Dl Makes $137m

[lowecur]

Good job in a tough environment.

imp:​

http://biz.yahoo.com/pz/080716/146454.html

 

[727C47]

congrats !!!glad to hear it, i have some good amigos over there !

 

[spinproof]

What?????? Which is it????

writePost();new_york_times:http://www.nytimes.com/2008/07/17/business/17air.html
By ABHA BHATTARAI
Published: July 17, 2008




The loss of $2.64 a share compared with a profit of $1.59 billion a year ago in the quarter a year ago.
Much of the loss came as the result of one-time charges of $1.2 billion.

Excluding those special charges, Delta said it had a profit of $137 million or 35 cents a share. On that basis, analysts polled by Thomson Financial expected a profit of 10 cents.

The airline, which in April agreed to merge with Northwest, said its revenue rose 10 percent to $5.50 billion. Airlines like Delta have been hit hard by higher fuel prices. Oil prices, which closed at $138 a barrel on Tuesday, have doubled in the last year, and Delta has estimated it will pay an extra $4 billion for fuel this year.

Delta which is based in Atlanta, said the $1.2 billion in one-time charges stemmed from goodwill write-down, employee buyouts and the closing some airport facilities. Delta has also said that it plans to cut capacity in its domestic flights by 13 percent in the second half of this year.

Delta is waiting for its shareholders to vote on a possible merger with Northwest Airlines that, if approved, would create the world’s largest carrier. Both airlines filed for Chapter 11 protection in 2005, when fuel prices spiked in the wake of Hurricane Katrina and emerged last year.

in June, negotiators for pilots at Delta and Northwest Airlines said that they had a tentative agreement with Delta management on a joint contract to cover both pilot groups when the companies combine.
On Tuesday, they hit a 52-year low of $4 before closing at $4.67.

A headline in an earlier version of this article misstated the size of Delta’s loss. It is $1.04 billion, not $10.4 billion.

 

[spinproof]

Good job in a tough environment.

imp:​

http://biz.yahoo.com/pz/080716/146454.html

Oh I see how a loss can be reported as a gain....
Source: Delta Air Lines, Inc.

...but in the greater scheme of things when you're flush with cash what's a few Billion here and there!

 

[contrail67]

Delta swings to $1B loss, still beats view


News is saying a Huge loss....which one is it?

July 16, 2008 7:59 AM ET
advertisementdap('&PG=INVNWS&AP=1089',300,250);
Article tools

• 
  E-mail this article
• Print-friendly version
• Discuss this article

Stocks mentioned in this articleDelta Air Lines Inc (DAL) Stock Quote, Chart, News, Add to WatchlistNorthwest Airlines Corp (NWACQ) Stock Quote, Chart, News, Add to WatchlistRelated topicsEarnings Reports
Related news

• Stocks end mostly lower even as oil prices retreat
• Business Highlights
• Nasdaq 100 Leaders and Laggards: INFY WYNN UAUA
• Premarket Movers: Freddie Mac, Fannie Mae plunge
• Dollar slides to fresh low against euro

All Associated Press news
ATLANTA (AP) - Delta Air Lines Inc. says it swung to a hefty loss in the second quarter despite a strong increase in sales.
The results excluding one-time items still beat Wall Street estimates.
The Atlanta-based company also said Wednesday that it expects to achieve $2 billion in cost savings by 2012 from its acquisition of Northwest Airlines Corp.
For the three months ending June 30, Delta says it lost $1.04 billion, or $2.64 a share, compared to a profit of $1.59 billion a year ago when Delta emerged from bankruptcy protection.
Excluding one-time items, Delta says it earned 35 cents a share. Analysts polled by Thomson Financial expect a profit of 10 cents a share without items.
Delta says revenue rose 10 percent to $5.50 billion.

 

[~~~^~~~]

Spinproof:

Special items and one time charges are part of the profit and loss reporting, but not part of the profit and loss picture for the ongoing business.

For instance, lets say every month you make $10,000 and your bills are $2,500 giving you a $7,500 "profit" that you save & invest. In this same month, your daughter is getting married and she watches lots of the "E" channel. She decides to throw a bash of a reception and pay Brad & Angelina to attend. The bill for the wedding comes to $90,000.

If you evaluated that month, you have a $7,500 "profit" excluding the $90,000 bill for the reception. With the wedding, you report a loss of $82,500.

But hey, the kid is out of the house and your basic finances are sound.

In Delta's case, they separated several thousands of employees, which will help future profitability and prepare for the integration of NWA.

What some pilots are overlooking is that around half of Delta's fuel is hedged at $90 a barrell and those hedges start to run out in the next couple of quarters. Like SWA, DAL is still selling tickets for less than they cost. Also like SWA, DAL would be losing big money without the hedges.

While the performance at the top of its peer group is great, with nearly 100% load factors (EVERY seat has been taken on my flights lately) this business should be raking in the money if the market would bear the appropriate price level.

Most of the fix will require airlines like AirTran, Spirit, SWA and the others to either go the heck out of business, or price their product at a realistic level. A family friend got a round trip ticket on Spirit for $1 and was bragging about it and AirTran is still running $49 sales. The regulators need to realize that suicide is not competition.

In our business environment, Delta's JPWA is a good deal for labor. Most folks don't appreciate it for what it is in these times.

 

[spinproof]

Spinproof:

Special items and one time charges are part of the profit and loss reporting, but not part of the profit and loss picture for the ongoing business.

For instance, lets say every month you make $10,000 and your bills are $2,500 giving you a $7,500 "profit" that you save & invest. But, your wife wants to go live with a 25 year old cabana boy because you are working all the time.

When your divorce settles, you give your wife a $90,000 check.

If you evaluated that month, you have a $7,500 "profit" excluding the $90,000 divorce settlement. With the payment to the ex, you report a loss of $82,500.

In Delta's case, they separated several thousands of employees, which will helpfuture profitability and prepare for the integration of NWA.

What some pilots are overlooking is that around half od Delta's fuel is hedged at $90 a barrell and those hedges start to run out in the next couple of quarters. Like SWA, DAL is still selling tickets for less than they cost. Also like SWA, DAL would be losing big money without the hedges.

While the performance at the top of its peer group is great, with nearly 100% load factors (EVERY seat has been taken on my flights lately) this business should be raking in the money if the market would bear the appropriate price level.

Most of the fix will require airlines like AirTran, Spirit, SWA and the others to either go the heck out of business, or price their product at a realistic level. A family friend got a round trip ticket on Spirit for $1 and was bragging about it and AirTran is still running $49 sales. The regulators need to realize that suicide is not competition.

In our business environment, Delta's JPWA is a good deal for labor. Most folks don't appreciate it for what it is in these times.

Fins with all due respect thats crap! A gain is a gain and a loss is a loss! Period. I couldn't care less what the circumstances are!

The facts are , and have been stated by several economist, mergers are expensive and risky. Combine that with a down enviroment and the results are plain to see.

For you or anyone to play this as something it isn't is disingenious at best. The facts are the cost of this merger is being downplayed.

 

[Tanker Clown]

Hey fins, it wasn't too long ago that someone posted the fares from ATL to ORD from right off Delta's web site. The fare was cheaper than Greyhound. You are a fool. Maybe this business would be better if Delta and their sh!tty wages and low fares were out of the business. We got rid of Skybus, maybe with Delta gone this industry would be ok.

 

[labatt]

Spinproof:

Special items and one time charges are part of the profit and loss reporting, but not part of the profit and loss picture for the ongoing business.

For instance, lets say every month you make $10,000 and your bills are $2,500 giving you a $7,500 "profit" that you save & invest. In this same month, your daughter is getting married and she watches lots of the "E" channel. She decides to throw a bash of a reception and pay Brad & Angelina to attend. The bill for the wedding comes to $90,000.

If you evaluated that month, you have a $7,500 "profit" excluding the $90,000 bill for the reception. With the wedding, you report a loss of $82,500.

But hey, the kid is out of the house and your basic finances are sound.

In Delta's case, they separated several thousands of employees, which will help future profitability and prepare for the integration of NWA.

What some pilots are overlooking is that around half of Delta's fuel is hedged at $90 a barrell and those hedges start to run out in the next couple of quarters. Like SWA, DAL is still selling tickets for less than they cost. Also like SWA, DAL would be losing big money without the hedges.

While the performance at the top of its peer group is great, with nearly 100% load factors (EVERY seat has been taken on my flights lately) this business should be raking in the money if the market would bear the appropriate price level.

Most of the fix will require airlines like AirTran, Spirit, SWA and the others to either go the heck out of business, or price their product at a realistic level. A family friend got a round trip ticket on Spirit for $1 and was bragging about it and AirTran is still running $49 sales. The regulators need to realize that suicide is not competition.

In our business environment, Delta's JPWA is a good deal for labor. Most folks don't appreciate it for what it is in these times.

10 billion in losses since 2001 and you think other airlines business plans are suicidial and should go out of business. Pot meet kettle.

Good luck to all of us. Karma's a bitch and I wouldn't wish a layoff or shutdown on anyone.

"After reporting a $388 million dollar loss last month, the total losses for this company since January 2001 have been $10 BILLION DOLLARS. During this period, DELTA also cut 23,000 jobs in this country. Clearly, this level of loss cannot sustain itself indefinitely."

 

[Copydat]

Before you guys get too wound up read the news articles a little more. There was over a 1 billion dollar charge which was a non cash charge. I believe it was a write down of book value. The reason behind the descripancy in this thread is this charge. The wedding is not the best analogy. A better analogy would be taking a personal write down on your financial statement because your beater crash pad car has lost its value as compared to the last time you filled out a financial statement. Delta did report a profit when you exclude the non cash write downs. Good news is that we did not lose money excluding non cash charges. I hope the other airlines reporting are able to post similar or better results. Pilots will be much better off as a group if we can get the entire industry turned around.

 

[maxblast72]

What some pilots are overlooking is that around half of Delta's fuel is hedged at $90 a barrell and those hedges start to run out in the next couple of quarters. Like SWA, DAL is still selling tickets for less than they cost. Also like SWA, DAL would be losing big money without the hedges.

While the performance at the top of its peer group is great, with nearly 100% load factors (EVERY seat has been taken on my flights lately) this business should be raking in the money if the market would bear the appropriate price level.

Most of the fix will require airlines like AirTran, Spirit, SWA and the others to either go the heck out of business, or price their product at a realistic level. A family friend got a round trip ticket on Spirit for $1 and was bragging about it and AirTran is still running $49 sales. The regulators need to realize that suicide is not competition.

When looking at the big 3 airlines, Delta, American, and United, it definitely looks like Delta is doing the best. Delta operating income was about $300 million better than American's for the quarter. Also, looks like Delta is better hedged for the rest of the year than American.

Don't forget Airtran has about 1/2 of their fuel hedged the rest of year at an equivalent of about $2.90 a gallon. I think they said the value of our hedges was about $100 million. Not worried about selling 5 seats on a 117 seat airplane for $49 if that what it takes to get more traffic on website. If Delta was doing that great domestically, they wouldn't be reducing their capacity 10-15% domestically and removing the equivalent of 100 RJ from their fleet this fall.

Delta knows they have to shift to international, and have done a good job they moving the bigger airframes out of the domestic market. Their press release said they acheived their industry PRASM goal 1 year ahead of schedule (reaching 102% of industry PRASM). Thats why they are doing better than United or American.

 

[Minimaniac]

Good for Delta in being able to minimize the damage incurred by today's environment. But, a loss is a loss, cash related or value related. If my house loses 200,00 in value then sure, I agree my bank account is unchanged, but I am still out of luck when I go to buy a more expensive house. The gist of it is Delta is worth 1 billion less than it was last quarter. Call it what it is.

 

[maxblast72]

Pilots will be much better off as a group if we can get the entire industry turned around.

Pilots will be better off as a group if the weak airlines go out of business allowing better pricing power by the survivors. Then management can go after the passengers for revenue instead of employees for concessions.

 

[lowecur]

Spinproof:


What some pilots are overlooking is that around half of Delta's fuel is hedged at $90 a barrell and those hedges start to run out in the next couple of quarters. Like SWA, DAL is still selling tickets for less than they cost. Also like SWA, DAL would be losing big money without the hedges.

If oil swings to $100 bbl after Oct 15th (my cutoff date for major hurricane damage in Gulf), then some of the hedges may be under water or a wash. In either case, oil at $100 bbl will help the industry at the end of 08 and all through 09. The key will be each airlines ability to coordinate a steep reduction in capacity and still keep their head above water.

It's amazing that a US billionaire like Wilbur Ross invests $80M in India LCC - SpiceJet, but turns his nose up at airlines in this country. I think he wants to invest where labor is cheap. His reasoning is that oil is way overpriced and he sees little oil upside in this world financial environment.

If you want to invest in this industry here in the US, just wait until after 10/15/08, and place your bets on the probable survivors.....the ones that won't need a bailout.....as the Fed may just may not be able to help the airline industry and instead let foreigner's in the hen house.

imp: ​

 

[AA717driver]

Come on, guys! At least let's talk about something relevant that we UNDERSTAND. (Like chicks and beer...ok, at least beer. )

Even those who have MBA's among us and know the intricacies of corp. fin. don't REALLY know what's going on at a given carrier. It's a big shell game and you don't really know how a company is doing until they go bust or can't hide the cash anymore.

Plus, Delta has to put a smiley-face on their balance sheet or the regulators and BOD will sh!tcan the whole NWA deal and cost the management their bonuses.

I'm predicting AMR's Q2 report will look like the Nevada Test Site after the first above ground H-bomb test. Why? Because they NEED it to look that way. They're in Sec. 6 with a union they despise.

Now, maybe AB will put out a decent beer since the Belgians own them... TC

 

[lowecur]

Good for Delta in being able to minimize the damage incurred by today's environment. But, a loss is a loss, cash related or value related. If my house loses 200,00 in value then sure, I agree my bank account is unchanged, but I am still out of luck when I go to buy a more expensive house. The gist of it is Delta is worth 1 billion less than it was last quarter. Call it what it is.

It's a paper loss, like depreciation and goodwill. It's all accounting and used on their tax returns. They'd be stupid not to take advantage of the rules. All the airline's will do the same thing as they need it.

imp:​

 

[spinproof]

If oil swings to $100 bbl after Oct 15th (my cutoff date for major hurricane damage in Gulf), then some of the hedges may be under water or a wash. In either case, oil at $100 bbl will help the industry at the end of 08 and all through 09. The key will be each airlines ability to coordinate a steep reduction in capacity and still keep their head above water.

It's amazing that a billionaire like Wilbur Ross invests $80M in India LCC - SpiceJet, but turns his nose up at airlines in this country. I think he wants to invest where labor is cheap. His reasoning is that oil is way overpriced and he sees little oil upside in this world financial environment.

If you want to invest in this industry here in the US, just wait until after 10/15/08, and place your bets on the probable survivors.....the ones that won't need a bailout.....as the Fed may just may not be able to help the airline industry and instead let foreigner's in the hen house.

imp: ​

Funny you mention Wilbur Ross I was thinking along similar lines yesterday. Wilbur is a very conservative investor and I was shocked by this event.

My only conclusion is he sees oil stabilizing soon. Thats big! Please may it be so.

 

[Copydat]

Pilots will be better off as a group if the weak airlines go out of business allowing better pricing power by the survivors. Then management can go after the passengers for revenue instead of employees for concessions.

Wow - If you find it so easy to dismiss your fellow pilots it makes me hope that your airline does fold so that I can keep my job.

 

[~~~^~~~]

Good luck to all of us. Karma's a bitch and I wouldn't wish a layoff or shutdown on anyone.

I did not wish a shutdown on anyone. Can't you read? I have good friends at AirTran and seriously considered going there myself.

I was much more sympathetic to AirTran until they fired their new hires. When that happened, I sent the memo to the partners in my side business and we made the decision corporately that our Company will no longer fly AirTran.

Would you feel better if I found quotes from Spirit and AirTran's management to post? The reality is that they have to raise fares to survive. SWA is so well hedged that they intend to continue to sell tickets for less than they would realistically cost and I admitted Delta is only posting an operating profit due to hedges.

We are all flying on one engine with the flaps stuck at 40 and the gear down.

$1 fares on Spirit. How can you defend that?

 

[PCL_128]

Congrats to DAL! Very impressive in this current environment.

 

[PCL_128]

The regulators need to realize that suicide is not competition.

Very well said.

 

[av8tor4239]

From the Delta weekly specials Email:
Atlanta, GA (ATL) to Providence, RI (PVD)$119

From the Greyhound Bus website:
Departing: Jul 22, 2008
From: Atlanta, GA
To: Providence, RI
Miles: 1134
Schedule: 1066
At: 02:30am

Select Fare Type
PurchaseFare TypeQtyPassengerEachTotal Refundable Fare 1
Adult
$167.00
$167.00 Non-refundable 1
Adult
$150.00
$150.00
From Amtrak webstie:

Atlanta, GA (ATL) To Providence, RI (PVD) SelectServiceDepartsArrivesDurationAmenitiesSeats/
Rooms $271.00 20 Crescent

Atlanta, GA
(ATL)
8:21 pm
22-JUL-08 New York, NY
- Penn Station
(NYP)
2:02 pm
23-JUL-08 17h 41mDining car, Lounge, Checked baggage 1 Reserved Coach Seat
Other Options Sold Out 176 Northeast Regional

New York, NY
- Penn Station
(NYP)
3:30 pm
23-JUL-08 Providence, RI
(PVD)
7:17 pm
23-JUL-08 3h 47mSnack car 1 Reserved Coach Seat

 

[~~~^~~~]

The facts are , and have been stated by several economist, mergers are expensive and risky. Combine that with a down enviroment and the results are plain to see.

For you or anyone to play this as something it isn't is disingenious at best. The facts are the cost of this merger is being downplayed.

They are revising their figures in a positive direction. Either something is going better than planned, or they were too conservative, or all this is eyewash.

Delta today doubled its target for new revenue and savings from the planned merger with Northwest Airlines Corp. to $2 billion, and said it will pull 30 more regional jets out of service to save on fuel. ... Delta said its profit was $137 million for the quarter, or 35 cents a share.

New Savings Target
The carrier created $12.3 billion in goodwill when it left court protection in April 2007. That accounting step reflected the excess value of the reorganized company over the estimated fair market value of its assets at that time. Delta wrote down about half of its goodwill in the first quarter.

Delta's new savings target for the merger compares with its April goal of $1 billion. Analysts including UBS Securities LLC's Kevin Crissey have said the previous target fell short of necessary cost cuts.

One-time merger integration costs will be $600 million over three years, Delta said today, less than the $1 billion it estimated in April.

Delta will park 100 regional jets after the peak summer travel season is over, up from its earlier goal of 70. Delta is also pulling as many as 20 of its larger mainline planes out of service as it tries to reduce domestic seats by 13 percent by the end of the year to lower costs.

So far what has been stated has been accurate (with the exception of Anderson's statement that he wasn't here to do a merger and subsequent announcements that the merger was off). I trust Delta's management, but am not as sure of the work done by the outside consultants. In particular, I am not a fan of McKinsey's "work."

 

[spinproof]

"Delta will park 100 regional jets after the peak summer travel season is over, up from its earlier goal of 70. Delta is also pulling as many as 20 of its larger mainline planes out of service as it tries to reduce domestic seats by 13 percent by the end of the year to lower costs."


I hear you brother...so to save money on the merger you just cut more employees???

 

[~~~^~~~]

From the Delta weekly specials Email:
Atlanta, GA (ATL) to Providence, RI (PVD)$119

When I go to the Delta web site I get $1,388 to $1,578 for one of three ASA flights daily.

Mainline Delta does not seem to serve PVD. Best fare is $1,076 through JFK on Comair.

You probably did get the e-mail, I don't doubt you. But if they are doing that to throw away last minute inventory you can bet some of that service will be cancelled this fall.

They should consider using some RJ's to cover misconnected mainline passengers. What is the cost of 50 hotel rooms, meal vouchers, lost bags and ill will? Seems like they could use some of that paid for flying time to pick up the 50 to 100 extra people always standing around the gate in Vegas, San Fran, Regan National, etc...

Load factors this summer have been very near 100% on most flights. There is no make up room when something cancels. The RJ's flying is paid for, they go everywhere, Delta has scheduling control... why not?

 

[spinproof]

Congrats to DAL! Very impressive in this current environment.

Yeah very impressive..."Delta will park 100 regional jets after the peak summer travel season is over, up from its earlier goal of 70. Delta is also pulling as many as 20 of its larger mainline planes out of service as it tries to reduce domestic seats by 13 percent by the end of the year to lower costs."

Your ALPO dollars at work!...or should I say in a coma!

 

[maxblast72]

Wow - If you find it so easy to dismiss your fellow pilots it makes me hope that your airline does fold so that I can keep my job.

If my airline folds because of a bad business plan and folds, and your airline benefits because of it, then so be it. I can only blame myself for having my head in the sand and not having my resume out to airlines that have better business plans.

If bad business plans continued to get propped up by all sorts of means, then the 100,000 airlines pilots in this country will all continue to suffer instead of just 5,000-10,000. We got Eastern pilots pilots here at Airtran (both sides of the strike) that suffered after the shutdown while Delta and USAir pilots (major East Coast players) benefitted in the mid 1990's when the economy gained strength.

 

[PCL_128]

Yeah very impressive..."Delta will park 100 regional jets after the peak summer travel season is over, up from its earlier goal of 70. Delta is also pulling as many as 20 of its larger mainline planes out of service as it tries to reduce domestic seats by 13 percent by the end of the year to lower costs."

Your ALPO dollars at work!...or should I say in a coma!

As far as I'm concerned, parking fuel-guzzling replacement jets is a good thing.

 

[spinproof]

As far as I'm concerned, parking fuel-guzzling replacement jets is a good thing.

...and the ALPO pilots that go with them? That's OK with you,huh PFT boy?

 

[~~~^~~~]

If oil swings to $100 bbl after Oct 15th (my cutoff date for major hurricane damage in Gulf), then some of the hedges may be under water or a wash. In either case, oil at $100 bbl will help the industry at the end of 08 and all through 09. The key will be each airlines ability to coordinate a steep reduction in capacity and still keep their head above water.

If you want to invest in this industry here in the US, just wait until after 10/15/08, and place your bets on the probable survivors.....the ones that won't need a bailout.....as the Fed may just may not be able to help the airline industry and instead let foreigner's in the hen house.

imp: ​

Lowcur:

You are right. Some are saying that this DAL/NWA deal is worth doing because it puts the Company #1 at the bail out table. But, as you point out, Delta already told AirFrance/KLM to keep their money for now.

With either party in office I would think it would be tempting to let the French bail out the US based "World's Largest Airline."

I hope we don't go there for a variety of reasons. For starters, I don't want ALPA negotiating 777 and A330 scope with the French on the top end.

A lot will come together in October. In addition to the hurricane season we probably have a new administration in Washington. Much of the market malaise is driven by what Bill Clinton would have called a "funk" that existed when Senior left office. The failure of the dollar is a result of bad policy and loss of faith. A new administration will probably restore some faith and might fix policy.

I'd be getting out of oil right now, but I said that months ago and was wrong then.