Thanks, IFlyJetz on the Orbitz stakes. I thought I had remembered that DAL had retained a bit bigger share after the IPO last year but your article shows the opposite.
Several sources (including some quoted in Aviation Daily) have conjectured at the price Delta will get for its 8 MD11s but it’s generally in the $200-250 million neighborhood which is actually pretty low for 10-12 year old widebody aircraft. The question is whether those aircraft are security for any of DL’s debt; based on DL’s financial reports the MD90s and MD11s are not shown as being used to secure any debt.
It’s important to remember that 3 airlines have engaged in significant restructuring since 2002: AA, UA, and US (they all did layoffs and cuts immediately after 9/11). Although all airlines have improved productivity, DL is only now embarking in a large scale restructuring. Thus, you have to really compare DL’s performance 6 months FROM NOW with AA’s and UA’s six months AGO. AA and UA have begun to add capacity based on their cost cuts, thus their financial performance should reflect significant improvements. DL along with CO and NW do not have any labor cost cuts or significant capacity increases baked into their results since they have basically only added back the capacity they have cut during the Iraq invasion.
Also, while all carriers face LCC pricing pressure across their entire network (connecting traffic) DL has next to no major routes left that could fall to low cost competition since all of the major ATL markets except for ATL-Pacific northwest are low cost carrier priced. As mentioned, UA still has significant exposure in both IAD and SFO, AA has it at DFW and MIA, CO has it at EWR and IAH, NW has it at all of its hubs, and US has it at CLT plus what has now been priced by LCCs at PHL. In short, future revenue decreases because of LCC will not be equally spread out across all of the network carriers. I can’t quantify it but I would bet that AA is most exposed.
NHBB,
I agree that American Eagle will be an increasingly powerful force AA can use in the near future to pick off revenue from other carriers. It will be interesting to see what they do in DFW w/ RJs since they converted a lot of markets to RJs to compete w/ DL; now that DL is leaving, I wouldn’t be surprised if they put some of the Saabs back in some of those markets or at least use the new RJ deliveries for new markets rather than turbo replacements. Delta has been using those pesky jets for several years to get into other carriers’ business rather effectively… an example AA has surely not missed.
Heard a piece on the radio that WN’s CEO said they are looking at adding service to DFW but haven’t seen it in print. As I have stated, those 20 open gates at DFW are bad news for AA since it opens up the possibility of LCC competition for AA.
NRT is a great hub but I think you will see its importance diminish in the future to NW’s detriment. UA already overflies NRT to a number of Asian markets along w/ its NRT hub and AA, CO, and DL will certainly add NRT overfly flights. I think NW will soon need to develop a strategy to overfly NRT as well.
That's readily admitted at UAL. But if things are tough at UAL, how can the possibly be peachy at an airline running with much worse margins? your latest arguments bring a whole new level of Comedy to the boards. Notice the other FRNT folks have gotton quite quiet on the subject. FRNT is in BIG trouble and you wil see some "big" changes before christmas. 
Quote me on it. Savy over on the U boards must've just become team lead for the late shift at BK, and offered to take resume's. You might want to act now to be at the front of the line...
