AAI 107 million loss

[gt1900]

Didn't see this coming. At least not that much. Includes a 41.5 million charge due to fuel hedging.... I wonder how many other things they written off to show a big loss, since they want folks to take a pay cut..

 

[mnboyev]

great...... good revenue mgmt.... nice job MCO...

 

[maxblast72]

Summary of earnings conference call:

- Down to 136 Aircraft by year's end (3 more sales will be finalized in 4th qtr -financing not an issue due to buyers being cash buyers).
- Possible sale of a few more next year at the right price (although they said trying to reduce fleet to bring utilization of remainder of fleet back up to 11 hrs/day which is their prefered utilization).
- 2009 ASM down to 3-7%.
- 7 Aircraft scheduled for delivery in 2010 but they are looking at whether that is smart or not with the current economic environment.
- 53 Deliveries total 2010-2015
- $10 million gain from the sale of 3 aircraft in the qtr.
- 3rd Qtr RASM up 5%, 4th Qtr expected up 7-9%
- Unrestricted cash down to $318 million, restricted cash up to $82 million (credit card revised agreement)
- $2.85-2.90 4th quarter estimated fuel cost (obviously higher than spot market price due to some upside-down hedges).
- Sees Delta's capacity flat to slightly up in competing markets although he said that costs Delta alot more than it costs Airtran.

Good news:
- Fuel's rapid drop will help us more than others due to fact that over 50% of our costs are fuel.
- Fornaro predicts less ability by other carriers to subsized domestic losses with international profits as the international market slow down.
- Have unwound some of our hedges (which probably cost us in the 3rd qtr) so that only 30-40% of our Nov-Dec 2008 fuel is hedged and 35% of our 2009 fuel is hedged. This will allow us to start to see the benefit of lower fuel prices going forward.

 

[Captjiggles]

I miss Joe Leonard

 

[Max Powers]

"- Sees Delta's capacity flat to slightly up in competing markets although he said that costs Delta alot more than it costs Airtran."

Hmmmmm....we are going to see even more and more compass, mesaba, pinnacle, and the likes with their brand new 90 seaters which have costs significantly lower than our 717 and 737s. Not good.

They are confident going forward????

 

[PCL_128]

"- Sees Delta's capacity flat to slightly up in competing markets although he said that costs Delta alot more than it costs Airtran."

Hmmmmm....we are going to see even more and more compass, mesaba, pinnacle, and the likes with their brand new 90 seaters which have costs significantly lower than our 717 and 737s. Not good.

They are confident going forward????

Those regionals don't have 90-seaters. Their biggest airplanes are fitted with 76 seats. On a CASM basis, they aren't cheaper than us.

 

[Full of LUV]

Summary of earnings conference call:


- Sees Delta's capacity flat to slightly up in competing markets although he said that costs Delta alot more than it costs Airtran.

Good news:

- Fornaro predicts less ability by other carriers to subsized domestic losses with international profits as the international market slow down.

I thought SWA and Airtran set the prices for their markets....why should it cost Airtran to lose "less" than Delta if they set the price for a market? Why not at least put prices where a profit can be made by Airtran and a smaller loss to Delta?

 

[Full of LUV]

Its the feed....

Summary of earnings conference call:

- Fornaro predicts less ability by other carriers to subsized domestic losses with international profits as the international market slow down.

Unfortunately for Airtran, what you see as your "market" Delta sees as necessary feed for its international "market". I believe Pan Am taught the industry that a mainline carrier serving international destinations without its own source of feed to the hubs will be at the whim of the other "domestic" carriers feed. Do you think DAL could just pull out of the Airtran markets?

 

[Max Powers]

Those regionals don't have 90-seaters. Their biggest airplanes are fitted with 76 seats. On a CASM basis, they aren't cheaper than us.

I hope your correct but the crj 900 has 83 seats I think and XJ and 9e operate them for nwa and delta respectively. I heard the casm for the crj900 was about at the same casm as a 757 with 200 seats. That may have been before fuel was at 80 plus a barrel.

 

[PCL_128]

I hope your correct but the crj 900 has 83 seats I think and XJ and 9e operate them for nwa and delta respectively. I heard the casm for the crj900 was about at the same casm as a 757 with 200 seats. That may have been before fuel was at 80 plus a barrel.

Delta and NWA scope limits their feeders to 76 seats. Those -900s are only fit with 76 seats, even though they can hold more. When I was at Pinnacle for the first few years, NWA scope limited most of our airplanes to 44 seats. We had CRJ-200s with 6 seats torn out and replaced with closet space to meet scope requirements. They've had to do the same thing with their -900s. There are no 83-seat airplanes being flown by regional feeders for either NWA or Delta.

As for CASM, yes, with a full 90 seat configuration, the -900 would be equivalent to our CASM. But, with only 76 seats, their CASM is significantly higher than ours.