DL's profit does not disappoint.

[WorldTraveler]

The discussion of Delta capacity expansion began with questions by JPMorgan analyst Jamie Baker. Delta has grown in Seattle, where it is building a trans-Pacific hub and where it reported 6% third-quarter growth in passenger revenue per available seat mile on a 25% capacity increase, and in Los Angeles, where it will begin Delta Connection service to Dallas and Austin next month and to San Antonio next spring.
 
"I am curious about how you model for new routes and whether that has evolved at all over time, and in particular whether you consider earnings multiple destruction," Baker said.
 
"When you add capacity, particularly into (other airline) hubs, it diminishes [background=transparent]shareholder[/size][/background]

confidence, it suggests a lack of discipline, and in my opinion, it jeopardizes the likelihood of earning a multiple closer to that of high-quality industrial transport," he said. "So I know it may be difficult to quantify, but do you ever stop before you announce a route and just ask, or maybe run it past others: What if this destroys tens of millions of dollars of shareholder value by robbing me of a better earnings multiple?"

Following the call, Wolfe Research Hunter Keay, who downgraded Delta to peer perform from outperform on Sept. 26, called Delta's 2% capacity guidance "unnerving," saying it implies 4% domestic growth since international growth is likely to be flat. He also called Baker's question "one of the most on-point questions we've heard (yet) it was dismissed by management as being inappropriate."

http://www.thestreet.com/story/12918525/2/delta-to-wall-street-dont-tell-us-how-to-run-our-airline.html

wondered how long it would take for sometime to pick this up.

guess you decided you should start harping on DL's strategic moves since I am providing factual information regarding the labor issues which you cannot counter.

your ears should perk up and get the truth that DL's RASM INCREASED in SEA and LHR even after adding capacity.

given that DOT data will be available to validate whether DL is telling the truth or not, let's see what kind of excuse AA comes up with for restarting ATL-LGA and adding ATL-LAX where it is highly doubtful that their RASM will be better than elsewhere on their system.

BTW, they said they would ask the same question of other carriers on their earnings calls.

Since Parker cried about DL and VS adding capacity into LHR, it isn't hard to see the logic of why AA felt a need to go after DL's top markets - even if AA can't and won't show positive revenue results from their move while DL already is.

 

[WeAAsles]

wondered how long it would take for sometime to pick this up.

guess you decided you should start harping on DL's strategic moves since I am providing factual information regarding the labor issues which you cannot counter.

No one could counter what you say and I guess that's why you are one of the most respected advisers in the Aviation industry earning Millions of Dollars for your point of view providing insight to both company's and investors right?

Not just some poor schlub on a blog site spending hours upon hours posting nonsensical rubbish because he obviously has noting else and nothing better to do with his time.


your ears should perk up and get the truth that DL's RASM INCREASED in SEA and LHR even after adding capacity.

given that DOT data will be available to validate whether DL is telling the truth or not, let's see what kind of excuse AA comes up with for restarting ATL-LGA and adding ATL-LAX where it is highly doubtful that their RASM will be better than elsewhere on their system.

BTW, they said they would ask the same question of other carriers on their earnings calls.

Since Parker cried about DL and VS adding capacity into LHR, it isn't hard to see the logic of why AA felt a need to go after DL's top markets - even if AA can't and won't show positive revenue results from their move while DL already is.

 

[WorldTraveler]

I'm not doubting his credentials.

I am saying that making money is what airlines do. If DL can add capacity into another carrier's strength markets and increase its financial performance in the process, then any analyst is wrong to try to argue that carriers shouldn't grow their network because it might step on someone else's toes.

It is the exact position that I have had for years on here regarding AA's Asian buildup.

If they can make money adding routes to Asia or ATL or anywhere else, then that is precisely why the airline industry was deregulated in the US and the US has pushed for Open Skies worldwide.

but when AA loses money flying to Asia - where it is most aggressively adding capacity - while DL is improving its revenue performance to LHR and SEA - where DL says it will continue to focus its attention, then it is AA that should be asked the question as to why it is destroying shareholder value and should be asked to provide DOT data validating that their investment makes economic sense not down the road but now.

 

[WeAAsles]

I guess Jaime Baker and Hunter Keay don't care about your opinions and neither do I. Thinking as an airline investor which I also am besides an employee.

 

[WorldTraveler]

the stock market does.

DL is and will remain the highest valued airline in the western world.

DL's RASM grew faster than AA's despite the fact that DL added more capacity than AA/US, UA, or WN.

AA's costs grew faster than DL's.

You will see on Thursday why AA's performance compares less favorably to DL's.

 

[diamondcutter]

wondered how long it would take for sometime to pick this up.guess you decided you should start harping on DL's strategic moves since I am providing factual information regarding the labor issues which you cannot counter.your ears should perk up and get the truth that DL's RASM INCREASED in SEA and LHR even after adding capacity.given that DOT data will be available to validate whether DL is telling the truth or not, let's see what kind of excuse AA comes up with for restarting ATL-LGA and adding ATL-LAX where it is highly doubtful that their RASM will be better than elsewhere on their system.BTW, they said they would ask the same question of other carriers on their earnings calls.Since Parker cried about DL and VS adding capacity into LHR, it isn't hard to see the logic of why AA felt a need to go after DL's top markets - even if AA can't and won't show positive revenue results from their move while DL already is.

You yourself posted that investors do pay attention to the analysts....but when it's dl , you have a different narrative!! You no longer have credibility. Of course you were kicked off airliners.net !! You are full of contradictions and constantly look foolish with your bias and opinion .

 

[LD3]

guess you decided you should start harping on DL's strategic moves since I am providing factual information regarding the labor issues which you cannot counter.

 

That ladies & gentlemen is how you spin like a Duncan Top.... This is not even a labor topic....

 

[WorldTraveler]

for AAirline employees who don't share in the profit of their company, then profits don't matter.

for the rest of the industry, profitability of the company most certainly does have labor implications.

 

[metopower]

The discussion of Delta capacity expansion began with questions by JPMorgan analyst Jamie Baker. Delta has grown in Seattle, where it is building a trans-Pacific hub and where it reported 6% third-quarter growth in passenger revenue per available seat mile on a 25% capacity increase, and in Los Angeles, where it will begin Delta Connection service to Dallas and Austin next month and to San Antonio next spring.
 
"I am curious about how you model for new routes and whether that has evolved at all over time, and in particular whether you consider earnings multiple destruction," Baker said.
 
"When you add capacity, particularly into (other airline) hubs, it diminishes [SIZE=100%]shareholder[/SIZE] confidence, it suggests a lack of discipline, and in my opinion, it jeopardizes the likelihood of earning a multiple closer to that of high-quality industrial transport," he said. "So I know it may be difficult to quantify, but do you ever stop before you announce a route and just ask, or maybe run it past others: What if this destroys tens of millions of dollars of shareholder value by robbing me of a better earnings multiple?"

Following the call, Wolfe Research Hunter Keay, who downgraded Delta to peer perform from outperform on Sept. 26, called Delta's 2% capacity guidance "unnerving," saying it implies 4% domestic growth since international growth is likely to be flat. He also called Baker's question "one of the most on-point questions we've heard (yet) it was dismissed by management as being inappropriate."

http://www.thestreet.com/story/12918525/2/delta-to-wall-street-dont-tell-us-how-to-run-our-airline.html

way different story when you read the whole article.But that doesn't fit your narrative does it.

 

[WeAAsles]

way different story when you read the whole article.But that doesn't fit your narrative does it.

The narrative is pointing out the arrogance of the CEO who does not own the airline. Although he is a major shareholder I too am a shareholder of the airline he works for and I find his comments alarming personally. I don't consider his reaction to Baker's questions to be appropriate.

It seems he doesn't know his place.

 

[metopower]

I CHEERED his comments. I also doubt that you own any stock in anything but your 401 or us air .

 

[WorldTraveler]

The narrative is pointing out the arrogance of the CEO who does not own the airline. Although he is a major shareholder I too am a shareholder of the airline he works for and I find his comments alarming personally. I don't consider his reaction to Baker's questions to be appropriate.

It seems he doesn't know his place.

and yet DL pointed out EVEN BEFORE the question - in the prepared remarks - that DL's revenue performance increased in both SEA and LHR.

DL generated the highest operating margin it has seen in a very long time and likely far larger than what any legacy carriers will report.

DL isn't throwing capacity where it cannot generate sufficient returns but reallocating capacity to generate the highest returns for stockholders.

the only reason you find it alarming is because the whole issue highlights the competitive skirmishes that are taking place even after the industry has consolidated and shareholder returns are increasing.

the difference between DL and AA is that DL can demonstrate that its actions are improving revenues - and stockholder returns - while it is highly doubtful that AA can, esp. based on their previous performance in ATL-LGA and what they are doing to Asia right now.

 

[robbedagain]

You yourself posted that investors do pay attention to the analysts....but when it's dl , you have a different narrative!! You no longer have credibility. Of course you were kicked off airliners.net !! You are full of contradictions and constantly look foolish with your bias and opinion .

you nailed it diamond   you hit the truth syrum 

 

[WorldTraveler]

no, he didn't.

If DL was doing the same thing as AA, then I would have no choice but to agree.

an investor analyst pointed out the increase in competitive flying while ignoring that DL had already noted that its increases in LHR and SEA are generating positive revenues.

again, AA is the airline that for the past two months at least has had declining LFs on ALL of its int'l segments and is reporting RASMs that are below DL's and UA's.

so, no, the standards are really quite the same.

and, again, Jamie Baker noted that he will ask the same question of other airlines.

AA just happens to have a head start to figure out how to start 'splaining how AA can lose hundreds of millions of dollars per year in "investment flying" to Asia and still justify adding two new routes out of ATL, a market where AA has underperformed DL in the past on the route which it is now restarting.

 

[jcw]

Bless your heart
 
Hail to DL - let DL rule the world - they are the only airline that can do anything right - Hail to DL, Hail to DL
 
It's like a daily affirmation for some