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Archive for the 'Delta' Category

September 15th, 2005
Posted by Matt at 7:00 pm

On September 14, 2005, 4 years and 3 days following 9/11 attacks, Delta Air Lines (DAL) entered into the equivalent of corporate jail and became wardens of the state/courts. Hopefully they will be granted parole soon.

It was a very sad day in our family as my father is a retired pilot from Delta, giving over 32 years of service to the company. The source of my sadness is not necessarily the financial situation at Delta but rather what their bankruptcy symbolizes to me – the death of an ideology. I grew up in the “Delta Family” and while the airline that C.E. Woolman found will most likely live on, the family he fathered is certainly lost forever.

My fondest Delta memories are of attending the summertime Delta picnics. The swimming pool with the extra-high slide, the “old” guys playing softball, Grandy’s fried chicken and country dancing. One year, we managed to sneak away a couple of our parents’ beers and we went out to the car and tried to act like grown-ups by “throwing one back”. I think I might have been 10 or 11 at the time, so it was a real struggle but somehow I managed. (I think I poured ¾ of mine out while no one was looking.)

When I grew up, I wanted to marry a flight attendant because I knew them to be the sweetest people in the world. (Some of the pilots may disagree with me, but when you’re a cute kid wearing a suit and tie, the women adore you.) On my first flight alone, I was served 5 ice cream sundaes. That was back when non-revving meant sitting in first class.

The only time my brother and I got along was when we were non-revving. We fought incessantly when we were at home but while we were flying our father would constantly remind us that Delta would pull our passes if we didn’t behave. He would tell us story after story about kids having their flying privileges revoked so they had to stay home with the baby sitter while everyone else went to Disney Land. I’m now convinced that these stories were fictional but they worked.

I remember the tremendous pride I felt when our college marketing class studied the “Delta Family”. I remember testimony after testimony of fellow Dallasittes who cherished flying Delta over AA because of the superior service they received. I remember the Spirit of Delta poster on the wall in our game room which was ironically sold within weeks of bankruptcy – the plane not the poster. I remember my dad telling me about how Delta was considered a nothing airline compared to Braniff and how his buddies ribbed him when he was hired in ‘72.

Unfortunately, I also remember making a sales call to Delta and having a member of Delta’s management explaining to me that Southwest wasn’t a competitor. I remember the first strike vote. I remember the revolving door at the upper management level.

I owe a tremendous debt of gratitude to Delta. They offered my father gainful employment which allowed him to send my brother and me to a couple of the finest schools in the country. They offered us the opportunity to be reunited with our extended family every summer and Christmas. The absolute best part about your Dad being a pilot was the flexibility it offered him. My dad coached all my little league teams – even soccer. I cannot remember a HS or college game of mine that he wasn’t able to attend. All though he was gone a lot, he was always there whenever it mattered. Birthdays, Games, School Plays – Anything that mattered, he was there.

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Posted by Matt at 6:59 pm

From a financial advisor’s perspective, the bankruptcy of DAL is just another ding in the armor of the American economy. Airline bankruptcy is certainly nothing new. Don’t we go threw this every couple of decades. When my dad joined Delta; Pan Am, Eastern, TWA and Braniff were the dominant airlines. I remember a close friend our ours ribbing my dad because he worked for “lowly” Delta and couldn’t get a job at Braniff. Similarly, my dad has friends who were shunned by the majors so they had to resort to flying for Southwest.

The lesson to be learned is important. For what ever reason, we refuse to learn from our mistakes. Someday, I’ll be watching the ticker LUV careen down to pennies. Count on it.

As for my clients who retired from Delta, It’s too early to tell exactly what the ramifications will be. I’ve heard countless rumors and I don’t want to speculate on their validity. I will certainly keep you updated. For the time being, we need to stay the course. We’ve been heavily overweighted towards energy commodities which will significantly offset some of the losses you’ll experience in your pension. As I’ve discussed with you in person, energy prices should continue upward as long as our economy doesn’t slip into a recession. At that time, we could see consolidation. Any surprises in the energy market will likely be to the upside.

I’ll keep you posted on any news I hear.

More Reading:
http://merceronvalue.com/archives/2005/09/delta_and_north.html

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