Delta expects profitable year and 2Q despite expected 1Q loss

Sedona16

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http://www.bizjournals.com/cincinnati/stories/2009/03/09/daily30.html

Delta Air Lines Inc. told investors Tuesday it will post a profit for 2009 despite warnings of sizable loss in the first quarter on slumping revenues, upside-down fuel hedges and weakened passenger demand.
Delta President Ed Bastian said the Atlanta-based carrier’s operating revenues are expected to shrink 14 percent in the first quarter, while passenger revenues are expected drop 10 percent compared to the first quarter of 2008 because of slumping flight demand.
The carrier also said Tuesday it would further reduce its international capacity 10 percent , including an 11 percent to 13 percent cut to Trans-Atlantic capacity starting in September, while Trans-Pacific capacity will be down 12 percent to 14 percent compared with winter 2008.
The carrier has already implemented a 10 percent cut to domestic capacity and a 3 percent to 5 percent draw down in international capacity.
Delta (NYSE: DAL) pinned much of its turnaround efforts coming out of bankruptcy on traditionally lucrative international growth, but has had to pare its capacity as global travelers pull back.
Bastian said in the first quarter of the year – typically the weakest for most carriers – Delta also will face the heaviest losses related to “out-of-the-money” fuel hedges, which will carry over in some degree into the second quarter. Many carriers, like Delta, hedged their fuel purchases prior to the recent precipitous decline in prices.
Delta lost $8.9 billion in 2008, largely because of a one-time $7.3 billion non-cash charge, rewards tendered to its employee equity program and upside-down late-season fuel hedging.
Delta said earlier Tuesday in a memo to employees that in addition to the 2,100 employees who recently opted for early-out and retirement packages, the airline now has to “reassess our staffing needs” in the wake of the international route cuts. Delta did not mention specific job cut goals.
Bastian did not give guidance on potential losses for first quarter 2009 in his remarks to investors.
Still, despite slacking demand, dipping revenues and penalties from fuel hedging, Bastian said the carrier will be profitable in the second quarter and “we are expecting this year to be a profitable year.”
Bastian said the carrier boasts the best revenue performance and best cost structure of major United States-based airlines, and will see a substantial benefit from expiring fuel hedges and synergies from its merger with Northwest Airlines.
Delta will realize a $500 million savings related to the merger for 2009 and the carrier is moving as fast as possible to raise that figure to $2 billion annually once the carriers are totally combined, Bastian said.
As the economy has soured, airlines have struggled to maintain liquidity. Bastian said Delta should meet its guidance of $7 billion in liquidity by the end of the year.
Discussing the progress of Delta’s assumption of Northwest, Bastian, who is serving as Northwest’s CEO during the merger, said the combination of the two carriers is going “very, very smoothly.” The carrier hopes to receive its Single Operating Certificate from the Federal Aviation Administration by the end of the year.
Representation and seniority integration issues have been resolved for 25 percent of Delta’s more than 70,000 employees, including its pilots and mechanics. Ground workers and flight attendants from the carriers’ pre-merger work groups have not been integrated.
Twenty-four Northwest jets are now bearing Delta livery, with a total of 300 to be converted to Delta interiors and exteriors by year-end.
Executives are in the process of “rightsizing” the combined carrier’s supply of aircraft, moving wide-body jets to long haul points of origin and narrow-body planes to shorter routes.
Bastian said the combined carrier’s technology—including its reservation system—should be merged by January 2010.
The carriers have also integrated 107 Northwest stations to Delta colors, and airport-based employees will don Delta uniforms by the end of March.
“When you put that all together we will be a single airline by the spring of next year,” he said.
 

ACL65PILOT

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That is what they say. The loss for Q1 is mostly due to fuel expenses.
 

General Lee

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I Can't Wait To Fly One Of These In 6 Years.......

UPDATE 3-Boeing says it still aims for 787 delivery in 2010

Tue Mar 10, 2009 2:45p * Boeing on track for 787 delivery in 2010
* Boeing on track for 787 test flight in 2009
* Delta reaffirms 787 orders
* Boeing shares up more than 5 pct (Adds Delta reaffirming its 787 orders, updates shares)
CHICAGO, March 10 (Reuters) - Boeing Co (BA.N) is still working toward the first delivery of its delayed 787 Dreamliner in the first quarter of 2010, and its customer financing for new orders is sufficient into next year, the planemaker said on Tuesday.
The company also is on track to make its first test flight of the 787 in the second quarter of 2009, Scott Carson, chief executive of Boeing Commercial Airplanes, said at the J.P. Morgan Aviation and Transportation Conference.
Boeing shares were up 5.35 percent at $32.66 in New York Stock Exchange trade following the comments.
"A reiteration of the schedule is certainly good," said Alex Hamilton, senior managing director at Jesup & Lamont Securities.
Hamilton also said the Carson's comments on credit were encouraging, given the tight credit markets that have curbed buying since last year. Boeing has said it is likely to book fewer orders this year than it did in 2008.
Carson said market demand for the carbon-composite jetliner was strong, with 878 firms orders from 57 customers.
Boeing has been struggling to assemble the plane because of late design changes, parts shortages and substandard work by contractors.
Also on Tuesday, Delta Air Lines (DAL.N) President Edward Bastian reaffirmed that the carrier has firm orders for 18 787s despite speculation in the industry that it might cancel them.
"We still have a firm order position on the 787, and I realize that the fact that our legal folks had us take that out of the firm column in our 10-K recently provoked a lot of controversy," Bastian said.
"I would like to reaffirm we still have a firm order book on the 787 with 18," he said. (Reporting by Kyle Peterson, editing by Dave Zimmerman and Lisa Von Ahn)



Bye Bye--General Lee
 

nwaredtail

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"We still have a firm order position on the 787, and I realize that the fact that our legal folks had us take that out of the firm column in our 10-K recently provoked a lot of controversy," Bastian said.
"I would like to reaffirm we still have a firm order book on the 787 with 18," he said. (Reporting by Kyle Peterson, editing by Dave Zimmerman and Lisa Von Ahn)



Bye Bye--General Lee
[/QUOTE]

But you said during all of your SLI bragging that the 787 would never fly, let alone be a DAL airplane?
 

General Lee

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But you said during all of your SLI bragging that the 787 would never fly, let alone be a DAL airplane?[/quote]

I would say unless you were Ed Bastain and the lawyers he talked about in the article, you and everyone else might infer that we WEREN'T getting the 787s, especaially since they weren't included in the 10-K report. It was cloudly like that pre-SLI also---nobody really knew. So, we all were "right on the money" when thinking that. It was almost confirmed too, until Bastain gave his latest comments. I didn't know you and Ed were sooo close? Do you and Ed, along with the lawyers, go eat appetizers at Chilli's in MSP on Tues nights? Then you would know....


Bye Bye--General Lee
 

nwaredtail

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? Do you and Ed, along with the lawyers, go eat appetizers at Chilli's in MSP on Tues nights? Then you would know....

Actually, I did have apps with Ed, Bill L, 3 CP's, 3 fleet managers, etc last month at Captain Leadership Seminar. He confirmed the 787, etc. Thanks for asking. And it was on a Tuesday night.
 

Bake

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ooooppppsssieeee daisy.
 

GuppyWN

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So who gets "reassessed"? NWA pilots or DAL pilots?

Gup
 

General Lee

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Actually, I did have apps with Ed, Bill L, 3 CP's, 3 fleet managers, etc last month at Captain Leadership Seminar. He confirmed the 787, etc. Thanks for asking. And it was on a Tuesday night.
Cool. When those 787s come and the FNWA guys move up to it, maybe I will bid A320 Capt in MSP. That will be fantastic, and COLD. See ya up there hoser.


Bye Bye--General Lee
 

General Lee

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So who gets "reassessed"? NWA pilots or DAL pilots?

Gup

No word yet. It depends on what planes leave prior to SOC. After SOC then the combined list gets hit.

So, what about you guys? Last I heard you were 300 pilots fat.


Bye Bye---General Lee
 

General Lee

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Finished CQ a couple weeks ago. 300 fat was the number I heard. A high percentage of those are on the B757.
I was talking about SWA pilots. I have heard they are 300 fat.

Which 300 were you talking about? FNWA or FDAL?
PM me with the "deets".

Bye Bye---General Lee
 
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GuppyWN

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WN is 300 fat last I heard and it certainly is showing up in line totals and open time. I'm down $5k this year over last year.

Word is the surplus will be absorbed with summer schedules and everybody has to go to Dallas this summer for RNP training.

We will see.

Gup
 

N2264J

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Delta Air Lines Inc. told investors Tuesday it will post a profit for 2009...
Of course they tell the investors that. They're trying to get the investors to put money into Delta.

We better hope Obama is allowed to dump another train load of money into this economy. Noble laureate economists are saying the stimulus package just isn't big enough.

Delta pilots as socialists...wait for it, wait for it...
 
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humveedriver

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Gup,

I hope you see the merit in taking a 5,000 grand hit so far, and keeping 300 pilot's and family's health insurance/ mortgage. Sounds like you guys are doing the right thing.
 

GuppyWN

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Gup,

I hope you see the merit in taking a 5,000 grand hit so far, and keeping 300 pilot's and family's health insurance/ mortgage. Sounds like you guys are doing the right thing.
I'd take 20K less if it meant helping a brother feeding his kids........ but I'm votin' no on any contract without airtight scope and codeshare language.

Gup
 

Bavarian Chef

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I'd take 20K less if it meant helping a brother feeding his kids........ but I'm votin' no on any contract without airtight scope and codeshare language.

Gup
How about 30k? Or 40?
 

ACL65PILOT

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Good for you. It is easy to see the mistakes we all have made on it. The problem is that if you have no scope there is nothing to enforce.
DAL had that shown to him during the Ron Allen days. They actually threatened to put all of the 737's on DCI. You know what, they could have too.
 
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