WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #16
Bankruptcy is all about everyone flexing their muscles to get what they want. DL had a mild contest of wills over the three 20 year old 763s that did end up getting repo’d but other than that DL has really not been hugely aggressive in trying to force its lessors to take lease rates they don’t want. If fact, DL’s creditors committee threatened to sue DL for accepting renegotiated lease rates on a group of aircraft which the creditors cmte said that DL was paying too high of less rates for. I’m not sure I buy the whole argument about whether DL is doing anything to harm the value of the aircraft – they are either being operated within FAA guidelines and if they aren’t the FAA takes actions, not banks. Perhaps they are coming due for heavy maintenance and DL is not doing it now but “coming due†and “due†are two entirely different things.
The M90s are mission specific but they are also owned and are a small subfleet. DL has enough 738s and 757s in the fleet that could replace the M90s if need be. The MD90 is an improvement (although slight) over the MD80 but you only get one chance to get rid of airplanes you don’t want. DL could very well be trying to dump the MD90s. Further, DL has said they are interested in add’l 757s and M80s, undoubtedly based on the very low rates DL was able to negotiate for its MD80s. I’m sure if they can get more 80s and 57s, the MD90s are gone. Dumping owned aircraft is much harder than leased aircraft but it can be done but I doubt if DL can lease many, if any, aircraft – new or used – while in bankruptcy. They may well gamble on losing the MD90s after the summer and then work on having replacements on line by next summer if the market is still strong.
The reason US had to shed aircraft in order to get exit financing was because US’ turnaround plan was all but certain and GE felt like it was more prudent to reduce their exposure. US was forced to merge in order to exit which will undoubtedly be a very different story from DL. By the way, US’ numbers today show they are putting together a sound turnaround plan but with a lot less capacity. Fare increases across the industry have helped but US is clearly benefiting from pulling down a lot of its own capacity.
Yes, it is widely known that DL is much more conservative with its operational requirements than other airlines but there are indications that is changing. DL recognizes that carrying extra fuel is costly and they are changing… although they may let others blaze the path for them. Diversions are costly, though, esp. when you carry a higher percentage of connecting traffic than other carriers.
As for DL and 757s, DL’s 757s are much older than CO’s, having lower thrust engines and takeoff weights and are not even equipped for over the ocean use. DL also has firmly held to the belief that longhaul flights should be on widebody aircraft and since they have plenty of 767s, that is a principle they can easily keep. I personally would far prefer to fly on a widebody to Europe and there are reports that CO has operational problems using 757s over the Atlantic while DL is able to operate a full flight with enough fuel for a decent hold time plus carry cargo – and passengers aren’t blocked by serving carts for half of the flight.
The M90s are mission specific but they are also owned and are a small subfleet. DL has enough 738s and 757s in the fleet that could replace the M90s if need be. The MD90 is an improvement (although slight) over the MD80 but you only get one chance to get rid of airplanes you don’t want. DL could very well be trying to dump the MD90s. Further, DL has said they are interested in add’l 757s and M80s, undoubtedly based on the very low rates DL was able to negotiate for its MD80s. I’m sure if they can get more 80s and 57s, the MD90s are gone. Dumping owned aircraft is much harder than leased aircraft but it can be done but I doubt if DL can lease many, if any, aircraft – new or used – while in bankruptcy. They may well gamble on losing the MD90s after the summer and then work on having replacements on line by next summer if the market is still strong.
The reason US had to shed aircraft in order to get exit financing was because US’ turnaround plan was all but certain and GE felt like it was more prudent to reduce their exposure. US was forced to merge in order to exit which will undoubtedly be a very different story from DL. By the way, US’ numbers today show they are putting together a sound turnaround plan but with a lot less capacity. Fare increases across the industry have helped but US is clearly benefiting from pulling down a lot of its own capacity.
Yes, it is widely known that DL is much more conservative with its operational requirements than other airlines but there are indications that is changing. DL recognizes that carrying extra fuel is costly and they are changing… although they may let others blaze the path for them. Diversions are costly, though, esp. when you carry a higher percentage of connecting traffic than other carriers.
As for DL and 757s, DL’s 757s are much older than CO’s, having lower thrust engines and takeoff weights and are not even equipped for over the ocean use. DL also has firmly held to the belief that longhaul flights should be on widebody aircraft and since they have plenty of 767s, that is a principle they can easily keep. I personally would far prefer to fly on a widebody to Europe and there are reports that CO has operational problems using 757s over the Atlantic while DL is able to operate a full flight with enough fuel for a decent hold time plus carry cargo – and passengers aren’t blocked by serving carts for half of the flight.
