Delta Airlines finally admitted defeat this morning. Well, sort of. After struggling to keep its head up while being dragged down by the fledgling Song unit, major competition and high oil prices, CEO Gerald Grinstein announced today that Delta has a problem. Okay, so it’s a step in the right direction. According to Reuters, Grinstein said it was “completely clear” that the airline can’t survive as-is. He did not say it will file for bankruptcy or ask for government loans, at least not yet.
United, the number two airline, filed for bankrupcy in 2002. It’s still sitting there, waiting for loan guarantees. American Airlines, the biggest in the nation, is still out from under the protective wing of the government, but it had major fights with employee unions for the past year.
We probably won’t hear anything solid about Delta until an internal review is completed in August. Of course there’s no easy solution, especially when so many jobs and so much money is involved. As I think about anyone who’s not in an executive suite over at Delta, I feel a pang of concern – will they end up as miserable as their counterparts at American? Do they have any sort of job security?
It’s hard to say who a company should put first, its shareholders, employees or customers. If Delta files for bankruptcy, its stock will most certainly fall. If it doesn’t, it may lose employee satisfaction. Delta’s customers are clearly unhappy and are switching to other airlines, and will probably continue to do so no matter what.
What’s your solution? How would you handle Grinstein’s financial (and, as always, PR) dilemma?