WHINE AND CHEEZ
by Sean Mendis
Way the Delta Family died
9 May 2003
The Delta of pre-deregulation days was largely an entity that defined its own niche. The primary focus of the airline was to serve communities in the Southeastern United States, both by providing air services as well as being a corporate citizen of the region. Delta was more than just a transportation provider or an employer - it was a way of life. Thus the "Delta family" was born. In an era of regulation where each airline could pick and choose where it could compete, Delta was able to let the availability of appropriate "family members" be the factor that determined the pace of their growth. The employees loved the airline and vice-versa. The "Spirit of Delta" is a classic example of this mutual respect. There was no employees versus management struggle that characterizes labor relations in the industry today. Management were employees and employees were management.
Deregulation changed that once and for all. It created an environment where universal accessibility was the only way for a network carrier to compete. Some airlines like American and United chose growth as the means towards achieving this universal accessibility, while others like Delta and Northwest chose consolidation via mergers and acquisitions.
The first nail in the Delta family coffin was the merger with Western. Both airlines had very strong corporate cultures, but the cultures were simply not compatible. As the surviving entity, Delta essentially required that the Western folks shape up to the "Deltoid" mold, something that was very hard to accept for the Western folks who would always be considered outsiders. To this day, almost 2 decades later, longtime Delta employees refer to each other as "original" and "ex-Western".
Nonetheless, despite a few acrimonious issues arising, the amalgamation of Western into Delta was largely painless compared to other transactions of the day (remember, this was the era of Frank Lorenzo running amok with his acquisition machine). The Western employees settled down in their role as stepchildren of the airline doing their own little thang out in the west, for the most part away from the core Southeastern markets.
Then came the death of Pan Am, throwing up a once-in-a-lifetime opportunity for an airline to capitalize by scavenging the international routes of this dying behemoth. With all the other major competitors having already made their moves, Ron Allen made a play first for the whole enchilada and subsequently just the tasty fillings. Volumes have been written about the way that Allen handled the transaction, but the end result was that he was perceived by PanAm employees to have reneged on his word and caused the final nail to be driven into the coffin of the blue meatball. This was scarcely the right time for Delta to try and amalgamate these same people into the tight-knit Delta family.
In the end, that was what destroyed the Delta family. The PanAm folks came in with a chip on their shoulders, both from what they perceived as Delta's role in killing their airline as well as the standard gripes over seniority, pensions, etc... that accompany every transaction. Costs spiralled as Delta scrambled to integrate incompatible systems and aircraft into their own operations. The increasing costs forced Ron Allen to launch Leadership 7.5 which only served to alienate the most loyal of the remaining "original Deltoids". The point of no return was crossed.
I have a soft spot for Ron Allen partly because we share the same alma mater of Georgia Tech, but mainly because I think he was the last true nuts-and-bolts airline chief in the United States. He gave his life to Delta and without a doubt would have given his life for Delta. That alone inspired loyalty among the few Deltoids he had yet to alienate and kept him in the drivers seat for so long before making an inglorious exit to stage left.
Enter Leo Mullin, the Harvard man from a Chicago utilities firm. For an airline that had never even hired a chief executive from another player within the industry, the choice of Mullin to succeed Allen was a complete shock. To his credit, Leo implemented programs that achieved the same results that Allen sought from Leadership 7.5, but without the transparency that Allen had used to his detriment.
In the past, Delta had always been able to keep unions out of their airline by treating the employees fairly and generously, thus creating an atmosphere of trust. The AFA unionization vote of 2002 was a watershed event in that Delta succeeded in keeping unions off property again, but did so by cultivating an atmosphere of lies, fear and mistrust. They then went and stabbed their employees in the back by reneging on many commitments they had been made during the anti-union campaign. This is merely one example of the "us versus them" mentality that has pervaded the airline. You simply cannot unite to compete with an external threat when you are too busy fighting your own civil war. Alas, that is where Delta has fallen.
Now that the Delta employee is disillusioned by the airline, obviously that malcontent will pass down to the consumer. Remember, the original Delta family was a community affair consisting not only of the Delta employees, but also the regular customers who were recognized as Flying Colonels and Flying Orchids. Now that the employees themselves no longer feel part of the family, nor do the consumers. The difference of course is that consumers always have a choice, whereas employees rarely have a similar luxury.
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