supplant them (and to help aim the gun). Today, there's no alternatives to the airlines, and energy prices aren't going to let any of these flyboys off the hook again.

 

KJP

Delta seeks Chapter 11

$28 billion debt proves too heavy a load

By James Pilcher

Enquirer staff writer

 

Delta Air Lines filed for Chapter 11 bankruptcy protection Wednesday, ending a troubled phase in the proud carrier's history - and starting a new, potentially more difficult one in its struggle to survive.  The nation's No. 3 carrier joined three other major U.S. airlines in bankruptcy court just minutes before Northwest Airlines, the nation's fourth largest, also filed for bankruptcy.  The twin filing combined to create the darkest day for U.S. aviation since the 9/11 attacks.

 

"This is certainly a historic day, and not for the right reasons," said William T. Robinson, chairman of the Kenton County Airport Board, which oversees the Cincinnati/Northern Kentucky International Airport - Delta's second-largest hub. Indeed, Delta's filing was the ninth largest in U.S. corporate history, based on the value of assets.

 

The Atlanta-based carrier said operations for it and its Erlanger-based subsidiary, Comair, would go on as normal for customers as well as workers. "Delta is open for business as usual and will continue normal operations throughout the reorganization process," company chief executive officer Gerald Grinstein said in a statement.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150352

Expect a smaller airline with fewer high-pay jobs

Comair sale also possible

By James Pilcher

Enquirer staff writer

 

BY THE NUMBERS

Four years of losses, big debt at Delta:

 

- $28 billion: Total debt at bankruptcy filing Wednesday

 

- $10 billion: Losses since 2001

 

- 8,000: Current local employment of Delta/Comair

 

- 1,000: Jobs to be eliminated, most here

 

- 599: Current daily local departures

 

- 442: Daily local departures after planned December cutbacks

 

- 9: Ranking in the list of biggest U.S. bankruptcies

 

- 71 cents: Stock price at Wednesday close, before bankruptcy filing

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150330

Nice to see that Delta bought a very profitable local airline and drove it into the ground with them!

 

 

Comair joins with Delta in filing for bankruptcy

Regional airline avoids possible forced sale, may restructure labor pacts

By James Pilcher

Enquirer staff writer

 

ERLANGER - Comair, the locally based airline started by a father-and-son team 28 years ago, also asked for bankruptcy protection Wednesday as part of Delta Air Lines' Chapter 11 filing.  The company, which has been a wholly owned subsidiary of Delta since January 2000, will continue flying as normal.  It operates more than 400 flights at the Cincinnati/Northern Kentucky International Airport.

 

But Comair, the nation's third-largest regional carrier, is now able to restructure its costs, work with creditors and even potentially void labor contracts, which have been a contentious issue for years.  "Understandably, a Chapter 11 filing is unsettling," Comair president Fred Buttrell wrote to workers.  "The restructuring efforts that will be necessary to retool our airline will not be easy. ... We must become the low-cost provider of connection feed. The creditors will demand it. Our very survival depends on our ability to achieve these objectives quickly and together."

 

Comair officials would not comment further.  The airline is due to see a 26 percent cut in its flights on Dec. 1, meaning 350 jobs could be affected, mostly locally.  Delta's move to include Comair in a bankruptcy filing was not a surprise, given that creditors could otherwise force the company to sell Comair as an unencumbered asset.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150321

Airport expecting little more effect

Company could default on a month's rent

By James Pilcher

Enquirer staff writer

 

HEBRON - Even though the Cincinnati/Northern Kentucky International Airport counts on Delta for nearly 45 percent of its operating revenue, officials say the airline's bankruptcy will have minimal financial impact.  The Atlanta-based airline, which operates its second-largest hub locally, pays about $3.6 million a month to the airport in landing fees, rent for ramp space and other fees.  That includes Delta and its Erlanger-based regional subsidiary, Comair.

 

Airport finance director Sheila Hammons said Delta has paid most of its bills in advance but can default on one month's worth of rent or fees under Chapter 11.  Delta must keep all accounts current after that.  "They are current on everything, but we haven't billed them for landing fees yet, so they wouldn't have to pay that," said Hammons.  That landing fee amount due is about $2.9 million including August and the first two weeks of September.  Hammons said that loss would be just under 3 percent of the airport's total budgeted revenue of $97 million for 2005.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150319/1002/BIZ

Anyone own any Delta toilet paper, er I mean stock???

 

 

 

What Wednesday's action means ...

 

 

Local employees

 

Up to 1,000 of the current 8,000-strong Delta/Comair work force already face possible layoffs, which were announced last week. Workers' concerns now turn to pay cuts, the security of their pensions, Delta stock investments in 401(k) plans and perhaps more job cuts as Delta/Comair are reorganized.

 

Your travel plans

 

Delta and Comair will keep flying, and all tickets remain valid. The SkyMiles frequent-flier program is unaffected. However, travel analysts advise passengers to pay for tickets with a credit card so they can dispute the charge later if the flight is canceled. To check schedules, go to www.delta.com.

 

Your investments

 

If you're a Delta stockholder, you'll have to get in line behind other creditors. As unsecured creditors, shareholders may be among the last to be compensated as the company is reorganized. Delta's stock closed Wednesday at 71 cents a share, and trading likely will be suspended today.

 

Our economy

 

Airport officials expect little financial impact now from their lead client (93 percent of daily flights are Delta/Comair). But there are concerns about the future of Delta - Northern Kentucky's largest employer. The University of Cincinnati estimates the airport's annual economic impact is $4.6 billion.

 

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150353/1002/BIZ

Frequent fliers calm in the face of bankruptcy

By Cliff Peale

Enquirer staff writer

 

Delta Air Lines may initially reduce fares, then raise the average ticket cost as it works through a Chapter 11 bankruptcy filing.  Many passengers at Cincinnati/Northern Kentucky International Airport are shrugging off the announcement.  While a bankrupt Delta Air Lines may try to keep its best passengers with frequent-flier miles and temporary fare reductions, fliers soon could see fewer low-fare seats available and fewer flight options as the airline restructures, airline experts said Wednesday.

 

After Atlanta-based Delta filed the bankruptcy petition late Wednesday afternoon, it assured customers that the planes would continue to fly and that customers should continue to buy Delta tickets.  Most observers and fliers took the filing in stride.  "It's not like the government's going to let them go under," said Reyne Haines, who owns a Clifton art gallery and flies Delta several times a month.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150331/1002/BIZ

Northwest seeks Chapter 11, too

By Joshua Freed

The Associated Press

 

MINNEAPOLIS - Northwest Airlines Corp., pummeled by high labor costs and soaring fuel prices, filed for bankruptcy protection Wednesday, seeking Chapter 11 protection on the same day as its larger rival, Delta Air Lines Inc.  The filings put three of the nation's four largest airlines in bankruptcy court.  The company, which said it had almost $17.92 billion in debt, said it would continue to fly its normal schedule and operate its frequent-flier program while reorganizing.

 

Its filing, made in U.S. Bankruptcy Court in the Southern District of New York, also listed $14.35 billion in assets and said Northwest had $1.5 billion in cash.  Like other airlines, Northwest has been hit by meteoric increases in jet fuel prices.  But the fourth-largest airline also has the highest labor costs in the industry and has been losing money at the rate of $4 million a day.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050915/BIZ01/509150318/1002/BIZ

Delta, Northwest file for bankruptcy

Spike in jet fuel sparks filings, putting almost half of U.S. airline capacity in Chapter 11.

September 14, 2005: 7:47 PM EDT

By Chris Isidore, CNN/Money senior writer

 

NEW YORK (CNN/Money) - The airline industry's five-year financial crisis came to a head Wednesday evening as Delta Air Lines and Northwest Airlines, two of the nation's largest carriers, both filed for bankruptcy.  Delta, the nation's No. 3 airline, filed first.  Northwest, the No. 4 carrier, followed within minutes.  Both cited the recent spike in jet fuel costs, which have soared nearly 20 percent since June 1, as prime reasons for seeking protection from creditors under Chapter 11 of federal bankruptcy laws.

 

"This is a coincidence, but what a coincidence," said industry consultant Michael Boyd.  "This is another 9/11. Most carriers adjusted to that, but now we have another 9/11 that's called fuel. And we have another half of a 9/11 called pensions. The problem is there is so much competition out there, that fares get driven into the cellar," he added. "All this does is get two carriers into position where they can better deal with it, but it's not going to solve the basic problem that the industry [pricing] is irrational."

 

Full story at http://money.cnn.com/2005/09/14/news/fortune500/bankruptcy_airlines/index.htm

More airline turbulence ahead

Record high jet fuel could spur more losses, bankruptcies as industry shakeout picks up steam.

September 14, 2005: 6:58 PM EDT

By Chris Isidore, CNN/Money senior writer

 

NEW YORK (CNN/Money) - Despite five years of staggering losses, the nation's airline industry looks surprisingly close to the way it looked when the good times ended in 2000.  Yes, TWA got snapped up by American Airlines parent AMR Corp. in March of 2001, and US Airways is set to be purchased by America West after two trips to bankruptcy court.

 

But other troubled carriers have kept flying, and remained independent, despite only a handful of profitable quarters among the nation's largest airlines in the last five years.  Delta Air Lines, which filed for bankruptcy Wednesday after the bell, has lost $6.1 billion, excluding special items, since the start of 2001, according to earnings tracker First Call. 

And Northwest Airlines filed for Chapter 11 within a half hour of Delta, confirming days of speculation that the board would was set to file.

 

Full story at http://money.cnn.com/2005/09/13/news/fortune500/airlines_future/index.htm

CVG must turn profit for Delta or lose hub status

By Bob Driehaus

Post staff reporter

 

Cincinnati/Northern Kentucky International Airport has a critical test to pass in the coming months - turn a profit for Delta Air Lines or risk losing its status as a Delta hub.  That's the stark assessment offered by Ray Neidl, a Delta analyst with Calyon Securities in New York in the wake of Delta filing for bankruptcy protection Wednesday.  Delta has already said it will reduce the number of flights at the airport by 26 percent with an estimated 20 percent drop in passengers beginning Dec. 1, when the slimmed-down flight schedule takes effect.

 

Whether that is enough for the region's airport to be profitable enough for Delta's goals remains to be seen, Neidl said.  "(Cincinnati/Northern Kentucky airport) is still well-positioned, but Cincinnati is going to have to prove it's profitable," Neidl said.  "They're trying to make it profitable by the recent changes, but if that doesn't work, it will probably go as a hub."  That alarming stance was not shared by airport officials, who maintained confidence Wednesday that the pared-down Delta flight schedule already announced will continue indefinitely at an airport that has become a linchpin for economic development in the region.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050915/BIZ/509150351

Northwest, Delta Must Make Pension Payments

 

WASHINGTON - The head of the federal agency that protects private-sector pensions Thursday said Delta Air Lines Inc. and Northwest Airlines Corp. are required to keep making pension contributions in bankruptcy.  The two airlines filed for bankruptcy Wednesday. Both owe their pensions plans billions of dollars.  Delta said Wednesday it does not plan to make the next scheduled contribution to its pension fund.

 

"Northwest and Delta continue to be responsible under the law for making their pension contributions," the executive director of the Pension Benefit Guaranty Corp., Bradley Belt, said in a statement.  "As long as companies remain in operation with ongoing pension plans, they have a legal obligation to meet their funding requirements," he said.

 

More at http://news.yahoo.com/s/ap/20050915/ap_on_bi_ge/airlines_pensions;_ylt=AqfYDbL6uPtn1KQyl82Lyius0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk-

How the hell does someone get $20B or $17B in debt?

BTW...to anyone who doesn't have the time to read all of these stories or to digest what's going on just now, the Enquirer has started up a special section on the Delta bankruptcy:

http://news.enquirer.com/apps/pbcs.dll/section?category=bizdelta

 

Could Delta, Northwest merge?

Report: Analysts speculate that the two carriers could explore merger while in bankruptcy.

September 16, 2005: 8:04 AM EDT

 

NEW YORK (CNN/Money) - After almost simultaneously filing for bankruptcy this week, industry analysts now speculate that Delta Air Lines and Northwest Airlines could explore a possible merger, according to a report published Friday.  "I wouldn't be at all surprised. In the past, these two airlines have talked and they have very little route overlap," Benchmark analyst Helane Becker told USA Today.

 

According to the newspaper, Atlanta-based Delta is concentrated in the East and launches more daily flights across the Atlantic than any other carrier.  Eagan, Minn.-based Northwest is concentrated in the Midwest with a strong route structure in Asia, the newspaper said.  On Wednesday, both companies filed for bankruptcy. Delta, the nation's No. 3 airline, filed first.  Northwest, the No. 4 carrier, followed within minutes.

 

More at http://money.cnn.com/2005/09/16/news/fortune500/delta_northwest/index.htm

CVG worry: Delta bonds

By Bob Driehaus

Post staff reporter

 

Delta Air Lines has pumped $500 million into construction of terminal and gates it owns and uses at Cincinnati/Northern Kentucky International Airport.  Whether it makes good on repayment of the bonds that financed construction is a major question that will affect the future of the airport, a key economic engine for the Greater Cincinnati economy.

 

Delta is in the rare position of owning the hub terminal it uses.  Most U.S. airports are owned by a municipality or port authority that owns its terminals and gates.  Delta, by contrast, built Terminal 3 in 1992, the heart of airport traffic.  Terminals 1 and 2 are lightly used by American and United airlines.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050916/NEWS01/509160332

Is there a raider lurking?

Past bankruptcies have opened door to takeovers

 

The collapse of Delta Air Lines Inc. has set into motion a classic battle between three classes of investors, with the mostly unknown list of secured creditors potentially poised to seize control and dictate the carriers' futures.  Bankruptcies typically wipe out equity investors, and leave most unsecured bondholders receiving an average of 25 cents on the dollar, corporate debt consultants said. But those secured creditors - a list that could include venture capitalists and major corporations - are expected to remain in the shadows until both airlines go before bankruptcy courts.

 

Negotiations between secured creditors and management teams during Chapter 11 proceedings have created some of the most storied takeovers in corporate history.  Wall Street raider Carl Icahn seized control of bankrupt Trans World Airlines in 1986 through his significant stake in the airline. Hedge fund investor Edward Lampert used his stake in discount retailer Kmart to orchestrate the takeover of Sears Holding Corp.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050916/BIZ/509160329/1001

Delta's woes pose benefits for rivals

 

By filing bankruptcy, Delta Air Lines has won short-term relief from looming financial obligations that threatened to overwhelm it, but ultimately it could benefit direct competitors.  Industry and bankruptcy experts say Atlanta-based Delta will use the new leeway under Chapter 11 protection to renegotiate debts, cancel unwanted leases on aircraft and facilities, cut jobs, pay, benefits and possibly eliminate pensions. But an inevitable part of the process will be cutting back its flight operations - creating possible expansion opportunities for low-cost rivals.

 

Delta, which has lost nearly $10 billion since 2000, said it would "deploy smaller aircraft on many of its routes" and continue cutting flights at its hubs in Atlanta, Cincinnati and Salt Lake City.  Even before the bankruptcy filing, industry analysts predicted low-cost carriers, especially AirTran, will benefit from Delta's shrinking network under Chapter 11.  Jamie Baker, an analyst with JP Morgan in New York, predicted Delta would slash 15 to 20 percent of its flights - mostly domestic routes overrun by low-cost rivals.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050916/BIZ/509160328/1001

Bankruptcy's bumpy ride

 

From the Cincinnati Post Opinion Section

 

If there was any surprise in Delta Air Lines' bankruptcy filing this week, it was the happenstance that another major carrier, Northwest Airlines, did the same thing on the same day.  The filings by the nation's third and fourth-largest airlines, respectively, demonstrated the depth of the structural problems facing the industry.  Four of the seven largest carriers in America, accounting for about half of the passenger load by volume, are now operating under the protection of the bankruptcy courts.

 

Full opinion at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050916/EDIT/509160303/1003

Delta's troubles ripple with subsidiary Comair

Tensions with unions may worsen

By James Pilcher

Enquirer staff writer

 

ERLANGER - In the first two days after Delta Air Lines sought bankruptcy protection, more than 110 additional procedural filings were made in the case in New York. Only four additional filings were made regarding Comair, Delta's locally based subsidiary.  The difference in paperwork is not an indication that the Comair case will go more smoothly than Delta's.  Far from it, say experts, who point out that the bankruptcy of an economically stable subsidiary of a parent company also in Chapter 11 can be extremely messy.

 

The experts note that although Comair could be close to breaking even if not actually turning a profit, the way that bankruptcy court works could still mean that the carrier will have to undergo the same painful restructuring as Delta.  Translation: There could be more cuts at the locally-founded carrier, both for total flights locally, as well as for jobs and pay for all workers, possibly creating further union friction at Comair.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050918/BIZ01/509180332/1076/BIZ

Area could take $500M thrashing

Economists: Delta troubles costly even before Ch. 11

Lucy May

Senior Staff Reporter

 

The Tri-State didn't need a Chapter 11 filing to feel Delta Air Lines' pain.  The cutbacks at the Cincinnati-Northern Kentucky International Airport that Delta announced Sept. 7 could wipe out more than 3,300 jobs across Greater Cincinnati and decrease regional household earnings by almost $110 million, according to an economic impact analysis released to the Courier.

 

The 26 percent cut in service also could reduce sales of regional businesses by a whopping $414 million, according to data compiled by the Applied Economics Research Institute at the University of Cincinnati's department of economics.  And that's without considering any additional cuts that could come as a result of the bankruptcy filing announced Sept. 14.  "This could be devastating for us, particularly in Northern Kentucky," said Tom Zinn, director of the institute.  "The jobs that we're cutting are very high-wage jobs."

 

Full story at http://cincinnati.bizjournals.com/cincinnati/stories/2005/09/19/story2.html?page=1

Thanks for screwing us, Delta.  You know, your horrible business practices are killing our local economy.  While you get a relatively painless bankruptcy every couple of years, you hurt people.

 

I'm really disgusted with Delta and the airlines in general right now.

Ugh Leo Mullin was an idiot. And his retirement package is still on the payroll.

 

It seems like him and his buddies are to blame for most of the mess. Delta was a great airline before they came along.

Delta to detail job, pay cuts

By James Pilcher

Enquirer staff writer

 

Delta Air Lines could tell its workers as early as this week what kinds of pay and benefit cuts are in store and perhaps how many overall job cuts are coming as part of its Chapter 11 bankruptcy restructuring, according to a memo to all workers Monday.  Delta chief operating officer Jim Whitehurst and chief financial officer Ed Bastian stated in the memo that cuts in pay, benefits and head count were needed to help the company survive and that "we'll provide you with more information on how these changes might affect you ... as soon as possible, perhaps this week."

 

Delta, the nation's third-largest airline, filed for Chapter 11 bankruptcy protection Wednesday after losing almost $10 billion in the last four years.  The Atlanta-based airline operates its second-largest hub at the Cincinnati/Northern Kentucky International Airport, where it employs about 4,000. Delta's Erlanger-based regional subsidiary Comair, which was included in the bankruptcy filing, employs another 4,000 locally.  Delta employs about 52,000 total.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050920/BIZ01/509200326/1076/BIZ

The only good thing is they might be able to release the Delta space more easily than on a sublease....

 

Delta set free from multiple leases

By Alexander Coolidge

Post staff reporter

 

A bankruptcy judge has tentatively granted a motion by Delta Air Lines to abandon leases on a dozen ticket and sales offices around the country, including already-vacant space at its downtown Cincinnati reservation center.  Delta officials stressed the move was to get out of unused office and sales space, such as its vacant Fourth Street city ticket office.  While the lease on some first-floor space at its Cincinnati reservation center at the corner of Sixth and Plum streets is being rejected, its call center operations that employ 700 workers won't be affected, company officials said.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050920/BIZ/509200335/1001

Lawyers to profit from bankruptcies

Fees worth hundreds of millions of dollars from Delta, Northwest

By Harry R. Weber and Joshua Freed

Associated Press

 

Delta and Northwest have hired law firms to lead their bankruptcy cases. They've tapped legal consultants to handle corporate tax and immigration issues. And they've put on the payroll financial and aviation experts to advise them on government procurement matters.

 

It's the business of bankruptcy, and these days, with four major airlines in Chapter 11, it's big business.  The litany of firms that will provide professional services to Delta and Northwest as they wade through bankruptcy court will rack up fees of tens, perhaps hundreds of millions of dollars over the next few years. 

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050920/BIZ/509200333/1001

$800 an hour??? Geez no wonder companies have no money left over to pay creditors.

Everyone gets fat.

Delta's airfares now less simple

Restrictions being imposed

By James Pilcher

Enquirer staff writer

 

Delta Air Lines' SimpliFares program is getting more complicated.  The airline has made it harder to get the cheapest fares to many markets.  It's now requiring Saturday night stays or a three-night minimum stay for those fares, according to statements to the federal bankruptcy court in New York, where the carrier filed for Chapter 11 last Wednesday.

 

Executives told the court that the changes, which began earlier this month, would boost revenue by $30 million to $35 million annually. Company officials stressed, however, that Delta is still committed to the concept of simplifying fares.  Delta, the nation's third-largest carrier, introduced SimpliFares in August 2004, here at its second-largest hub.  The program went national in January - lowering most fares while capping prices.  At the time, the lowest fares required a one-night stay.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050921/BIZ01/509210322/1002/BIZ

Delta Pilot Lump Sum Payouts May Be at Risk

By HARRY R. WEBER, AP Business Writer

 

ATLANTA - A continuing exodus of Delta Air Lines Inc. pilots has drained the pension plan to the point where future lump sum payouts to retirees by the bankrupt carrier may be in jeopardy, according to the union.  The chairman of the pilot union's executive committee, John Malone, said in a letter to members Tuesday night there is a significant likelihood that lump sum payments will not be immediately available to pilots who are considering retirement on or after Oct. 1.

 

Part of the reason, Malone said, is the high number of pilots who have retired, many of them early, over the last 21 months.  There were 202 pilots who retired Sept. 1, two weeks before Delta's bankruptcy filing, and more that 2,300 have put in their papers since January 2003, Malone said. 

 

Full story at http://news.yahoo.com/s/ap/20050921/ap_on_bi_ge/delta_bankruptcy;_ylt=ApFAB2eqUkW.XE4srU4JGNhu24cA;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

Pilots hold off on talks

 

By James Pilcher

Enquirer staff writer

 

Delta Air Lines' pilot union Wednesday said it was delaying a decision on whether to enter into concessionary talks with management. Delta is seeking wage and other cuts as the carrier tries to restructure in bankruptcy.  The Atlanta-based airline's branch of the Air Line Pilots Association said it was waiting to analyze the company's proposal.  The union also has told members that the option of taking a cash payout from the pilot pension plan upon retirement instead of getting a monthly check would probably be halted by the company to keep the plan solvent.

 

Delta employs nearly 8,000 pilots who are members of the union.  Those include nearly 800 based at the Cincinnati/Northern Kentucky International Airport.  If the pilots do not come to a negotiated settlement, the company could ask the bankruptcy court to void the contract and start from scratch.

 

Full story at http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050922/BIZ01/509220320/1002/BIZ

Delta plans to cut 9,000 jobs

 

Up to 9,000 more jobs will be cut at Delta Air Lines, one of Greater Cincinnati's largest employers, as the bankrupt air carrier plans to save an additional $3 billion a year in expenses.  Most remaining employees will see their wages cut by up to 10 percent, the airline announced today. 

 

Even more cuts could be on the way at Comair, a Delta subsidiary, which now employs about 4,500 in Northern Kentucky.  Cuts to Comair's fleet of 174 smaller jets "are under evaluation and are expected to be determined soon,'' the company said in a statement.  Comair officials say today's cuts don't apply to the regional subsidiary. Comair will announce its own restructuring plans after analyzing Delta's needs.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050922/BIZ/509220361

This is a great article, it explains in plain english why the airline industry is so f'ed up.  I think it is a great example of why the government should let the market forces work and not artificially shore up an entire industry.  I know it would be painful for a few years, but it would be much better in the long run.

 

 

 

Why airlines fail

Bankrupt air carriers just keep on flying

By David Wessel and Susan Carey

Wall Street Journal

 

The U.S. airline industry has a business problem that's simple to state and difficult to solve: Twenty-seven years after deregulation, major airlines' costs exceed revenues, and they can neither cut costs nor raise fares enough to turn a profit. 

 

In classic competitive markets, such as retailing and auto-parts manufacturing, such circumstances kill off the least efficient players, freeing survivors to raise prices enough to make money.  In the airline industry, this process is proving to be excruciatingly prolonged.  How come?

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050923/BIZ/509230337/1001

For airline employees, worries fly high

 

By Vickie Elmer

Washington Post

 

Flying isn't much fun anymore for anyone - but flying for a living has gone from glamour to grim, stressful duty for some airline workers.  With the bankruptcy reorganizations of Delta Air Lines and Northwest Airlines announced last week, workers' worries may rise like a 747 taking off.

 

Flight attendants these days sometimes gather in the galley to discuss their fates - and those of their employers. They are distracted by news and rumors. They are bothered by long commutes and declining paychecks. What a way to make $24,000 to $49,000 a year.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050923/BIZ/509230342/1001

The article "Why airlines fail" just made me more mad.  Seriously, I can't even discuss this without losing it.  This isn't how America is supposed to work.

^yes, that isn't how it is supposed to work. More regulations are needed.

Not more regulations.  More accountability.

CVG may lose fees incurred by Delta

 

By Bob Driehaus

Post staff reporter

 

Cincinnati/Northern Kentucky International Airport may be out $2.9 million in unpaid Delta Air Lines bills as part of the first wave of financial fallout from the airline's bankruptcy reorganization.  But the airport is confident enough in its long-term growth prospects to move ahead with a $60 million plan to upgrade its rental car facilities.

 

The good news for the airport is that the bankruptcy judge overseeing Delta's bankruptcy reorganization has approved a plan to pay landing fees the airline will owe from Sept. 14 - the day it filed for bankruptcy protection - onward.  But the $2.9 million in fees that Delta racked up in August and the first 13 days of September are considered an unsecured debt that may not be fully or even partially repaid, said airport attorney Wil Ziegler.

 

Full story at http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050927/NEWS01/509270351