Delta Air Lines Management Discusses Q1 2013 Results

[Airlinelifer]

http://seekingalpha....pt?source=yahoo

 

[Kev3188]

I couldn't get around the pop-up to read past the first page, but will try again.

In the meantime, here's a link to yesterdays's earnings announcement press release:

http://news.delta.com/index.php?s=43&item=1959

Love the signature line, BTW... Soooo true.

 

[spectator]

DL’s earnings weren’t earth shattering but since the words “first quarter” and “earnings” are paradoxical in the airline industry, there should be at least a little celebration at what DL accomplished. The fact that DL stock spiked quite nicely and has regained much of the ground that was lost in the airline selloff of the last few weeks says DL did as good or better than what many on Wall Street expected.
The earnings report does highlight the risk DL took in passing out pay raises last year even though much of the cost benefits from the labor agreements are coming this year – and mostly later this year. DL’s non-fuel costs have been growing about 5% per year for a year. The consolation is that those efficiencies will start to come later this year esp. as the refleeting strategy moves forward.
A couple key points….
DL is now breaking out LGA and JFK RASM which is rare for an airline to do but they obviously don’t mind doing it because it is a good story. Both show very healthy numbers driven by gaining corporate revenue, esp. at JFK. There are even stronger RASM improvements at LHR which bodes well for what DL can do with the joint venture with VS and the additional couple flights which will be flown on DL metal. The chances are also quite high that larger aircraft than the 764 will make their way to LHR.
Also notable is that DL has significant Yen hedges valued at USD 240 over the next several years… gives DL significant lead time to “reset” the transpacific operation based on a weaker yen…. Not sure how other players are hedged but it could give DL a significant advantage in gaining market share not unlike what WN did w/ fuel hedges in the 2000s.
Pension funding has been completed for 2013… free cash generation is strong which means paying down more debt and building cash is likely in order… DL also said it is looking at stockholder returns, perhaps dividends.
-----------------------
The comments about accountability are interesting, even if they are vague. Who is the reference about and to whom are they not being accountable and on what issues? And what is the practical implications of this observation to those who make the observation?

 

[topDawg]

DL’s earnings weren’t earth shattering but since the words “first quarter” and “earnings” are paradoxical in the airline industry, there should be at least a little celebration at what DL accomplished. The fact that DL stock spiked quite nicely and has regained much of the ground that was lost in the airline selloff of the last few weeks says DL did as good or better than what many on Wall Street expected.
The earnings report does highlight the risk DL took in passing out pay raises last year even though much of the cost benefits from the labor agreements are coming this year – and mostly later this year. DL’s non-fuel costs have been growing about 5% per year for a year. The consolation is that those efficiencies will start to come later this year esp. as the refleeting strategy moves forward.
A couple key points….
DL is now breaking out LGA and JFK RASM which is rare for an airline to do but they obviously don’t mind doing it because it is a good story. Both show very healthy numbers driven by gaining corporate revenue, esp. at JFK. There are even stronger RASM improvements at LHR which bodes well for what DL can do with the joint venture with VS and the additional couple flights which will be flown on DL metal. The chances are also quite high that larger aircraft than the 764 will make their way to LHR.
Also notable is that DL has significant Yen hedges valued at USD 240 over the next several years… gives DL significant lead time to “reset” the transpacific operation based on a weaker yen…. Not sure how other players are hedged but it could give DL a significant advantage in gaining market share not unlike what WN did w/ fuel hedges in the 2000s.
Pension funding has been completed for 2013… free cash generation is strong which means paying down more debt and building cash is likely in order… DL also said it is looking at stockholder returns, perhaps dividends.
-----------------------
The comments about accountability are interesting, even if they are vague. Who is the reference about and to whom are they not being accountable and on what issues? And what is the practical implications of this observation to those who make the observation?

uh...what?

Other than that little bit of confusion. Big congrats to Delta Employees worldwide. This is the best I have seen this company operating in a long time.

 

[Airlinelifer]

DL’s earnings weren’t earth shattering but since the words “first quarter” and “earnings” are paradoxical in the airline industry, there should be at least a little celebration at what DL accomplished. The fact that DL stock spiked quite nicely and has regained much of the ground that was lost in the airline selloff of the last few weeks says DL did as good or better than what many on Wall Street expected.
The earnings report does highlight the risk DL took in passing out pay raises last year even though much of the cost benefits from the labor agreements are coming this year – and mostly later this year. DL’s non-fuel costs have been growing about 5% per year for a year. The consolation is that those efficiencies will start to come later this year esp. as the refleeting strategy moves forward.
A couple key points….
DL is now breaking out LGA and JFK RASM which is rare for an airline to do but they obviously don’t mind doing it because it is a good story. Both show very healthy numbers driven by gaining corporate revenue, esp. at JFK. There are even stronger RASM improvements at LHR which bodes well for what DL can do with the joint venture with VS and the additional couple flights which will be flown on DL metal. The chances are also quite high that larger aircraft than the 764 will make their way to LHR.
Also notable is that DL has significant Yen hedges valued at USD 240 over the next several years… gives DL significant lead time to “reset” the transpacific operation based on a weaker yen…. Not sure how other players are hedged but it could give DL a significant advantage in gaining market share not unlike what WN did w/ fuel hedges in the 2000s.
Pension funding has been completed for 2013… free cash generation is strong which means paying down more debt and building cash is likely in order… DL also said it is looking at stockholder returns, perhaps dividends.
-----------------------
The comments about accountability are interesting, even if they are vague. Who is the reference about and to whom are they not being accountable and on what issues? And what is the practical implications of this observation to those who make the observation?

My signature is about co-workers who by their own choice DO NOT pull their own weight, are apathetic and frankly are lucky to have a job. Their is a company push to highlight Woolman's core values in his "Rules of the Road" booklet that is being passed around the station. I agree with the concepts of his business philosophy, it's the execution of said philosophy that concerns me. We "D E L T A" can be WAY, WAY AHEAD OF THE GAME if they they brought back ACS evaluations and let the chips fall where they may. I'm tired of the "I'll call HR" B.S.
It's getting real old, real fast.

 

[spectator]

There are plenty of people in any sized organization that are exactly as you say.... loafers, give the minimum. As much as you would like to think otherwise, all companies struggle with human performance on the job... the majority do the majority of the work well, a small minority go above and beyond consistently, a small minority are lead weights... it's a bell curve kind of thing.

That said, I totally agree that DL could push the evaluation process in non-mgmt. jobs further forward. But let's also keep in mind that the entire concept of a performance eval after the initial work period was new for a lot of people who are not native DL.... DL continues to balance expectations of the entire workforce.

That said, DL still has a very respectable CASM among its peers and well above average revenue generating potential. UA's latest results show how much of an advantage DL has and it is on that basis that DL will be increasing its focus on increasing its presence in Asia/Pacific. When you have a 5% cost advantage over your primary competitor whose costs continue to go up while yours have probably topped out and will be heading down in the future, it is a much easier job to expand there. Add in that DL's service levels are ahead of UA's and DL is generating strong revenues on what it current flies - as good as or better than its other network competitors - and the fundamentals of the business are strong.

Unfortunately, there is a certain amount that is sacrificed in the name of the larger organization and as you perceive, part of it is probably the performance of a certain small number of individual performers.

BTW, Kev, if you sign up for seeking alpha you can read the earnings transcripts w/o problems....

 

[Kev3188]

My signature is about co-workers who by their own choice DO NOT pull their own weight, are apathetic and frankly are lucky to have a job. Their is a company push to highlight Woolman's core values in his "Rules of the Road" booklet that is being passed around the station. I agree with the concepts of his business philosophy, it's the execution of said philosophy that concerns me. We "D E L T A" can be WAY, WAY AHEAD OF THE GAME if they they brought back ACS evaluations and let the chips fall where they may. I'm tired of the "I'll call HR" B.S.
It's getting real old, real fast.

The "I'll call HR" BS is a byproduct of years of being non-union, dealing with a passive-aggressive leadership style, and has now become the default defense mechanism. Slackers have just co-opted it as a "cover."

BTW, all the ALA's in my station were brought in one by one into the manager's office, and read selected passages of both the Rules of the Road, and The Way we Fly...

 

[spectator]

yet DL's labor CASM was identical to NW's at the time of the merger and is still one of the lowest among network carriers even though DL employees excluding the pilots have higher average pay than other network airline employees. If DL was as inefficient as some here might believe, DL wouldn't be achieving what they are achieving.

DL achieves what it does in different ways than other airlines, but they do succeed - and the majority of DL employees have decided DL's system is preferred to other alternatives.

In the years I have participated in aviation chat forums, I find that many employee participants are idealists who are strongly to their beliefs. It is great that they believe what they believe but the majority of the employee base is much closer to the "average" and do accept many of the realities of the workplace, even if they are not ideal.

DL is one of the most successful airlines in the world by financial, operational, and HR dimensions. It simply is not worth DL's while to significantly mess with that success to achieve more at the risk of losing large portions of what they have.

DL might nibble around the edges and will likely push for increased corporate culture conformity (if that is how you read the ALA briefings) but those changes will be incremental rather than earth-shattering.