Delta post 88 million loss for October

[GOTAFLY]

People thought doug was crazy when he said there were 600 million in synergies with the US/AWA MERGER, I think they had more than 600 million and the merger isn't even finished.

 

[lowecur]

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.

I'll give you a few:

• Moving the headquarters for both companies to ATL
• Carving out the injudicious use of RJs with Skywest/Comair
• Using Republic as the main feed carrier
• Closing CVG/SLC/CLT as large hubs along lines of PIT
• Focusing International Ops at JFK, ATL, and LAX.
• Cut back ops at PHL and PHX by 10%
• Banking lots of money by selling a Shuttle, 733,734s and gates to WN and anyone else that is in the market.

imp: ​

 

[FDJ2]

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

imp:

October revenue improvement has been very stronger when compared to the same time period last year.

October improvement $196M with 15.1% improvement in PRASM

DAL's revenue improvement, year over year for the same month, is more than twice the industry average.

 

[Hutchman]

DAL's revenue improvement, year over year for the same month, is more than twice the industry average.

Remember, when an airline is so far behind the competition it is easy to beat the competitors in revenue "improvement" on a percentage basis. All this means is that DAL is catching up. How fast? Who knows, they left that out of the reprot. The question is how far behind the competition is DAL now? Still behind, but not as much. I will agree that it is a step in the right direction.

 

[9rj9]

what he really wants

Parker will sell off many assets after the merger, thus boosting the share price and making himself and management very rich. He doesn't care about anything else, its all ego/money and if you believe anything else you are a sucker.

This is why he wants to get hold of Delta BEFORE the exit from bakruptcy. You can't dump obligations after exit. Sell, sell sell, aircraft and gates. He doesn't care about synergies, it will be slash and burn with a cash rich Southwest picking up the pieces.

 

[slaquer5]

Parker will sell off many assets after the merger, thus boosting the share price and making himself and management very rich. He doesn't care about anything else, its all ego/money and if you believe anything else you are a sucker.

This is why he wants to get hold of Delta BEFORE the exit from bakruptcy. You can't dump obligations after exit. Sell, sell sell, aircraft and gates. He doesn't care about synergies, it will be slash and burn with a cash rich Southwest picking up the pieces.

That sounds good to me

 

[FDJ2]

Remember, when an airline is so far behind the competition it is easy to beat the competitors in revenue "improvement" on a percentage basis. All this means is that DAL is catching up. How fast? Who knows, they left that out of the reprot.

You are correct, that when you are far behind you need to outpace the competition to catch up, I believe DAL is doing a fairly good job at that. Let's compare 2005 Q2 unit revenue.

Airline: '05 '06 improvement

DAL 9.67 11.31 17%
AMR 10.56 11.82 11.9%
NWA 11.14 12.34 10.8%
CAL 10.57 11.57 9.5%

You can draw your own conclusions on whether or not DAL is making progress in closing the revenue gap.

 

[Hutchman]

You are correct, that when you are far behind you need to outpace the competition to catch up, I believe DAL is doing a fairly good job at that. Let's compare 2005 Q2 unit revenue.

Airline: '05 '06 improvement

DAL 9.67 11.31 17%
AMR 10.56 11.82 11.9%
NWA 11.14 12.34 10.8%
CAL 10.57 11.57 9.5%

You can draw your own conclusions on whether or not DAL is making progress in closing the revenue gap.

Improvement-yes
Still in last-yes
Closing the gap-yes

 

[737 Pylt]

Parker will sell off many assets after the merger, thus boosting the share price and making himself and management very rich. He doesn't care about anything else, its all ego/money and if you believe anything else you are a sucker.

This is why he wants to get hold of Delta BEFORE the exit from bakruptcy. You can't dump obligations after exit. Sell, sell sell, aircraft and gates. He doesn't care about synergies, it will be slash and burn with a cash rich Southwest picking up the pieces.

And who says a GED can't get you anything in life. You are as clueless as you are boring!

737

 

[General Lee]

People thought doug was crazy when he said there were 600 million in synergies with the US/AWA MERGER, I think they had more than 600 million and the merger isn't even finished.

That merger made more sense, to airline people and the Gov't who actually approved it, because there was no overlap of hubs (USAir all East, AWA all West), and USAir NEEDED the merger to survive. The fleets were fairly close, and Airbus added some money to the pot if the new USAir bought A350s (20).

None of that is the case with DL. None.

Bye Bye--General Lee

 

[General Lee]

Parker will sell off many assets after the merger, thus boosting the share price and making himself and management very rich. He doesn't care about anything else, its all ego/money and if you believe anything else you are a sucker.

This is why he wants to get hold of Delta BEFORE the exit from bakruptcy. You can't dump obligations after exit. Sell, sell sell, aircraft and gates. He doesn't care about synergies, it will be slash and burn with a cash rich Southwest picking up the pieces.

The Gov't and Oberstar won't allow that, even if it somehow gets past the friendly creditor committee. Oberstar likes "choice" for consumers, and Southwest and JB won't fill in flights to the small communities, like Florence, SC, and Lynchburg, VA, etc.


Bye Bye--General Lee

 

[lowecur]

Overview of the next 2 months

This article gives a great perspective of what will happen right up till 2/15/07.

Some key thoughts:

• “There will be six to eight weeks of public jousting, then everybody will go into (seclusion),” Mann said. By mid-January, creditors should have decided on a preferred direction. Mann said that could include Delta teaming up with other suitors. They may pop up in the coming weeks, he said, but likely none would have Parker’s clout.
  
  “Parker has a strong hand, because he’s done it before,” Mann said. “We may see somebody try to top his offer, but the question is, ‘Can they offer credibility and a better value? Have they done this before?’”

• Of more concern is the reduction of competition on several routes. Among the flights US Airways would need to dump to allay regulators worries would be several along the East Coast, especially in Boston, New York LaGuardia and Washington, D.C., Reagan airports, according to Bear Stearns. Those are not likely to be an issue to anyone, Boyd said, and other airlines are likely to snatch up suddenly available gates in major cities. Southwest Airlines has already shown interest in snagging extra slots in Philadelphia and Baltimore if they are casualties of a merger.
  
  US Airways said the two airlines only have nine overlapping routes without competition, and no community will lose service completely. But Boyd estimates at least six will be worse off if the deal gets done, and he labels claims that the merger would not kill competition as “nonsense.”
  
  “Where it will reduce service is in the smaller communities,” Boyd said. “There’s no airline that will move into Lynchburg, Va., Florence, S.C. or Gainesville, Fla. Lynchburg will be down to one carrier without any hope of getting another one.”
  
  Nevertheless, if track record is an indication, regulators will OK the deal, Boyd said.
  
  “Lobbyists will come out of the woodwork,” he said. “If competition is the goal, the regulators will turn it down, but if they can be misled into thinking its good for the industry, they’ll approve it.”

• Parker said he has $7.2 billion in committed financial backing. That’s nearly double what he needs to make the deal since the offer is for half the value in cash and half in US Airways stock. The potential to make much more in US Airways stock based on Parker’s track record, also will look attractive to creditors, Mann said. (This is the part I like. Parker has another $3.2 billion to play with along with probably another billion once the stock goes into the 70s. That will be tough for creditors to turn down).

• “Although there are high hurdles for airline mergers and acquisitions, we believe the probability of a transaction is clearly rising — and if one major transaction takes place, it could trigger a cascade of deals,” wrote Bear Stearns’ airline analysts in a research paper. “As the industry emerged from a brutal downturn, our sense is that airline executives are motivated to repair balance sheets, fortify networks, and improve fleets. While not a panacea, mergers and acquisitions provide a means to accomplish all three of these goals. Moreover, we believe fresh capital is available and the political window is open.”
  
  Neidl of Calyon gives the merger a 30 to 40 percent chance of making it, mostly because he’s not as convinced politicians and regulators are ready for mega-airlines. But if it happens, he said it could trigger others.
  
  “We believe the industry is fragmented and primed for consolidation, and various management teams and financial resources are ready to begin the process” Neidl wrote in his assessments.

• Industry experts say Delta creditors are the real key. If they like the US Airways deal and push for it, Delta management will have to toe the line, and the government is likely to sign off on the deal.
  
  Politicians, Neidl said, could be spoilers.
  
  Mann thinks a deal in one form or another, is likely.
  
  “The reality is, it will be difficult for Delta as a single carrier to create value for creditors that Parker can create through the combination,” he said.

http://www.eastvalleytribune.com/index.php?sty=79968

imp:​

 

[RP 04]

They should make the pilots clean the cabins, bet they would save at least $5000/year...

 

[FDJ2]

Improvement-yes
Still in last-yes
Closing the gap-yes

You got that right, but the second half of the equation is costs (CASM 2Q).

CAL 11.25

NWA 11.0

AMR 10.88

DAL 10.22

% change in CASM year over year

CAL +9.6%

AMR +3.7%

DAL -2.3%

NWA -8.3%

 

[ponder]

Parker fired most of the management at the
old USAir didn't he? I think that's where some of
the synergies come from.

 

[9rj9]

thats why

thats why they don't want the merger, goodbye stock options and big exit bonus. Now they're using their employees to protect them. Rally cry "stand alone delta", ya after taking your retirement, i can't believe you listen to them. boring ? not.

 

[YourPilotFriend]

I don't know exactly how this going but, I would think that Parker knows US/DAL is a huge loser. The capacity change would put SWA/Jetblue unit costs at such an advantage. Personally, I think it is a ploy to force the price of DAL up for another carrier. That way someone like UAL will pay top dollar for delta. USair could then pick up NWA at a bargain price. US/NWA is a winner, much more than US/DAL. That's just my take on the situation, since no one has bid for NWA yet. The DOT would never allow UAL/NWA since the freedom rights would return to japan and the US gov would lose mucho dinero.