DL January Performance

[WorldTraveler]

it's still you because instead of actually looking at the data and doing your own calculations, you rely on a single article which isn't current.

The Brazilian Real is at its worst point in 11 years. there is no other way to put it.

http://finance.yahoo.com/echarts?s=USDBRL=X&t=5d&l=on&z=m&q=l&c=

http://finance.yahoo.com/echarts?s=USDBRL=X&t=5d&l=on&z=m&q=l&c=

the high for the Euro vs Dollar in the last year was 1.39. It closed today at 1.11. plz don't tell me that the difference in those two numbers is a 25% reduction from the high of 1.39. or add your school to the blacklist.

there is one flight from the US to Russia operated by a US airline. Russia's little issue w/ Ukraine is a far bigger source of problems with US-Russia trade (heard of the sanctions in place?) than the exchange. DL has reduced capacity and noted for several quarters that Russia is underperforming. LESS THAN DAILY 767-300ER service.

DL has yen hedges that are reducing DL's exposure to yen decreases. As I have repeatedly said but you have chosen to ignore, DL hedges the yen. UA does too. DL hedges other currencies. AA hedges no currencies OR FUEL.

The current value of DL's currency hedge book was $73 million based on current quotations as of 12/31/2014. (DL 10K for 2014, page 48)

a 10% reduction in the value of the yen and CAD would yield DL an additional $60M in hedge gains.

you do realize that the CAD has lost more than 10% of its value relative to the USD over the last year... and DL is actually the SMALLEST of the big 3 US carriers to Canada....and so far as I can tell, the only one hedged.

for someone who is so quick to call other people dumbasses, you do a mighty fine job of demonstrating how ignorant you actually are on the subjects.

 

[FrugalFlyerv2.0]

Apologies on the EUR vs USD calculation.   Your 20% drop in value is accurate, I was mistaken.
 
And yes, the Real has lost something in the range of >45% to almost 50% in value over the last 10 years.
 
The point is, while you are nitpicking on the currencies in Latin America, you're conveniently ignoring the depreciation of the Euro and the Yen.  Ofcourse the economies of numerous Latin America countries are in the dumpster, and you nitpick on how devastating this is for AA, you conveniently ignore the problems of numerous countries in the Eurozone where DL has a large presence.
 
But I guess that's your modus operandi when trying to convince the world of a certain narrative.

 

[WorldTraveler]

first, let me thank you for admitting you are wrong. that is a great place for all of us to operate in and when I am wrong, I will admit it.

I have not at all diminished the issues with the yen or Euro.

I have acknowledged for years that the yen devaluation is what is driving DL to restructure its Pacific operation to remove connections from NRT and use smaller, lower CASM aircraft to serve the local Japan market.

many people here have tried to argue that DL is losing its share of the local Japan market because of the yen issue. That is not substantiated by evidence. Local Japan-US revenues are down for all carriers - with DL no worse in its effects than any other carrier.

flying passengers nonstop to other destinations in Asia is more economical and that is what DL is doing more and more of.

I'm not minimizing the effect of the Euro on DL... however, DL's continental revenues are much more USD focused than European focused which I am guessing is because DL receives more bookings on US originating travel of the JV while AF/KL receive your European originating bookings - regardless of who operates the flights.

And DL does have yen hedges which have offset a chunk of the yen weakness. It appears that those hedges are nearing the end of their usefulness but they are still helping to cushion DL.

I am also aware that Latin economies are deteriorating long after US airlines are completing their plans to adapt to a less Japan-centric Asia market.

AA will get to the same point in Latin America. Economists are saying that Brazil's economy will likely weaken for remain weak for 2 years. given that AA gets 25% of its Latin revenues from Brazil and 65% is Brazil originating, the impact to AA is enormous.

All of this is tied to the discussion about fuel hedges.
Let's face it that forums has become a means by which we can try to find the "other guy's" Achilles Heel and hit them there.

I don't believe that when all is said and done that the impact of fuel hedges vs. non-fuel hedges compared to local weakness in markets is going to affect any carrier's performance substantially more than any other's.

The competitive environment in the industry is changing and that is not something that will be fixed like economies and currency issues are - or are adapted to.

AA clearly has a window of fuel hedge benefits (or lack of fuel hedge losses) where it can offset some of its revenue weakness.

I hold nothing against them for that.

let's just all be willing to use real facts and then admit that the overall guidance each carrier uses is more indicative of how it all will come together.

fair enough?