Yikes! Let's clean that up a bit: Delta President Reid Quits to Run Virgin's U.S. Low-Fare Carrier By EVAN PEREZ, DANIEL MICHAELS and JOANN S. LUBLIN Staff Reporters of THE WALL STREET JOURNAL Frederick Reid, passed over for the top job at Delta Air Lines, resigned Friday as the carrier's president and chief operating officer to head the new U.S. low-fare venture from Richard Branson's Virgin Group. Delta Chief Executive Gerald Grinstein will initially assume Mr. Reid's duties, with more organizational moves to be announced "soon," the carrier said. Mr. Reid will leave the company April 1, Delta said. Mr. Reid, 53 years old, came to Delta in 1998 from Lufthansa, where he was president. After rising through the ranks at Delta, he was widely thought to be next in line to be chief executive, following Leo Mullin's retirement announcement in November. But Delta tapped longtime director Mr. Grinstein instead. Mr. Reid's task at Virgin will be to start from scratch the as-yet-unnamed carrier, which hopes to take to the skies by early next year. The company is considering bases in Boston, Washington, and San Francisco. It would be Virgin's third low-fare venture, following Virgin Express, in Brussels, and Virgin Blue, based in Australia. Virgin also has to contend with U.S. law that forbids foreigners from owning more than 24.9% of the voting interest in a U.S. airline. Virgin officials say they expect opposition from rivals, which could cause delays in getting Transportation Department approval for Virgin's takeoff. Mr. Reid has never run a low-fare carrier, but he played a key role in the start-up of Delta's airline-within-airline experiment called Song. A San Francisco native, Mr. Reid was also credited with leading the acquisition of Delta's regional subsidiaries, on which the company has grown dependent since the current airline recession began in 2001, and for leading negotiations to form the SkyTeam alliance. Virgin's American venture will encounter already-crowded skies, competing against UAL Corp.'s recently launched low-fare unit of United Airlines, dubbed Ted, and the new Independence Air from Atlantic Coast Airlines. Already profitable low-fare carriers also are expanding, including Southwest Airlines, JetBlue Airways, AirTran Airways and Spirit Airlines. The exit of Mr. Reid, who oversaw day-to-day operations at the third-largest U.S. airline behind AMR Corp.'s American Airlines and United, could bring more uncertainty to Delta. The airline continues to post steep losses amid stalled wage-cut talks with its pilots union. A slate of management changes is expected as Mr. Grinstein tries to push Delta back into the black. Britain's Financial Times last month first reported that Virgin was in talks with Mr. Reid. Already, a top-to-bottom reassessment of Delta's operations, due in July, is causing uncertainty among employees. Some flight attendants at Song, which put its slated expansion on hold during the reassessment, have applied to return to Delta out of fear their jobs might be eliminated. -----Original Message----- From: The Airline List [mailto:AIRLINE@xxxxxxxxxxxxxxxxx] On Behalf Of Douglas Schnell Sent: Friday, March 12, 2004 1:55 PM To: AIRLINE@xxxxxxxxxxxxxxxxx Subject: More Uncertainty for Delta: Fred Reid Resigns to head Virgin US Delta President Reid Quits to Run Virgin's U.S. Low-Fare Carrier By EVAN PEREZ, DANIEL MICHAELS and JOANN S. LUBLIN Staff Reporters of THE WALL STREET JOURNAL Frederick Reid, passed over for the top job at Delta <http://online.wsj.com/mds/companyresearch-quote.cgi?route=BOEH&template=com [snip]