Delta...New Lows

[Flying Freddie]

Delta stock hits nadir, 10-Q delayed
Wednesday August 10, 9:01 am ET



Delta Air Lines Inc. stock dropped to a new low Tuesday morning, following the announcement it hired a new treasurer, an analyst downgraded its rating and oil prices hit a record $64 a barrel.

Atlanta-based Delta's (NYSE: DAL - News) stock dropped 12.6 percent to close at $1.95 a share, beating the 43-year low it reached on Aug. 2, when it closed at $2.53 a share.

Delta recently reported a net loss of $382 million for the second quarter, bringing its loss since 2001 to $10 billion. High fuel prices weighed on the carrier during the second quarter. Average fuel price per gallon for the second quarter was $1.60, a 53.3 percent increase over the prior year period. Based on Delta's expected fuel consumption for 2005, every 1 cent increase in the average annual cost per gallon of jet fuel results in $25 million in additional mainline fuel expense per year.

In the second-quarter report, Delta CEO Gerald Grinstein noted Delta's attempts to reduce costs and increase revenue through a variety of initiatives, including fuel conservation measures, debt-for-equity exchanges, implementation of a new revenue management system, surcharges on trans-Atlantic flights and additional significant fare initiatives. A week later, Grinstein sent a memo to employees saying the carrier's transformation plan is delivering results, but it "is not enough."

Later Tuesday, Delta Air Lines Inc. reported it will delay filing its second-quarter 10-Q with the Securities and Exchange commission for up to five days so it can start negotiations with a new credit card processing company. "The potential Visa/MasterCard processor has advised the Registrant [Delta] that it will require a significant cash reserve, deposited with the processor immediately upon start of the new contract, for tickets purchased using Visa or MasterCard but not yet flown," Delta said in the filing. "The Registrant is exploring alternatives to offset a portion of the cash reserve, but there can be no assurance whether or when it can implement any such alternative."

 

[mnboyev]

Raise the fares !!!!! The pax are back !! Everybody wins.

You cant save that much by dumping the glassware and dishing out Lance crackers... ??

Rumor is the Pilots are meeting to see if they can avoid Bankruptcy..?
Is it true General ?

 

[~~~^~~~]

Rumors are informal meetings are taking place.

Fact is, the Delta MEC has postponed elections.

Also Delta is in a crunch to get a contract for someone to process their credit card billing. The credit card companies get stuck in the crunch for refunds when airlines cease operations. For this reason the credit card issuers are wanting cash up front from Delta to continue their relationship.

....and some of Delta's fair haired managers who went to the Connection lifeboat are scrambling for the exits. Skip Barnette left ASA for Caribbean Star, a Dash 8 operator with 80 flights a day to 13 destinations....

None of this appears to be good news for the big D. Glad I hold AAI stock, wish I held a seniority number.

 

[Ty Webb]

Delta's problems are not good for AirTran. If they go into bankruptcy, I would expect it will just allow them to continue dumping seats into the marketplace to "maintain marketshare".

It doesn;t take a genius to figure out that if you can't serve that market at the market price, it ain't your market, but, hey, what do I know . . . . I'm just a yoke and throttle operator from sector 7-G.

 

[FDJ2]

Rumors are informal meetings are taking place.

Fact is, the Delta MEC has postponed elections.

This is Communications Chairman Kingsley Roberts on Tuesday, August 9th, with two items.

Item one. The Delta MEC was scheduled to elect new MEC officers and one new member of the Negotiating Committee today. The MEC has received information indicating that Delta may have accelerated the announced closing date of the Dallas/Ft. Worth domicile in order to interfere with the MEC election process. The MEC has authorized an immediate investigation. Therefore the election of new officers and the Negotiating Committee member has been postponed to no later than August 31st.

Item two. There have been national media reports stating that sources report the company is requesting $275 million in cuts from the pilots. In response to those media inquiries, MEC Chairman Capt. John Malone stated "The Delta pilots’ union has not been approached for cuts. Last year the pilots made a significant investment in Delta’s restructuring plan, one billion dollars per year for five years. As Delta CEO Gerald Grinstein said “Do it once, do it right.””

 

[lowecur]

WSJ is reporting that the pilots are contemplating a giveback to help the airline stay out of Chapt 11. If this is true, it's too little too late. DL is not going to pass up an opportunity to go to Chapt 11 under the existing rules. They need to dump one or both of the crazy twin sisters to formulate a viable business plan for investors and creditors.

 

[G4G5]

For the pilots sake I hope they don't. All they are doing is lowering the bar for the BK judge.

Cross this line and I kill you, ok this line, ok this line............

 

[TooBad]

Delta's problems are not good for AirTran. If they go into bankruptcy, I would expect it will just allow them to continue dumping seats into the marketplace to "maintain marketshare".

It doesn;t take a genius to figure out that if you can't serve that market at the market price, it ain't your market, but, hey, what do I know . . . . I'm just a yoke and throttle operator from sector 7-G.

Right you are, they've just announced a ton of new service from JFK to FL markets. Thus, putting the pressure on B6.

 

[XR650R]

WSJ is reporting that the pilots are contemplating a giveback to help the airline stay out of Chapt 11. If this is true, it's too little too late. DL is not going to pass up an opportunity to go to Chapt 11 under the existing rules. They need to dump one or both of the crazy twin sisters to formulate a viable business plan for investors and creditors.

What exactly changes this Fall with the BK rules and will it affect the companies currently in BK?

 

[F9 Driver]

Delta's problems are not good for AirTran. If they go into bankruptcy, I would expect it will just allow them to continue dumping seats into the marketplace to "maintain marketshare".

It doesn;t take a genius to figure out that if you can't serve that market at the market price, it ain't your market, but, hey, what do I know . . . . I'm just a yoke and throttle operator from sector 7-G.

Welcome to the wonderful world we've known for the past almost THREE YEARS!