Big 1st quater loss!

[WorldTraveler]

UA is kind enough to give me a day off every so often.

 

[Bear96]

. . . if they do even halfway as well to Europe, they should be golden.

May we quote you on that?

Insolvent, bankrupt Delta is doing "golden"?

I'm not sure many of those holding Delta stock or debt right now would agree with that assessment. But of course, you know all . . .

 

[NewHampshire Black Bears]

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?

===========================================================

"Titan"

Watch my MAGIC trick.

I can make Ch.12 Appear "out of thin air" !!

BUT first an answer to one of your questions.

"Where do the additional cost savings come from"

Answer:
"From the NON UNION EMPLOYEES" !! (This despite the rhetoric from "JERRY" that he WOULD NOT even entertain such a thought)


(Excuse me while I add a "DISCLAIMER" here)

"I, NewHampshire Black Bears fully EXPECT "JERRY" to $$$ "corn hole" the DL NON UNION employees, even thought he GAVE HIS WORD that "HE" would not. Furthermore, I DO NOT WISH that DL NON UNION EMPLOYEES suffer financially, though (unfortunately) I fully expect that they will" !!!


NH/BB's

 

[FWAAA]

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.

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".

How wonderfully pedantic of you. Well played. 🙄

Of course airlines can't fly without fuel. But even Delta thinks that comparing operating results x-fuel makes some sense. From last week's first quarter release:

(4) Delta presents mainline unit costs excluding fuel expense and special items because management believes (a) high fuel prices during the March 2006 quarter mask the progress the Company achieved toward its business plan targets and (B) the exclusion of the special items is helpful to investors to evaluate the Company's recurring operational performance.

But just for kicks, let's compare CASM at DL and AA on a consolidated basis (not just mainline) since both airlines depend so heavily on their regional feed. AA's inclusive consolidated CASM is less than DL's: 11.365 cents at AA v. 11.8 at DL.

As to that other thread, I've looked at the numbers, and you're simply wrong. AA's first quarter beat UA in every respect. Three years in BK and UA is still higher cost and lower revenue than AA. And still promising investors that things will get better.

 

[Kev3188]

DL's losses make NW look like rank amateurs in comparison (we can't even fail correctly!)....

 

[Flying Titan]

NHBB -
I suppose it's possible that DL will go after the employees again, but it's a carrier that's managed to stay mostly non-union over the decades by not screwing its employees at every turn the way some other carriers have done (union and non-union). I hope they don't go back to the well again (employee cuts)...but looking at these numbers I'm not sure how many other options DL has.

Who knows, maybe there's gold in them thar transatlantic flights...but I just don't think it's enough to offset this much red ink. And it's risky - Let's hope the world stays healthy - SARS, bird flu, anyone?

ATL's a great hub, but AirTran's effectively controlling fares in most key O&D markets. SLC and CVG certainly aren't going to be the saviors.

 

[WorldTraveler]

why don't you have a look at the footnotes to DL's 1Q 06 earnings report. Subtract out Jan and Feb monthlies and, absent the "accounting adjustments" DL was profitable in the month of March. In reality, DL can't stand the prospect of showing a profit until the pilots agree to the new contract.

Golden is in the future tense but it's really not that far from reality.

Yes, fuel and ex-fuel comparisons are worthwhile but AA obviously loses its ex-fuel advantage because of its huge MD80 fleet. And remember, AA's tiny ex-fuel advantage now will disappear by the time DL's other cost cuts come in... and those are coming from fleet and facility cost reductions, reduced administrative costs, and debt costs (yes, DL's debt costs are actually lower now than they were a year ago because of being in BK). Even though NHBB is wetting his pants waiting for DL to screw its non-contract employees, it won't happen. DL has a sound plan.

FL is on top of DL but all you have to do is look at fares from ATL today vs. a year ago and you realize FL is all about getting more money now...because their fuel costs are going up for them too. And did you notice that 20% increase in domestic RASM? That is far in excess of the increase in fares and is because DL is rightsizing capacity and gaining the revenue premiums its markets can command.

Yes, golden is indeed the right word. DL doesn't want to say it now but it will be very evident by this summer unless a major economic calamity strikes the industry - and if it does other carriers will be hurt as bad if not worse than DL.

GOLDEN!

 

[NewHampshire Black Bears]

"NO-NO-NO" World Traveler, I POSTED a DISCLAIMER, that said I "THOUGHT" DL would come after the NON Union people.

NO WHERE did I say, that I "WANTED" DL to go after them !!!

YOU made a "ROOKIE" mistake, WT, and I will EXCEPT your apology. 🙄

NH/BB's

 

[john john]

Where do the additional cost savings come from
Answer:
"From the NON UNION EMPLOYEES" !! I DO NOT WISH that DL NON UNION EMPLOYEES suffer financially, though (unfortunately) I fully expect that they will" !!!
NH/BB's

I think you are right on. NO raises, NO benefit increases, NO additional staff and yes these are pay cuts went the union guys get them and NON-UNION doesn’t. Guarantee raises and benefit increases versus you have to wait in line

 

[Bear96]

Yes, golden is indeed the right word. DL doesn't want to say it now but it will be very evident by this summer unless a major economic calamity strikes the industry - and if it does other carriers will be hurt as bad if not worse than DL.

GOLDEN!

Well don't look now but a major calamity has already struck DL. It's called bankruptcy.

But if being bankrupt = golden, well more power to ya!

 

[Vikedog64]

why don't you have a look at the footnotes to DL's 1Q 06 earnings report. Subtract out Jan and Feb monthlies and, absent the "accounting adjustments" DL was profitable in the month of March. In reality, DL can't stand the prospect of showing a profit until the pilots agree to the new contract.

Golden is in the future tense but it's really not that far from reality.

Yes, fuel and ex-fuel comparisons are worthwhile but AA obviously loses its ex-fuel advantage because of its huge MD80 fleet. And remember, AA's tiny ex-fuel advantage now will disappear by the time DL's other cost cuts come in... and those are coming from fleet and facility cost reductions, reduced administrative costs, and debt costs (yes, DL's debt costs are actually lower now than they were a year ago because of being in BK). Even though NHBB is wetting his pants waiting for DL to screw its non-contract employees, it won't happen. DL has a sound plan.

FL is on top of DL but all you have to do is look at fares from ATL today vs. a year ago and you realize FL is all about getting more money now...because their fuel costs are going up for them too. And did you notice that 20% increase in domestic RASM? That is far in excess of the increase in fares and is because DL is rightsizing capacity and gaining the revenue premiums its markets can command.

Yes, golden is indeed the right word. DL doesn't want to say it now but it will be very evident by this summer unless a major economic calamity strikes the industry - and if it does other carriers will be hurt as bad if not worse than DL.

GOLDEN!

Went to a meeting last week and was told by our revenue management people that we have been cash positive since March. I believe in this airline and our management team. To be honest, we, as employees have to. Thanks for the support WT..

 

[WorldTraveler]

glad to point out what no one else wants to admit. DL is coming back and well on the way to the top. In alot of ways, DL is like the cat that has 9 lives.... I'm thinking this heart attack was about #6 or 7 so it is time for them to find a way to sticking around for the long term but they will.

Thanks for sticking in there..... DL will always be my 1st choice in air travel... and I've noticed a lot more reasons to like DL in the last few months and every one of those reasons revolve around people like you, Vikedog.

 

[Deleted by Moderator]

yippee, soon you can meet and rub up against each other. Maybe you should stop celebrating and see if you can right the Titanic.

 

[Ch. 12]

You all crack me up. DL is IN REORGANIZATION!!! Do you honestly think that they should be turning large profits yet? If they were, I could honestly say that they wasted way too much money by filing for BK, but it is ironically reassuring to me that DL is losing $$...IOW, BK was necessary...and DL is making progress despite fuel that has spiked beyond all conceivable predictions. So yes...I would expect that DL would still be losing money...even after excluding re-org costs...b/c they aren't done reorganizing! You don't cut a cost here or add revenue there and poof! you're instantly profitable. If you ask me...so many just like to create drama that they ignore little things like DL just went into BK this past fall.

Who knows what will happen in the future but I'm not heading for the hills just b/c of a loss during BK. That is normal and whoever thinks it isn't doesn't have any concept of when you should be in BK. My guess is that if fuel stays at current levels, even the mightiest will fall...and of course the weakest will. There needs to be some intervention that can't be done simply by airline executives. We need a government that is in bed with big oil to actually do something positive for the country and do something about profiteering...then maybe ANY airline would have a chance. Until then...NONE of them do.

Oh...and sorry NHBB...you didn't make me appear this time. Notice no reference to your skipping-record argument. We've already been down that road once or twice <_< and I suppose a 10th time won't do any good. Valiant effort, though!

 

[WorldTraveler]

There is nothing that prevents a company from being wildly profitable in bankruptcy. Bankruptcy exists because a company's cash position cannot support the required outlays. BK says nothing about whether a company is profitable or not. Most companies are losing money going into bankruptcy which is what exacerbates the cash crisis.

DL's bankruptcy was driven more by the requirement of its credit card processors for DL to have $1B in revenue held back. Prior to August 2005, DL had no credit card holdbacks so as soon as a customer using a credit card bought a ticket on DL, the cash was immediately transferred to DL. DL was one of the very few airlines that did not have a credit card holdback and it was due to DL's strong financial position when the previous credit card agreement was signed.

Credit rating agencies were getting increasingly concerned about DL's continued losses through the summer of 2005 and its grim forecasts without a pilots agreement. Combined with soaring oil prices, credit rating agencies found DL's losses hard to sustain w/o a bankruptcy filing. So, the sinking credit rating and the credit card processor holdbacks were the reason for DL's bankruptcy. When combined with high fuel prices, DL had less than $1B in cash which put it in default of its pre-BK loan requirements.