Thursday, October 24, 2013

Well, That's A Special Kind Of Journalistic Ignorance Right There

Many journalists don't seem to understand how businesses work, much less publicly-held corporations.

This could be because they've gone from jo-jobs right to the newsroom, stopping only in University to get a journalism degree how journalism's purpose, instead of reporting the news, is to "Comfort the afflicted and afflict the comfortable (unless the comfortable is a Democrat)".

In short they've likely never held a business position above asking if the buyer wants fries with that; or if madam would like a kerchief to match her dress; and thus have no clue how a business runs, the profit motive or the mystery of shareholder dividends. There's no room in a head full of mush to learn how the world actually works.

The Detroit Free Press' writer Ellen Creager certainly doesn't get it.

The Detroit Free Press: Michigan Traveler: Hey, Delta, where's profit sharing for passengers?

Today, Delta Air Lines posted a $1.2-billion third-quarter profit. Billion with a B.

Most of it was from what’s officially called “passenger revenue” — you know, tickets, baggage fees, change fees and other fees that you and I pay to fly Detroit Metro’s biggest airline.

Thrilled Delta executives told investors that it “began returning capital to shareholders” with $51 million in dividend payments. It also touted its employee profit-sharing program — $357 million so far this year. It also said its fuel prices are way down and should stay that way. It’s predicting a good fourth quarter.

So I am very excited.

I am watching my mailbox and sitting by the telephone.

I am expecting that any day now, I will get notice from Delta that they are also going to share their profits with me!

The article rapid;y goes downhill form there, getting dumber by the sentence.

Ms. Creager, there's a very easy way to get a share of the profits - it's called buy some Delta Airlines stock.

Let's recall that airlines have been having a hard time of it for years now - 9/11, high fuel prices, and with the TSA groping their passengers, there's been a real crimp in the industry.

That Delta is finally showing a healthy profit should be celebrated, as healthy airlines mean competitive airlines where through the competition of multiple healthy airlines, ticket prices may decline or at least be held steady in these economically uncertain times.

Also, coming form the Detroit area, Delta should be celebrated for taking over the execrable Northwest Airlines and actually introducing Detroiters and South-Eastern Michiganders to a strange new concept - a flight that actually departs and arrives on time! We flew Delta from Detroit to SFO and back, and I have to say I was impressed with the fact that both flights were on time, with the first flight actually arriving in San Fran early, the efficiency of the Delta ground staff, and the competence and friendliness of the Delta cabin crew. I'm glad they're making a profit on their work so they'll keep doing it and hopefully do it even better in the future.

Yes, Delta isn't perfect, but the fact that it is finally making a profit should be celebrated and not castigated in the childish faux-naiveté fashion of her article.

1 comment:

Expatriate Owl said...

[This is 2nd try at commenting; the sign-in glitched and dropped my first comment. Must be the same website designers who did Obamacare.]

But if she buys Delta Airlines stock she then runs the r-i-s-k that the stock may lose value.

Which is the whole point and purpose of the stock market -- to transfer risk from industry to investor, so that industry is free to produce and innovate. In return for assuming the risk, the investor is promised rewards if he or she calls the market correctly.

Maybe Ellen is aware of some arcane statute, regulation, or administrative pronunciamento which guarantees customers a share of the profits of the vendors they buy from, but insulates them from the vendors' losses. I wouldn't take on the risk that such is the case, however.