luvthe9
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Big 1st quater loss!
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hp_fa
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"Roger King, an analyst at CreditSights, said the airline needed to raise its revenue and cut costs further.
"There is still a lot to do," King said. "They are still not making enough money to cover their costs."
Delta has said that it needs about $3 billion in revenue increases and cost savings to survive. The carrier has been renegotiating its aircraft leases and cutting labor costs, among other things, to achieve those goals."
And they are busy dealing with new FA uniforms?
"There is still a lot to do," King said. "They are still not making enough money to cover their costs."
Delta has said that it needs about $3 billion in revenue increases and cost savings to survive. The carrier has been renegotiating its aircraft leases and cutting labor costs, among other things, to achieve those goals."
And they are busy dealing with new FA uniforms?
Flying Titan
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Even if you set aside the reorganization costs, DL's still losing $4M per day. Not pretty.
If the fuel situation eases up a bit, that will certainly help to right the ship, but beyond that where do they start to look for real savings? They've already hit the employees and the aircraft leases. Revenue for most carriers is already improving, but sharing its biggest hub with FL makes that part of the equation tough for DL. Seems like there's only so much that int'l flying from JFK can help. How does DL turn this ship around?
If the fuel situation eases up a bit, that will certainly help to right the ship, but beyond that where do they start to look for real savings? They've already hit the employees and the aircraft leases. Revenue for most carriers is already improving, but sharing its biggest hub with FL makes that part of the equation tough for DL. Seems like there's only so much that int'l flying from JFK can help. How does DL turn this ship around?
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Don't worry Titan, World should be here soon to write a novel explaining how BK is such a positive for Delta and such a death march for everyone else.
(how did they get a judge to approve new uniforms for the f/a's? What could possibly make that a smart business decision?)
(how did they get a judge to approve new uniforms for the f/a's? What could possibly make that a smart business decision?)
Flufdriver
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..WT...spin...spin...spin...awaiting the "SpinMaster". He'll explain how Delta is miles ahead of others that experienced BK. Why hasn't DALPA raised cane about taking cuts but allowing the company to dump "their" giverbacks into f/a uniforms...The "Kool-Aid" is flowing in ATL!!!
$485 million operating loss for 1st quarter-almost half a billion dollars, almost triple UA's first quarter operating loss; not good. DL management has to do a better job when it comes to operating earnings because losses like this are unsustainable.
Anyone else remember UAL's losses in BK. Watch the cash balance. Management made no bones about the next 2 quarters..they would be ugly.
WOW...you folks are really beating a dead horse on the uniforms. Not only that, but you actually went and dug up the horse to beat it again. The uniform changes were decided on 2 years ago. The change in cost is near zero. You have to replace f/a uniforms on a schedule anyway from the normal wear & tear. The new uniforms are being provided as your current ones wear out.
As for the loss, it is somwhat surprising. We'll be more informed as to overall direction after the summer months. Summer is Delta's big time, moreso than for AA/UA/CO, etc. The reliance on Florida is the reason. We all know this. The big piece though is that most others are looking at a profitable summer. If Delta can at least see operating profit, that might be a better signal of their future prospects...
As for the loss, it is somwhat surprising. We'll be more informed as to overall direction after the summer months. Summer is Delta's big time, moreso than for AA/UA/CO, etc. The reliance on Florida is the reason. We all know this. The big piece though is that most others are looking at a profitable summer. If Delta can at least see operating profit, that might be a better signal of their future prospects...
WorldTraveler
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They’re not only beating a dead horse but they are showing an incredible lack of intelligence and ability to read a financial statement. And I won’t write a lengthy treatise but I will point out a few things for those who do have the capacity to learn and a desire to do so.
Yes, DL lost a boatload on a net basis … but so has every other airline in bankruptcy… most of which were due to restructuring charges. Remember that $20+ Billion profit than UA reported? There were an aweful lot of corresponding losses during bankruptcy that match that. DL is doing the same thing which says that these companies are using bankruptcy to accomplish what they should. The degree they do it is reflective of the size of the mess they are in.
DL was 3 ½ months into BK when this quarter started. It would be a stretch to think a whole lot would have been accomplished in the 1st 3 months. The real story comes when you look at the monthly reports. Did you happen to notice that aside from special charges, DL lost just $6 million, a fraction of what they lost in January or February.
Notice also that DL’s cost items went down in just about every category except for fuel, landing fees, and maintenance related items – apparently related to fleet modifications and conversions they are doing. DL is getting costs down.
Also, capacity for the quarter is lower than what it is expected for the year, meaning DL will add more capacity over a lower cost base. The CASM should drop considerably this summer – and is already lower than UA, AA, and NW and within 4 per cent of CO. DL will certainly have the lowest CASM in the industry by the end of the year if not before. In fact, after 3 years in bankruptcy, UA still has the highest costs in the industry. Tell me how that is going to work with WN breathing down their throat.
Finally, though, look at DL’s RASM (revenue per available seat mile). DL is within 5% of CO’s RASM, and less than 10% of AA’s. DL is closing the RASM gap quickly on the domestic side where it long lagged the industry. Latin America is where most of DL’s growth occurred and that entity generated a higher RASM despite 25% more capacity.
DL's cash stash has gone up by several hundred million dollars during the quarter. They ain't burning it.
No, DL is not through yet but they never said they would be through with the bankruptcy process in six months. Factor in significant revenue growth this summer as costs continue to come down and they are solidly on the way to a return to stability, a trend that anyone that looks at trends and details instead of just headlines should be able to see.
Yes, DL lost a boatload on a net basis … but so has every other airline in bankruptcy… most of which were due to restructuring charges. Remember that $20+ Billion profit than UA reported? There were an aweful lot of corresponding losses during bankruptcy that match that. DL is doing the same thing which says that these companies are using bankruptcy to accomplish what they should. The degree they do it is reflective of the size of the mess they are in.
DL was 3 ½ months into BK when this quarter started. It would be a stretch to think a whole lot would have been accomplished in the 1st 3 months. The real story comes when you look at the monthly reports. Did you happen to notice that aside from special charges, DL lost just $6 million, a fraction of what they lost in January or February.
Notice also that DL’s cost items went down in just about every category except for fuel, landing fees, and maintenance related items – apparently related to fleet modifications and conversions they are doing. DL is getting costs down.
Also, capacity for the quarter is lower than what it is expected for the year, meaning DL will add more capacity over a lower cost base. The CASM should drop considerably this summer – and is already lower than UA, AA, and NW and within 4 per cent of CO. DL will certainly have the lowest CASM in the industry by the end of the year if not before. In fact, after 3 years in bankruptcy, UA still has the highest costs in the industry. Tell me how that is going to work with WN breathing down their throat.
Finally, though, look at DL’s RASM (revenue per available seat mile). DL is within 5% of CO’s RASM, and less than 10% of AA’s. DL is closing the RASM gap quickly on the domestic side where it long lagged the industry. Latin America is where most of DL’s growth occurred and that entity generated a higher RASM despite 25% more capacity.
DL's cash stash has gone up by several hundred million dollars during the quarter. They ain't burning it.
No, DL is not through yet but they never said they would be through with the bankruptcy process in six months. Factor in significant revenue growth this summer as costs continue to come down and they are solidly on the way to a return to stability, a trend that anyone that looks at trends and details instead of just headlines should be able to see.
Flying Titan
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WT -
Good points all... but my point was that DL still lost $4M per day even after reorganization costs were taken into account. That was a surprising number to me given the number of large cost reductions that have already been implemented.
My question is where do the additional cost savings come from?...and beyond the international flights at JFK, where does DL find another revenue bump?
Good points all... but my point was that DL still lost $4M per day even after reorganization costs were taken into account. That was a surprising number to me given the number of large cost reductions that have already been implemented.
My question is where do the additional cost savings come from?...and beyond the international flights at JFK, where does DL find another revenue bump?
WT: While you're inulting everyone's intelligence and inability to read financial statements, your own posts are contradicted by the financial statements themselves:
You claimed that DL's CASM is already lower than AA's. Yet the DL mainline x-fuel CASM for the first quarter was 7.82 cents. AA's mainline CASM for the first quarter was 7.69 cents. Last I checked, 7.82 is not less than 7.69 - but maybe I'm overlooking something.
DL may be adding a slight amount of capacity in the subsequent quarters, but DL's own guidance is for much less systemwide capacity year over year.
By the way - could you take a look at this thread and help straighten me out? Your post there a few days ago left me completely confused: http://www.usaviation.com/forums/index.php?showtopic=28678
WorldTraveler
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FWAAA,
and tell me how far airlines get without fuel. Not very. So ex-fuel CASM doesn't mean much, does it? AA's operating casm with that necessary evil of fuel but w/o charges was 10.81, DL's on the same basis was 10.71, which I do believe is lower.
And if you look at capacity for the quarter vs. the year, you will see DL's full year guidance shows slight capacity guidance.
Obviously DL is counting on significant revenue generation this summer. They obviously are hitting on all 8 cylinders on the domestic system. if they do even halfway as well to Europe, they should be golden.
As for the other thread, why don't you compare UA and AA's RASM vs CASM and you'll see how I made the statement that UA has both a revenue and a cost premium. On a unit profit/less basis, UA doesn't look as bad as AA or as bad as some people are tying to make them look. Having high costs leaves you very vulnerable esp. when WN is breathing down your neck but for the current quarter, UA managed to maintain a better RASM/CASM "spread" than AA did (now no jokes, children). And when you add in items beyond the basic operation, UA doesn't look as favorable because they still have to deal with that nasty debt and all that "stuff".
My disdain for UA is well known but I will give them credit for what they have done at least for the present. And remember they are now a much smaller airline than AA.
Let's be perfectly clear, though. No US airline has developed or is maintaining a sustainable business plan. But I have said several times that I think AA is consistently one of the best managed airlines in the US. Whether one carrier or another passes them for a single quarter in one statistic won't sink AA if they can adapt to the changing industry, something that AA has done better than just about any other airline. However, if DL gets its costs down to industry leading levels and develops a revenue base that is at least on par with the rest of the industry (both of which I believe they will do), they AA could have some real competition.
and tell me how far airlines get without fuel. Not very. So ex-fuel CASM doesn't mean much, does it? AA's operating casm with that necessary evil of fuel but w/o charges was 10.81, DL's on the same basis was 10.71, which I do believe is lower.
And if you look at capacity for the quarter vs. the year, you will see DL's full year guidance shows slight capacity guidance.
Obviously DL is counting on significant revenue generation this summer. They obviously are hitting on all 8 cylinders on the domestic system. if they do even halfway as well to Europe, they should be golden.
As for the other thread, why don't you compare UA and AA's RASM vs CASM and you'll see how I made the statement that UA has both a revenue and a cost premium. On a unit profit/less basis, UA doesn't look as bad as AA or as bad as some people are tying to make them look. Having high costs leaves you very vulnerable esp. when WN is breathing down your neck but for the current quarter, UA managed to maintain a better RASM/CASM "spread" than AA did (now no jokes, children). And when you add in items beyond the basic operation, UA doesn't look as favorable because they still have to deal with that nasty debt and all that "stuff".
My disdain for UA is well known but I will give them credit for what they have done at least for the present. And remember they are now a much smaller airline than AA.
Let's be perfectly clear, though. No US airline has developed or is maintaining a sustainable business plan. But I have said several times that I think AA is consistently one of the best managed airlines in the US. Whether one carrier or another passes them for a single quarter in one statistic won't sink AA if they can adapt to the changing industry, something that AA has done better than just about any other airline. However, if DL gets its costs down to industry leading levels and develops a revenue base that is at least on par with the rest of the industry (both of which I believe they will do), they AA could have some real competition.
Flufdriver
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WT...don't you have a late flight to work??
