2014 Investor Day presentation

[Kev3188]

I see bits & pieces of this are already showing up all over the place. I thought it merited it's own thread, as there are some interesting points to be discussed (at least I think so, anyway)...

*H/T to 700UW for the link
 
http://ir.delta.com/files/doc_presentations/2014/Investor-Day-Combined-Presentation-with-Non-GAAPs%281%29.pdf
 

 

[WorldTraveler]

thanks, Kev.

nothing earth shattering other than continuation of the same themes that DL has focused on for quite some time... industry best employees, operational excellence, reduced debt, yada, yada,

oh... DL does say it could generate $5 billion in pre-tax profits, is the first US airline to ever break the $40 billion market cap ceiling (and they intend to take it higher), DL is generating more than enough cash to not increase debt even with its new aircraft deliveries, fuel savings will be more than $1.2B even after hedge losses...

any insights you picked up...

 

[FrugalFlyerv2.0]

nothing earth shattering other than continuation of the same themes that DL has focused on for quite some time... industry best employees, operational excellence, reduced debt, yada, yada,
 

Maybe not earth shattering, but I did notice this on pg.12 "hedge book expected to produce $1.5 billion loss in 2015".
 
Also, I'm curious about the meaning, on pg.19, "linking Virgin's extensive UK network into DL's US hubs". 
I was not aware Virgin has an extensive UK network.
I do see that Virgin flights out of Gatwick are to exactly 0 DL hubs (at least from the slide shown on the presentation).  GLA flights operate to MCO and LAS - again not DL hubs. BFS-MCO isn't a flight to a DL hub.  The only city that could qualify is MAN to ATL & JFK. 

 

[WorldTraveler]

perhaps you can tell us if AA or UA will see an increase in revenue worth $200M from a year ago in LHR.

I too could care less how DL describes VS' network.. I do care about the money that is involved.

 

[Kev3188]

*I always look at Operating margin first, and then go back from there.

*The "non fuel productivity improvements" comments usually mean "do more with less" for people like myself. Hopefully, some of the other efficiencies will offset that for once.

*I'm curious what optimizing domestic markets will mean overall...

*On a personal note: It won't happen, but a little less corporate jargon, and little more "normal" English on these PPT's would go a long way...

 

[WorldTraveler]

thanks for your comments, Kevin.

but these presentations are geared for Wall Street analysts.

and DL is absolutely counting on increased productivity via larger aircraft, increased automation, reduced maintenance....

did you pick up the figure for maintenance savings as the older aircraft are parked? hundreds of millions of dollars (UA has made similar statements)?

and yet DL still sees a case for adding used aircraft where it makes sense... typically domestic narrowbodies, not int'l widebodies where interior mods are too expensive.

 

[Kev3188]

but these presentations are geared for Wall Street analysts.

Yes I know.

ButI have to think that at least some of them would appreciate a little more "real talk" once in awhile...

 

[WorldTraveler]

Yes I know.

ButI have to think that at least some of them would appreciate a little more "real talk" once in awhile...

this presentation is in their language, Kevin.

I've not been in the industry for how many years and yet I read the presentation and listened to the webcast while doing other things.

it is in my language just as it is in the language of WS investors.

likewise, I and they would not be expected to know the specialized language you use in your line of work. you trained for it and know it well.

I don't. they don't

 

[eolesen]

likewise, I and they would not be expected to know the specialized language you use in your line of work. you trained for it and know it well.

I don't. they don't

Translated: You're not clearly not smart enough to understand finance-speak, Kev...

 

[WorldTraveler]

Kev is the one that asked for different language.

I simply said this is the language for the target audience for this event.

 

[commavia]

Translated: You're not clearly not smart enough to understand finance-speak, Kev...

 
Which is, needless to say, ironic coming from someone who claims to speak the same language as "WS investors" and yet thinks a company can "just create" goodwill and add it to a balance sheet.

 

[WorldTraveler]

what crack did you pull that out of?

speaking of crack, DL is saying the crack spread is rising again which is typical with falling crude prices which will make the refinery even more valuable in allowing DL to capture those savings.

also, DL said that the JFK T2 RJ bullpen would be deactivated in January with the opening of the RJ extension of T4. The end of T2 will be remodeled.

Also, DL noted the outstanding operational performance of DL Tech Ops in increasing reliability while reducing costs. DL has the lowest maintenance CASM and the best maintenance operational performance.

 

[eolesen]

I like how the most responsibly run airline still has $12B in net operating loss carryforwards so they can continue to avoid paying taxes.

At the same time, I have to give them credit for their extremely ambitious goal of 80% funded pension liabilities by 2020. You'd think that they could hold back some of that 40% in free cash going back to shareholders and top off the pension liabilities.

Yes, it's all sunshine and unicorns that fart rainbows in the ATL....

 

[WorldTraveler]

perhaps you missed the notices that AA wants to REDUCE its pension contributions while DL is increasing them by $250 million per year.

why would AA which is raking in so much money want to cut its pension contributions?

maybe the unicorns don't do that in Texas?

 

[topDawg]

*I always look at Operating margin first, and then go back from there.

*The "non fuel productivity improvements" comments usually mean "do more with less" for people like myself. Hopefully, some of the other efficiencies will offset that for once.

*I'm curious what optimizing domestic markets will mean overall...

*On a personal note: It won't happen, but a little less corporate jargon, and little more "normal" English on these PPT's would go a long way...

Things like west coast growth, changing some of the hubs like SLC to all 2-class RJs...... etc. etc. 
 

thanks for your comments, Kevin.

but these presentations are geared for Wall Street analysts.

and DL is absolutely counting on increased productivity via larger aircraft, increased automation, reduced maintenance....

did you pick up the figure for maintenance savings as the older aircraft are parked? hundreds of millions of dollars (UA has made similar statements)?

and yet DL still sees a case for adding used aircraft where it makes sense... typically domestic narrowbodies, not int'l widebodies where interior mods are too expensive.

I believe UA has made some pretty big statements on a frame by frame base when talking about a 757-200 vs a 737-900ER. I want to say I saw something about, even with the lease costs, they were going to be saving millions by replacing 752s with 739s.