This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Departure of Delta's Song Unit Boss Stirs Questions

John Selvaggio may have announced his decision to retire as president of Delta Air Lines' (DAL) low-cost unit Song, but his departure has drawn conflicting messages from the company, leaving Wall Street wondering where he may go next.

Delta is losing Song's leader at a critical time for the carrier, which plans to expand the low-cost unit as part of a restructuring plan to reduce costs by $2.7 billion through 2006 and avoid a Chapter 11 bankruptcy filing. Over the next year, Delta will boost Song's fleet by a dozen aircraft and add a number of flights, part of the largest schedule overhaul in the 75-year history of the airline.

"I share with you my decision to retire. While this was not an easy decision to make, it is the right decision and the right time to take this step," the 58-year-old Selvaggio said in a letter to Song employees. "I leave here knowing Song is well-positioned and fully supported as a strategic and vital part of Delta's transformation and future. Growth is assured, the road map is in place, and Song will be leading the way forward."

In an internal memo, Paul Madsen, Delta's chief marketing officer, had a slightly more conflicted take on Selvaggio's departure. "It is with mixed emotions that I announce [that he] has informed me that he plans to retire effective immediately to pursue personal interests," Madsen said in a memo.

After spending three decades in the airline industry and two years fighting for Song's survival, Selvaggio may have decided it was time to retire. But conflicting reports on the resignation had Wall Street wondering if Selvaggio was pursuing was another job in the industry.

"I read that he had retired. But I also read that he resigned to pursue other interests," said Helane Becker, airline analyst at The Benchmark Company, a New York-based brokerage. "The rumor that I've been hearing is that he's going to Virgin to join [former Delta president and COO] Fred Reid."

Indeed, Reid left Delta in March to become head of a U.S.-based version of Virgin Airways, Richard Branson's low-cost carrier that revolutionized European air travel by establishing high levels of service at lower prices.

Ultimately, Selvaggio's biggest legacy won't be starting Song -- but saving it. When CEO Gerald Grinstein took over at Delta last year, he quickly moved to freeze the nascent unit's growth and even quipped that it should be called "Swan Song." But as the company did a top-to-bottom evaluation of Delta's business while crafting its restructuring plan, Grinstein sang a new Song, recently quipping "you can teach an old dog new tricks."

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,102.04 +50.31 0.30%
S&P 500 1,973.63 -4.59 -0.23%
NASDAQ 4,424.7040 -7.4420 -0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs