Delta reports 4Q loss

[regionalcap]

Delta Reports Narrower 4Q Loss
Wednesday January 23, 7:58 am ET
By Harry R. Weber, AP Business Writer
Delta Air Lines Reports Narrower 4Q Loss on Higher Sales ATLANTA (AP) -- Delta Air Lines Inc., the nation's No. 3 carrier, reported Wednesday it was hampered by high fuel prices in the fourth quarter but was able to post a narrower loss on a solid increase in sales.[SIZE=-2]ADVERTISEMENT[/SIZE]

if(window.yzq_d==null)window.yzq_d=new Object(); window.yzq_d['BKwhBULaSjs-']='&U=13b5kfeb3%2fN%3dBKwhBULaSjs-%2fC%3d634981.12169082.12582806.1435155%2fD%3dLREC%2fB%3d5180558'; For the three months ending Dec. 31, Atlanta-based Delta said it lost $70 million, or 18 cents a share, compared to a loss of $1.98 billion for the same period a year earlier. The airline did not provide a per share figure for the prior year, when it was in bankruptcy.
Excluding reorganization items, Delta said it lost $105 million in the fourth quarter. It did not provide a comparable per-share figure.
Analysts surveyed by Thomson Financial were expecting a Delta loss of 18 cents a share. Analyst estimates generally exclude one-time items.
Revenue in the fourth quarter rose 10 percent to $4.68 billion, compared to $4.25 billion recorded a year earlier.
A statement issued with the company's earnings release did not update investors on the status of talks between Delta and Northwest Airlines and United Airlines. Delta has said previously that its board is considering strategic options, including a possible consolidation transaction. The airline has not elaborated.
For all of 2007, Delta said it earned $1.61 billion, compared to a loss of $6.2 billion for all of 2006. It did not provide per-share figures. Full-year revenue rose to $19.15 billion, compared to $17.53 billion recorded a year earlier.
Delta said it expects operating margins of minus 2 percent to minus 4 percent in the first quarter of this year. For all of 2008, it expects operating margins of 4 percent to 6 percent. It expects to see its domestic capacity drop 2 percent to 3 percent in the first quarter, while its international capacity is expected to increase 10 percent to 12 percent in the first quarter compared to a year earlier.
Delta Air Lines: http://www.delta.com

 

[GCAP]

Good !!!!!

 

[John Pennekamp]

Maybe Delta will learn that crapping on your employees and contractors does not contribute positively to your bottom line.

No, probably not.

 

[jke406]

Maybe Delta will learn that crapping on your employees and contractors does not contribute positively to your bottom line.

This coming from a regional guy?

I'm trying to be sympathetic to your upcoming plight, but it's hard to feel sorry for a tool such as yourself.

 

[~~~^~~~]

John:

I thought the non-rev fee got recinded.

Delta has honored their contract with SkyWest despite doing so at a loss.

Transferring aircraft during negotiations was a SkyWest thing, I considered that to be "crap."

I agree with you about the non-rev fee, but disagree that it rises to the level of "crapping on your employees and contractors."

You got a pretty good raise this year, and your flying is more protected than the junior NWA, or Delta pilot's is. Look at the sunny side of life.

 

[John Pennekamp]

This coming from a regional guy?

I'm trying to be sympathetic to your upcoming plight, but it's hard to feel sorry for a tool such as yourself.

What a creative, witty, and intelligent rebuttal!

That post made no sense. I am now dumber for having read it. I award you no points, and may God have mercy on your soul.

 

[John Pennekamp]

John:

I thought the non-rev fee got recinded.

No, just postponed again.

Delta has honored their contract with SkyWest despite doing so at a loss.

Do you have numbers to prove the veracity of this statement? Or are you now parroting DALPA rhetoric?

Transferring aircraft during negotiations was a SkyWest thing, I considered that to be "crap."

Not Delta's decision, not germane to this discussion.

I agree with you about the non-rev fee, but disagree that it rises to the level of "crapping on your employees and contractors."

This isn't just about the travel benefits. It's about Delta trying to micro-manage the daily operations of companies it doesn't even own, much less its own employees.

You got a pretty good raise this year, and your flying is more protected than the junior NWA, or Delta pilot's is. Look at the sunny side of life.

So Delta got me my raise?

I wasn't even specifically referring to how Delta treats me. The comment about contractors was an afterthought.

I have many friends and neighbors who are Delta gate agents, rampers, pilots, FAs, mechanics supervisors, etc. I'd say a lot of Delta employees are unhappy right now, what with hour cuts and overbearing supervisors. Most of the Delta employees I come in contact at work also seem disgruntled. This is what I was referring to.

 

[Truckdriver]

This isn't just about the travel benefits. It's about Delta trying to micro-manage the daily operations of companies it doesn't even own,

That is why it would be a good thing for DALPA to get all 70+ seat flying back to mainline during the merger negotiations. That way Delta won't have to micro-manage companies it does not own and the Delta pilots can fly Delta passengers.

 

[9rj9]

So, do you guys get a raise or will they just take more money from you ???

 

[~~~^~~~]

Do you have numbers to prove the veracity of this statement? Or are you now parroting DALPA rhetoric?

Have not heard a word from D-ALPA on the subject. But it is pretty common knowledge that many 40 & 50 seat operations are not profitable and you have been seeing those go away. There will always be a place for the RJ, but fuel makes a small jet an expensive operation that only works if really good revenue can be pulled out of those seat miles.

It's about Delta trying to micro-manage the daily operations of companies it doesn't even own, much less its own employees.

Delta has every right to micro manage its' brand. It is Delta's money. I'm surprised Delta does not clamp down further to bring its' contractors' operations in line with the rest of the company.

You go to Chick Fil A, or Wendy's, your product is predictably good. Even though the store might be owned an operated by Mohammed the Rug Merchant of Tehran the careful supervision, supply chain and procedures are carefully managed by the brand. When it comes to outsourcing, no one has anything on Mickey D's.

If anything, the airlines have not reaped much benefit from outsourcing. The "profit plus" contracts place the risk on the branded mainline carrier and there is not sufficient incentive for the contractor to take care of customers, or operate efficiently.

Unfortunately, we do not have franchise agreements which serve the same customers. We have outsourcing to the lowest cost provider, largely as an end run around organized labor.

So Delta got me my raise?

I'm not sure, but rumors are that Delta called SkyWest and told them to fix the problem. At least that is how it worked in 99.

I'd say a lot of Delta employees are unhappy right now...

I've observed the complete opposite. Pretty amazing when you consider how much many of these people gave up in pay and benefits.

I think a lot has to do with attitude. When someone comes up asking "hey, why you running the APU? What do you need?" realize that they are trying to help, trying to save the Company a buck and doing their job. ... that's a good thing, not overbearing.... We all should want mother Delta to make a profit, puts food on the table.

Heck, it is better than flying for Northwest - oh - nevermind.....

 

[Truckdriver]

So, do you guys get a raise or will they just take more money from you ???

Not sure what you mean by them taking more money from us, but we got the minimum 1.5% raise per the contract. The operating margin for 07 was 5.8%. For us to get more than the minimum the margin had to be at least 7%.

 

[Tanker Clown]

Not sure what you mean by them taking more money from us, but we got the minimum 1.5% raise per the contract. The operating margin for 07 was 5.8%. For us to get more than the minimum the margin had to be at least 7%.

Inflation in '07 was 4.4%. Looks like you guys in reality are taking another cut. You guys need to take a stand. Granted, after posting another loss, now may not be the best time.

 

[General Lee]

So, do you guys get a raise or will they just take more money from you ???

Well, we will get $178 million for profit sharing (the whole company), which for us equates to 5% of our W2s not including the claim money. As far as the loss goes, I would probably GUESS that we could have had the fuel surcharges stick a bit more, but when you think about it, do you need to have some sort of loss to ask for a merger? Would two perfectly healthy carriers go to the DOJ and ask to merge for no real financial reason? (these days anyway) You have to point your finger at something so you can merge. Adding $25 per leg for a fuel surcharge could have really helped, but a lot of airlines need and or want a merger.


Bye Bye--General Lee

 

[Tanker Clown]

Well, we will get $178 million for profit sharing (the whole company), which for us equates to 5% of our W2s not including the claim money. As far as the loss goes, I would probably GUESS that we could have had the fuel surcharges stick a bit more, but when you think about it, do you need to have some sort of loss to ask for a merger? Would two perfectly healthy carriers go to the DOJ and ask to merge for no real financial reason? (these days anyway) You have to point your finger at something so you can merge. Adding $25 per leg for a fuel surcharge could have really helped, but a lot of airlines need and or want a merger.


Bye Bye--General Lee

That's rich. Delta NEEDED the loss for a merger. Nicely done sir. I was wondering how we can make a loss look good. I hope you guys don't "need" more losses, because the Ch 11 rules have changed and it's not exactly the good deal it once was. I am sure that you company welcomed the loss in some respect. It allowed them to stick you with another pay cut (1.5% "raise" vs 4.4% inflation).

I can't wait to see what the 1st quarter will bring.

 

[General Lee]

Inflation in '07 was 4.4%. Looks like you guys in reality are taking another cut. You guys need to take a stand. Granted, after posting another loss, now may not be the best time.

A combined airline (DL and NWA), according to Goldman Sachs, would produce an annual savings of $890 million, and extra INTL routes would add a lot of extra revenue that is free from our Recession here. We have to ask for part of that, and we will. For the year of 2007, we actually did fairly well. Here are the numbers.




Press ReleaseSource: Delta Air Lines, Inc.
Delta Air Lines Reports 2007 Financial Results
Wednesday January 23, 7:30 am ET
International expansion helps drive more than $1 billion improvement in 2007 annual pre-tax income
ATLANTA, Jan. 23, 2008 (PRIME NEWSWIRE) -- Delta Air Lines (NYSE:DAL - News) today reported results for the quarter and year ended Dec. 31, 2007. Key points include: * Delta's 2007 pre-tax income was $1.8 billion. Excluding reorganization related and certain items, pre-tax income was $625 million, a $1.1 billion improvement compared to 2006.(1,2,3) * Due to a 26% rise in fuel price, Delta reported a pre-tax loss for the fourth quarter of $105 million. * Delta ended the year with $3.8 billion in unrestricted liquidity, including $1 billion available under its revolving credit facility. * Delta employees will receive $158 million in profit sharing in recognition of their critical role in achieving significant financial improvements in 2007.

Delta reported pre-tax income of $1.8 billion in 2007. Excluding reorganization related and certain items, pre-tax income was $625 million, a $1.1 billion improvement compared to 2006. As a result of the unprecedented increase in jet fuel prices from $2.31 to as high as $2.77 per gallon, Delta reported a pre-tax loss for the quarter of $105 million, an $80 million improvement compared to the prior year period excluding reorganization items.
Delta's net income for the year was $1.6 billion, or $418 million excluding reorganization related items. Delta reported a net loss of $70 million for the fourth quarter, or $0.18 per diluted share.
``2007 was an historic year for Delta marked by achievements that demonstrate the extraordinary power of Delta people,'' said Richard Anderson, Delta's chief executive officer. ``Our successful emergence from bankruptcy; continued successful international expansion; strong operational performance; positive financial results -- in spite of the unrelenting pressure we face from record fuel prices -- reflect the outstanding work of our people, and I'm pleased that we'll deliver $158 million in profit sharing to my Delta colleagues in a few weeks in recognition of their many achievements in 2007.''
Revenue Improvements
Delta's network restructuring and revenue management initiatives continued to drive positive momentum during the December 2007 quarter. Passenger revenue increased 10% compared to the prior year period driven by 5% higher yield and 5% higher traffic. During the fourth quarter, 32% of Delta's capacity operated in international markets, up from 23% in the December 2005 quarter. During the same periods, the percentage of Delta's capacity operating in domestic markets declined to 68% from 77%.
Delta's fourth quarter consolidated passenger unit revenue (PRASM) improved 6% year over year to 10.87 cents. Continued strong demand for Delta's international product resulted in a 14% increase in international PRASM year over year. Domestic PRASM increased 4% driven by the domestic network restructuring and higher yields from pricing actions implemented to offset higher fuel costs. Based on 2007 ATA data, Delta's consolidated length of haul adjusted PRASM for 2007 was 95% of industry average PRASM (excluding Delta), up from 86% in 2005 when the Company began its restructuring.
Comparisons of revenue related statistics by geographic region are as follows: December 2007 Quarter vs. December 2006 Quarter -------------------------------------------------- Domestic Latin America Atlantic Pacific -------- ------------- -------- ------- Passenger Revenue 4.4% 13.5% 33.3% 50.3% Passenger Unit Revenue 4.3% 13.6% 15.2% (6.0)% Yield 4.6% 4.7% 12.7% 2.3% Traffic (0.2)% 8.5% 18.3% 47.0% Capacity 0.0% 0.0% 15.7% 59.9% Load Factor (0.2) pts 6.0 pts 1.7 pts (6.5) pts
Other, net revenues increased $72 million, or 17%, in the fourth quarter primarily due to higher passenger fees and charges, an increase in SkyMiles revenue and the impact of fresh start reporting.

Cost Discipline

For the December 2007 quarter, Delta's operating expenses increased 10%, or $445 million, over the prior year period. Of this amount, increased fuel price represented almost $370 million, including fuel prices paid under our contract carrier arrangements. The remainder of the increase in operating expense was primarily due to higher expenses related to the 4% increase in capacity during the quarter. For the same period, non-operating expenses declined 46%, or $88 million, due primarily to lower effective interest rates, improved cash flows and the impact of fresh start reporting.
Because of the steep rise in fuel price during the fourth quarter of 2007, Delta's mainline unit cost (CASM(4)) increased 4% to 10.79 cents compared to the prior year period. Excluding fuel expense, mainline CASM declined 6% to 6.79 cents.
``While the recent sharp rise in fuel price pressured the business significantly in the fourth quarter, the year over year improvements in unit revenue and non-fuel unit cost demonstrate the progress we continue to make to transform Delta,'' said Edward Bastian, Delta's president and chief financial officer. ``However, the business must be recalibrated to this high fuel price environment and we have moved aggressively to reduce domestic capacity beginning in January while retaining the flexibility to quickly make further adjustments as the domestic economic outlook warrants.''

Operational Performance

Based on the most recent available DOT data(5), Delta ranks first among the network carriers in on-time performance in 2007, a significant accomplishment by Delta employees given the considerable weather and congestion challenges faced during the year. In addition, during November 2007, Delta led the industry by ranking first in on-time performance at each of its hubs in Atlanta, New York-JFK, Salt Lake City and Cincinnati.
Delta was pleased to participate with the Federal Aviation Administration (FAA) on a schedule reduction process, finalized in mid-January, to ease congestion and reduce delays at New York's three major airports. The Company worked cooperatively with the FAA to adjust its JFK schedule during peak times, while maintaining previously announced international growth plans for summer 2008. Delta believes the revised schedule will result in more efficient operations and a better travel experience for its customers, particularly during the busy summer travel season.

Liquidity


In October 2007, Delta continued to strengthen its liquidity position by issuing $1.4 billion in new enhanced equipment trust certificates (EETC). This transaction refinanced $961 million in aircraft-secured debt, including Delta's 2001-2 EETC, lowering the interest rate and deferring more than $560 million in maturities which had been due in 2010-11.
In December 2007, Delta received $156 million under a new agreement that allows the company to borrow up to $233 million to finance aircraft pre-delivery payments. This credit facility consists of separate loans for each related aircraft, with various maturity dates between February 2008 and August 2009.
Also during the quarter, Delta received $83 million from the sale of its investment in ARINC. This investment had been recorded at fair value upon emergence from bankruptcy. As a result, there was no gain or loss recorded on this transaction.
As of Dec. 31, 2007, Delta had $3.3 billion in cash, cash equivalents and short-term investments, of which $2.8 billion was unrestricted. Delta has an additional $1 billion available under its revolving credit facility, resulting in a total of $3.8 billion in unrestricted liquidity at year end.

Continued.....

 

[General Lee]

Continued...

Fuel Hedging
During the December 2007 quarter, Delta hedged 21% of its fuel consumption, resulting in an average fuel price of $2.61 per gallon. Delta realized approximately $40 million in cash gains on fuel hedge contracts settled during the quarter.
As of Jan. 22, 2008, Delta has the following fuel hedges in place for estimated 2008 consumption: Jet Fuel Percent Equivalent Hedged Cap ------------------------- Q1 2008 26% $2.77 Q2 2008 31% $2.72 Q3 2008 15% $2.70 Q4 2008 10% $2.69

2007 Highlights

In 2007, Delta continued the positive momentum in its business, demonstrating its ongoing commitment to providing the best products and services to its customers while creating value for shareholders. Highlights include, Delta: * Successfully emerged from bankruptcy on April 30, positioning itself to compete aggressively with a best-in-class cost structure and balance sheet, a diversified global network, a renewed focus on the customer experience, and a dedicated and committed workforce; * Invested significantly in Delta people worldwide through a comprehensive compensation program, including a stock distribution and cash lump sum payment to employees upon emergence from bankruptcy, an increase in base pay, an enhanced annual profit sharing program, a monthly Shared Rewards program, and a new defined contribution benefit; * Earned, for the second consecutive year, a ranking in the top two among network carriers in the JD Power Customer Satisfaction Survey; * Signed a joint venture agreement with Air France, to be implemented in April 2008, to share revenues and costs on certain trans-Atlantic routes, expanding the existing partnership that has resulted in new routes and choices to customers on both sides of the Atlantic since its inception. As part of this agreement, Delta customers will the have option of four daily Heathrow flights beginning March 30, 2008: twice daily from New York-JFK, and once daily from Atlanta, operated by Delta; and once daily from Los Angeles, operated by Air France; * Won the rights to offer nonstop flights between the world's largest airline hub in Atlanta and Shanghai, China, effective March 30, 2008, filling a critical void in air travel by providing 65 million residents of the Southeast direct access to the world's fastest growing economy; * Completed the conversion of 11 B767-400 aircraft from domestic to international service, with three remaining B767-400 aircraft to be converted by spring 2008. These aircraft support Delta's international expansion strategy. In 2007, Delta launched 16 new international routes, including service from Atlanta to Dubai, Lagos, Prague, Seoul, and Vienna and from New York-JFK to Bucharest and Pisa; * Confirmed orders for a total of eight B777-LR aircraft, and announced the planned installation of winglets on more than 60 B737-NG, B757-200 and B767-300ER aircraft over the next two years; added more two-class regional jets featuring first class cabins; and introduced into trans-Atlantic service Delta's first long-range B757-200 aircraft featuring on-demand digital entertainment in every seat; * Invested in facilities and on-board products to improve the customer's travel experience including a redesigned, state-of-the-art lobby at Hartsfield-Jackson Atlanta International Airport, a dedicated premium customer check-in facility at Terminal 2 at New York-JFK, and enhanced food offerings with new domestic First Class and international BusinessElite(r) entrees from Chef Michelle Bernstein and new food-for-sale options from Chef Todd English in U.S. Coach Class.
Emergence Related Items For the December 2007 quarter, emergence related items resulted in a $65 million increase to pre-tax income. Fresh start reporting increased pre-tax income by $94 million, and share-based compensation expense for emergence equity awards decreased pre-tax income by $29 million. In total, emergence related items increased consolidated PRASM by 0.15 cents and increased mainline non-fuel CASM by 0.14 cents.


Bye Bye--General Lee

 

[John Pennekamp]

Have not heard a word from D-ALPA on the subject. But it is pretty common knowledge that many 40 & 50 seat operations are not profitable and you have been seeing those go away. There will always be a place for the RJ, but fuel makes a small jet an expensive operation that only works if really good revenue can be pulled out of those seat miles.
Delta has every right to micro manage its' brand. It is Delta's money. I'm surprised Delta does not clamp down further to bring its' contractors' operations in line with the rest of the company.

You go to Chick Fil A, or Wendy's, your product is predictably good. Even though the store might be owned an operated by Mohammed the Rug Merchant of Tehran the careful supervision, supply chain and procedures are carefully managed by the brand. When it comes to outsourcing, no one has anything on Mickey D's.

If anything, the airlines have not reaped much benefit from outsourcing. The "profit plus" contracts place the risk on the branded mainline carrier and there is not sufficient incentive for the contractor to take care of customers, or operate efficiently.

Unfortunately, we do not have franchise agreements which serve the same customers. We have outsourcing to the lowest cost provider, largely as an end run around organized labor.
I'm not sure, but rumors are that Delta called SkyWest and told them to fix the problem. At least that is how it worked in 99.
I've observed the complete opposite. Pretty amazing when you consider how much many of these people gave up in pay and benefits.

I think a lot has to do with attitude. When someone comes up asking "hey, why you running the APU? What do you need?" realize that they are trying to help, trying to save the Company a buck and doing their job. ... that's a good thing, not overbearing.... We all should want mother Delta to make a profit, puts food on the table.

Heck, it is better than flying for Northwest - oh - nevermind.....

I's just amazing how different the view is from Concourse A behind a Double Breasted Jasket. The view from the trenches on Concourse D is very different. Guess we'll have to agree to disagree.

 

[General Lee]

That's rich. Delta NEEDED the loss for a merger. Nicely done sir. I was wondering how we can make a loss look good. I hope you guys don't "need" more losses, because the Ch 11 rules have changed and it's not exactly the good deal it once was. I am sure that you company welcomed the loss in some respect. It allowed them to stick you with another pay cut (1.5% "raise" vs 4.4% inflation).

I can't wait to see what the 1st quarter will bring.

You think I came up with that idea? Are you saying managements do not throw numbers out there for their own reasons? Your management (the Gov't) does it all of the time, but you can't see it! You must be watching a lot of FOX NEWS while at your desk.

And, since you are new to Airlines and this industry (you may never get into this industry anyway), certain quarters are more profitable than others. Please look at the Delta numbers for 2007 (I just posted them), and you will get a better understanding. There is SOOOOO much for you to learn....

Bye Bye--General Lee

 

[Tanker Clown]

A combined airline (DL and NWA), according to Goldman Sachs, would produce an annual savings of $890 million, and extra INTL routes would add a lot of extra revenue that is free from our Recession here. We have to ask for part of that, and we will. For the year of 2007, we actually did fairly well. Here are the numbers.


Apparently, for 2007, you didn't do well enough. You only got 1.5% of a "raise" and lost $70 million dollars for the quarter.

 

[Tanker Clown]

You think I came up with that idea? Are you saying managements do not throw numbers out there for their own reasons? Your management (the Gov't) does it all of the time, but you can't see it! You must be watching a lot of FOX NEWS while at your desk.

And, since you are new to Airlines and this industry (you may never get into this industry anyway), certain quarters are more profitable than others. Please look at the Delta numbers for 2007 (I just posted them), and you will get a better understanding. There is SOOOOO much for you to learn....

Bye Bye--General Lee

I guess Southwest took this quarter off. They seemed to not lose $70 million. CAL must have not participated in the 4th quarter either.

My "guess" to your quarterly loss is this: You guys don't have a strong business model like CAL, your costs are too high, and your scratching at a merger to bail yourselves out. But that's just a guess. I tend to think that companies try to make money.

 

[jke406]

A combined airline (DL and NWA), according to Goldman Sachs, would produce an annual savings of $890 million, and extra INTL routes would add a lot of extra revenue that is free from our Recession here. We have to ask for part of that, and we will. For the year of 2007, we actually did fairly well. Here are the numbers.


Apparently, for 2007, you didn't do well enough. You only got 1.5% of a "raise" and lost $70 million dollars for the quarter.

I hate to admit it, but I might actually agree with the gayest military pilot ever, Tanker Clown.

How can a pay adjustment that doesn't even cover cost of living increases be considered a "raise?"

it's really just less of an a$$ pounding.

 

[800Dog]

I guess Southwest took this quarter off. They seemed to not lose $70 million. CAL must have not participated in the 4th quarter either.

My "guess" to your quarterly loss is this: You guys don't have a strong business model like CAL, your costs are too high, and your scratching at a merger to bail yourselves out. But that's just a guess. I tend to think that companies try to make money.

Delta's costs are too high. The business model is not very strong. Why? My opinion is an overreliance on rjs. They have a high casm and the cos. that operate them provide a very poor product. No consistency to the Delta product. I place the blame on management and those who have continually voted in favor of relaxing scope as they have enabled managements poor decisions.

 

[General Lee]

Delta's costs are too high. The business model is not very strong. Why? My opinion is an overreliance on rjs. They have a high casm and the cos. that operate them provide a very poor product. No consistency to the Delta product. I place the blame on management and those who have continually voted in favor of relaxing scope as they have enabled managements poor decisions.

You bet, we have too many RJs. No doubt there. But we are parking some, and a possible merger with NWA will get rid of a lot more in CVG. We have 56 daily mainline flights in CVG, vs Comair's 200+. Let's see how Lee Moak handles any future negotiations regarding scope. I would hope he and management have learned something with RJs and higher fuel.

Bye Bye--General Lee

 

[General Lee]

I hate to admit it, but I might actually agree with the gayest military pilot ever, Tanker Clown.

How can a pay adjustment that doesn't even cover cost of living increases be considered a "raise?"

it's really just less of an a$$ pounding.

You and tanky agreeing? Next you will go to the prom together and hold hands after the dance.

Remember, we went to BK, and lost a total of 47% of our old pay scale. It is hard to cover COLA when that happens. We are aiming for more pay in the future, and if this merger is attempted, then we will ask for more, and it is likely we will get a raise. How much? Good question.

Bye Bye--General Lee

 

[On Your Six]

You bet, we have too many RJs. No doubt there. But we are parking some, and a possible merger with NWA will get rid of a lot more in CVG. We have 56 daily mainline flights in CVG, vs Comair's 200+. Let's see how Lee Moak handles any future negotiations regarding scope. I would hope he and management have learned something with RJs and higher fuel.

Bye Bye--General Lee

50-seaters are an anachronism in this age of high oil prices. 70+ seat jets or props (Q400) are the only way to go unless you have longer/thinner routes with virtually no competition so that you can preserve your margin. Otherwise, 50 seaters just won't cut it. I agree, time for Delta to cut more dead weight 50-seat RJs...

I don't know how regionals like Eagle and Comair do it here in the Northeast on competitive routes (BOS-LGA or LGA-DCA) with their E135s and CRJ-200s. Or Eagle ERJs out in SoCal competing against Southwest and UAL. Their load factors have got to be very high for every flight to break even... Feed is important, but you need profitable feed to survive.

 

[General Lee]

I guess Southwest took this quarter off. They seemed to not lose $70 million. CAL must have not participated in the 4th quarter either.

My "guess" to your quarterly loss is this: You guys don't have a strong business model like CAL, your costs are too high, and your scratching at a merger to bail yourselves out. But that's just a guess. I tend to think that companies try to make money.

I don't think Southwest could lose $70 million in a quarter if they tried. (too bad they won't hire you) CAL also did well. This is not a conspircay theory but, anyone actively persuing a potential merger seemed to have a loss thanks to gas. CAL never said it wanted to merge with anyone, unless they HAD to. Southwest has now said the same. Everyone else wants to merge now.

As far as how a merger would affect us---the right one will keep us in the game for the long run. A good fit will make us a formitable competitior to anyone in the World--offering Asia, Europe, North America, South America, and Africa. That seems to be the idea, anyway, and it could become a great thing. Competing on global scale will produce more profits than being a domestic only carrier. No doubt there.

And can you please read the 2007 report for Delta. You may learn something.


Bye Bye--General Lee

 

[John Pennekamp]

50-seaters are an anachronism in this age of high oil prices. 70+ seat jets or props (Q400) are the only way to go unless you have longer/thinner routes with virtually no competition so that you can preserve your margin. Otherwise, 50 seaters just won't cut it. I agree, time for Delta to cut more dead weight 50-seat RJs...

Why do you mention the Q400? If your theory is correct, you would want the more efficient airplanes. The Q400 burns 75% the fuel of a CRJ-200 on a given route. The ATR-72 burns about 25%.

 

[~~~^~~~]

General: Listen to the conference call before making any more "RJ getting parked" predictions.... pick up the recording around 38:30

 

[737 Pylt]

Why do you mention the Q400? If your theory is correct, you would want the more efficient airplanes. The Q400 burns 75% the fuel of a CRJ-200 on a given route. The ATR-72 burns about 25%.

Just wondering.....
Who wants the ATR parked? Sky or DAL?
It would seem that the ATR is weight restricted a lot less then the rj is!?

737

 

[On Your Six]

Why do you mention the Q400? If your theory is correct, you would want the more efficient airplanes. The Q400 burns 75% the fuel of a CRJ-200 on a given route. The ATR-72 burns about 25%.

Fair enough, the lastest versions of the ATR-72 would work too. I would look at acquisition cost as well - which manufacturer (ATR or Bombardier) could provide the best volume-discount deal. We always forget the financing cost in the equation vs. operating cost.