DL 4th Qr Loss and parking RJ's

[SPDBRD747400]

Who is going to be parking RJ's, Comair maybe or hopefully Freedumb is gone!


WASHINGTON, Dec 4 (Reuters) - Delta Air Lines Inc (DAL.N: Quote, Profile, Research) said on Tuesday that it may post an operating loss in the fourth quarter because of higher-than-expected fuel prices.
The No. 3 U.S. carrier lowered its operating profit margin target to a range of 0 percent to negative 2 percent. That compares with an October forecast of an operating profit margin of 3 percent to 5 percent, Delta said in a filing with the U.S. Securities and Exchange Commission.
The company also raised its forecast for fourth-quarter jet fuel to $2.60 from $2.36 per gallon. Delta said it was responding to higher fuel prices by reducing capacity.
It said it took 13 domestic aircraft out of its fleet during the fourth quarter. Delta also plans to cancel the equivalent of 10 domestic mainline aircraft and 35 regional jets by grounding aircraft and reducing utilization.
Delta said it expected 2008 domestic capacity to decline 4 percent to 5 percent.
Some of those planes will be transferred to more lucrative international routes. Delta forecast international capacity to rise 15 percent next year.
The company plans to cut costs by about $400 million in 2008, in part by installing lighter seats and winglets on certain aircraft and halting hiring of back-office jobs. (Reporting by Chris Reiter; Editing by Maureen Bavdek)

 

[blott]

Don't remember how many 135's CHQ has, but BB has said they are going away.

B

 

[flyguy81]

15 135's start going away in sept i think

 

[~~~^~~~]

4th quarter is always tough. 50% increase in fuel costs makes it tougher.

 

[norskman2]

I love the spin!

They didn't lose money. They just had a "negative profit"!

 

[sweptback]

My guess:

15 CHQ 135s
8 Freedom 145s
12 ASA ATR 72s

 

[time builder]

Hate to say it, but I had a feeling this was coming.

 

[wmuflyguy]

They mentioned the "equivalent of 35 regional aircraft" So park a few and just fly the others less. More long airport breaks!

 

[Crash Pad]

And just like that the pilot shortage is solved. That was close.

Hey Delta management here is an idea. Plan on gas going higher... It sounds kind of silly when you never anticipate oil going up. Plan on $100 a barrel and then if it is $70 guess what you come out OK.

Note: Watch Southwest have a hedge and then everyone will say that the "only reason they make money is..."

 

[OCP]

My guess:

15 CHQ 135s
8 Freedom 145s
12 ASA ATR 72s

Why the ATRs? They burn about 1/2 of what the 200 does.

 

[Crash Pad]

OCP another outburst like that and you can go to Europe. Drive a diesel and use timed light switches!

This is America. Passengers want a jet so they get a jet no matter what the cost!

 

[General Lee]

Notice how the article said the "equivalent" of 10 mainline planes? In reality, the remaining domestic 764s and some domestic 763s will be transferred from domestic flying to INTL flying, and will go through modifications for the business elite seats. Didn't I say more 50 seaters were going to be parked?


Bye Bye--General Lee

 

[Flybywire44]

My guess:

15 CHQ 135s
8 Freedom 145s
12 ASA ATR 72s

Yes fuel is getting more expensive so lets get rid of the most fuel efficient aircraft in the DAL fleet. Awesome.

 

[Indy319FA]

Most of this has already been announced. CHQ is parking all 15 of its 135s, plus Comair is parking 14 CRJ 100s. In return SA is getting EMB 175s and OH is getting CRJ 900s.

Would be surprised if DL parked the ATRs given the price of fuel. If fuel stays high, look for 50 seaters to be parked and be replaced by a mix of 70-90 seaters and turboprops in the markets that wont support a 70 seat aircraft. Bombardier and Embraer have anticipated this and have already made plans to convert 37 and 50 seaters into business jets.

The 50 seat jets just don't make financial sense with fuel prices where they are. They were an artificial creation of mainline scope clauses, and now that these clauses permit larger aircraft more 50 seaters will be swapped for CRJ 700s, 900s, and EMB 170 family aircraft. Look for DL to place turboprops on shorter routes (already happening in CVG with BE 1900s). Wouldn't be surprised to see more turboprops next year, particularly if fuel stays high.....

 

[BoilerUP]

Too bad the Saab 2000 still isn't being built...

 

[rocket bob]

What does the margin forecast of flat to -2% do to the anticipated 3-6% raise the pilots were supposed to receive. Does this mean they get 1.5% instead?

 

[samballs]

Notice how the article said the "equivalent" of 10 mainline planes? In reality, the remaining domestic 764s and some domestic 763s will be transferred from domestic flying to INTL flying, and will go through modifications for the business elite seats. Didn't I say more 50 seaters were going to be parked?


Bye Bye--General Lee

Who hasn't said DL is gonna get rid of more 50's

 

[scarlet]

DL is making it look like they need to MERGE--here we go.

 

[~~~^~~~]

No they are not. Merger would be a whole lot more extreeme, but it does not make sense and the press is beginning to get that story out. Mergers do not make the cost of fuel go down and the legacy carriers are well positioned to adjust capacity if need be. Cheap MD88's can be parked, 757's can backfill 767's as they go further out internationally. (Can AirTran, or JetBlue, afford to park their jets with high lease payments?)

General is close, but not completely right. As I understand things, Delta has returned 13 mainline aircraft this year and recieved other aircraft. Overall the Delta fleet should grow by some 14 jets by the end of 2008. As soon as scope was expanded to allow 200 large RJ's we all knew the 35, 40 and 50 seaters would be swapped for 900's. Much of this was already in the works.

Delta has to be responsive to the owners of the Company. When the 4th quarter is coming in below projections due to a 50% increase in the cost of fuel an explanation has to be offered to the owners of the Company. Most of the answer has already been carefully considered, evaluated and acted on.

I think the price of fuel will raise the pressure on Delta to consider re-fleeting before the plastic wonder jet gets here 5 to 10 years from now. Cheap lease rates on older equipment might not be enough. This might lead to another round of scope wars with the MD88 being at risk.

 

[fatdumbandhappy]

I hope these mergers take place soon, we just need to get it over with and start moveing forward.... open skies is just around the corner.