General Lee
Well-known member
- Joined
- Aug 24, 2002
- Posts
- 20,442
I would probably be tired and bored as well, if I were you, General...... Just put the sippy-cup you have been swilling Kool-Aid from back in the pantry, now..... Play time is over-you need some nite-nite time, now.
When SWA comes in and completely kicks your butt, and when the Eurpoean routes that DAL has invested so much in fail, just get back to me...... Tough times ahead for everyone, but especially for those who don't remember the lessons of the first DAL near-BK (as you like to call it.) In the early 90s, DAL totally over-extended into Europe, and when the boys across the pond had a recession, (by today's standard a mere sniffle-compared to the current crash-cart situation) DAL ate it hard.
So here's to you-Gen. You keep right on believeing that crap, but you really should be worried. DAL has played this game before, and was lucky to survive. Back then, SWA was not a threat-but with AirTran weakened or out of business , you will really have some problems to deal with, and much worse than who has more flight to CAK.
Good Luck-you will need it!
OH-KAAAAAY? Anyways, who is this guy? Herb Kelleher's son? We have a Major Corndog here. Yikes. Anyways.......Did you hear how SWA was doing lately?
Reuters
Volatile fuel puts Southwest, Continental into loss
Thursday October 16, 11:05 am ET
By Kyle Peterson and Bill Rigby
CHICAGO/NEW YORK (Reuters) - Volatile fuel prices caused losses at Continental Airlines (NYSE:CAL - News) and its low-cost rival Southwest Airlines (NYSE:LUV - News) in the third quarter as airlines struggled to adjust to wild swings in the cost of oil.
Continental blamed its loss on a spike in fuel prices that accompanied the run-up in crude oil to a record high in July. Expensive fuel also plagued Continental's rivals AMR Corp (NYSE:AMR - News), parent of American Airlines, and Delta Air Lines (NYSE:DAL - News), which reported losses on Wednesday.
Southwest was cut by the other side of that sword, writing down $247 million in mark-to-market losses on the value of its fuel hedge program after a stunning 50 percent drop in oil prices since July 11, when crude hit its record high above $148.
"I can assure you that falling energy prices is a great thing for Southwest Airlines," Southwest Chief Executive Gary Kelly told reporters.
The shares of both airlines rose more than 3 percent in premarket trading.
But he added that it may be time to "dehedge a bit," because "nobody knows where the bottom is."
Southwest, whose fuel hedges are the envy of the industry, was somewhat insulated from the more expensive fuel costs but reported charges of $247 million related to adjustments on a portion of the future period of its hedge portfolio.
Despite the drop in fuel prices, which lessened the value of its hedge portfolio, Southwest said its fuel hedge remains "in the money," meaning it has locked in prices that are below current market prices.
The airline industry has cheered the recent drop in oil prices, but carriers worry that ongoing economic weakness could lead to a decline in travel demand. So far, however, airlines have blunted any impact from weaker demand by sweeping capacity cuts that have reduced costs and bolstered fares.
CONTINENTAL LOSS
Continental, the No. 4 U.S. carrier, reported a third-quarter net loss of $236 million, or $2.14 per share, compared with a profit of $241 million, or $2.15 per share, in the year-earlier quarter.
Excluding some one-time items, it reported a loss of $1.32 per share. That was narrower than the $1.55 per share loss Wall Street was expecting, according to Reuters Estimates.
The Houston-based carrier blamed its loss partly on operational disruptions caused by Hurricane Ike. The storm weakened the airline's operating results by about $50 million.
Continental's revenue rose 9 percent to $4.2 billion. The company said it ended the quarter with $2.9 billion in unrestricted cash, cash equivalents and short-term investments.
"During the quarter, the high cost of fuel continues to be a challenge, outpacing strong revenue gains," Continental Chief Financial Officer Zane Rowe said in a statement.
Continental also said on Thursday it would push back the delivery of some Boeing Co (NYSE:BA - News) planes as the airline's capacity dips. It said it would now take two wide-body 777s in 2010 rather than 2009 and agreed to push back delivery of 16 single-aisle 737s to start in 2011, rather than the original schedule of 2009 and 2010.
Continental also said Boeing would provide backstop financing for the 14 planes it is scheduled to deliver to Continental next year.
The delivery deferrals and possibility of providing financing is bad for Boeing, which would prefer to deliver planes as soon as possible and minimize its involvement in financing customers' purchases.
The Chicago-based plane maker is already struggling with a slowdown in new orders, and a five-week strike that has idled its Seattle-area plants.
SOUTHWEST HEDGES CAUSE LOSS
Southwest, the world's leading discount carrier, reported a quarterly net loss of $120 million, or 16 cents per share, compared with a profit of $162 million, or 22 cents per share, a year earlier.
Excluding one-time items, Southwest earned $69 million, or 9 cents per share, beating the average Wall Street estimate of 7 cents per share, according to Reuters Estimates.
The airline said its revenue was $2.9 billion, a gain of 11.7 percent. The company ended the quarter with $3.4 billion in cash and short term investments.
Southwest said that because of the strike at Boeing, it will likely not take delivery of three remaining planes originally scheduled for this year. The carrier said it now expects to take delivery of 13 Boeing 737-700 aircraft next year. (Editing by Maureen Bavdek)
Bye Bye--General Lee