http://news.delta.com/delta-air-lines-a ... 016-profit

2016 profit $6.1 Billion USD
2016 Employee Profit Sharing $1.1 Billion USD
Q4 2016 profit $923 Million USD

Another great year for Delta.

That's a heck of a year!

Those are amazing numbers!

holy cow .. is that a record?

I know another poster will probably find a way to bash this, but $1.1 billion back to the employees is truly amazing. Happy for everyone with a widget on the top of their check.

Nice... that's an average of $13,750 per employee (Approx 80,000 Delta employee).

Yes I know, some get more and some less, but still.... on average ....not bad!

Does that come to an even $13,750 per employee?

If / when DL matches UA and begins adding a fee for cabin baggage on its Economy Basic fares, I'm waiting for all the DL fan boys to tell me "...but that's what the market supports."

holzmann wrote:

Does that come to an even $13,750 per employee?

It doesn't.

Just wait for the DALPA press release stating that most of those profits belong to them

So is this wrong?

Delta Air Lines Inc (DAL.N) on Thursday reported a 37 percent decline in fourth-quarter net profit and forecast passenger unit revenue, a closely watched metric, to be flat to up 2 percent in early 2017.

The No. 2 carrier by passenger traffic said net income fell to $622 million from $980 million a year earlier.

Excluding special items, earnings of 82 cents a share met the analysts' average estimate, according to Thomson Reuters I/B/E/S.

Delta said the profit decline stemmed from the recent agreement it struck with its 13,000 pilots, granting them a 30 percent raise by 2019. The four-year deal, ratified on Dec. 1, is retroactive to Jan. 1, 2016.

Operating revenue fell to $9.46 billion from $9.50 billion, slightly above the analysts' average estimate of $9.40 billion.

Delta shares were down 10 cents at $51.35 in premarket trading.

http://www.reuters.com/article/us-delta ... SKBN14W1MG

But beyond this question I do say good job to Delta and am glad to see US airlines turning a solid profit year after year.

Tugg

Tugger wrote:

So is this wrong?

They are both correct. DL (and the OP) is highlighting the adjusted pre-tax income (because bigger number), and ignoring how it is lower 4Q2016 vs 4Q2015 (and how GAAP FY16 is lower than GAAP FY15). That article is talking about the net income and comparing to last year.

Wow that is an impressive figure for a legacy airline to put up. Congrats Delta

flyingcat wrote:

Just wait for the DALPA press release stating that most of those profits belong to them

I guarantee it will be arriving shortly after the pilots at UA, AA and WN say their pilots have to recieve the same raises that Delta just recieved

Polot wrote:

Tugger wrote:

So is this wrong?

They are both correct. DL (and the OP) is highlighting the adjusted pre-tax income (because bigger number), and ignoring how it is lower 4Q2016 vs 4Q2015 (and how GAAP FY16 is lower than GAAP FY15). That article is talking about the net income and comparing to last year.

Excellent points. I expect 2016 was the top of this market cycle for airlines. Labor costs will be increasing sharply going forward, as well as fuel costs.

The legacies can boost their airfares in the short term, but that will suppress demand and widen the door for the domestic ULCCs and the foreign competition such as Norwegian and (dare I say it) the ME3.

Still, congrats to the Delta employees!

Let's not be so quick to give Delta credit for doing such a great job as far as profits are concerned. In the current environment one can no help but turn a profit. The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from. Most small market have one carrier and are subject to whatever price they are being charged. Not to long ago when there was viable competition every airline was in bankruptcy court except for Southwest that turned a profit every year during those turbulent times in the airlines industry with competent management. So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice we now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky. That being said we need to take these huge profits with a grain of salt and ask ourselves if there was more competition in the market could they still work their profitability magic. I think not.

klm617 wrote:

Let's not be so quick to give Delta credit for doing such a great job as far as profits are concerned. In the current environment one can no help but turn a profit. The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from. Most small market have one carrier and are subject to whatever price they are being charged. Not to long ago when there was viable competition every airline was in bankruptcy court except for Southwest that turned a profit every year during those turbulent times in the airlines industry with competent management. So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice we now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky. That being said we need to take these huge profits with a grain of salt and ask ourselves if there was more competition in the market could they still work their profitability magic. I think not.

I think if you sat through a pricing meeting at a major you would know that competition in major markets is alive and well, even in smaller markets like my hometown ROC-Florida. These profits are adequate but below many other industries. Perhaps on a.net they seem high, but in business they are normal to below-normal. The industry is finally healthy and we should applaud that.

Congrats to all Delta employees on another great year.

klm617 wrote:

Let's not be so quick to give Delta credit for doing such a great job as far as profits are concerned. In the current environment one can no help but turn a profit. The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from. Most small market have one carrier and are subject to whatever price they are being charged. Not to long ago when there was viable competition every airline was in bankruptcy court except for Southwest that turned a profit every year during those turbulent times in the airlines industry with competent management. So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice we now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky. That being said we need to take these huge profits with a grain of salt and ask ourselves if there was more competition in the market could they still work their profitability magic. I think not.

Well said. Adding to your point.

In 2006, the top ten airline operators were as follows:

1 American
2 Southwest
3 Delta
4 United
5 Northwest
6 Continental
7 US Airways
8 America West
9 AirTran
10 SkyWest

In 2006, the total number of departed schedule passenger flights was 9.7 million within the US. The total number of passengers flown on those flights was 660 million.

In 2016, the top ten airline operators were:

1 American
2 Southwest
3 Delta
4 United
5 JetBlue
6 SkyWest
7 ExpressJet
8 Alaska
9 Spirit
10 Republic

In 2016, the total number of departed scheduled passenger flights was 8.2 million within the US. The total number of passengers flown on those flights was 725 million (Oct-Dec estimated)

So, 1.5 million less flights with over 50 million more passengers is definitely less supply more demand which equals big $$$ for all of these carriers in the current times, in addition to all the fees and surcharges they are tacking on. So while lower oil prices have helped the airlines be extremely profitable again, it is the consolidation that has really given airlines like Delta the profits that are record numbers.

815Oceanic wrote:

klm617 wrote:

I think if you sat through a pricing meeting at a major you would know that competition in major markets is alive and well, even in smaller markets like my hometown ROC-Florida. These profits are adequate but below many other industries. Perhaps on a.net they seem high, but in business they are normal to below-normal. The industry is finally healthy and we should applaud that.

On the surface yes but ROC has WN service. Not every market has WN service. Legacies frequently are locked together in pricing and do not undercut each other for fear of upsetting the dominant carrier, AA no longer does this. US used to undercut all legacy hubs, that is gone. FL used to carry less restrictions on competing DL routes, WN has shrunk in these areas. Is there competition yes but it is limited to an oligopolistic nature these days.

If you analysed non WN cities served by legacies only they have largely absorbed massive pricing increases with limited capacity changes. WN helps but they clearly want in on larger markets and secondary airports are no longer their focus. The US sadly has not had a full Ryanair competitor set up shop serving dwindling secondary airports. While I am not a fan of their service their affect on EU aviation and its pricing is clear.

piedmontf284000 wrote:

In 2016, the total number of departed scheduled passenger flights was 8.2 million within the US. The total number of passengers flown on those flights was 725 million (Oct-Dec estimated)

So, 1.5 million less flights with over 50 million more passengers is definitely less supply more demand...

That's not a compellingly structured argument. You're ignoring change in average gauge (lots of EM2s and Saabs are gone, and most everybody has been putting in more seats on existing aircraft) and stage length. Change in available seat miles would be a better metric.

flyingcat wrote:

815Oceanic wrote:

klm617 wrote:

I think if you sat through a pricing meeting at a major you would know that competition in major markets is alive and well, even in smaller markets like my hometown ROC-Florida. These profits are adequate but below many other industries. Perhaps on a.net they seem high, but in business they are normal to below-normal. The industry is finally healthy and we should applaud that.

On the surface yes but ROC has WN service. Not every market has WN service. Legacies frequently are locked together in pricing and do not undercut each other for fear of upsetting the dominant carrier, AA no longer does this. US used to undercut all legacy hubs, that is gone. FL used to carry less restrictions on competing DL routes, WN has shrunk in these areas. Is there competition yes but it is limited to an oligopolistic nature these days.

If you analysed non WN cities served by legacies only they have largely absorbed massive pricing increases with limited capacity changes. WN helps but they clearly want in on larger markets and secondary airports are no longer their focus. The US sadly has not had a full Ryanair competitor set up shop serving dwindling secondary airports. While I am not a fan of their service their affect on EU aviation and its pricing is clear.

Oligopolies usually aren't characterized by declining prices.

While Wall Street will always find nits to pick, it's hard to argue with the great numbers and operational reliability DL is putting together. Congrats to the people of Delta on an outstanding year!

DL CEO:

Trump win helped our bottom line

http://money.cnn.com/2017/01/12/investi ... index.html

It's a decent result, but in virtually all important aspects it's a decline from 2015. I expect that to the best case with most U.S. airlines as costs rise and revenue stagnates. They'll still make plenty of money going forward, but the year of records was clearly 2015. We probably won't see a repeat for a very long time, if ever.

Clipper136 wrote:

Nice... that's an average of $13,750 per employee (Approx 80,000 Delta employee).

Yes I know, some get more and some less, but still.... on average ....not bad!

It's big. But let's not kid ourselves though. It's part of the compensation package needed for DL to be competitive in the marketplace. Eligible non-contract employees took a large hit this year in profit sharing. The total profit sharing decline was 385 million, and virtually of that would be for the non-contract group, which would have significantly balanced out the pay raises they received.

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Amazing performance.

While the European legacy carriers are trying to keep their head above water, the US carriers are printing money.

MSPNWA wrote:

It's a decent result, but in virtually all important aspects it's a decline from 2015. I expect that to the best case with most U.S. airlines as costs rise and revenue stagnates. They'll still make plenty of money going forward, but the year of records was clearly 2015. We probably won't see a repeat for a very long time, if ever.

Yes, expect profits to go further downhill this year.

Airline profits to drop, oil prices to rise in 2017

bobnwa wrote:

flyingcat wrote:

Just wait for the DALPA press release stating that most of those profits belong to them

I guarantee it will be arriving shortly after the pilots at UA, AA and WN say their pilots have to recieve the same raises that Delta just recieved

In the case of UA, the pilots will be getting the raise no matter what. We have a snap-up pay clause with DL in our pilot contract.

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

It certainly depends on how you look at it, although the increase to base pay may not be an exact 14% raise, there is always a risk of profit sharing decreasing whether in the near or long term. Employees would rather have taken a base pay raise that is less likely to decrease and less volatile than profit sharing but I could be interpreting your comment wrong.

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Everybody knew that up front.

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

777Mech wrote:

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

DAL profits increase 3% YOY
Profit Sharing percentage decreases by 54%

They threw all those parties and got all that attention because they gave employees a 14.5% raise. LMAO. Thru knew all along what they were doing. The problem lies with the employees too ignorant to consider the entire equation...instead they saw 14.5% and took it to the bank.

Mike1212 wrote:

777Mech wrote:

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

DAL profits increase 3% YOY
Profit Sharing percentage decreases by 54%

They threw all those parties and got all that attention because they gave employees a 14.5% raise. LMAO. Thru knew all along what they were doing. The problem lies with the employees too ignorant to consider the entire equation...instead they saw 14.5% and took it to the bank.

The employees knew exactly why they were getting the 14.5 pay raise and the implications regarding future profit sharing. It's nothing new. really. You joined a.net today to tell us what we already knew? Thanks and welcome to a.net!

DL profit sharing is allocated as a percentage of base salary correct? Does anyone have a ballpark average for your standard DL employee?

compensateme wrote:

If / when DL matches UA and begins adding a fee for cabin baggage on its Economy Basic fares, I'm waiting for all the DL fan boys to tell me "...but that's what the market supports."

I hope DL doesn't stoop to the depths of hell like United. Obviously, they aren't hurting for money. No reason to nickel and dime the passengers more than they already do.

777Mech wrote:

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

People it was a 14.5 percent raise, you would be a fool to think that on top of that one would get the same amount of a profit sharing. !4.5 + 10 equals 24.5. Even the next year your almost 15 percent higher than what ur base was already and the future profit will be paid on the elevated rate, plus they are getting another 6% (1.8 average inflation knocks off 2) raise in April. So the average joe blow in the past two years with Delta has received 4 raises 14.5, 4-5 i believe and, 4 (2 out for inflation) thats almost 24% INCREASE in three years in the same role at the same level. Add the 21% they received last year, 10 this year and 15 the year before......am i missing something? Not many career individuals (non contract) can say that they received that. Especially in the airline industry (not everyone is a pilot or FA).

piedmontf284000 wrote:

klm617 wrote:

Let's not be so quick to give Delta credit for doing such a great job as far as profits are concerned. In the current environment one can no help but turn a profit. The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from. Most small market have one carrier and are subject to whatever price they are being charged. Not to long ago when there was viable competition every airline was in bankruptcy court except for Southwest that turned a profit every year during those turbulent times in the airlines industry with competent management. So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice we now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky. That being said we need to take these huge profits with a grain of salt and ask ourselves if there was more competition in the market could they still work their profitability magic. I think not.

Well said. Adding to your point.

In 2006, the top ten airline operators were as follows:

1 American
2 Southwest
3 Delta
4 United
5 Northwest
6 Continental
7 US Airways
8 America West
9 AirTran
10 SkyWest

In 2006, the total number of departed schedule passenger flights was 9.7 million within the US. The total number of passengers flown on those flights was 660 million.

In 2016, the top ten airline operators were:

1 American
2 Southwest
3 Delta
4 United
5 JetBlue
6 SkyWest
7 ExpressJet
8 Alaska
9 Spirit
10 Republic

In 2016, the total number of departed scheduled passenger flights was 8.2 million within the US. The total number of passengers flown on those flights was 725 million (Oct-Dec estimated)

So, 1.5 million less flights with over 50 million more passengers is definitely less supply more demand which equals big $$$ for all of these carriers in the current times, in addition to all the fees and surcharges they are tacking on. So while lower oil prices have helped the airlines be extremely profitable again, it is the consolidation that has really given airlines like Delta the profits that are record numbers.

Unfortunately not a meaningful reference point. The 50 seaters are disappearing while the A321's and 737-900's are rolling in.

LawAndOrder wrote:

777Mech wrote:

Mike1212 wrote:

2016 profit was bigger than the 2015 profit yet non-pilot profit sharing goes from 21.6% to just 10%. Maybe now people will realize that the 14% increase to just their base pay wasn't a 14% raise.

Congrats!!!

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

People it was a 14.5 percent raise, you would be a fool to think that on top of that one would get the same amount of a profit sharing. !4.5 + 10 equals 24.5. Even the next year your almost 15 percent higher than what ur base was already and the future profit will be paid on the elevated rate, plus they are getting another 6% (1.8 average inflation knocks off 2) raise in April. So the average joe blow in the past two years with Delta has received 4 raises 14.5, 4-5 i believe and, 4 (2 out for inflation) thats almost 24% INCREASE in three years in the same role at the same level. Add the 21% they received last year, 10 this year and 15 the year before......am i missing something? Not many career individuals (non contract) can say that they received that. Especially in the airline industry (not everyone is a pilot or FA).

Nobody said it was going to be equal to last year. The main complaint is that the pilots have gotten more % wise with profit sharing on top of a 30% raise. The profit sharing pool should be equal. We all contributed. In the infographics delta put out when they changed it, pretty much said we had to top the previous year's earning to trigger the 20%. Now it was updated to say it will still be 10% but you'll get 20% of whatever dollar amount over the previous year.

For instance if Delta made 1B in 2015, then 1.1B in 2016, then 20% of the $100M would get added to the profit sharing. That was not explained to us.

The also speak of a survey that said we wanted to more base pay, but yet nobody had ever seen said survey. We keep asking about this survey that supposedly took place, but there's no answer.

777Mech wrote:

LawAndOrder wrote:

777Mech wrote:

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

People it was a 14.5 percent raise, you would be a fool to think that on top of that one would get the same amount of a profit sharing. !4.5 + 10 equals 24.5. Even the next year your almost 15 percent higher than what ur base was already and the future profit will be paid on the elevated rate, plus they are getting another 6% (1.8 average inflation knocks off 2) raise in April. So the average joe blow in the past two years with Delta has received 4 raises 14.5, 4-5 i believe and, 4 (2 out for inflation) thats almost 24% INCREASE in three years in the same role at the same level. Add the 21% they received last year, 10 this year and 15 the year before......am i missing something? Not many career individuals (non contract) can say that they received that. Especially in the airline industry (not everyone is a pilot or FA).

The main complaint is that the pilots have gotten more % wise with profit sharing on top of a 30% raise. The profit sharing pool should be equal. We all contributed.

That sounds like a participation trophy argument. Life is fair starting when?? The pilots negotiated this agreement and that's what they get. They also took a larger portion (% and $$) of the pay cuts in bankruptcy, are you arguing that YOU should have taken the same cuts since you were participating?

Give credit where it's due. A good result. An increasingly numbers driven airline, making good decisions (see other threads - increasing profitable domestic business, taking hard decisions on unprofitable international routes).

Are they the best prepared for slower industry growth, higher fuel prices, an acquisition?

klm617 wrote:

In the current environment one can no help but turn a profit.

Tell that to Alitalia. Regardless, the point isn't that most airlines are profitable; its that DL made $6.1 Billion ($4.4 Net) in Profit (Income) in 2016 which is comparable to the combined profit of all European and the Middle Eastern airlines made combined. Its the degree of profit.

klm617 wrote:

The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from.Most small market have one carrier and are subject to whatever price they are being charged.

If you are referring to International long haul then you have the US3 plus essentially every major long haul airline in the World competing for that business. There is more long haul competition then ever.

If you are talking about US domestic (lion's share of profit) then I don't understand why you suggest there are only three? In fact, the '4th' carrier (WN) handles more traffic than a member of the US3. WN flies more passengers than LH and FR combined. Not to mention the 5th largest US airline is about the size of AC and is a top 2 player on the US west coast while the #6 player is #3 on the US east coast.

Airline ticket prices are down, not up.

klm617 wrote:

So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice

B6 (~10% growth), F9 (~20%), AS (8%) and NK (18%) are all growing a very high rates while the US3 are essentially flat. F9 is exploring an IPO. If there was no open opportunities these airlines could not accomplish this. Any aspiring entrepreneur who sees these growth rates and a DL profit of $6 billion would be encouraged to enter this market place.

---[quote="klm617"]We now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky.[\quote]----

How many is ideal? Is there some target you are supposed to hit? 1 is bad. 2 is better but who is to say that 20 is better than 7? Personally, I believe airlines that make money is better for the consumer/employees than when airlines don't. Look at this $1.1 Billion in profit sharing, increased employee wages, and long overdue improvements at LAX ($1.9 Billion) and NYC ($2 Billion) and ATL ($) that are being funded by these profits. I don't see that as a bad thing.

Improved efficiency with a reduction in redundancy and smarter operations are a big driver of increased profitability.

tortugamon

777Mech wrote:

LawAndOrder wrote:

777Mech wrote:

Especially when the pilots got 30% AND their profit sharing didn't get touched. Folks are blind to this. It wasn't a true raise in that regard.

People it was a 14.5 percent raise, you would be a fool to think that on top of that one would get the same amount of a profit sharing. !4.5 + 10 equals 24.5. Even the next year your almost 15 percent higher than what ur base was already and the future profit will be paid on the elevated rate, plus they are getting another 6% (1.8 average inflation knocks off 2) raise in April. So the average joe blow in the past two years with Delta has received 4 raises 14.5, 4-5 i believe and, 4 (2 out for inflation) thats almost 24% INCREASE in three years in the same role at the same level. Add the 21% they received last year, 10 this year and 15 the year before......am i missing something? Not many career individuals (non contract) can say that they received that. Especially in the airline industry (not everyone is a pilot or FA).

Nobody said it was going to be equal to last year. The main complaint is that the pilots have gotten more % wise with profit sharing on top of a 30% raise. The profit sharing pool should be equal. We all contributed. In the infographics delta put out when they changed it, pretty much said we had to top the previous year's earning to trigger the 20%. Now it was updated to say it will still be 10% but you'll get 20% of whatever dollar amount over the previous year.

For instance if Delta made 1B in 2015, then 1.1B in 2016, then 20% of the $100M would get added to the profit sharing. That was not explained to us.

The also speak of a survey that said we wanted to more base pay, but yet nobody had ever seen said survey. We keep asking about this survey that supposedly took place, but there's no answer.

The pilots negotiated it in their contract and to get the old profit sharing. There is going to come a time that the airlines aren't making as much as they have been if history repeats itself (likely). In that instance it would be better to have more in the base pay. I don't have historical data on what the pilots lost during bankruptcy so I cant speak for that. But from what I have been told many employees knew exactly what to expect. Possibly that was your direct leader that did not enlighten you. Either way I hear your opinion and I think it is a valid one. I just do not think this was done in malice I think your leadership was probably getting pressured by outside forces. There is a reason Southwest the leader of employee relations for a while only offers 401K contribution

I think you are mis-informed. SWA was one of the first to start a profit sharing program. And as far as matching funds in the 401K is concerned, the last pilot contract changed from matching to direct contributions, due to pressures from other airline contracts.

Sheesh!!! I need to jump ship and go work for Delta.

The fact is that Delta is a very well run airline and part of the reasons for their profits over the years is that they are experts at right sizing aircraft to a market, using the maximum economical life of an air-frame (shinny new airplanes are often partly ego trips), and have been paying down their debt so they are not paying much interest (and interest payments reduce profit). I anticipate in another few years they will be in a position to buy all new aircraft with cash; which will give them a low cost of operation position in the US that no one else will be able to touch.

Have a great day,

exunited wrote:

777Mech wrote:

LawAndOrder wrote:

People it was a 14.5 percent raise, you would be a fool to think that on top of that one would get the same amount of a profit sharing. !4.5 + 10 equals 24.5. Even the next year your almost 15 percent higher than what ur base was already and the future profit will be paid on the elevated rate, plus they are getting another 6% (1.8 average inflation knocks off 2) raise in April. So the average joe blow in the past two years with Delta has received 4 raises 14.5, 4-5 i believe and, 4 (2 out for inflation) thats almost 24% INCREASE in three years in the same role at the same level. Add the 21% they received last year, 10 this year and 15 the year before......am i missing something? Not many career individuals (non contract) can say that they received that. Especially in the airline industry (not everyone is a pilot or FA).

The main complaint is that the pilots have gotten more % wise with profit sharing on top of a 30% raise. The profit sharing pool should be equal. We all contributed.

That sounds like a participation trophy argument. Life is fair starting when?? The pilots negotiated this agreement and that's what they get. They also took a larger portion (% and $$) of the pay cuts in bankruptcy, are you arguing that YOU should have taken the same cuts since you were participating?

Okay but the pilots were also saying it wasn't "fair" that they took the larger cut. The bigger issue is Delta said we were surveyed on what we want, rebut they haven't said when this was conducted or the complete results of it. They are trying to say you got 25% BUT 14.5 of that was touched with profit sharing.

So now, who cares if we turn a profit? I do believe this will push the FAs towards finally unionizing.

tortugamon wrote:

klm617 wrote:

In the current environment one can no help but turn a profit.

Tell that to Alitalia. Regardless, the point isn't that most airlines are profitable; its that DL made $6.1 Billion ($4.4 Net) in Profit (Income) in 2016 which is comparable to the combined profit of all European and the Middle Eastern airlines made combined. Its the degree of profit.

klm617 wrote:

The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from.Most small market have one carrier and are subject to whatever price they are being charged.

If you are referring to International long haul then you have the US3 plus essentially every major long haul airline in the World competing for that business. There is more long haul competition then ever.

If you are talking about US domestic (lion's share of profit) then I don't understand why you suggest there are only three? In fact, the '4th' carrier (WN) handles more traffic than a member of the US3. WN flies more passengers than LH and FR combined. Not to mention the 5th largest US airline is about the size of AC and is a top 2 player on the US west coast while the #6 player is #3 on the US east coast.

Airline ticket prices are down, not up.

klm617 wrote:

So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice

B6 (~10% growth), F9 (~20%), AS (8%) and NK (18%) are all growing a very high rates while the US3 are essentially flat. F9 is exploring an IPO. If there was no open opportunities these airlines could not accomplish this. Any aspiring entrepreneur who sees these growth rates and a DL profit of $6 billion would be encouraged to enter this market place.

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klm617 wrote:

We now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky.[\quote]----

How many is ideal? Is there some target you are supposed to hit? 1 is bad. 2 is better but who is to say that 20 is better than 7? Personally, I believe airlines that make money is better for the consumer/employees than when airlines don't. Look at this $1.1 Billion in profit sharing, increased employee wages, and long overdue improvements at LAX ($1.9 Billion) and NYC ($2 Billion) and ATL ($) that are being funded by these profits. I don't see that as a bad thing.

Improved efficiency with a reduction in redundancy and smarter operations are a big driver of increased profitability.

tortugamon

OK for the sake of argument we can say there is 4 network carriers in the US. As far as how many is Ideal the answer is when the customer is getting the best value for their dollar not where a person get's their leg room cut down to the bare minimum or when you have to pay $25 to check a bag or chose a seat especially where automation and efficiency are at an all time high as far as the work force is concerned. In most markets cities like PLN, MKG, MBS and the like you now only have one choice where most of these markets had 3 or more in some cases not to mention Southwest would never enter this small a market. My city DTW is down 200 departures a day from it's peak not to mention cities like CLE, CVG, PHL and PIT how are also down by a considerable amount. As far as improvements go that's great but what does that do for the people of CLE, IND, STL, and PIT. Delta is operating in a more or less protected environment where there is much less competition to fight for than there was say 10 or 15 years ago where all the majors went through bankruptcy and I suspect if they were subject to the same amount of competition and choice in the market they would not be turning the same profits so it's not that their doing anything right it's just that the playing field is more tilted in their favor that it ever has which is not how the free market works.

815Oceanic wrote:

klm617 wrote:

Let's not be so quick to give Delta credit for doing such a great job as far as profits are concerned. In the current environment one can no help but turn a profit. The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from. Most small market have one carrier and are subject to whatever price they are being charged. Not to long ago when there was viable competition every airline was in bankruptcy court except for Southwest that turned a profit every year during those turbulent times in the airlines industry with competent management. So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice we now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky. That being said we need to take these huge profits with a grain of salt and ask ourselves if there was more competition in the market could they still work their profitability magic. I think not.

I think if you sat through a pricing meeting at a major you would know that competition in major markets is alive and well, even in smaller markets like my hometown ROC-Florida. These profits are adequate but below many other industries. Perhaps on a.net they seem high, but in business they are normal to below-normal. The industry is finally healthy and we should applaud that.

Thanks for the well put reply. I think sometimes people think air travel is a right and should be free. I have complaints against some things about the US economy but airfare are not part of them. We have a healthy model now with a fairly balanced competition.

It's known I'm pro mergers on the past big ones but I can and do admit it could of worked out like many claim. It didn't and I'm glad. And I'd own it if the mergers didn't help bring a healthy balance to consumers employees and the the companies themselves. Besides the fact most 50% Americans paycheck are the same has 12years ago airfares are affordable to the masses. It's just not a given that it will be the luxurious travel experience it was in the late 80s 90's most of the early 2000's. Higher load factors cheap fuel employee sacrifice mergers and better management have enabled it.

richcam427 wrote:

compensateme wrote:

If / when DL matches UA and begins adding a fee for cabin baggage on its Economy Basic fares, I'm waiting for all the DL fan boys to tell me "...but that's what the market supports."

I hope DL doesn't stoop to the depths of hell like United. Obviously, they aren't hurting for money. No reason to nickel and dime the passengers more than they already do.

Isnt basically economy fare supposed to be for people who don't want those kind of amenities and don't want to pay for him. Not for people who want those things and expect them to be in their price paid. I understand the basic economy fare doesn't get miles and is a bare minimum's seat from point a to point B option. This fair is not for me but I think that's its plus if Your on a extremely tight budget and I don't need to bring things along with you, I look at that as a positive.

piedmontf284000 wrote:

klm617 wrote:

Let's not be so quick to give Delta credit for doing such a great job as far as profits are concerned. In the current environment one can no help but turn a profit. The airlines today are operating in an environment where there are only 3 big players with a lot of them operating in markets where there is little or no options for travelers to chose from. Most small market have one carrier and are subject to whatever price they are being charged. Not to long ago when there was viable competition every airline was in bankruptcy court except for Southwest that turned a profit every year during those turbulent times in the airlines industry with competent management. So please in the current environment that is little or no chance of new start ups and these big airlines can levy any charges they want against you with the limited choice we now have in the market most major airports have gone from 20 airlines serving a market to about may 7 if their lucky. That being said we need to take these huge profits with a grain of salt and ask ourselves if there was more competition in the market could they still work their profitability magic. I think not.

Well said. Adding to your point.

In 2006, the top ten airline operators were as follows:

1 American
2 Southwest
3 Delta
4 United
5 Northwest
6 Continental
7 US Airways
8 America West
9 AirTran
10 SkyWest

In 2006, the total number of departed schedule passenger flights was 9.7 million within the US. The total number of passengers flown on those flights was 660 million.

In 2016, the top ten airline operators were:

1 American
2 Southwest
3 Delta
4 United
5 JetBlue
6 SkyWest
7 ExpressJet
8 Alaska
9 Spirit
10 Republic

In 2016, the total number of departed scheduled passenger flights was 8.2 million within the US. The total number of passengers flown on those flights was 725 million (Oct-Dec estimated)

So, 1.5 million less flights with over 50 million more passengers is definitely less supply more demand which equals big $$$ for all of these carriers in the current times, in addition to all the fees and surcharges they are tacking on. So while lower oil prices have helped the airlines be extremely profitable again, it is the consolidation that has really given airlines like Delta the profits that are record numbers.

The old model was broken. Their business is not charities and I really think they do a pretty nice job at providing our communities with a service. Unless you want taxes and a government take overairlines and think that travel should be a right to all people, I think we have a pretty fair and decent system.