Big 1st quater loss!

[Ch. 12]

WT-

BK is a liquidity issue (not just cash but ST assets as well) if you want to get basic. You and I both know, though, that the airlines' issues lie in operating losses that eat up cash. IOW, operating is the main culprit in eating cash...not investing or financing (though large debt loads are also culprits). I stand by the statement that I think it would be ridiculous for a profitable company...especially and airline...to enter BK.

And as far as DL entering BK...it goes beyond just a credit card processor though that was definitely a capital outlay that helped to make the decision. DL entered BK for the same reason as NW...the window was closing for "easy" bankruptcies due to new legislation and these carriers probably could not have survived...credit card processor or not...at present losses with much more stringent BK processes. DL had many reasons for entering BK...not just credit card processing contracts. One might say that a higher-than-average debt burden might also be a culprit. The CC processor issue was only a symptom of the overall debt-laden liquidity issue.

 

[WorldTraveler]

I think you're splitting hairs or trying to argue that the chicken came before the egg. If DL or any other company could convert assets to cash, they would to stay out of BK. The credit card processor was the tipping point. Yes, DL recognized the door was closing on "easy" bankruptcies but they wouldn't have filed if they could have restructured... that's plain and simple. And the fact that NW's BK was something of a surprise argues more that they wouldn't to get in before the laws changed where DL had fought bankruptcy for years.

While it is academic at best at this point, DL's failure was that it failed to address the changing industry problems fast enough and kept heaping debt on in the hopes that a brighter day would come. DL DID have a restructuring plan that was in place but they should have started it in full by the spring of 2003 like AA instead of the fall of 2005.

The impact for today may not be much different, though. DL still has one of the most sound turnaround plans in the industry and is executing against it faster and more accurately than any previous airline in bankruptcy. And yes, the plan does include losses for a period of time and that period of time has not ended yet but is expected to end by this summer.

My point in posting here is to counter those that want to throw DL overboard as ancient history and no longer relevant to the current industry. DL is well on its way back to a position of strength and will retake a position of leadership in the industry, one that will be stronger than any position DL held before.

 

[NewHampshire Black Bears]

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!

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Ch.12,

I don't care if you respond or not !

JUST as long as you know that;

1. I hope NOTHING happens ($$$) to your job.....(SERIOUSLY)

and

2. Despite my "hopeful" wishes for you(and yours), I SERIOUSLY predict that "JERRY" WILL attempt to "stick it to you guys", no matter what he tells you.

The reason I feel he WILL, is because he CAN.


NH/BB's