Saturday, September 25, 2004

Delta's Restructuring It looks like a "big bang" is in store for Delta in January, but will it be done with or without bankruptcy?  Delta will probably have to go through Chapter 11 to achieve the cost reductions necessary for survival.  What about the restructuring plan?  No airline has ever shrunk to prosperity, and the Delta plan looks promising by preserving or even modestly expanding capacity.  The Dallas hub is collapsed, but overall the airline gains 50-60 mainline flights and loses 70-80 regional flights for a modest capacity increase.  It's not clear how the new schedule can be flown with 7,000 fewer employees unless a good portion of the layoffs will be replaced with contract/offshore staffing. Locally, Bay County gains one flight daily to/from Orlando, and loses weekend service to Dallas/Ft. Worth.   USAir has offered Orlando service, but never jet service, so the Delta Connection flight has potential.  The Orlando flight will also test Delta's plan for more intra-Florida service.  Historically, east-west service along the Gulf coast has been weak, but the intra-Florida focus is a recent pattern that may succeed. Delta is moving at last to bring its costs and fares in line with the mass market.  At Cincinnati, fares have been simplified and reduced in a move Delta says will be expanded over the other hubs.  That is good news for customers and ultimately the only way forward for Delta.  Let's hope the benefits reach down to smaller markets like Bay county. 10:02:53 AM    comment

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