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!

 

[Tim47SIP]

Skips gone?

....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....

This may be because he might not have a job in the near future and knows it. If we are sold, it makes sense. Things are only going to get worse, not better. Hold on for the ride!

 

[Mikes Apartment]

I don't blame Barnett for leaving ASA, he doesn't want to move to St George. I would rather live in San Juan anyday. And those Delta pilots would have to get something unbreakable in court to give it up, and that doesn't sound like it could happen. I would be really nervous too if I were a Comair or ASA pilot, because in court their contracts will be looked at too, along with the Delta guys. Everyone will share in the pain.


And Flying Freddie seems to love bad news about Delta. He was turned down and now has a chub everytime there is bad news. Pathetic. Peace out.

 

[Green]

I think one of the changes to the Bk laws will be to prohibit companies from paying retention bonuses to executives unless they can prove that they have recieved a bona fide job offer from another company. Now you can see why dal would scramble to file.

 

[densoo]

STREET LIFE
Oil Barrels Past $65
With fuel costs continuing to spike, four of the major U.S. carriers could be in Chapter 11 by the fall.
FORTUNE
Thursday, August 11, 2005
By Andy Serwer

"I say after August, Delta goes Chapter 11...Almost certainly Independence Air will too, in fact it will probably liquidate. This discount carrier was founded only 14 months ago and flies out of Dulles. Used to be ACA....Northwest too is in very bad shape. So what happens if by October we have United and US Air, plus Delta, Northwest and Independence all bankrupt? That represents between one quarter and one third of total carrier capacity in the U.S! Hello Washington, we have a problem!"

http://www.fortune.com/fortune/streetlife/0,15704,1092401,00.html?promoid=yahoo

 

[skykid]

I think one of the changes to the Bk laws will be to prohibit companies from paying retention bonuses to executives unless they can prove that they have recieved a bona fide job offer from another company. Now you can see why dal would scramble to file.

Yep, the biggest change though is going to be the amount of time allowed to reorganize. For a company as complex as Delta, for example, that has hundreds of aircraft of different types operating in dozens of countries, 10s of thousands of employees all over the world, and such a complicated balance sheet, you are not going to get it done in ch11 in 1 year, or even 2. So you either perform a miracle, get part of the job done and come out incomplete (U and CAL), or liquidate. A much better option would be to get in ch11 before the laws change. I'm hoping the price of fuel can go dramatically in the other direction, so Delta and Northwest get a major repreive.

By far the scariest thing going right now is the labor relations at Northwest. Good luck guys.

 

[jetflyer]

What is going to happen when OIL goes to $100-200/barrel??

Listen to the MOST IMPORTANT THING that will concern OUR AIRLINES and OUR WORLD in the near FUTURE BELOW:

From "The Financial Sense Newshour with Jim Puplava":
http://www.netcastdaily.com/fsnewshour.htm

Select an Audio Format below to listen to Matthew Simmons, a TEXAS OIL MAN and advisor to the Bush Administration on the Energy Policy, talk about OIL SUPPLY Problems from Saudi Arabia and the world. (PEAK OIL)
[font=arial,helvetica,verdana]LISTEN TO THE[/font]
[font=arial,helvetica,verdana]2nd Hour Guest Expert
[/font][font=Arial,Helvetica,Verdana]Matthew Simmons, Chairman
Simmons & Company International
and author of "Twilight in the Desert:
The Coming Saudi Oil Shock and the World Economy"[/font]
Select an Audio Format to listen:[font=Arial,Helvetica,Verdana]
RealPlayer l WinAmp l Windows Media l mp3

Listening to these economists talk about PEAK OIL and the coming ENERGY CRISIS is very interesting.

LISTEN TO THE

[font=Arial,Helvetica,Verdana]3rd Hour with Jim & John​

The Big Picture [/font]
[font=Arial,Helvetica,Verdana]--Energy Tsunami Hitting Globally by Quarter 4
[/font][font=Arial,Helvetica,Verdana]--The Geopolitical Aspects of Oil
[/font][font=Arial,Helvetica,Verdana]--China and the Next Commodity Bull Run[/font]
[font=tahoma,verdana,arial]Select an Audio Format to listen:[/font]
[font=Arial,Helvetica,Verdana]RealPlayer l WinAmp l Windows Media l mp3[/font]

[font=Arial,Helvetica,Verdana]"CHANGES ARE COMING"[/font]

[font=Arial,Helvetica,Verdana]Jet
[/font]

[/font]

 

[General Lee]

Jet,


Come on now, at even $100 a barrel most economies will shut down, and then oil supplies will increase. There will be a point where the price stops and then retreats. $200 a barrel is ridiculous. Even $100. You are whipping yourself into a frenzy.


Bye Bye--General Lee

 

[jetflyer]

Listen to the show.

$65 oil is not decreasing demand. Supply is about to have major problems. Listen to the show. If Supply goes down, so must DEMAND THROUGH HIGHER PRICES. Oil prices will go as high as it takes to not only stop Demand Increases but after about 2007-8, they're going to have to go high enough to REDUCE DEMAND permanently more and more every year and that will probably mean reducing the size of the economy through a recession in the process.

$100-200/barrel WILL happen in atleast the next 5 years. I think sooner, from the research I've done.

Alaskan Oil, the Oil Sands, Coal gassification, Use of the Oil-shale from Colorado, Bio-fuels, Nuclear, Hybrids, and other alternatives are all going to have to be used. They will take time to ramp up though. In the mean time here comes the higher oil prices.

Denial is wonderful, normal and everyone's first instinct(was mine 3 months ago when I learned of peak oil) but isn't going to help you General.

All of you reading this do yourselves a favor and educate yourselves on this subject. Make up your own minds what will happen with OIL. First listen to the above show I linked, and then google PEAK OIL. Do your own research. They've even been talking about PEAK OIL in Congress.

There are also about 10 books on the subject out there. Do a search on Amazon.com. I've read two and just bought my third.

Jet

 

[jetflyer]

Roscoe Bartlett, Republican Congressman from Maryland just gave a new speech to Congress, broadcast on C-SPAN on July 19, 2005 about COMING OIL SUPPLY PROBLEMS(PEAK OIL).

Here is the transcript. I highly recommend you all read it:
http://www.xecu.net/thorn/PO/PO-July19-2005.html

April 19th Bartlett gave this speech to congress. This is a good speech to read, with visuals.
http://www.bartlett.house.gov/SupportingFiles/documents/energyspeech.pdf

Roscoe Bartlett met with Bush about Peak Oil on June 29th. So Bush, no doubt knows about the coming oil supply problems. Here is the press release:
http://www.bartlett.house.gov/latestnews.asp?ARTICLE2900=7308

BARTLETT, regarded as one of the most CONSERVATIVE republicans in the House, strangely drives a PRIUS and DOES NOT BELIEVE WE SHOULD DRILL IN ANWAR. He thinks we should leave that oil for future generations that will be in need of cheap energy. I think we should drill ANWAR ASAP.

Bartlett thinks we should begin to "get off oil" NOW. His speeches to congress on OIL SUPPLY PROBLEMS are great reads.

Jet

 

[Prog 2/2]

STREET LIFE
Oil Barrels Past $65
With fuel costs continuing to spike, four of the major U.S. carriers could be in Chapter 11 by the fall.
FORTUNE
Thursday, August 11, 2005
By Andy Serwer

"I say after August, Delta goes Chapter 11...Almost certainly Independence Air will too, in fact it will probably liquidate. This discount carrier was founded only 14 months ago and flies out of Dulles. Used to be ACA....Northwest too is in very bad shape. So what happens if by October we have United and US Air, plus Delta, Northwest and Independence all bankrupt? That represents between one quarter and one third of total carrier capacity in the U.S! Hello Washington, we have a problem!"

http://www.fortune.com/fortune/streetlife/0,15704,1092401,00.html?promoid=yahoo

Man, I'm just glad the administration was able to ramrod through all those tax breaks for the oil companies. If they don't deserve the governments help, who does ?