CNN In the Money

[zethya]

Indeed. All plans end up with a smaller Delta.... I predict that DL management will come out with a new restructuring plan in the next few months that rejects more leases......

According to the CFO, via AP, the new Plan will be produced by mid-December - 3 months ahead of schedule.

 

[DLFlyer31]

Indeed. All plans end up with a smaller Delta. US will shrink DL by 10%. Any white knight will do the same or more. And to end up independent, DL management will need to shrink to project better operating results.

I predict that DL management will come out with a new restructuring plan in the next few months that rejects more leases -- a bunch of RJs, a moderate number of MD80s and more than a few 767s. Plus there will be some very rosy forecasts of yields in those new European markets.

If you haven't noticed, DL has already shrunken a lot in the past few years. DFW hub is gone. CVG and MCO have taken hefty cuts (25-35% of capacity). Even ATL/SLC are smaller today than they were a year ago. The only hubs with any real growth are JFK and to a lesser extent LAX.

DL has already dumped hundreds of planes since 9/11. Not to mention that they've already said they plan to dump some additional 50 seat RJ's.

At this point, DL can't shrink too much more or the airline will collapse. Once you start shrinking a hub too far, the entire operation begins to unravel. Profit margins get worse...not better. DL's hubs at CVG and SLC are already near this point. Additional cuts would likely kill them.

 

[Charlie_Tuna]

According to the CFO, via AP, the new Plan will be produced by mid-December - 3 months ahead of schedule.

Three months ahead of the original schedule or the multi- bumped one?

 

[luv2fly]

Three months ahead of the original schedule or the multi- bumped one?

Right now it is the only one that matters. That's why they call it the exclusive right to reorganization. You know, the one granted by the BK judge to DL and not US.

 

[WNrforlife]

Parker needs to get his own house in order before his ego starts writing checks that his empty promises can't cash.

Let's see - where do we begin.....

US Scareways pilots picketing in PHX

Boeing is also one of Delta's creditors. Do you think they are anxious to award a company that has been loyal to the Euro-weenies at Scare-Bus? Over 50% of the US-Scareways fleet are Scare-bus aircraft


AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

 

[hp_fa]

Right now it is the only one that matters. That's why they call it the exclusive right to reorganization. You know, the one granted by the BK judge to DL and not US.

True, but Parker has at least opened the unsecured creditors eyes to what else may be available to them. As many have said, it will be the creditors and the judge who decide how this plays out.

Boeing is also one of Delta's creditors. Do you think they are anxious to award a company that has been loyal to the Euro-weenies at Scare-Bus? Over 50% of the US-Scareways fleet are Scare-bus aircraft
AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

That's a double-edged sword. If I recall correctly, LCC's commitment to Airbus has been concluded because they have repaid the loaned monies and the A-350 will not be available in the agreed upon timeframe. So Boeing will never have a better opportunity to gain this business, especially since it is business that they are taking directly from Airbus.

 

[RowUnderDCA]

Indeed. All plans end up with a smaller Delta. US will shrink DL by 10%. Any white knight will do the same or more. And to end up independent, DL management will need to shrink to project better operating results.

I predict that DL management will come out with a new restructuring plan in the next few months that rejects more leases -- a bunch of RJs, a moderate number of MD80s and more than a few 767s. Plus there will be some very rosy forecasts of yields in those new European markets.

Yes, Techboy, you get my point and express it better.

 

[luv2fly]

Any white knight will do the same or more. And to end up independent, DL management will need to shrink to project better operating results.

White knight. What white knight?
Link

 

[luv2fly]

True, but Parker has at least opened the unsecured creditors eyes to what else may be available to them. As many have said, it will be the creditors and the judge who decide how this plays out.

I have never argued against that for a minute. I do however, find it funny that most here assume the creditors are giddy about US's proposal.

 

[Charlie_Tuna]

I have never argued against that for a minute. I do however, find it funny that most here assume the creditors are giddy about US's proposal.

You don't have to be giddy or even like something to decide you have to do the right thing.

 

[Flufdriver]

I have never argued against that for a minute. I do however, find it funny that most here assume the creditors are giddy about US's proposal.

Rumor has it in Atlanta the Coke is shutting down the line that produces the "Delta Kool-Aid". See I knew this merger was going to put people out on the street!!

 

[TechBoy]

I have never argued against that for a minute. I do however, find it funny that most here assume the creditors are giddy about US's proposal.

Let's see. The price of DL debt went up 20% after the US proposal. Why shouldn't they be giddy?

 

[runabout319]

Indeed. All plans end up with a smaller Delta. US will shrink DL by 10%. Any white knight will do the same or more. And to end up independent, DL management will need to shrink to project better operating results.



A smaller Delta? How can this be when you're adding the current #3 and #5 airlines? There can be a reduction in the total number of aircraft for the combined carrier with very little impact. For example, each carrier has 8 flights between CLT and ATL, meaning the "new Delta" will have 16 flights between these two cities. Reducing service by 10% still leaves at least 14 flights a day, versus a stand alone Delta in which a 10% reduction would have roughly 7 flights a day, don't forget the competing Shuttle service either.

Here's the synergies...the "new Delta" will be much larger than the current Delta, just look at the number of aircraft: 457 (Delta) + 357 (US) = 814 aircraft, minus 10% is roughly 733 aircraft for the carrier. Seems like it's grown in size rather than shrunk. But then again "no child left behind" has done wonders for math skills.

 

[TechBoy]

If you haven't noticed, DL has already shrunken a lot in the past few years. DFW hub is gone. CVG and MCO have taken hefty cuts (25-35% of capacity). Even ATL/SLC are smaller today than they were a year ago. The only hubs with any real growth are JFK and to a lesser extent LAX.

DL has already dumped hundreds of planes since 9/11. Not to mention that they've already said they plan to dump some additional 50 seat RJ's.

At this point, DL can't shrink too much more or the airline will collapse. Once you start shrinking a hub too far, the entire operation begins to unravel. Profit margins get worse...not better. DL's hubs at CVG and SLC are already near this point. Additional cuts would likely kill them.

DL has not undergone the kind of shrinkage that US and UA did in their trips through Chapter 11. Yes, they have parked some of their oldest aircraft and cut back at CVG. But, as our friend WT often pointed out, DL has not decreased ASMs that much by using aircraft more efficiently.

I highly doubt that DL will collapse if they cut the bottom 10% of their flights. That would still leave them larger than many other majors, with strong hubs in ATL and JFK. Oh, and profitable as well . . .

 

[aislehopper]

Rumor has it in Atlanta the Coke is shutting down the line that produces the "Delta Kool-Aid". See I knew this merger was going to put people out on the street!!

Kool-Aid is a Kraft Foods product. 😛