• NC Software is proud to announce the release of APDL - Airline Pilot Logbook version 10.0. Click here to view APDL on the Apple App store and install now.

AAI 107 million loss

gt1900

Well-known member
Joined
Feb 12, 2005
Posts
609
Total Time
37
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

Well-known member
Joined
Dec 6, 2001
Posts
550
Total Time
71717
great...... good revenue mgmt.... nice job MCO...
 

maxblast72

Well-known member
Joined
Jun 5, 2006
Posts
931
Total Time
9000+
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.
 
Last edited:

Max Powers

Well-known member
Joined
Oct 26, 2005
Posts
1,136
Total Time
9000+
"- 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

Well-known member
Joined
Nov 21, 2002
Posts
15,296
Total Time
5000+
"- 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

Well-known member
Joined
Feb 4, 2002
Posts
1,021
Total Time
5100
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

Well-known member
Joined
Feb 4, 2002
Posts
1,021
Total Time
5100
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

Well-known member
Joined
Oct 26, 2005
Posts
1,136
Total Time
9000+
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

Well-known member
Joined
Nov 21, 2002
Posts
15,296
Total Time
5000+
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.
 

maxblast72

Well-known member
Joined
Jun 5, 2006
Posts
931
Total Time
9000+
Do you think DAL could just pull out of the Airtran markets?
No, but right now Delta is reducing domestic capacity except markets where they overlap with Airtran (which Delta is flat to slightly up). Fornaro did say alot of those reductions were in Cincinatti and Salt Lake City, and that he didn't think Detroit would fare real well during the merger process due to the Michigan economy.

I think Delta with Richard Andeson at the helm has taken the philosophy not to give Airtran any breathing room. Unless they increase the frequency in the overlapping markets (2 RJ flights per mainline flight), replacing MD-80s and 737s with large RJ's would be a reduction in ASM on those routes.

I found Horizon's CASM in Alaska earnings report (seem to be the only airline that breaks out the wholly owned regionals). For a fleet of 21 CRJ-700's 34 Dash 8-400's and 12 Dash 8-12's, the average CASM for the fleet was $0.24/mile. That is over twice Airtran's total CASM even with the -400 skewing the numbers lower (since they are supposed to be 30% more fuel efficient than they RJs they replace). I would imagine Fornaro would rather compete with RJ's over Delta's MD-80s or 737's.
 
Last edited:

maxblast72

Well-known member
Joined
Jun 5, 2006
Posts
931
Total Time
9000+
Nice presentation for trying to make the sale.

Of course Bombardier probably uses Mesa's labor costs for determining their CRJ-900 CASM and Southwest's labor costs for determining the 135 seat LCC CASM. Also, like to see the numbers brought up to our average stage length of 700 miles. And at what Jet A price assumption do you think their using for their models? I doubt it is over $2/gallon.
 
Top