Delta Air Lines president and COO Fred Reid this week will leave the company to lead Sir Richard Branson's Virgin-branded low-cost entry in the domestic U.S. market. Current Delta CEO Gerald Grinstein will assume Reid's duties on an interim basis. Delta said additional organizational changes soon would be announced.
Robert Mann of R.W. Mann & Co., an airline industry consulting firm in Port Washington, N.Y., worked with Reid at Pan American World Airways and said the decision was "a no-brainer. When there is an opportunity to work for a luminary like Branson and to craft an airline in your own style, who wouldn't jump at that?" Mann asked. "Fred knows high-touch, and he has only become more talented since his Pan Am days, so my only question is what he knows about running a true low-cost operation."
To be fashioned as a low-fare, low-cost carrier, Virgin USA still has not identified its planned base of operations, although speculation is centering on Boston, San Francisco and Washington. Other details also have been thin, including: fleet type, network and possible connections with existing U.S. carriers, as well as a definitive timeframe for launch. Virgin USA said it is targeting the first quarter of 2005.
"Reid will oversee all operational and executive facets of the airline, including its upcoming certification process," Virgin USA said in a statement. "Fred will best position the airline to succeed in a competitive but poorly served market."
At Delta, the writing had been on the wall for several months. In late November, when Leo Mullin announced plans to relinquish CEO duties, Delta passed over Reid—seen by many as the carrier's CEO-in-waiting—and named longtime board member Grinstein as Mullin's replacement
(BTNOnline, Nov. 24, 2003). Reid maintained his role as president and COO, but industry observers speculated his tenure at Delta was nearing an end.
Reid joined Delta in 1998 as chief marketing officer and in May 2001 assumed president and COO duties
(BTN, June 25, 2001). He also has been serving as chairman of Delta Connection, Delta's regional feeder network. Delta credited Reid with rebuilding its revenue management system, negotiating the formation of the SkyTeam alliance and leading the acquisitions of Atlantic Southeast Airlines and Comair.