Delta Air Lines Inc – TheNewsHub https://thenewshub.in Thu, 24 Oct 2024 20:24:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 Southwest and activist investor Elliott strike deal to keep CEO Bob Jordan, add six new directors https://thenewshub.in/2024/10/24/southwest-and-activist-investor-elliott-strike-deal-to-keep-ceo-bob-jordan-add-six-new-directors/ https://thenewshub.in/2024/10/24/southwest-and-activist-investor-elliott-strike-deal-to-keep-ceo-bob-jordan-add-six-new-directors/?noamp=mobile#respond Thu, 24 Oct 2024 20:24:41 +0000 https://thenewshub.in/2024/10/24/southwest-and-activist-investor-elliott-strike-deal-to-keep-ceo-bob-jordan-add-six-new-directors/

Bob Jordan, CEO of Southwest Airlines, listens to questions from media during Southwest Airlines Investor day at Southwest Airlines Headquarters on September 26, 2024 in Dallas, Texas.

Sam Hodde | The Washington Post | Getty Images

Southwest Airlines and activist hedge fund Elliott Investment Management struck a deal to avert a proxy fight in exchange for naming six directors to the airline’s board — short of board control — and an earlier retirement for Executive Chairman Gary Kelly. Southwest CEO Bob Jordan will keep his job as part of the deal.

“We are pleased to have come to an agreement with Southwest on the addition of six new directors that will enhance and revitalize its Board,” Elliott’s John Pike and Bobby Xu said in a statement Thursday.

Five of Elliott’s board nominees along with former Chevron CFO Pierre Breber will join the board, which will stand at 13 members, Southwest said.

The Southwest board will appoint a new chairman to replace Kelly, who will now step down next month instead of next year.

Elliott had called for both Kelly and Jordan’s ouster and criticized the airline’s leadership for not moving fast enough on sales- and profit-boosting strategies. The airline has made few changes to its business model in its 50 years of flying and is now planning to upend its long-standing policies like open seating and a single-class cabin for premium seats that more profitable carriers like Delta Air Lines offer.

Southwest’s shares are up less than 1% this year while the S&P 500 has risen 21%. The airline’s third-quarter profit, also announced Thursday, topped analysts’ estimates. Shares in the carrier were down roughly 6% in midday trading.

The Dallas-based carrier has been slashing unprofitable routes to cut costs. At an investor day last month, it said the new revenue initiatives and other changes put it on track to boost earnings before interest and taxes in 2027 by $4 billion. The airline also authorized a $2.5 billion buyback, the first $250 million of which was announced Thursday. 

Elliott and Southwest as recently as last week had been girding for a proxy fight. The activist called for a special meeting in December to vote on its slate of board nominees, which it had trimmed from 10 to eight.

Elliott’s campaign hinged in large part on the removal of Kelly and Jordan from their leadership positions.

With eight new directors joining as a result of the settlement and of Southwest’s earlier board refreshment, the deal is the largest board change Elliott has driven in a U.S. fight.

Southwest’s board said in September it would drop from 15 directors to 12. Thursday’s announcement notches the board back up to 13 members.

Also in September, Southwest said Kelly would step down next spring, but the airline’s board had staunchly backed Jordan. Both Kelly and Jordan have worked at Southwest for more than three decades.

“I believe Southwest’s best days lie ahead under the vision and leadership of Bob Jordan and the oversight of this reconstituted Board,” Kelly said in a release Thursday.

— CNBC’s Leslie Josephs contributed to this report.

Correction: This story has been corrected to remove an inaccurate description for Pierre Breber, who will be joining Southwest’s board. Southwest previously announced its board would drop from 15 directors to 12. An earlier version of this story misstated that announcement.

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Elections, hurricane damage and more: Here are four factors that will shape holiday shoppers' purchases https://thenewshub.in/2024/10/19/elections-hurricane-damage-and-more-here-are-four-factors-that-will-shape-holiday-shoppers-purchases/ https://thenewshub.in/2024/10/19/elections-hurricane-damage-and-more-here-are-four-factors-that-will-shape-holiday-shoppers-purchases/?noamp=mobile#respond Sat, 19 Oct 2024 13:00:01 +0000 https://thenewshub.in/2024/10/19/elections-hurricane-damage-and-more-here-are-four-factors-that-will-shape-holiday-shoppers-purchases/

A Macy’s store is seen at Herald Square on December 11, 2023 in New York City.

Michael M. Santiago | Getty Images

Inflation may have cooled, but retailers are still staring down a holiday season with plenty of uncertainty.

Several hard-to-predict factors will influence consumers’ spending, as they deck the halls and look for the perfect gifts. Volatile weather, election distraction and a deal-hunting mindset may shape the season. And fewer days between Thanksgiving and Christmas than last year will put shoppers on the clock.

Yet there’s reason for optimism for retailers: Shoppers are feeling more upbeat and plan to spend more compared with last holiday season, according to an annual survey by consulting firm Deloitte and a separate forecast by the National Retail Federation.

Holiday spending in November and December is expected to increase by 2.5% to 3.5% compared with 2023 and range between $979.5 billion and $989 billion, according to the National Retail Federation. That’s a more modest increase than the 3.9% year-over-year jump from the 2022 to 2023 holiday season, when spending totaled $955.6 billion. The NRF’s figure excludes automobile dealers, gasoline stations and restaurants.

Shoppers expect to spend an average of $1,778 on the holidays this year, 8% more than last holiday season, according to consulting firm Deloitte’s survey. The survey, which included about 4,000 consumers and was conducted in late August and early September, attributed that spending increase to a more favorable economic outlook, a perception among respondents that prices would be higher and more willingness to spend among higher-earning households with an annual income of between $100,000 and $199,000.

Low unemployment, a return to more typical inflation levels and a recent Federal Reserve interest rate cut are lifting consumers’ spirits, said Stephen Rogers, managing director of Deloitte’s Consumer Industry Center.

“People are still in a better frame of mind, despite the political chatter,” he said. “When they look at their bank account and think about what their financial situation is, they feel better.”

People shop (L) ahead of Black Friday at a Walmart Supercenter on November 14, 2023 in Burbank, California. 

Mario Tama | Getty Images News | Getty Images

Home Depot, which sells a wide range of holiday decor including Santa-themed throw pillows and a giant animated reindeer for yards, the high demand for decor could be an opportunity. Yet the home improvement retailer said it’s prepared for consumers to seek value, too.

This holiday season, Home Depot bought more low-priced artificial Christmas trees, such as a prelit tree that sells for $49, said Lance Allen, senior merchant of decorative holiday for the home improvement retailer.

Signs showing support for both Democratic presidential candidate Vice President Kamala Harris and Republican presidential candidate former President Donald Trump sit along a rural highway on September 26, 2024 near Traverse City, Michigan. 

Scott Olson | Getty Images News | Getty Images

Walmart and SharkNinja, that are hoping shoppers will browse and buy rather than become glued to the news. The election is on Nov. 5, and it could take days for a winner to be called if the race between Vice President Kamala Harris and former President Donald Trump ends up as close as polls suggest.

SharkNinja CEO Mark Barrocas described the election as the “biggest unknown” that will shape the holiday season.

“It may be a blip and it may be nothing, and it may disrupt things for a few weeks if the news cycle is all-consuming,” he said. “Christmas is going to come and there will be a holiday season. It’s just a matter of how many distractions there are.”

He said the election and the news cycle around it may also influence how consumers feel about the economy.

Walmart’s internal research suggests “an uptick in positivity” as its shoppers enjoy the fall and get ready for Halloween, said Jen Acerra, vice president of customer insights and strategy at Walmart.

“The one thing that is still out there and moving is what’s going to happen with the election, and what happens with the election will really determine if this is something that stays positive or not,” she said.

Already, some companies have blamed the election for taking a bite out of their sales. Amazon chalked up a weak forecast in August to election distraction that would dampen demand for online shopping, a comment some mocked as an excuse.

Delta Air Lines‘ CEO, Ed Bastian, said in a CNBC interview this month that the company expects lower demand before and after the election to hit the carrier’s revenue.

“Consumers will, I think, take a little bit of pause in making investment decisions, whether it’s discretionary or other things,” he said. “I think you’re going to hear other industries talking about that as well.”

After Hurricane Milton hit Florida, the city of Clearwater was flooded. Search and rescue operations are ongoing in the area. 

Lokman Vural Elibol | Anadolu | Getty Images

Hurricane damage and winter temperatures

For retailers, cooler and wintery weather is always on the Christmas wish list.

Weather can tip shoppers into the holiday spirit and get them in the mood to buy thicker sweaters, coats and gifts, said Evan Gold, executive vice president for Planalytics, a Philadelphia-based company that advises retailers on weather-related inventory planning.

“There’s no external factor that influences consumers’ purchases as directly, frequently and immediately as the weather,” he said.

This year, the early fall got off to a rockier start. The now unofficial kickoff to the holiday shopping season marked by October sales events coincided with unseasonably warm temperatures in San Francisco and other parts of the country, and severe hurricanes that battered North Carolina and Florida. That makes shoppers less likely to want to buy sweaters, coats and artificial trees.

Yet the weather this year should eventually help retailers, Gold said, since November and December temperatures are expected to be colder than a year ago. He said the shift in weather, such as a dusting of snow or a cold snap, can help signal shoppers to get ready for the season.

Many families will just be trying to rebuild from hurricane damage rather than buying holiday gifts, which could redirect money to furniture, clothes or home repairs, Jack Kleinhenz, the NRF’s chief economist, said on a call with reporters.

“It’ll be just an adjustment in their budget in what they’ll be spending for, but it’s really too early to know the full impact on retail,” he said.

Home Depot expects that, too. It pulled holiday product out of 124 of its big-box stores to make room for items that hard-hit areas need, such as shingles and drywall, Allen said. Instead, he said, it plans to sell a more limited assortment in those stores of items such as wreaths and its top-selling trees.

“They’re trying to rebuild and recover their houses,” he said. “So obviously, they’re not going to go buy a nine-foot reindeer and put that out there.”

A shorter holiday season

Thanks to the calendar, the holiday rush may be on overdrive.

Shoppers will have five fewer days between Thanksgiving and Christmas this year compared with last year — which could dampen spending or potentially motivate time-pressured shoppers to seek out rush shipping, curbside pickup or other quicker options to get gifts.

The pressure will be on retailers to make the most of each day and to deliver on convenience, as shoppers race to get what they need and expect items to arrive within a few hours or at minimum, within a few days, said the NRF’s Shay.

“A shorter period does have consequences and implications and one of those, of course, is that the shipping season will be shorter,” he said.

On a recent store tour, Kohl’s Chief Marketing Officer Christie Raymond said the retailer expects it will have to work harder to woo customers, especially lower- and middle-income shoppers, who have felt pinched by the cumulative effect of inflation and crunched for time.

“We think they’re feeling more squeezed than last year,” Raymond said. And, she added, shoppers have also said they are “feeling time-squeezed.”

To appeal to those consumers, Kohl’s wants to have more of what they need, Chief Merchandising and Digital Officer Nick Jones said.

The retailer has bulked up its offering of gift items, added more party dresses and started to sell a wider range of decorations, including Christmas trees, lawn ornaments and wrapping paper.

“We want to be a holiday destination,” he said. “We haven’t got the food, but we’ve got everything else.”

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Delta pauses hot meal service on dozens of Detroit flights citing 'food safety issue' at caterer https://thenewshub.in/2024/10/14/delta-pauses-hot-meal-service-on-dozens-of-detroit-flights-citing-food-safety-issue-at-caterer/ https://thenewshub.in/2024/10/14/delta-pauses-hot-meal-service-on-dozens-of-detroit-flights-citing-food-safety-issue-at-caterer/?noamp=mobile#respond Mon, 14 Oct 2024 00:25:46 +0000 https://thenewshub.in/2024/10/14/delta-pauses-hot-meal-service-on-dozens-of-detroit-flights-citing-food-safety-issue-at-caterer/

Delta Air Lines planes are seen parked at Seattle-Tacoma International Airport on June 19, 2024 in Seattle, Washington.

Kent Nishimura | Getty Images

Delta Air Lines had to suspend hot meal service on more than 200 flights out of its Detroit Metropolitan Wayne County Airport hub over the past several days because of a “food safety issue.”

Delta said that operations from the facility were shut down and hot food will be managed by other kitchens.

“During a recent inspection at a DTW kitchen, Delta’s catering partner was notified of a food safety issue within the facility,” Delta said in a statement on Sunday. “Delta and its catering partner immediately shut down hot food production and subsequently suspended all activity from the facility. Hot food and other onboard provisioning will be managed from other facilities.”

A message to a flight crew on Friday said first-class meals couldn’t be loaded because of “an unforeseen supply chain issue” and that the flight would be stocked with additional snacks.

The Food and Drug Administration did not immediately respond to requests for comment on Sunday.

The carrier said no employee or customer illnesses were reported, and that it gave affected customers travel vouchers or frequent flyer miles as compensation.

Airlines serve thousands of meals to passengers a day, generally through third-party catering kitchens. Do & Co., which works with Delta, didn’t immediately comment.

In July, a Detroit-to-Amsterdam Delta flight diverted to New York because of a report of spoiled chicken, forcing the carrier to limit meals to pasta for several days on certain flights.

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Delta says travelers are trading scorching summer Europe trips for fall getaways https://thenewshub.in/2024/10/10/delta-says-travelers-are-trading-scorching-summer-europe-trips-for-fall-getaways/ https://thenewshub.in/2024/10/10/delta-says-travelers-are-trading-scorching-summer-europe-trips-for-fall-getaways/?noamp=mobile#respond Thu, 10 Oct 2024 16:50:07 +0000 https://thenewshub.in/2024/10/10/delta-says-travelers-are-trading-scorching-summer-europe-trips-for-fall-getaways/

A woman uses an umbrella to protect herself from the sun as she passes past the Colosseum during an intensely hot day in Rome, Italy, on July 11, 2024. 

Riccardo De Luca | Anadolu | Getty Images

Summer trips to Europe are getting too hot for thousands of tourists.

Delta Air Lines President Glen Hauenstein said travelers are opting out of flying to Europe during the traditional summer peak travel season. Instead, they are shifting trips to cooler months, a trend that airline officials have been noticing over the past couple of years as consumers look to escape crowds and record heat of popular destinations.

“The weather in Europe in August is really hot, and that people who have choices when they can take their vacations are moving into let’s call it more temperate months,” Hauenstein said Thursday on an earnings call. Corporate [travel] we haven’t seen much change year over year but it’s continuing to shift travel to Europe in particular from July and August peak to a September and October peak.”

Summer this year in the Northern Hemisphere was the hottest on record, according to the European Union’s climate monitor.

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Airlines have been extending robust trans-Atlantic schedules through much of the fall to cater to the shifting patterns.

“What we’re doing at United is we’re extending the season,” Patrick Quayle, United Airlines‘ senior vice president of global network planning and alliances, said in an interview earlier this year.

He said the carrier opted to begin some European routes in March and April this year and will fly some of them through late October and early November. “What we’re seeing is, more and more, travelers are going in those shoulder seasons where you can get a bit more value, and I think the weather’s a bit better,” he added.

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Southwest Airlines to cut service and staffing in Atlanta to slash costs https://thenewshub.in/2024/09/25/southwest-airlines-to-cut-service-and-staffing-in-atlanta-to-slash-costs/ https://thenewshub.in/2024/09/25/southwest-airlines-to-cut-service-and-staffing-in-atlanta-to-slash-costs/?noamp=mobile#respond Wed, 25 Sep 2024 19:12:47 +0000 https://thenewshub.in/2024/09/25/southwest-airlines-to-cut-service-and-staffing-in-atlanta-to-slash-costs/

A Southwest Airlines plane takes off from Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, US, on Friday, July 12, 2024. 

Elijah Nouvelage | Bloomberg | Getty Images

Southwest Airlines is planning to reduce service to and from Atlanta next year, cutting more than 300 pilot and flight attendant positions, according to a company memo seen by CNBC.

The changes come a day before Southwest’s investor day, when executives will map out the company’s plan to cut costs and grow revenue as pressure mounts from activist investor Elliott Investment Management.

Southwest told staff it isn’t closing its crew base in Atlanta. Instead, it will reduce staffing by as many as 200 flight attendants and as many as 140 pilots, for the April 2025 bid month.

The airline also isn’t laying the crews off, but they will likely have to bid to work from other cities.

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Southwest will reduce its Atlanta presence to 11 gates next year from 18, according to a separate memo from the pilots’ union.

It will service 21 cities from Atlanta starting next April, down from 37 in March, the carrier said.

“Although we try everything we can before making difficult decisions like this one, we simply cannot afford continued losses and must make this change to help restore our profitability,” Southwest said in its memo. “This decision in no way reflects our Employees’ performance, and we’re proud of the Hospitality and the efforts they have made and will continue to make with our Customers in ATL.”

The unions that represent Southwest’s pilot and flight attendants railed against the airline for the staffing and service cuts.

“Southwest Airlines management is failing Employees while impacting Customers. Management continues to make decisions that lack full transparency, sufficient communication with Union leadership, and most alarmingly, a lack of focus on what has made the airline great, the Employees,” said Bill Bernal, the flight attendants’ union president.

A Southwest spokesman confirmed the changes and said the carrier will “continue to optimize our network to meet customer demand, best utilize our fleet, and maximize revenue opportunities.”

Travelers check in at a Southwest counter at Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, US, on Tuesday, July 23, 2024.

Elijah Nouvelage | Bloomberg | Getty Images

The airline had already pulled out of certain airports, some of which it experimented with during the pandemic to focus on more profitable service.

Southwest is not only facing changing booking patterns and oversupplied parts of the U.S. market but aircraft delays from Boeing, whose yet-to-be-certified 737 Max 7 airplanes are years behind schedule

The airline’s COO, Andrew Watterson, told staff last week that it will have to make “difficult decisions” to boost profits.

The reduction in Atlanta, the world’s busiest airport and Delta Air Lines home hub, is the latest development for the airline. In July, Southwest announced it plans to get rid of open seating and offer extra legroom on its airplanes, the biggest changes in its more than half-century of flying.

Also on Wednesday, Southwest released an expanded schedule, selling tickets through June 4. In addition to the planned cuts in Atlanta, the carrier said it will boost service to and from Nashville, Tennessee. It will also start offering overnight flights from Hawaii, beginning April 8. Those include service from Honolulu to Las Vegas and Phoenix; Kona, Hawaii, to Las Vegas; and Maui, Hawaii, to Las Vegas and Phoenix.

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