Delta in talks to acquire dozens of small narrowbody jets - sources

[metopower]

My airline does have a decent balance sheet, thank you. But it isn't AA.I could care less about who is bigger, who has the best balance sheet, who is the largest, or who is the best run.None of that has any more bearing on this than trying to split off on a Squirrel! tangent about labor.It seems pretty obvious that AA came up with a business case for replacing the MD80's that met the CapEx spending thresholds from their finance department, and it looks like they were also able to convince banks to underwrite the financing for re-fleeting.I guess it's possible DL has higher thresholds for CapEx. Or, maybe they're comfortable enough that their network can support having subfleets fenced off into island-style operations.There are lots of different ways to run an airline. Just because DL does it one way doesn't make AA's way right or wrong.

Well I'm glad it's not AA because from my original AA friends they fear that it will become unraveled. Their opinion not mine..I can only talk about DL. The references were only about AA because of the discussion about replacing md80's with 738's verses newer twa md80's..

 

[FWAAA]

Well I'm glad it's not AA because from my original AA friends they fear that it will become unraveled. Their opinion not mine..I can only talk about DL. The references were only about AA because of the discussion about replacing md80's with 738's verses newer twa md80's..

On 12/31/01, TWA LLC had 103 MD-80s, and their average age was 9 years old. What's the average age of that fleet of MD-80s on 12/31/15? 23 years.

Yes, TWA had a few younger, almost new MD-80s when AA bought the assets. IIRC, TWA had the last MD-80 off the line, which was practically new. And they're built like tanks, and could probably safely fly for 40 years. If fuel hadn't hit $3/gal, perhaps AA would have kept them longer.

They're not fuel efficient, and they're aged. That's why they'll all be put down sometime in 2017 as AA retires the last one.

 

[metopower]

On 12/31/01, TWA LLC had 103 MD-80s, and their average age was 9 years old. What's the average age of that fleet of MD-80s on 12/31/15? 23 years.Yes, TWA had a few younger, almost new MD-80s when AA bought the assets. IIRC, TWA had the last MD-80 off the line, which was practically new. And they're built like tanks, and could probably safely fly for 40 years. If fuel hadn't hit $3/gal, perhaps AA would have kept them longer.They're not fuel efficient, and they're aged. That's why they'll all be put down sometime in 2017 as AA retires the last one.

Good point if fuel was $3.00 a gallon

 

[robbedagain]

MD 80 twin sister lasted some 40 plus yrs with DL NW   so there's no reason that its sister ship MD80 can do similar    If the plane is well cared for itll take care you .   thats the phrase Ive heard for years

 

[eolesen]

Good point if fuel was $3.00 a gallon

If you wait until fuel is at $3.00/gallon (which it will be eventually), you've already lost your opportunity.

The time to buy new aircraft is when fuel is low, and the manufacturers are hungry.

If the rumors are true about UA getting their last batch of 737's at C-series prices, then the likelihood of DL being able to cut a good deal on new aircraft is probably still high.

 

[metopower]

If you wait until fuel is at $3.00/gallon (which it will be eventually), you've already lost your opportunity.The time to buy new aircraft is when fuel is low, and the manufacturers are hungry.If the rumors are true about UA getting their last batch of 737's at C-series prices, then the likelihood of DL being able to cut a good deal on new aircraft is probably still high.

Don't get me wrong I'm all for fleet modernization . It's just about timing. And that deal is a good example . That was a smart deal.

 

[Airlinelifer]

 Grease's "Coach Calhoun's"  pep rally at Rydell High...."We're just not going out their to win, we're going out their for glory. When we get out their we're goin' to yank them, get down and rip 'em 'an take 'em and roll them around and rrrrrrip them up to pieces and then we're gonna slaughter 'em, and after the slaughter is over, we're gonna come back here, and ring that victory bell."

 

[FWAAA]

Good point if fuel was $3.00 a gallon

It was $3/gal in 2011, 2012, 2013 and 2014.

If fuel stays cheap for an extended period, then AA's massive fleet orders (placed in 2011, when fuel was $3/gal) won't be nearly as smart-looking as they'd look if fuel had stayed expensive.

Hindsight is always 20/20.

Right now, DL's strategy (keeping older, less-efficient planes flying) is paying off. Burning some extra fuel when fuel is cheap is certainly cheaper than new plane payments.

My initial point in this thread still stands: DL has ordered lots of planes in piecemeal orders just like AA ordered lots of planes in one big order.

 

[eolesen]

With oil back at $48 and jet above $50, we'll be back at $3 before you know it.

 

[topDawg]

With oil back at $48 and jet above $50, we'll be back at $3 before you know it.

No it won't. Nothing points to that at all. 
 

Not getting the concept of total cost of ownership I see...

Keeping an asset around just because it still has a usable life isn't necessarily enough reason to keep it.

What's the cabin training cost for having to keep more FA's certified on the type than will actually fly on the airframe?

What's the cockpit training cost of having to run pilots thru the schoolhouse twice, assuming the MD80 is a junior airframe?

What's the incremental cost of having to keep MD80 rotables & consumables around for a shrinking fleet?

What's the cost of staying current on all the AWD's around the MD80?

What's the schedule change cost of having to deal with seatmap changes when routes swap between a MD80 and 737?...


When running "an asset to its max" costs more than it is generating in revenue, it's time to park or replace the asset.

 
Delta has given out the rough numbers internally many times. 
 
Your line of thinking is very much spend a dollar to save a nickel. Once again I will say, Delta isn't valued (much) higher than American because American is doing the better thing. IMHO Parker is setting up American for bk part 2 once the economy tanks again. Very 1990s ways of thinking going on. 

 

[eolesen]

No it won't. Nothing points to that at all.

Well, your new boss seems to disagree with you:

“When you have oil prices rising, that takes a thin-margin route to a negative route pretty quickly,” Bastian said in an interview on Bloomberg TV. “You start to ask yourself the question, ‘Is that the right decision, and do you need to be doing it now?”’

Jet-fuel prices have increased 59 percent since hitting a 12-year low on Jan. 20, according to data compiled by Bloomberg.

Fuel will probably climb even higher after the Nov election.

 

[topDawg]

Well, your new boss seems to disagree with you:


Fuel will probably climb even higher after the Nov election.

 
I didn't say fuel wasn't going up a point here or point there
 
I said it won't go above 3 a gallon. 

 

[eolesen]

I hope you're right, but suspect you're wrong.

 

[topDawg]

I hope you're right, but suspect you're wrong.

 
Well If I'm wrong then so is basically every other person on wall street.