Delta is burning through the cash

[storminpilot]

http://biz.yahoo.com/ap/041015/delta_outlook_1.html



Associated Press
Delta's Financial Performance Deteriorates

Friday October 15, 7:53 am ET

Delta Air Lines' Financial Performance Continues to Deteriorate on High Fuel Prices

ATLANTA (AP) -- In a filing with the Securities and Exchange Commission, Delta Air Lines Inc. said Friday that its financial performance continued to deteriorate during the September quarter, primarily due to a significant decline in the domestic passenger mile yield year-over-year and high fuel prices.

Delta expects to post a loss for the third-quarter of $625 million to $675 million, or $4.99 to $5.39 per share, compared with a loss of $164 million, or $1.36 per share, in the 2003 period.

Analysts surveyed by Thomson First Call currently forecast quarterly losses of $3.79 per share on revenue of $3.89 billion.

The company said quarterly loss estimates include a $40 million asset impairment charge related to Delta's agreement to sell eight MD-11 aircraft, as well as a $14 million settlement charge associated with lump sum distributions to pilots who have retired. Delta also said it no longer recognizes income tax benefits associated with current period losses.

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IT IS REALLY SAD WHEN THEY HAD THE MOST CASH AFTER 9/11 AND NOW THEY ARE DOWN TO FILING FOR BANKRUPTCY

 

[DLslug]

No good news

I hate to say it, but I think TA or not, we are going to BK court.

There just seems to be no way to get out of all that debt and survive on just pay cuts, especially with oil prices where they are. It just won't happen.

In some ways, we might as well start out in court at our current pay rates rather than take a double-hit. Eh, but what's the point, we gonna take a big cut one way or the other.

Look at US Air, those poor employees have had everything taken away and it still will probably not work. I wish it was different for you all.

Management at all airlines need to do is fix the fundamentals that can be controlled;

Capacity and pricing.

They have all just fallen off the wagon and don't know what to do next.

Let's just hope that things will improve, but I know the worst is yet to come.

Sorry about the depressing post.

All for now,

DLslug

 

[FDJ2]

DAL will most likely report under $1.5B in unrestricted cash this quarter, which many analyst believe will be the trigger for BK. However, DAL has extended a recent debt exchange offer to next month, which will give some creditors a better deal if they agree to the terms within the next two weeks. I think that will be the trigger. If DAL can get a positive response on its debt exchange offer BK will be avereted, otherwise it's most likely CH11. Pilot concessions save money over an extended period of time, but pilot concessions will not give DAL either a substantial cash infussion or restructure DAL debt. Coincidentally, neither do non contract employee take backs, which is probably why they won't kick in until January 2005. The 800 pound gorilla has always been the $20B in DAL debt and long term obligations, not the $300M between DALPA's offer and managements demands. It's high stakes brinksmanship by GG with the pilots and the lenders.

 

[MedFlyer]

DAL will most likely report under $1.5B in unrestricted cash this quarter, which many analyst believe will be the trigger for BK. However, DAL has extended a recent debt exchange offer to next month, which will give some creditors a better deal if they agree to the terms within the next two weeks. I think that will be the trigger. If DAL can get a positive response on its debt exchange offer BK will be avereted, otherwise it's most likely CH11. Pilot concessions save money over an extended period of time, but pilot concessions will not give DAL either a substantial cash infussion or restructure DAL debt. Coincidentally, neither do non contract employee take backs, which is probably why they won't kick in until January 2005. The 800 pound gorilla has always been the $20B in DAL debt and long term obligations, not the $300M between DALPA's offer and managements demands. It's high stakes brinksmanship by GG with the pilots and the lenders.

The airline said its unrestricted cash balance was $1.45 billion on Sept. 30, 2004, compared with $2.0 billion on June 30.

http://www.thestreet.com/_yahoo/markets/marketfeatures/10188189.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

High fuel prices, creditors balking at restructuring and negotiations that have been drawn out way too long, sounds like a recipe for BK.

 

[FDJ2]

High fuel prices, creditors balking at restructuring and negotiations that have been drawn out way too long, sounds like a recipe for BK.

You might also then add, $1B of non contract take backs deffered until 2005 and $100s of millions from the pilots on the table for months. Regardless, it looks like a TA will be coming soon.

Delta, unions said to be near agreement-WSJ

Fri Oct 15, 2004 06:06 AM ET

NEW YORK, Oct 15 (Reuters) - Negotiators for Delta Air Lines (DAL.N: Quote, Profile, Research) and its pilots union are near a wage agreement that is geared toward helping the airline avert bankruptcy, the Wall Street Journal reported on Friday, citing people familiar with the talks.
The Journal quoted an unnamed source as saying that the two sides are close to agreement. Delta and representatives from the Air Line Pilots Association intend to work through the weekend on the most critical remaining issues, including guarantees on pensions and a reduced pay scale for pilots, the paper reported.

Delta and its pilots union have been engaged in discussions for more than a year. The Journal, citing an unnamed source, said the two sides are now considerably closer to an agreement.

Delta is trying to obtain about $1 billion in cost savings through 2006 from its pilots union.

The air carrier's pilots are among the highest paid in the industry, and the airline's only major unionized work group. Some analysts say a giveback deal with pilots could spur cost-saving deals with creditors and lessors.

A representative for Delta was not immediately available to comment on Friday.