Delta Loss As Expected

[alexander66]

The pension issue is the single issue that will decide whether DL moves to bankruptcy or not. There really is no advantage for DL or the creditors (and instead a lot of potential damage) by restructuring most other debt in bankruptcy. However, there is no present way to restructure pension benefits outside of bankruptcy. I can't help but think that part of the reason DL cannot allow itself to post improvements in its financials is to make sure that the government gets the message that they will inherit $5B or more of DL pension obligations if they don't give DL what it really wants - restructured pension benefits. Let's not underestimate the damage that has been to UA and US as a result of their pension terminations. Mr. Grinstein would love to be able to successfully restructure DL outside of bankruptcy but it will only happen if DL can deal w/ all of its large issues in at least as equitable of a manner as UA and US are doing inside of bankruptcy. Until this issue is resolved, DL will continue to bleed red ink. It is no surprise that NW's financials are as bad as they are since they are #2 on the hit parade at the PBGC help desk.
Let's also not forget that DL's restructuring is not even three months old. Many of the cost reductions associated w/ certain strategies - such as closing DFW as a hub - were only partially completed during the quarter.

[post="265377"][/post]​

 

[WorldTraveler]

Yeah, we are just waiting to see all the revenue roll in from the "Simply dumb-a$$ fares". Those stupid fares have done ALMOST as much damage as having two majors in bk. :down:

[post="265631"][/post]​

DL never said that it implemented Simplifares for the benefit of NW or any other legacy airline. SF was a DL solution to problem which DL disproportionately needed an answer: the increase in drive divert traffic from small and medium airports to large airports in order to access LCC fares. As the largest carrier of connecting traffic in the US of A, DL did Simplifares in order to make its connecting system work. If NW's or CO's or AA's overpriced hubs are a casualty, so be it.

 

[BoeingBoy]

I just want to know if we all get a special group sticker or stamp when we join the other BK carriers this fall. I am really looking forward to learning the secret handshake.

[post="263597"][/post]​

Going thru the 2nd bankruptcy in as many years, I can save you the pain of learning the secret handshake - there isn't one.

However, there is a "Bend over and spread'em" stance one has to get used to.

Jim

 

[skyflyr69]

[post="265987"][/post]​

to bad the gov't turned its back on US and UAL. Why should those carriers that have no defined benefit plan support this????

:down:

:angry:

 

[North by Northwest]

DL never said that it implemented Simplifares for the benefit of NW or any other legacy airline.  SF was a DL solution to problem which DL disproportionately needed an answer: the increase in drive divert traffic from small and medium airports to large airports in order to access LCC fares.  As the largest carrier of connecting traffic in the US of A, DL did Simplifares in order to make its connecting system work.  If NW's or CO's or AA's overpriced hubs are a casualty, so be it.

[post="266123"][/post]​

Like I said ...Delta's revenue from the "Simply Dumb-a$$" fares is really rolling in. "Delta Air Lines (DAL: news) added 3 cents to $3.21 even after Gary Chase of Lehman Bros. downgraded the stock to equal weight from overweight."A combination of factors that include weaker-than-anticipated profitability, high fuel prices, and extreme weakness in East Coast pricing leaves us with an inability to justify material upside in the shares barring an outright liquidation of US Airways, which we do not currently envision," he told clients in a note."
I predict we will soon see the end of "Simply Dummy" fares.

 

[UAL_TECH]

Like I said ...Delta's revenue from the "Simply Dumb-a$$" fares is really rolling in.

[post="266224"][/post]​

Well, you gotta do something with the $1 billion in pilot concessions, why not pi$$ it away? HE11, Works for us!!!

Hey Delta!!!, come on in, the waters just right (if you are a frigging Penguin)!!!

UT

 

[WorldTraveler]

weakness in east coast pricing and weaker than anticipated profitability say nothing about the virtues of simplifares.

If you read DL's press release announcing its financial performance, you will note that mainline non-fuel costs came down over 12% even though DL's transformation wasn't even completed by March 31, 2005 and mainline CASM excluding special charges and fuel was the lowest of the legacy airlines. What do you know! DL managed to get unit costs down lower than two airlines in bankruptcy and lower than two airlines (CO and AA) that are perceived to be much better run.

Says to me that DL is well on the road to being the lowest cost producer in the legacy industry. That position shouldn't surprise you, though, because DL held if for decades only to give it up for a brutal five year period. Also says that despite the pricing irrationality on the east coast, DL is positioned to stick around and pick up the pieces of airlines that haven't been able to get their costs down even with the help of bankruptcy.

You'll also notice that US' RASM fell nearly 10% reflecting the brutality of east coast pricing while DL managed to limit RASM slippage to better than 3%.

Don't you just hate it when you write someone off and they just bounce back w/ one more winning hand?