Is ANOTHER Delta Investment "going in the tank" ?

[NewHampshire Black Bears]

NHBB  can you spell DELTA or DL instead of the other way   thanks

 
'robbed'.
As one of the long time true gentlemen on these boards, it WILL be my pleasure to refer to Delta Airlines (for you) in a respectful way.

 

[NewHampshire Black Bears]

NHBB's memory aside, the point still stands --- the investments in MU and G3 have lost value, and DL is on the hook for a lot of G3's debt.

The investment in AM seems to have done the best out of all of these.

 
YOU TELL EM' Eric  !!!!!!!!
A lot of people can't deal with the truth.  Some think that De nial, is a River in Egypt.
 
Also, be prepared when the 'Wailing (by DL)    starts  over the allocations of the Henada routes.

 

[topDawg]

I can't this second recall which asian carrier investment TANKED on DL, but is ANOTHER one about to go in the Crapper ?     aka  G O L  ?

And as normal you don't know what you are talking about. 
 

Jim, per the asian carrier, I was referring to a failed investment Del - DUH made with some asian carrier not so long ago, who name is failing me at the moment.

Delta hasn't made any "failed" investment in carriers. Delta isn't buying stock for the same reason me or you by stock. Just like the refinery, Delta is buying into these airlines to help Delta grow in key areas of the world. The only way to know if these investments have or haven't failed is if they are reaching the total revenue numbers the company expects 
 
and no one on here has the data to answer that. 
 

China Eastern $450 million investment, and already has lost its value.

Like I said above, stop looking at these investments like you or I would. Delta isn't doing this to make a quick buck off the stock market. These are all very long term investments to better the airline in places like London and China. 
 
 
 

Just like all the hoopla over the money losing refinery and the horrible investment in the money losing Virgin Atlantic. DL may be on the hook for now but we will just have to see what happens. Besides GOL is not going to disappear.It may reorganize. And if they don't I wonder if their fleet is collateralize by DL.

 
exactly.

 

[eolesen]

Arguably, DL could have gotten just about all of the revenue benefits from an alliance/JV with Virgin without the investment.

AA and BA have no cross investments, neither do UA & LH.

The only airlines actively investing in other airlines that they don't plan to merge with are are Etihad, Delta, and Hainan.

If it were such a great model to follow, I'd think there would be others doing it.

 

[topDawg]

Arguably, DL could have gotten just about all of the revenue benefits from an alliance/JV with Virgin without the investment.

AA and BA have no cross investments, neither do UA & LH.

The only airlines actively investing in other airlines that they don't plan to merge with are are Etihad, Delta, and Hainan.

If it were such a great model to follow, I'd think there would be others doing it.

 
You need to take a look at airlines like LH, UA, NZ, KE and SQ. 
 
All have or had active investments in other airlines. 
 
If you listen to why Delta is doing some of the things they are doing it makes complete sense. Or just keep running on the same 1990s era thoughts of management. Worked so well the first time........... 

 

[eolesen]

Listening to DL and believing DL are mutually exclusive.

 

[FrugalFlyerv2.0]

AA and BA have no cross investments, neither do UA & LH.
 

 

 
You need to take a look at airlines like LH, UA, NZ, KE and SQ. 
 
All have or had active investments in other airlines.

 
IAG owns BA, IB, EI etc as subsidiaries.
LH Group owns LH, OS, LX, etc as subsidiaries.
Scoot is a low cost subsidiary for SQ
Jin Air as a low cost subsidiary for KE
 
AA used to own a chunk of CP.
SQ used to own a chunk of VS.
LH used to own a chunk of B6 (or maybe they still do?)
 
It didn't work out.
 
But this seems to be a strategy (owning % of other carriers) that DL is following, not the wholly owned subsidiary strategy of LH, KE, SQ, etc.

 

[robbedagain]

I think LH owns a chunk of B6     Is DL going to help GOL restructure  or do they have a seat on their board?

 

[NewHampshire Black Bears]

(Putting who buys into whom, for a second,), and as far as the battle of the US Aviation Giants go, I'd love to see  'Jet - A '  ($$$$$)   Go thru-the-roof, and sit back and watch   Which one, AA - UA  or DL   'blinks first'  !! 

 

[eolesen]

LH cashed out their stake in B6 for a profit about a year ago.

https://skift.com/2015/05/06/lufthansa-profits-on-jetblue-share-sale-gain/

There's a huge difference between owning another airline and investing in one.

In the case of IAG and LHG, they own all of the brands mentioned in Frugal's post.

I'm sure if they could get away with killing off all of the former national carrier brands and fold them into BA and LH, they would do so in a heartbeat.


Holding minority stakes is a 1990's and 2000's idea that didn't work out for the airlines who followed that strategy.

Maybe it will work out for DL better than it has for the half-dozen or so other airlines who tried it and lost money in the process.

 

[topDawg]

 
 
IAG owns BA, IB, EI etc as subsidiaries. ​Owns a piece of Comair. (the one in South Africa) 
LH Group owns LH, OS, LX, etc as subsidiaries. ​owned a piece of B6, but dumped it because their JV partner merged into an airline with a 500 flight per day at EWR. Also owns a part of 3S. Also owns 45% of Brussels airlines. Also owns 50% of SunExpress. 
Scoot is a low cost subsidiary for SQ ​SQ also owns a piece of VA
Jin Air as a low cost subsidiary for KE ​KE owns a piece of CSA (or at least was planning on it, pretty sure they did it) 
 
AA used to own a chunk of CP.
SQ used to own a chunk of VS.
LH used to own a chunk of B6 (or maybe they still do?) ​dumped it shortly after the merger between UA/CO. Made little since to keep it at that point. 
 
It didn't work out. two examples doesn't mean they "didn't" work out. 
 
But this seems to be a strategy (owning % of other carriers) that DL is following, not the wholly owned subsidiary strategy of LH, KE, SQ, etc.

and others out there, ANA owns a piece of Skymark, Air New Zealand owns piece of Virgin Australia (which sounds like its moving on to Cathay) and a few others. 
 

I think LH owns a chunk of B6     Is DL going to help GOL restructure  or do they have a seat on their board?

Not any more 
and yes Delta has at least a seat on the GOL board. Matter of fact I believe Ed is the one who is on the BOD for GOL. 
 

(Putting who buys into whom, for a second,), and as far as the battle of the US Aviation Giants go, I'd love to see  'Jet - A '  ($$$$$)   Go thru-the-roof, and sit back and watch   Which one, AA - UA  or DL   'blinks first'  !! 

Then you are an idiot who wants to see labor get screwed over yet again. 
 
Oh and guess what, Its going to be ugly for American. All those leased airplanes they can't park when the need for capacity decreases come. Paying lease payments on those they do end up parking. #### ton of debt. tons of airplanes on order.
 

LH cashed out their stake in B6 for a profit about a year ago.

https://skift.com/2015/05/06/lufthansa-profits-on-jetblue-share-sale-gain/

There's a huge difference between owning another airline and investing in one.

In the case of IAG and LHG, they own all of the brands mentioned in Frugal's post.

I'm sure if they could get away with killing off all of the former national carrier brands and fold them into BA and LH, they would do so in a heartbeat.


Holding minority stakes is a 1990's and 2000's idea that didn't work out for the airlines who followed that strategy.

Maybe it will work out for DL better than it has for the half-dozen or so other airlines who tried it and lost money in the process.

 
Read my edits to the post. All of those airlines have a less the 50% ownership in at least one airline. 
 
Also then you should be defending it, seeing how awesome you think it is to being buying(leasing) a ton of planes and putting about as much debt on the books as possible. 

 

[robbedagain]

thx dawg

 

[eolesen]

Yeah, I think you're probably not getting why all those smaller airlines had to invest in other airlines...

Comair (SA) has been a BA franchise carrier for ~20 years, and the investment has been there probably just as long. You also have to realize that the SA government owns SAA, and won't allow BA to manage Comair for fear that they'll inflict mortal damage onto SAA.

SQ and NZ have a long history of investing in other airlines, but that's because they both come from relatively small nation-states with very little O&D traffic of their own. Their 20% & 23% stakes in VA basically gives them little to no actual benefit aside from preserving the bi-lateral codewhoring relationships they have. Both NZ and SQ are also majority owned by their respective governments, so you shouldn't expect them to behave entirely rationally...

KE's 44% ownership in OK was for one reason only: losing their interline agreement with LH. When LH canceled the agreement, KE lost access to a huge chunk of its Europe feed, and had to scramble to try and re-establish that. For about €3M, they got a huge stake in OK and recreated at PRG what they were able to get as feed at FRA. For €3M, I can't fault them for trying.

Oh, and your timing on the LH/B6 deal is off by about five years. UA and CO merged in 2011, while LH held onto the B6 investment until 2015. That's not a knee jerk reaction to the merger by any means.


The only reasonable parallel you can make to IAG & LHG is that DL is trying to project global power thru investing in weaker partners.

My opinion is they'd be better off culling out about half the Skyteam airlines, many who can't come even close to providing the same levels of service that DL & AF/KL do.

 

[topDawg]

Yeah, I think you're probably not getting why all those smaller airlines had to invest in other airlines...

No I get it completely.
 

Comair (SA) has been a BA franchise carrier for ~20 years, and the investment has been there probably just as long. You also have to realize that the SA government owns SAA, and won't allow BA to manage Comair for fear that they'll inflict mortal damage onto SAA.

Okay, but IAG keeps that investment for what? (somewhat) Control and to keep the partner locked up and a handle on the product. Again, have you EVER listened to Delta management when they talk about why they are making these investments?
 

SQ and NZ have a long history of investing in other airlines, but that's because they both come from relatively small nation-states with very little O&D traffic of their own. Their 20% & 23% stakes in VA basically gives them little to no actual benefit aside from preserving the bi-lateral codewhoring relationships they have. Both NZ and SQ are also majority owned by their respective governments, so you shouldn't expect them to behave entirely rationally...

compared to most airlines (period much less government airlines) those are two of the best ran airlines in the world.
but again, they keep a stake in other airlines to help expand the network. Again, listen to Delta management.....
 

KE's 44% ownership in OK was for one reason only: losing their interline agreement with LH. When LH canceled the agreement, KE lost access to a huge chunk of its Europe feed, and had to scramble to try and re-establish that. For about €3M, they got a huge stake in OK and recreated at PRG what they were able to get as feed at FRA. For €3M, I can't fault them for trying.

cheap when you compare it to what it would cost to do it alone.....
boy that sounds like an Atlanta based airline buying into a LHR based airline for a steal when you see how much it would cost to buy all those LHR slots on the open market.
 

Oh, and your timing on the LH/B6 deal is off by about five years. UA and CO merged in 2011, while LH held onto the B6 investment until 2015. That's not a knee jerk reaction to the merger by any means.

If you have worked in this industry for as long as you have said you know nothing happens overnight.
More importantly I believe LH and/or B6 said that is makes little sense to keep the relationship going since UA/CO had merged.
but it has taken them a long time to be somewhat merged so obviously LH didn't move over night.
 

The only reasonable parallel you can make to IAG & LHG is that DL is trying to project global power thru investing in weaker partners.

no what I am doing is taking your original quote and proving it wrong. Now that I have done that you are jumping around trying to still prove a point that most people who put money on the game say is with 15 billion more than Delta peers.
 

AA and BA have no cross investments, neither do UA & LH.

The only airlines actively investing in other airlines that they don't plan to merge with are are Etihad, Delta, and Hainan.

If it were such a great model to follow, I'd think there would be others doing it.

 
this was the quote I replied to. It is wrong and I have proved so. Jump and dance around it all you want though.

My opinion is they'd be better off culling out about half the Skyteam airlines, many who can't come even close to providing the same levels of service that DL & AF/KL do.

And again, listen to Delta management just once and you will see that is EXACTLY the point.

For example, Delta invested into MU with the plan of helping them improve the on board product, PVG connection and just general airline practices. Delta also bought into MU to help Delta better learn about what/why/when/where the people of the area do what they do.
And this is the same model they are using for every other investment.

Delta is expecting to be a 50/50 domestic/International carrier over the next few years. The best way to do what is to have hubs in the key markets to the US. IIRC of the top ten counties DL has a hub, JV hub or a ownership hub in 6 or 7 of them. That gives them more control over those markets and hubs than other airlines.

 

[eolesen]

Sheesh. Did you give WT your login & password?...

You're the one who said "​dumped it shortly after the merger" with regard to LH/B6, but now want to couch it as "nothing happens overnight"... The fact is they made the investment strictly as an investment, not for strategic alignment with B6 or for marketing purposes.

BA's investment in Comair goes back some 20 years. Who have they invested in lately that they aren't intent on fully controlling?

How about LH?

Do keep drinking the Koolaid, Dawg. And keep listening to DL management.