Delta Q2 Profits

[SpauldingSmails]

http://www.marketwatch.com/story/delta-air-lines-profit-up-17-as-traffic-rises-2014-07-23

So far, so good. Apparently fueled by domestic bookings.

 

[Dornier 335]

Excuse you! This is GL'S job. You just spoiled his moment!

 

[General Lee]

Another great thing so far is that DL has poured almost $440 million into the profit sharing pool, after Q1 and Q2. Last year the total was $505 million for the whole year, and that equated to a Feb 14th check equivalent to about 8.6% of your W2. The first two quarters are usually weaker than the last two. So, things are looking good, and that profit sharing check also has a DC Fund contribution of 15% on top of that too. So far, so good!


Bye Bye---General Lee

 

[Mercyful Fate]

Holy hell, those 717's have changed the game!!

 

[General Lee]

Holy hell, those 717's have changed the game!!

You bet, but here's some highlights from the Q2 conference call this morning, via A. Berri from Benzinga dot com:



Highlights From The Call:

Delta announced 9 percent of top line growth for the quarter and 1.4 billion pre tax profit.

Passenger revenue increased by $772 million (nine percent) for the quarter.
$100 million in buy back in shares, Delta repurchased 12.4 million shares in the quarter.

4 points margins expansion, $1.5 billion free cash flow
11 percent improvement in baggage performance.

Delta's management was proud to announce the airliner currently obtains the lowest capital cost per aircraft in the sector. Ex fuel gases was flat for the quarter.

Delta JD reported 30 percent capacity rate.
Non-fuel cost 3 percent annually, previous goal given. Non-fuel cost decreased by 2 percent for each of the last four quarters.

Fuel expense declined by $168 million due to crude hedge benefits. Delta's average fuel price was $2.93 per gallon for the June quarter, including $99 million in settled hedge gains. Delta's operations at the refinery made a $13 million profit for the June quarter, $64 million increase year-over-year. Fuel expense decreased by 40 million in the quarter.

Forecast operating margin between 15 to 17 percent in Q3.

In a recent study, 85 percent of travel managers plan to continue to use delta for future flights.

Total unit revenues increased by 7 percent, while domestic unit revenue grew 6 percent. More than 60 percent of business is domestic.

Latin unit revenues were flat and demand weakness around the World Cup.

In pacific network restructuring decreased due to weaker yen. Delta holds a yen hedge of $130 million.

Delta plans to improve international capacity.

Capacity situation in transatlantic to be a concern reporting 8 percent unit revenue.

Increased intra Asia flights by 10 percent.

Operating expense increased 3 percent due to profit sharing in the quarter.

Maintenance savings reducing maintenance costs by $60 million.

Delta investing in new technology with new systems for report agence.

Current prices of crude hedged should add another $100 million in benefit.

Guidance for the second half of 2014 to maintain capex in the 2 to 3 billion range.

Joint venture in winter quarter (second half of Q4 to first half of Q1) was between 1 to 3 percent nearly half of its previous amount.





Bye Bye---General Lee

 

[Crash Pad]

Just wait until the hedges run out!

 

[General Lee]

Just wait until the hedges run out!

Do you mean the hedges on the Yen? They are worth $130 million I believe. Be more specific...


Bye Bye---General Lee

 

[RJLoser]

Sorry GL: Not as good as American/Airways... 1.5B

 

[SpauldingSmails]

Sorry GL: Not as good as American/Airways... 1.5B

Although still edged out by AAG, the net profit numbers were considerably closer.

 

[johnsonrod]

Sorry GL: Not as good as American/Airways... 1.5B

Parker's bar tab will hit at least $200 million. Gotta factor that in.

 

[waveflyer]

AA's is a staggering number for 1 qtr

Hoping it all equates to some stability

 

[BILL LUMBERG]

Sorry GL: Not as good as American/Airways... 1.5B

Not to dump on this great AA profit report...but they are taking writeoffs on retirement airplanes, receiving airplanes with deferred 4 year payments on leases (bankruptcy insisted) and all they have done is painted a few airplanes, broke ground on an OPS center and haven't done much else of substance to merge the two (maybe three) airlines.

IMHO Once the merge takes hold they will not show as huge a profit until its completed and they will make good cash afterwards. UAL is an example of the pitfalls of the middle of a merger.

 

[General Lee]

Sorry GL: Not as good as American/Airways... 1.5B

How's your profit sharing check going to be? I bet not as good as the DL pilots....(didn't you give it up?)


Bye Bye---General Lee

 

[skywiz]

How's your profit sharing check going to be? I bet not as good as the DL pilots....(didn't you give it up?)


Bye Bye---General Lee

General Lee,

In case anyone hasn't told you lately, you are awsome. You probably make more money than anyone on this board. Way to go. We are all so happy for you.

SW

 

[General Lee]

General Lee,

In case anyone hasn't told you lately, you are awsome. You probably make more money than anyone on this board. Way to go. We are all so happy for you.

SW

You might be right, especially with the extra money from the profit sharing. Thanks for noticing. Good aye!


Bye Bye---General Lee

 

[skywiz]

You might be right, especially with the extra money from the profit sharing. Thanks for noticing. Good aye!


Bye Bye---General Lee

No prob General, I'm glad you can validate your ego by talking about how much money you make on an internet message board. Good day sir.

 

[Mercyful Fate]

No prob General, I'm glad you can validate your ego by talking about how much money you make on an internet message board. Good day sir.

Lotsa money to be made flying a desk like Genital....

 

[waveflyer]

How on earth was profit sharing given up in this environment???

I'm just learning about this- anyone giving up profit sharing anytime since the delta/now merger has got to be dumber than a rock...
I get the Easties, but really? APA??

 

[General Lee]

How on earth was profit sharing given up in this environment???

I'm just learning about this- anyone giving up profit sharing anytime since the delta/now merger has got to be dumber than a rock...
I get the Easties, but really? APA??

Wave, even the DL pilots gave up partial profit sharing. It used to be 15% of the amount placed into the total employee profit sharing amount. Then the union agreed (and pilots voted for) a deal to increase pay but decrease the amount of profit sharing. Now, the pilots get 10% of the pie up to $2.5 billion, and then 20% of the pie for the amount OVER $2.5 billion. The problem is management actually pays for the increase in normal pay rates with the given up profit sharing, costing them little extra. When companies make Billions in profits, there shouldn't be give backs by pilots, which has happened to the AA/ US pilots, in a larger amount.


Bye Bye---General Lee

 

[waveflyer]

I guess it's all negotiation and reading the tea leaves: guaranteed money vs the uncertainty of profit sharing...
Consolidation though... The environment changed.
That said, many a pilot group, SWA included has been burned by putting too much faith in profit sharing.