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Cash Position of Airlines (USA Today Article)

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Delta and US Airways are moving close to what Neidl calls the bankruptcy/liquidation danger zone based on their cash and short-term investments at the end of June as a percentage of their revenue over the previous 12 months. The danger zone, he says, is a ratio of 10% or less. Delta's cash-to-revenue ratio on June 30 was 16.1%, while U.S. Airways' was 17.4%. Both are addressing that issue.

.

As I read the article, I was puzzled by the use of the Cash vs. Revenue ratio as I had never heard of it and didn't really see what that has to do with anything since revenue is far from stationary.

Not being a fincial whiz by any means, I asked the other F/O (spooky smart with an MBA to boot) about it..... Long pause..... "the what? I've never heard of the use of this ratio"

Be careful when idiots who need their names in the paper come bearing stats.
 
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Cash on Hand as Mulitiple of Monthly exspense is another ratio that is analyzed. *NWA is around 3.4, second best of the 10 biggest carriers and DAL is last at 1.5 DAL has $2.7 Billion debt due 2009-10. NWA has $900 Million. When large corporations hit 10% unrestricted cash on hand to revenue, they are at CH-11 levels. DAL has less than $2.0 Billion unrestricted cash on hand for a $18 Billion Revenue Company9(Cash to Revenue Ratio) Dangerously close to CH-11/7. They brag about $4.0 Billion liquidity because of a $2.0 line of credit. They DON'T need to take on any more debt. They are a sinking pirate ship trying to board and takeover NWA's $3.7 Billion (unrestricted $$) ship of gold to stay afloat. *Ref 2008 ALPA E & F A
 
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Cash on Hand as Mulitiple of Monthly exspense is another ratio that is analyzed. *NWA is around 3.4, second best of the 10 biggest carriers and DAL is last at 1.5 DAL has $2.7 Billion debt due 2009-10. NWA has $900 Million. When large corporations hit 10% unrestricted cash on hand to revenue, they are at CH-11 levels. DAL has less than $2.0 Billion unrestricted cash on hand. Dangerously close to CH-11/7. They brag about $4.0 Billion liquidity because of a $2.0 line of credit. They DON'T need to take on any more debt. They are a sinking pirate ship trying to board and takeover NWA's $3.7 Billion (unrestricted $$) ship of gold to stay afloat. *Ref 2008 ALPA E & F A

The fact is DAL Inc needs this deal with NWA far more NWA does with DAL. This analysis vindicates what has been said behind closed ALPA doors for months.

DAL may bring more pilots and more WB aircraft than NWA, but NWA is bringing the cash, operating efficiencies, and liquidity to survive and prosper, and it is obvious NWA is not being "rescued" by DAL

As far as not going further in debt they are not - despite the claims of acquiring NWA it is going to be a swap stock. How that qualifies as an acquisition must be WS speak. For those that still claim that we are being bought, I simply challenge you to show via SEC public documents where (when) the money for the purchase is being exchanged.

We are all bringing different, but equally valuable assets to the deal - let's put this my airline is bigger, better than yours stuff to bed - we are going to be a far stronger airline together than we will be as separate entities.
 
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Freight Is Great!

Where Is The Ranking???????

USA Today got this info from Aviation Week & Space Technology, the reporter neglected to report the strengths of the Cargo sector.



By James Ott
Publicly held air cargo companies outshined their passenger-carrying peers in the 2008 Top-Performing Companies study, and they appear to be better prepared for a hazardous future of fuel highs and economic lows.

United Parcel Service (UPS) heads the cargo rankings over rival FedEx and growing freight operator Atlas Air Worldwide Holdings. UPS scored a remarkable 99 out of 100 in the financial health category, as it has in each of the past eight years. The company ended the year with a cash and accounts receivable balance of $10.4 billion.

FedEx concluded the year with a $5.5-billion cash stockpile. Its financial health score of 92 ranks it second just above Atlas at 88. The financial strengths of these companies lead Aviation Week's panel of experts to predict that UPS and FedýýEx in particular will continue to make acquisitions in cargo, freight and related sectors.

Further consolidation is expected this year. DHL is negotiating with UPS to handle its lift needs, which would shift DHL express and cargo from AStar Air Cargo and ABX Air.

In general, operators are already feeling a revenue pinch from slowed economic activity as seen in reports from the first two quarters of this year. Unlike passenger carriers, freight companies have demonstrated an ability to adjust capacity more quickly to meet demand. In the recent past surcharges to compensate for fuel hikes have been applied, but managers may be testing the limits of price elasticity.

Despite economic lulls, express shipments are still a necessity, though airlift costs may cause some businesses to opt for surface transportation.

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EVERYTHING! NWA average F/A bra size is 38DD. Average DAL F/A is 34B, all natural.
 
Cash on Hand as Mulitiple of Monthly exspense is another ratio that is analyzed. *NWA is around 3.4, second best of the 10 biggest carriers and DAL is last at 1.5 DAL has $2.7 Billion debt due 2009-10. NWA has $900 Million. When large corporations hit 10% unrestricted cash on hand to revenue, they are at CH-11 levels. DAL has less than $2.0 Billion unrestricted cash on hand for a $18 Billion Revenue Company9(Cash to Revenue Ratio) Dangerously close to CH-11/7. They brag about $4.0 Billion liquidity because of a $2.0 line of credit. They DON'T need to take on any more debt. They are a sinking pirate ship trying to board and takeover NWA's $3.7 Billion (unrestricted $$) ship of gold to stay afloat. *Ref 2008 ALPA E & F A

I can't tell if you are responding to my post or not.
What you write makes complete sense.

The point I was trying to make is who cares what any ratio is when it used past information? Is revenue from the past 12 months necessarily a predictor of future results? This Neidl guy is simply creating statistics in an effort to prove what he believes.

I do agree that this is going to be a scary deal for DAL/NWA to pull off. In my mind (soaked with rum as it is) this is not a good time to be taking on the added expense of a merger.

Hopefully, I am wrong but this merger could easily end up a complete disaster.

No flame intended. (I'm using all of mine to burn United to the ground)
 
I can't tell if you are responding to my post or not.
What you write makes complete sense.

The point I was trying to make is who cares what any ratio is when it used past information? Is revenue from the past 12 months necessarily a predictor of future results? This Neidl guy is simply creating statistics in an effort to prove what he believes.

I do agree that this is going to be a scary deal for DAL/NWA to pull off. In my mind (soaked with rum as it is) this is not a good time to be taking on the added expense of a merger.

Hopefully, I am wrong but this merger could easily end up a complete disaster.

No flame intended. (I'm using all of mine to burn United to the ground)

Huh? I guess you forgot that we had an offer from Air France to help pay for the merger, and we said no. What does that mean? IF we ever needed help, good ole Air France would fund us. We obviously didn't think it was necessary. That is like having a bank nearby, at anytime. They will help us out if we need help in the future too, but instead we will merge with NWA and financially we will be more sound. And, we will dominate the world and become THE BORG. And best of all, we will all wear hats and double breasted uniforms, and chicks will "dig us."


Don't get tied up in a knot rumrunner, you may poop your pants...


Bye Bye--General Lee
 

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