Delta post 88 million loss for October

[lowecur]

We were affected a lot more by the transatlantic bomb scare, but they were more affected by SARS. That is the way it goes. IF you think that was management's fault, then you are wrong.


Bye Bye--General Lee

So you lost money in Oct because of the early August bomb scare? I doubt you will hear CAL or AA throwing that excuse out when 4th Q numbers come in.

imp:​

 

[General Lee]

So you lost money in Oct because of the early August bomb scare? I doubt you will hear CAL or AA throwing that excuse out when 4th Q numbers come in.

imp:​

I'd have to look at the actual loss, but some was from BK related issues, and the others were from something else. I guess people in AUG during the scare might not buy tickets for OCT. You never know. Does that mean our whole plan is wrong? You think so. Maybe OCT had more of our planes in the shop to redo the interiors for the Spring flying. OCT is usually our slowest month.

Bye Bye--General Lee

 

[lowecur]

I'd have to look at the actual loss, but some was from BK related issues, and the others were from something else. I guess people in AUG during the scare might not buy tickets for OCT. You never know. Does that mean our whole plan is wrong? You think so. Maybe OCT had more of our planes in the shop to redo the interiors for the Spring flying. OCT is usually our slowest month.

Bye Bye--General Lee

Nice bit of frosting there GL.

Here's a real recap of what went down yesterday and what to expect in the near future, not the glossed over statement from DL mgt.

http://blogs.usatoday.com/sky/2006/12/delta_us_air.html

imp:​

 

[ATR-DRIVR]

You don't? Back then there was just ONE hub or area that was close. Now there are many more--ATL/CLT (200nms a part and both fly to many cities in SE that no one else flies to), the NE (BOS/LGA/DCA area, along with Shuttles, all next to PHL and PIT), and the West (LAS/PHX/SLC---SLC and the Mormon Church--along with Sen Orin Hatch won't let that go away--you think JB could go in there to SLC? To Hawaii too? Do you know how many Mormons live in Hawaii? They go to SLC often apparently to Church functions etc..). You don't see that? Come on.
.


Bye Bye--General Lee

What makes you think JB would not expand in SLC?? If DL scaled back there significantly there is no reason we would not expand. None. Hawaii? How many flights a day? One. I don't think that is enough to stay an execution.

 

[Eagle757shark]

General, you keep mentioning OVERLAP all over this forum pertaining to this merger. I for one do not take this proposed merger at face value having listened to Parker the last couple of years. I believe this proposal is all about one of two things. First, US Airways makes a proposal in hopes that the creditors will go to Delta management and make it very difficult for Delta to get the cost cuts it was hoping for while in Bankruptcy. Delta may come out of Ch.11 as a independent carrier, but may not have the cost advantage it was hoping to gain in Ch. 11 making it's cost higher than the merged current US Airways. US Airways' largest competitor on the east is Delta and if they can keep Delta's cost above theirs coming out of CH.11, US Airways wins. Second, if the creditors side with US Airways, the DOJ is just a bidding war away. US Airways again knows the overlap, however, if their intent is to break Delta up to appeal to the DOJ, it could happen. Once through the creditors, Parker could call AMR or CAL and say hey boys, interested in SLC. AMR and UAL could be sought to purchase the Northeast Shuttle leaving Atlanta and CVG and there are alternatives there as well. I truly believe this merger is about the current US Airways weaking their largest competitor and now they have the financing, 8 billion dollars, from Citigroup to do it.

 

[Noserider76]

Well it certainly makes DL mgt look a little incompetant at this point in time. That's quite a difference between the 2 carriers in BK right now, and this is something the creditors will look at. The rush to the transatlantic market pays dividends in season, but can be a real loser in the off season.

imp:​

I disagree. DL is spending a lot of money to improve the product right now. Most of the fleet has received new interiors and a good portion are getting the brand new entertainment system. Atlanta is getting a completely redesigned departure lobby and the list goes on. They are investing to suceed in the future and will wind up with the best passenger product out there. It's expensive but it's a smart move. Not sure what's happening on the Northwest side.

 

[lowecur]

I disagree. DL is spending a lot of money to improve the product right now. Most of the fleet has received new interiors and a good portion are getting the brand new entertainment system. Atlanta is getting a completely redesigned departure lobby and the list goes on. They are investing to suceed in the future and will wind up with the best passenger product out there. It's expensive but it's a smart move. Not sure what's happening on the Northwest side.

Nothing wrong with that, but whether you spend money on new a/c or spruce the old one's up, you still need a network plan that is better than the one offered by DP.

Check out the 4th Q numbers between NWA and DL and see which one is doing a better job in making money. Didn't NWA just spend a ton of money on new ERJ's and CRJ's?

imp:​

 

[FDJ2]

Well it certainly makes DL mgt look a little incompetant at this point in time. That's quite a difference between the 2 carriers in BK right now, and this is something the creditors will look at. The rush to the transatlantic market pays dividends in season, but can be a real loser in the off season.

imp:​

You are of course correct Lowecur. DAL's PRASM increased 15.1% year over year compared to an industry average of 6.2% and DAL's non fuel CASM is down 4.1%. That transatlantic expansion is a real loser in Oct., it increased unit revenue and unit costs went down. 2Q operating margin went from -.8% to +7.9% and 2Q revenue increased 17% year over year. A sure sign of incompetence.

 

[lowecur]

You are of course correct Lowecur. DAL's PRASM increased 15.1% year over year compared to an industry average of 6.2% and DAL's non fuel CASM is down 4.1%. That transatlantic expansion is a real loser in Oct., it increased unit revenue and unit costs went down. 2Q operating margin went from -.8% to +7.9% and 2Q revenue increased 17% year over year. A sure sign of incompetence.

Now are all those numbers specific to Oct? No?.....I didn't think so. Let's see how they do in Nov (another slow month over the Atlantic).

imp:​

 

[FDJ2]

Now are all those numbers specific to Oct? No?.....I didn't think so.

imp:​

Lowecur, I specifically noted which were from the 2Q and if you had done your homework you would have been able to pick out the significant improvements in the October year over year numbers, which I posted above:

"DAL's PRASM increased 15.1% year over year compared to an industry average of 6.2% and DAL's non fuel CASM is down 4.1%. That transatlantic expansion is a real loser in Oct., it increased unit revenue and unit costs went down."

Really lowecur, I expect more from you.


DAL October results:

During the month of October, Delta demonstrated its continuing progress in restructuring its business, as follows:

• Delta made significant improvements in its unit revenue performance by restructuring its overall network and rebalancing the mix of domestic and international flying. Delta’s length of haul adjusted consolidated passenger unit revenue (PRASM) increased 15.1% for October 2006 versus October 2005, as compared to the industry average PRASM increase of 6.2% over the same period.
• Delta reduced its operating expenses by 6.9% on a capacity reduction of 4.5%, resulting in a 2.5% reduction in consolidated unit costs in October 2006 compared to October 2005. Mainline non-fuel CASM was 7.12 cents for the month, a 4.1% improvement year over year.

 

[General Lee]

Hey, leave poor Lowecur alone. He is busy trying to look at Flightinfo while selling insurance for Geico. He is amazing.....


Bye Bye--General Lee

 

[lowecur]

Lowecur, once again you are incorrect. This is humiliating. I bow to you. If you had done your homework you would know that the following, which I posted above was from DAL's October performance:

Actually, what I was getting at and didn't express myself very well was not the year over year improvement (like comparing the Titanic to the QEII), but the month over month declines. My point is there is a TransAtlantic flying season peak(June & July) where you had net income minus reorganization costs of $145M and $66M respectively. August probably would have been a decent month but you lost $11M, and then again in Sept you lost $6M. Oct you lost $66M. This is the trend as we get closer to the November to Easter off season for TransAtlantic Airtravel that is undeniable.

I will give kudos to your mgt team for the fine job they have done. No one will deny that. The fact that they have a plan to produce an additional $3B in cost benefits to the company by the end of 2007 is commendable. The real question is, can they do it, and is their plan better than the synergistic value of DP & Co?

Parallel to that is the fact that NWA made money in October. They are top heavy in the Pacific but do have some exposure over the Atlantic. This is what DL needs to do, and the question is can they do it by flooding an already overcrowded market with more flts. That my friend is the $64,000 question, and one that will determine the future.

imp: ​

 

[lowecur]

Hey, leave poor Lowecur alone. He is busy trying to look at Flightinfo while selling insurance for Geico. He is amazing.....


Bye Bye--General Lee

Thank's pally. Actually, I was on my way out the door to dinner and decided to post a quick unthoughtful response. R2D2 took me to task.:blush:

imp:​

 

[FDJ2]

Actually, what I was getting at and didn't express myself very well was not the year over year improvement (like comparing the Titanic to the QEII), but the month over month declines. My point is there is a TransAtlantic flying season peak(June & July) where you had net income minus reorganization costs of $145M and $66M respectively. August probably would have been a decent month but you lost $11M, and then again in Sept you lost $6M. Oct you lost $66M. This is the trend as we get closer to the November to Easter off season for TransAtlantic Airtravel that is undeniable.

Lowecur, most airlines have seasonal fluctuations. To point out that DAL didn't make as much money in October as they did in July is to really say nothing at all with regards to DAL's reorganization. A more acurate picture is to see if DAL's performance year over year is improving when compared to the same month the year before.

July improvement was $140M with a 13.2% improvement in PRASM

August improvement $147M with a 12.8% improvement in PRASM

September improved $392M with a 12.9% improvement in PRASM

October improvement $196M with 15.1% improvement in PRASM

As you can see the month to month comparisons show a definitive improvement and in OCT the PRASM improvement was the best so far, which kind of shoots your theorey that DAL's new network strategy will be weak in the fall. Revenue improvement were actually the strongest in October. The trend line is towards greater year over year financial performance.

 

[lowecur]

Lowecur, most airlines have seasonal fluctuations. This Nov to Easter is new to DL with the top heavy Transatlantic network. This is a major overhaul that will have a tremendously weak 6 month TransAtlantic season. DL will have to offset with diversity to other international markets and expense side cuts to suceed. To point out that DAL didn't make as much money in October as they did in July is to really say nothing at all with regards to DAL's reorganization. I think I tipped my hat to mgt, did I not? A more acurate picture is to see if DAL's performance year over year is improving when compared to the same month the year before. It may be a more accurate picture, but does that mean it's the right total strategy for the creditors committee? If it is and DL is allowed to maintain it's autonomy, then we shall see where they are at the end of 2007.

.....

imp:​

 

[General Lee]

Lowecur,

So, we don't have any other INTL destinations other than Europe? We are number 2 and growing to Central and South America from the US, with a better hub in ATL (you don't have to speak Spanish like you do in MIA). We are starting nonstops this month from LAX to Guatamala City, Managua, and Liberia (Costa Rica). This is in addition to new nonstops from LAX to Puerta Vallarta, Cozumel, Cancun, and a bunch of RJs to smaller Mexican cities to see if we can spark interest there. Some other cities we have added recently in the Carribbean and South America from ATL:

1. Fort De France, Guadeloupe
2. Pointe a Pitre, Guadeloupe
3. Quito, Ecuador
4. Guayaquil, Ecuador
5. an additional Sao Paulo flight from ATL, added to the nonstop from JFK
6. Port of Spain, Trinidad and Tobago
7. Puerto Plata, Dominican Republic
8. St. Croix (replaced RJ, added MD88)
9. Merida, Mexico (CR7), Leon, Guanjuato (CR7)
10. Kingston, Jamaica now with daily MD88
11. Ixtapa, MX

Here are some additional Winter time flights added from ATL:

1. Palm Springs daily (738)
2. Montrose (MD88 on Sat)
3. Steamboat Springs-Hayden daily 738
4. Vail--Eagle-daily 757
5. Bozeman, MT (3 days a week on 738)
6. Kona (daily 764 from SLC)


And we are adding 3 new destinations in AFRICA
1. Accra, Ghana from JFK 4 days a week nonstop
2. Daily 767ER from ATL--Dakar, Senegal, continuing onto Johannesburg


YES, we do have many European flights from JFK, CVG, and ATL, but they are scaled way back in the Winter. Daily flights in the Summer have been reduced to match capacity in the colder Winter. Flights not included are still daily, for a reason.

JFk--Athens (4 days a week now, instead of Daily)
JFK--Budapest (4 days a week now instead of Daily)
JFK--Berlin (5 days a week now)
JFK--Istanbul (4 days a week now)
JFK--Nice (3 days a week now--great layovers for crews though)
JFK--Venice (4 days a week now)
ATL--Venice (3 days a week)
ATL--Moscow (5 days a week now)
ATL--Copenhagen--(5 days a week now)

Get the picture yet? We have been doing this for YEARS. We know how it goes.

So what do we do with the 767s that were flying to Europe daily but now are not? Adding them to warmer destinations that may need more room for pax and luggage---like a daily 763 from ATL to Guatamala City, a 763 from ATL to San Jose, Costa Rica, and an additional 763 from ATL to Panama City, Panama. They have figured it out....

Do you need any more examples Lowecur?

Bye Bye--General Lee

 

[414Flyer]

Is that Accra destination new because North American started going there?

 

[General Lee]

Is that Accra destination new because North American started going there?

I don't think so. They also go to Banjul, Gambia----but I don't see us rushing to go there. I think Accra is the largest city in the area, for trade, etc. And, a nice tidbit for you---Ghana Airways, which operates 757s to London Gatwick and Johannesburg from Accra, is partly owned by Jerry Atkin, who runs SkyWest Airlines. Use that in Trivial Pursuit.

Bye Bye--General Lee

 

[lowecur]

Lowecur,

So, we don't have any other INTL destinations other than Europe? We are number 2 and growing to Central and South America from the US, with a better hub in ATL (you don't have to speak Spanish like you do in MIA).


Bye Bye--General Lee

If all this is working we should see a positive number in Nov, right? Didn't happen in October.

I think DP and his group are having some informal meetings with some of the creditors this weekend. I also think these creditors have received a synopsis of how Novemeber is going, and it's my guess the numbers will look alot like October. You think maybe Boeing would like to hear they could get a big order out of this merger?

This attorney Golden and his firm that represents and makes recommendations to the committee is busy at work pouring over the numbers before they make their final assessment. Since they are getting the big bucks from the committee to do the assessment, it may all come down to them.

Either way, DL could still wind up autonomous. If that happens we will see just how good the Grinstein plan is in little over 12 months.

imp: ​

 

[michael707767]

The real question is, can they do it, and is their plan better than the synergistic value of DP & Co?

I laugh every time I read about the synergies of merging DL and LCC. Tell me, anyone, just where are those synergies going to come from? There is no way Parkers plan, as advertised, can work.