Is Delta's Strategy Sound?

 
Old Mar 11, 03, 5:51 pm
  #1  
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Is Delta's Strategy Sound?

Today their stock is down 20%. They have agreed to waive change fees for the month of March in case of war.

DL has and continues to alienate long time customers due to the new SM program. Redcoats and long time DL personnel are being slashed left and right, often with little more than a snarl and less pay on the way out.

And the real threat of war looms.. and the economy in near recession.

Should DL be making all these rash decisions in one swoop? I know its hard to predict markets and passenger loads but many of the decisions they are making NOW are losing them money - some (like world events) beyond their control.

If anything, it seems they need to be wooing customers to fly, not kicking them into the street and instituting changes which lose the comapny money..

A magazine I read recently said DL was one of the more stable airlines right now, but it amazes me that no-one at DL seems to see the "Domino theory" of all the negative changes on the horizon..(planned and uncontrollable)

Any thoughts folks?

Steve G

[This message has been edited by heckler (edited 03-11-2003).]
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Old Mar 11, 03, 5:57 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by heckler:
If anything, it seems they need to be wooing customers to fly, not kicking them into the street and instituting changes which lose the comapny money..

</font>
The Big 6 monolithically have followed the kick-in-the-pants-for-the-customers strategy, if some in greater degree than others: DL's was more of a hobnail boot, for instance...

Only HP seems to have gotten deliberately nicer to pax in the last year-- no change fees, no use-it-lose-it, etc.

The marketing case writers at Harvard must be salivating at these six juicy post-mortems....

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Old Mar 11, 03, 6:24 pm
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I'm looking to go to Europe next summer. Does anyone know how I get there with Southwest or Jet Blue? How about with one of their partners? If not them, how about AirTran or ATA? Frontier?

I'm as angry as the rest of you about Delta's changes to the program being a short haul PM. However, I have a hard time bad mouthing their corporate strategy when they are the only one of the Big 6 with sufficient liquidity to last out these problems.

Yes, the industry is changing. Yes, Delta has done some stupid things? On the whole, though, I think Delta is doing a bit better than the rest.

marc
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Old Mar 11, 03, 11:45 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Marq:
However, I have a hard time bad mouthing their corporate strategy when they are the only one of the Big 6 with sufficient liquidity to last out these problems.

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And yet DL's hard-won liquidity will be in the end, alas, nothing but so much more blood for DALPA's vampire contract to drain over the next two years.
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Old Mar 12, 03, 12:36 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Any thoughts folks?

Steve G</font>
heckler....good post. You've touched on the one thing that, IMHO, defies any reasonable logic. With the myriad of factors affecting DL's future....90+% of which they have no control over....why would they choose.....NOW....to initiate a campaign to PO their best customers??
What am I missing here?? I've spent all my adult life in sales and marketing. it's simply Marketing 101 to bend over backwards to reward, cherish, prize....Hell....WORSHIP your best customers in times such as this!!!
When they could be making hay and assisiting the demise of UA, US, AA, etc, they instead choose to decimate their SM's program and fall on their own sword.
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Old Mar 12, 03, 1:16 am
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If a "scorched earth" policy of bludgeoning workers and PAX alike then Delta and the other 5 members of the big six are right on target. It's OUR FAULT if we let them win!

There is a part of me that wishes all six of them would liquidate as punishment for their unbridled arrogance towards hourly worker and PAX alike! If I was a Plat elite I wouldn't donate to saveOurSkyMiles I'd donate to whatever union wants to try to organize Delta. Leo Mullins needs to be humbled.
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Old Mar 12, 03, 4:00 pm
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Also of note is the fact that many CEO's (like Leo) are little more than weak-kneed political time servers - sitting in the chair long enough to make sweeping gestures (and changes) without any experience in airline operations or who knows or really cares about the little people.

I doubt Leo cares about all the people his company is making redundant, many who have given their entire careers to the airline.

Companies (of this size) are much like the military. The organization will ebb and flow depending on the leadership - which rotates constantly and often doesn't have a d*mned clue as to what's going on.

But don't worry Leo, when the shareholders vote you out, you'll still get you multimillion spearation bonus. Those hundreds of redcoats will get a kick in the pants and half a paycheck.

Why not cancel some plane orders, or sell the ones sitting out in the boneyards in Arizona?

Steve G

[This message has been edited by heckler (edited 03-12-2003).]
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Old Mar 12, 03, 4:39 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cholula:
heckler....good post. You've touched on the one thing that, IMHO, defies any reasonable logic. With the myriad of factors affecting DL's future....90+% of which they have no control over....why would they choose.....NOW....to initiate a campaign to PO their best customers??
What am I missing here?? I've spent all my adult life in sales and marketing. it's simply Marketing 101 to bend over backwards to reward, cherish, prize....Hell....WORSHIP your best customers in times such as this!!!
When they could be making hay and assisiting the demise of UA, US, AA, etc, they instead choose to decimate their SM's program and fall on their own sword.
</font>

You are both so right...but the braintrust in Atlanta views this as a chance to get all the bad news out of the way at once...and if things backfire on them, they have the cover of "bad economic climate, pending war, etc., etc."

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Old Mar 12, 03, 5:32 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by martin33:

Only HP seems to have gotten deliberately nicer to pax in the last year-- no change fees, no use-it-lose-it, etc.
</font>
Shhhhhhhhh! You'll give away my secret.

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Old Mar 12, 03, 10:18 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by ByrdluvsAWACO:
Shhhhhhhhh! You'll give away my secret.

</font>
After paying my most recent annoying $100 change fee to AA, I'm giving HP a limited tryout on a couple of trips this year--- on free tickets in First via Diners Club points.

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