Notes from the Delta Conference Call...

[Sedona16]

16. Money is being spent on the electronic bag tracking system and this continues to be a top priority to be top of the industry.

 

[Sedona16]

17. Subsidiary business will continue to produce a significant amount of revenue such as:

Cargo
Maintainence services
Selling frequent flyer miles
Selling ala cart revenue generators.

LCC will be operating at a disadvantage with inability to grab much if any premium revenue.

 

[Sedona16]

18. Fuel Hedging:

Systematic

Delta is currently using a combination of call options, swaps and collars. Most of the current swaps and collars will be out by second quarter 2009.

Currently purchasing fuel hedges for 2010.

 

[Sedona16]

19. Current aircraft orders (20) not inlcuding 787's

777, 737-700 and CRJ900

No major refleating at Delta. They are content with what is on property and adding a few airframes as it makes sense but no big captital expenditures in the near term and refleating is still quite some time out.

 

[Sedona16]

20. Pension funding is an increasing expense (presumably part of this is the now inherited NWA pilots pensions).

 

[Sedona16]

21. There are 80 hotels that are already shared by Delta/NWA crew....more on the way.

 

[Sedona16]

22. I kept hearing "getting the costs out" and referring to aircraft and people. Of course the non pilots are being offered early retirement programs. I'll let everyone here connect their own dots on how the costs with airplanes and pilots we dont need will be removed.

 

[Sedona16]

Thats about all I got but I was listening loosely. Anybody else care to chime in with your thoughts please do.

 

[ACL65PILOT]

More to come!

 

[Sedona16]

OK I checked the slides and the aircraft still coming are

6 777
6 737-700
8 CRJ900

A couple other points I thought were worth noting from the slides. Based upon the revenue/profits debt will be paid down very rapidly...from its current 15 billion (this is total combined debt of the two carriers) down to 6.2 billion within three years. Liquidity will stay high maybe even increasing from the almost 7 billion in the bank right now (including the 1 billion received from AMEX today). Also there will be very little taxes to be paid with all the write downs carried over from the past couple years (almost 15 billion when combining both DAL and NWA).

 

[bravodude]

No thread specifically on this yet so I thought I would start one. I am still listening to it now but key points I have so far or at least what I interpret:

1. There is something in play for an Alaska purchase.
2. Anderson spoke of the need for fleet consolidation (I think the 747's will go away within five years).
3. Anderson said pilot productivity in the form of block hours per pilot will be industry leading. I dont like the sound of that.

Industry leading productivity! I would like to see how you compare to SWA in terms of productivity.

 

[ACL65PILOT]

increased ALV!

 

[NuGuy]

Also there will be very little taxes to be paid with all the write downs carried over from the past couple years (almost 15 billion when combining both DAL and NWA).

Heyas Sedona,

THIS is a key point, and one of our guys was pointing out that the tax credits alone that NWA had paid for the entire deal.

Nu

 

[Scope out RJ's]

Industry leading productivity! I would like to see how you compare to SWA in terms of productivity.

Its waaaaaaay past your bed time junior.
Good night!

 

[GogglesPisano]

I heard the comment about 29 minutes in regarding Alaska Airlines. Actually RA's response regarding a merger was, "no comment." Not even an, "I'm not here to merge with Alaska Airlines."

It sounds like it will happen next year.

 

[ACL65PILOT]

Yep, it will happen sooner than you think. I even think that there are one or two on deck after AS!

 

[GogglesPisano]

Great. Now I work for the Borg!

 

[Sedona16]

I heard the comment about 29 minutes in regarding Alaska Airlines. Actually RA's response regarding a merger was, "no comment." Not even an, "I'm not here to merge with Alaska Airlines."

It sounds like it will happen next year.

I agree. Very telling indeed. Most CEO's would try to throw you off if the purchase was not immenent saying "We dont see an merger with Airline X anytime in the near future" (knowing they are technically accurate since things are still many months out). In this case I dont think RA could even say that because it is probably well under way and he would look silly even saying this when its announced in a couple months Delta is talking to Alaska.

One other point regarding a purchase of Alaska, if I'm not mistaken Alaska has around 1 billion in the bank so its one of those buy a company with their own money deals (ie pay one billion for them then go take the one billion Alaska has in the bank and throw it back in with the six billion Delta has left in the bank after the purchase)....you just got a company for free. Oversimplification I know but you get the idea. With the growth Delta has planned for LAX it makes alot of sense.

 

[Chief Pilot]

Great. Now I work for the Borg!

Haha...thanks for that one. Made me laugh. It will definately be an interesting next few months at both companies.

 

[Fly4hire]

Yep, it will happen sooner than you think. I even think that there are one or two on deck after AS!

Don't we get to recover from this SLI hangover first?