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This past weekend Bloomberg publicly broke the news that Delta cuts are on the way. This really comes as no surprise to me nor should it to those who spend a great deal of time flying Delta. Delta is in a very strange place right now. But first some highlights of the news:
- No one working for Delta should feel safe
- Cheap new hires better than old folks
- Union & front-line don’t be “afraid”
- Protect & drive earnings at all costs
I have been told by sources the “culture” inside Delta is not that good right now. Folks are nervous as to what is next and I am sure morale will suffer as cuts continue. No one should feel safe and when you look at the info Bloomberg you can see why. The piece suggests it will:
“…improve productivity and stay nimble particularly given that revenue has declined this year,” – Bloomberg.com
Ah. I see. Nothing makes one more loyal to an employer than knowing you could be dismissed at any time, not because of your skill and dedication, but because someone above your pay grade says you are not productive enough (or nimble enough). I am sure those estimated 600 or so who get canned are to blame for not measuring up. It also sounds like some will take early retirement under this kind of pressure and fear.
Oh, and I wonder why revenue has declined this year? Well no, not really, as I have suggested for a long time all the cuts to SkyMiles will one day catch up with Delta. Top spenders do not care that much about points – until all of a sudden they do! What I mean is day to day they don’t care but when they at last go to redeem a trip for their family and have to explain to the wife and kids they cannot go where promised that does tend to leave a bad taste in a flyer’s mouth. When it comes to SkyMiles, you can still “bleed out” from 1000 paper cuts, it just takes a while!
Then we look at those who will not suffer (for now). Pilots did not just cave in and take a bad package from Delta. They are working to get a better deal and I fully support them in this effort. Clearly flight attendants are not going to get cut as Delta is doing anything to keep them from going union. Even if it means a massive PR campaigns and going so far as to build SkySpa’s or anything else to make them happy.
“The carrier probably will report record third-quarter earnings excluding some items of $1.3 billion, according to analysts’ estimates compiled by Bloomberg. That release is set for Oct. 14.” – Bloomberg.com
Record earnings for the quarter are not enough as notice from last month income is down despite, as my fellow BoardingArea blogger MJ on Travel highlighted that they had a stunning 100% completion of all mainline flights.
What do I take from all of this for us as regular Delta flyers? Expect more strange things from Delta in an attempt to do all they can to make sure DAL stock price #KeepsClimbing. I mean look at this past year and see if this is not starting to sound like the “old United” play book of blame everyone but those who are running the show. Blame the ME3. Blame unions. Blame SkyMiles partners (I hear the AF/KLM relationship is worse than ever btw).
So the fix is bring in new folks and tell them how it is going to be? I can’t wait to see what happens next! Like what? Take a look at these:
SkyMiles, we all know, has been trashed. Badly! From earning to burning, SkyMiles are a shadow of what they were before. Hiding award charts, hiding nasty upgrade charts for next year, broken booking page, limited earnings and unlimited redemption = unhappy loyal travelers. Yet MGT. sees no issue with these changes and I am sure more cuts are on the way soon.
Delta service. I personally cannot really complain about Delta people, but there is a difference between them and some of the competition. I talk to Delta FAs all the time. Trust me when I tell you there is some real continuing frustration between the old NWA folks and Delta CORP attitude. Delta is asking more and more of these hard working folks and at some point enough will be enough and I think we are just about there. I think we will either see one of two things. Either 1) FAs will go union or 2) the level of service will decline out of frustration over working changes and requests from the mothership. I do see a real fight with FAs next year. This past round was just nasty and round two will be worse.
Bottom line is we are in for strange times flying Delta in 2016. Personally, I think things are going to get much worse before things turn for the better. I think there will be a real fight with pilots as they work toward a new contract that “must be a tentative agreement the pilots can be proud of” per the new Delta MEC Chairman Captain John Malone. I, for now, don’t expect to see any kind of strike action but if things don’t go well during negotiations I would not be shocked to see work slow downs that could affect the all important 100% completion results that are treasured above all else by Delta.
Yep, strange times ahead indeed for those inside Delta and those of us who spend a great deal of time interacting with the company! – Rene
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I wonder how long it will take for Delta to connect the dots. Slash the frequent flier program, piss off most loyal and profitable travelers, then wonder why revenues/profits are suffering? The only person Delta should cut is the chief idiot making the frequent flier program changes.
Most likely the cuts will be to low-level salaried employees and first-line supervisors not really management, i. e. managers and above. Also, the use of the term “staying nimble” is often corporate speak for outsourcing the work employees are doing now.
Record earnings mean record future financial expectations and lofty goals for annual and long-term executive compensation plans and stock options. Last year Dick Anderson made over $10 million from these plans, and his C-suite buddies made millions also. For them, that is the new normal. They (and probably the vast majority of people in their shoes) will do whatever they think is necessary to keep that money coming in. Wall Street says jump. Delta says how high. IMO.
Ironically, we just cut ties with American. So, there’s no longer codeshare or interline flights with them anymore. If that’s any consolation..
Excuse: Their completion factor is too poor (if this is true though, thank god.. I’ll be seeing alot less HKrs on my next flight 😀 )
Leave it to their Skyteam partners at Air France to show the Delta employees how to handle their management! Best the Delta employees handle their management than all the disgruntled frequent flyers.
>The only person Delta should cut is the chief idiot making the frequent flier program changes.