Delta’s CEO Is A Babbling Idiot

Typically when I think of airline CEOs who say mindless things, the first person who comes to mind is Akbar Al Baker, Qatar Airways’ CEO. However, I’m fairly certain Delta’s CEO, Richard Anderson, is doing everything he can to take over the title of being the most ridiculous guy in the airline industry.

In the battle for Open Skies, Delta’s CEO linked the “big three” Middle Eastern carriers to terrorism. After that gaffe you’d think he would keep his mouth shut for a while, or at least not be the poster-child for the US airlines in this Open Skies debate.

But unfortunately (or perhaps fortunately, for the Middle Eastern carriers) Richard Anderson just keeps on talking and talking and talking. What’s his accusation against the Middle Eastern carriers this time? That they’ve kept the US airlines out of India. Why? Because “subsidies.”

Via The Economic Times:

Government subsidies have forced major US airlines out of the Indian market, a top airlines executive has said.

“India is a very big country. It has a huge trade relationship with the US, particularly for IT, has huge agricultural trade between the two countries,” chief executive of Delta Airlines Richard Anderson told reporters yesterday during a luncheon meeting at the National Press Club.

“But in essence we don’t really have any aviation trade. We have exited the market completely,” Anderson said.

“Because essentially what these carriers have done is with subsidised government strategies, come into the marketplace to basically shift the traffic off of us and take us out of the Indian market,” he said.

“And think about it. US flag carriers ought to be in the Indian market. American and Delta should be in the Indian market. But it’s not sustainable when you have that. When you have USD 41 billion worth of subsidy it’s very difficult, if not impossible for us to be able to compete. And that harm is immediate,” he added.

I mean, Richard does make a very valid point. Delta used to have a dozen daily flights to India out of all of their hubs, and one by one they just became unsustainable because the big, bad Middle Eastern carriers. They were really “taken out of the market,” as he says.

Oh wait, no they didn’t and no they weren’t. Delta once operated a nonstop flight between the US and India. Delta launched a flight between Atlanta and Mumbai in 2008, when oil prices were at their peak. Less than a year later they discontinued the route.

Jeez, was it really Etihad or Qatar preventing Delta from flying to India in 2008 (when the Gulf carriers had only a fraction of the service to the US which they have now)? Nope, it was the fact that ultra longhaul flights simply aren’t profitable with 2008 oil prices. And that doesn’t even account for the fact that it takes time for demand and market share to grow. You have to keep a route for more than a year to figure out if it’s sustainable long term.

But here’s the great irony in all of this. Delta — or the US carriers on the whole — never really saw the potential of India. For years they were all “China! China! China! China!” And they completely ignored India. And now they’re blaming the Middle Eastern carriers for their lack of vision when it comes to India.

Here’s the part I can’t get over, though. Delta is literally the world’s most profitable airline (in terms of net profit). Literally. Yet somehow they’re playing the victim card, somehow they’re not capable of starting service to India, in their own mind. And that’s utterly ludicrous.

The “big three” US carriers are among the three largest airlines in the world, and they have many longhaul, fuel efficient planes on order, like the 787. Are they really trying to tell us they couldn’t make a point-to-point 787 service between the US and India work? And if they can’t, how on earth are the Middle Eastern carriers to blame for that?

Man, I’m starting to think Akbar Al Baker is spot on about Richard Anderson (they need to have a debate, and it needs to be on pay per view).

Emirates-A380

Bottom line

When the US airlines first made their Open Skies argument, they were onto something. Which isn’t to say they were right, but it was something that was at least worth looking into. What this has devolved into, however, is just pathetic.

“Wahhh, the Middle Eastern carriers kicked us out of a market we never even tried to get into. Subsidies. Terrorism. How are we the most profitable airline in the world supposed to survive?! Wahhh.”

Is anyone taking Richard Anderson seriously anymore?

Comments

  1. To be fair, linking the Qatari government to terrorism in general (not specifically 9/11, though) requires no stretch of the imagination… and given that they also own Qatar Airways, I don’t think anyone is wrong to suggest that American consumers may not want to support them. Still, Anderson phrased it poorly trying to connect the dots to 9/11 and the effect that had on our airlines. It’s also painting with a very broad brush to include the UAE in that heap as they’ve been very strong allies against extremism.

  2. Anderson also neglects the fact that United flies twice daily nonstop to India from Newark- to Mombai and Delhi

  3. I will admit India is tricky as the airport situation there has not developed as quickly as places like China. Transfers at many airports are a nightmare (I-D especially) which is where the ME3 have really capitalized on the market. AI joining *A will help for carriers like UA who have flights to BOM or DEL but unless you are already in NYC, if you are trying to get to other cities, you have three legs minimum vs two on the ME3. More direct flights, better service, you do the math Mr. Anderson, I don’t think it’s the subsidies that are driving the consumers decisions.

  4. @Justin when Delta partners with Saudia, and does not oppose Saudia Arabia’s Open Skies agreement with the US (when there’s much evidence of complicity with 9/11 itself at least within certain levels of the Saudi government), raising the specter of 9/11 in the context of an aviation dispute is the most extreme form of cynicism on Anderson’s and Delta’s part. There’s not really a ‘to be fair’ here in response to his remarks.

  5. Gene nailed it.
    GREED is the culprit here, and Mr Anderson sits on the throne of it. Shameful.

  6. I said linking Qatar to 9/11 or even bringing up 9/11 at all was wrong. Even if the reasons for Delta are competitive, however, I still don’t see a problem with anybody criticizing the Qatari government’s links to terrorism…

    In any case, I did not know we had an open skies treaty with Saudi Arabia, and it most certainly is very hypocritical of Delta not to oppose this as well if they want to oppose the agreement with Qatar on the basis of ties to terrorism–particularly since you can actually tie the Saudis to 9/11 in many cases (the politically connected oligarchy, if not the actual political leadership). Still, I don’t see how anyone can lump the UAE in with Qatar or Saudi Arabia…

  7. Anderson is not an idiot, he is a COWARD. Why not somebody back up with facts and say that Delta pulled out of Mumbai in March (via Amsterdam) and KLM didn’t bother taking over the route. More so Deltas partner Virgin Atlantic pulled out 2 months before. Anderson not only blames the Gulf three (who I hate anyways but not for the same reason as Richard Douchebag Anderson) but also AIR INDIA which I am sure somebody like Jeff Smisek would never do (he supported Aiir Indias Star entry). Anderson just is very sad that he lost a route that would have made him happy. I bet United is smirking like hell because they (Continental) won where Delta lost

  8. Well said Ben, the ramblings of a deluded man. They just want open skies on their terms and not in the manner it was intended.

    They can bleat on all they want but at the end of the day the ME3 have a huge investment in the US, both in the service they provide, and in the jobs they create, thanks to their mammoth orders of Boeing aeroplanes.

    It’ll only take the merest hint from either Emirates, Etihad or Qatar that they’d be prepare to cancel orders for planes for the Government to intervene and stop all this nonsense.

    I’m surprised they’ve not gone down that route to date, it’s the sort of thing Al Baker would do to make a point.

  9. The more he speaks the more pathetic and sad he sounds. He’s sitting on the globe’s most profitable airline and he’s whining about not being able to compete?
    I enjoy Delta, but RA is sounds like a petulant child. It’s getting quite annoying.

  10. Back in 2008, I know Emirates only flew to JFK and IAH (IAH service started in dec 2007). That’s it. It was only in the past 3-4 years that EK increased its presence in the USA.
    I think when the ME3 start nonstop services to ATL, that’s when DL will really feel the competition. Overall, the ME3 experience is a lot better especially in its longhaul economy class compared to Delta’s.
    I think DL didn’t realize that the majority of Chinese do not speak English, hence why the growth in India was faster than China’s in the IT industry. 😉

  11. This particular Richard Anderson is damaging the reputation of all the other Richard Andersons out there (including me!). I remember when I thought it was kind of cool that an airline CEO and I shared the same name. Not anymore!

  12. There are at least 4 major international airports in south India, that have no non-stop flights to the US. I think there’s a lot of potential for Delta and others when they explore more.

  13. Anderson is likely a student of Napoleon Bonaparte, as per Napoleon’s famous quotes:

    “A man will fight harder for his interests than for his rights”, and “The surest way to remain poor is to be an honest man.”. Richard Anderson just pulled in 17.6 million in salary. Is he a fool as Lucky claims? I am not so sure. A hypocritical, unethical scumbag?

  14. @PennAdam – Exactly right, and it’s the secondary cities beyond Delhi and Mumbai – places like Chennai, Hyderabad, Kolkata, Bangalore, and many others – where there’s tremendous growth potential, which is the whole strategy of the Middle Eastern carriers. Why connect two, three, or more times when one change of plane in Dubai gets you to so many places in South Asia, not to mention the Middle East, and Africa?

  15. @groobs – good point, the nuke option (of pulling out of huge manufacturing orders) is always in the back of their minds. but for some reason I believe this is all a publicity stunt. much like the east coast-west coast rap wars of the mid 90s (to increase album sales)…. all 6 of these airlines win in the short and medium term due to continuously being in the news and “fighting the good fight” even if it eventually leads nowhere. or even when they have backdoor deals that are actually co-operative in nature. for ex, AA is partners with both QR & EY. EK had huge ties with BA, and now with QF — so I’m sure those OW partners dont want to be pissed at AA. EY has huge stakes in several airlines in the major alliances, which all ties back to the US carriers.

    so my guess for this whole drama: welcome to the mideast-west coast wars, the aviation industry edition, in a quest to fill up more planes 😉 and/or perhaps price colluding behind the scenes instead of actual competition (no prizes for guessing DL aint opening up any routes to India anytime soon lol.) but yeah notice how much fares have increased year over year the last few yrs? and even currently when oil/jetfuel prices have come way down.

    @BHill – you hit the nail right on the head. CEO Dick will scream and shout so that he looks like he’s doing something to get an even bigger compensation next year, since DL is already the most profitable airline in the world, it’s akin to hitting a ceiling. where does DL go from here, what does Dick to to justify his position and perhaps even ask for more pay from the board etc. just one reason why many successful Execs at one company decide to leave and goto a struggling company, where they start from a low floor and however well the company does subsequently, %age wise under their “helm” the more handsomely the rewards.

  16. @Lucky You are way too liberal. ME3 are supported by governments without country. Without teaching those countries manners, they will do anything they want. It is not good for US economy and I totally support Delta’s defense over the greedy ME3 airlines. Unless ME3 companies can sell their share for cheap to US airlines.

  17. He is a babblying idiot (especially with his worldy sophisticated deep southern accent), who has created an oligopoly and who can’t handle competition. A skill set he probably acquired when he was at United Health in the pharma-insurance cartel.

  18. I mean what do we expect them to say? “We can’t and don’t want to overhaul our hard and soft product to even be remotely competitive with EY, EK, and QR”? That would be the truth but we all know that’s the issue. If they had a competitive product they would have no problem stealing market share back.

  19. @Justin – I was gonna call you a grade A idiot. so lemme break down your logic, because what you say is akin to basically saying that the US govt inadvertently caused and was responsible for 9/11 – and why stop at just Qatar (which BTW is our biggest supporter, most pro-US Arab ally in the mideast AND has the biggest US army base in the region.) anyways, the US govt was responsible not only because of the military industrial complex that plagues us which caused perma bases to be built in Saudi Arabia – OBL hated this more than anything else in the world (and as we all know MIL is purely a jobs program, not really serving any real purpose other than making defense contractors very wealthy who are very well connected politically esp to the Bush fam.) but ALSO because the CIA directly funded & armed the Mujahideens (freedom fighters) in Afghanistan to fight against the Soviets as part of the Great Game 2, right before the Cold War ended. read the book Charlie Wilson’s War!

    and who did the CIA go thru? ahh ofc, the beloved Saudi (and Pakistani) govt whereby several deals were made to use those intermediaries to fund the Mujahideens who would later go on to become the very same terrorists we came to despise. this incld OBL who fought alongside the Mujahideens in Afghanistan. because when you mess around in a snake pit, you’re gonna get bit…. so we created these terrorists: band of barbarian guerrillas who would go do our dirty work for us against the Ruskis cause we didnt want another Vietnam, we funded them, we gave them all the ammo and motivation — and they pulled off the impossible. I mean I still remember the Taliban leaders coming to TX in the mid 90s after these rural warlords came to power, to meet with the oil companies since there were plans to build gas pipelines from Central Asia to the Persian Gulf via Afghanistan — we do business with terrorists (incld dictators like Saddam, Ghaddafi, Mubarak), yet Qatar among other countries is to blame? and we act surprised for the problems we actually created? welcome to the wonderful world of real politik.

    these covert CIA plans obv werent clearly thought thru (mostly driven by external factors that involved political donations in exchange for winning campaigns that led to contracts and other such shady deals that got a few individuals what they wanted while the rest of the country and populous in foreign lands got screwed) … because much like the 2nd Iraq invasion and the deposition of Saddam created a power vacuum and the perfect opportunity for small time roaches like ISIS to turn into the baddest and most brutal terror outfit the world has yet seen. every action has a reaction. the world isnt so black and white, its very very gray.

  20. He is neither delusional nor stupid. We may not agree with him, but he knows exactly what he’s doing. And I’d bet he will have no trouble getting the American people and government to eventually give him everything he wants.

  21. I guess the big question in all this is whether anyone will buy the load of crap that ol’ Dick is trying to sell. Unfortunately, some people will.

  22. “To be fair, linking the Qatari government to terrorism in general”

    Are we still trying to spin this nonsense?

  23. Also, where is Nick? I’d have thought an alarm on his smartphone would have gone off as soon as Lucky posted this…

  24. I live in Atlanta (Delta’s home town) and fly to Mumbai atleast 3 times a year. Loved the Delta ATL-BOM direct flight the short time it operated. That flight was always full the few times I flew it so not sure why they stopped it. I would pay more for non-stop access to India.

    It is ridiculous for AA, United & Delta to blame Middle Eastern airlines and governments for subsidies when all 3 of them extinguished their debts through bankruptcy multiple times, obtained financing through the US government and operate a sub-par product (atleast compared to the ME3). What’s funny is despite these complaints, they still partner with Qatar, Etihad and Emirates.

  25. My suggestion: Blame China! Problem solved. Lol
    Seriously, most Indian airports are dirty and worse than you can imagine. Before they catch up the same level as China, Who want to fly there anyway?

  26. Bostonwalker: “Who want to fly there anyway?”

    Your atrocious grammar aside, you’re every bit as ignorant as Delta’s CEO. Who’d want to visit India? Um, who doesn’t want to visit and see floating palaces, the Taj, the highest mountains in the world, snowy passes, gorgeous beaches, sand dunes, ancient history that far predates the U.S.? I think most sane people would sooner visit Democratic India than visit China.

    India may have rudimentary infrastructure for now, but it’s modernising at a rapid rate. Have you even BEEN there recently? Take a look at Delhi’s airport, or even Mumbai’s brand new terminal. JFK looks like a slum in comparison.

  27. Edward, you are accurate about the Mumbai and Delhi airport being world class.

    Forgive me for going off-topic a bit; life outside those cities and those touristy spots, is very difficult for average citizens. 6-8 hours of no-power(they call it load shedding), poor roads and bad sanitation etc. They really have a very long way to go.

    see these clips for sample context
    https://www.youtube.com/watch?v=8EuHMGxw0KI
    https://www.youtube.com/watch?v=hmdSAhnDBmU

    and this new article about what was once a great airport
    http://www.newindianexpress.com/cities/chennai/For-the-40th-Time-Ceiling-Falls-at-Chennai-Airport-Again/2015/04/16/article2767301.ece

  28. Lucky, to presume you understand business issues and subsidies anywhere at the level of Fortune 500 executives is just sad. Delta is the world’s most profitable airline because it has made shrewd business decisions. Bailouts in a historically low margin industry are not at all equal to continual government subsidies.

  29. Bostonwalker: Yes, I am aware of what India’s average citizens go through. I am half Indian through my mum, been there many times, but I think we can all agree that it is fallacious to claim that what happens in one state represents the rest of the country. My mum is from the state of Himachal Pradesh in North India and I’ve been to Shimla, Manali, various other parts and found the roads (and infrastructure) pretty decent – even during winter (http://admis.hp.nic.in/himachal/hpridc/back-1.jpg), (http://graphics8.nytimes.com/images/2012/12/11/world/asia/11-POD-Shimla-IndiaInk/11-POD-Shimla-IndiaInk-blog533.jpg). I’ve even been to Rajasthan and I was impressed when I saw the sheer scale of the wind and solar farms, and renewable energy projects in the works — something that’s still an bone of contention in the ‘progressive’ U.S.

    You don’t see people going around claiming that the U.S. has the worst infrastructure in the world because of the recent Amtrak incident, or even the spate of bridge collapses across the country — yet India somehow happens to be the punching bag of choice for cherry-picking-addicted armchair experts who know absolutely nothing about the country and its people. India only became truly independent in the early 1950’s, after centuries of subjugation from the British, and it will take more than just half a century for a country its size to rebuild. I believe we should be a lot fairer to the country and its people, and I am honestly fed up with the same old arrogant Western narrative about how horrible and backwards the rest of the world is. It’s appalling. India (and China) won’t need us in the far future — we will need them.

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