Anderson credited employee for hard work despite an adverse economy, and said the carrier retains the goal of having no frontline layoffs. Delta and Northwest have offered buyout and early retirement packages to thousands over the past year, and officials have said 2,500 employees will leave the combined carrier after the busy summer travel season. “We just have to do our very best and work very hard,” Anderson said.That's right! No 'frontline' layoffs at Delta, according to the CEO - except that that doesn't include Delta's wholly-owned regional subsidiary Comair, which has cut jobs through 'attraction' this past February. So, no layoffs? Well, maybe if you work for Delta mainline, but if you don't...
BA's posted a net loss of £375 million ($594.6 million) for the 12 months that ended on March 31, only a year after posting a record £712 million profit a year before. Its operating loss of £220 million was compared to year-ago results of £878 million in profit. BA's full year fuel costs are near £3 billion - something that Walsh pinned the loss on, along with "reduced passenger and cargo demand."
While the news of the huge loss is certainly surprising, especially in light of the fact that the airline posted record profits only last year, it wasn't altogether unexpected. BA has long been dominant in flying 'premium' passengers; some have argued that it was the airline that really made business class popular. The number of premium passengers that it flew dropped 13%, and while this number isn't far from the industry average, BA has more exposure to the premium market than other airlines; as such, it is adversely affected by the double-digit drop even more.
This has meant that, over the past year, the airline has had to put volume over yields. In other words, instead of focusing on 'profit per seat' figures that are boosted by premium-paying passengers ('yield'), it's focusing on filling seats, even if those passengers filling seats are paying less. "We're now saying it's getting that balance between yield and volume so it's more a focus on volume than it has been," said Walsh, who believes that going after increased market share "is sustainable in the long term and will be profitable."
BA also announced that it is still ordering the Boeing 777-300ER for delivery between 2010-12, the same time that its remaining Boeing 757-200s will leave the fleet and be replaced by aircraft in the Airbus A320 family. But BA will slash capacity by 4% next winter to reflect the lowered demand for travel as it parks 16 aircraft.
A Boeing 777 in Air France's new livery. Photo courtesy Air FranceAir France/KLM and Delta yesterday put the finishing touches on a $12 billion-a-year joint venture deal that would allow them to operate as a single carrier on North Atlantic routes. The pact extends a previous joint venture that KLM and Northwest have had since 1997. Air France merged with KLM in 2004, and Delta recently took over Northwest, allowing for a four-way alliance (all are already members of the SkyTeam alliance).
The deal is a revenue- and profit-sharing venture, and will have antitrust immunity (something that American and British Airways are seeking right now). It affects more than 200 daily transatlantic flights to over 400 destinations in Europe and North America, or around 27% of total trans-Atlantic capacity. It also allows them to more effectively combine operations. For example, if both Delta and Air France have a flight from New York to Paris, but both flights are only 1/3 full, they can be combined and flown on one aircraft. Marketing, pricing, and ticketing will also be shared, and these result in very impressive cost savings (about $150 million per airline).
As previously mentioned, American, Iberia and British Airways in the oneworld alliance and United, Lufthansa (and soon Continental) in the Star Alliance are working on similar deals. This means that airlines without an alliance affiliation - like Virgin Atlantic - might suffer as a result. And while this means that Air France and Delta are cooperating even more closely, they can't actually merge - under US law, a foreign company can't own more than 25% of a US airline, although this rule might end in the future.
Some slides from the Air France/Delta news conference in Paris on Wednesday:
The deal is a revenue- and profit-sharing venture, and will have antitrust immunity (something that American and British Airways are seeking right now). It affects more than 200 daily transatlantic flights to over 400 destinations in Europe and North America, or around 27% of total trans-Atlantic capacity. It also allows them to more effectively combine operations. For example, if both Delta and Air France have a flight from New York to Paris, but both flights are only 1/3 full, they can be combined and flown on one aircraft. Marketing, pricing, and ticketing will also be shared, and these result in very impressive cost savings (about $150 million per airline).
As previously mentioned, American, Iberia and British Airways in the oneworld alliance and United, Lufthansa (and soon Continental) in the Star Alliance are working on similar deals. This means that airlines without an alliance affiliation - like Virgin Atlantic - might suffer as a result. And while this means that Air France and Delta are cooperating even more closely, they can't actually merge - under US law, a foreign company can't own more than 25% of a US airline, although this rule might end in the future.
Some slides from the Air France/Delta news conference in Paris on Wednesday:
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