DL loses $2.2B for the Q

[lowecur]

This is amazing. Without the $1.1B loan from GE, DL would have less than $1B cash. The actual loss without special charges was close to $750M. What the hell is next?

http://biz.yahoo.com/prnews/050120/clth026_1.html

 

[holdon]

Wow....

 

[Pimpin']

This is amazing. Without the $1.1B loan from GE, DL would have less than $1B cash. The actual loss without special charges was close to $750M. What the hell is next?

http://biz.yahoo.com/prnews/050120/clth026_1.html

Well at least they've lowered ticket prices to help get the ship turned around!

 

[SWA/FO]

Now all they need is a fuel hedge.

 

[michael707767]

Now all they need is a fuel hedge.

yes, and they will be back to the employees for more to finance the hedges.

 

[Dizel8]

"Well at least they've lowered ticket prices to help get the ship turned around"!

So they got that going for them, which is nice!

 

[F9 Driver]

Welcome to F9's world for the past two years...Hang on tight it gets wierd!

 

[FlyFastLiveSlow]

Welcome to F9's world for the past two years...Hang on tight it gets wierd!

Nice avatar!!

 

[Russ]

Standby for a rosier picture. Only one person can tell me how losing that much money really isn't all that bad because they are doing this and doing that and surely things are happening behind closed doors that will DAL back in the hunt in no time flat.

Where are you omnipresent one?

 

[IB6 UB9]

Standby for a rosier picture. Only one person can tell me how losing that much money really isn't all that bad because they are doing this and doing that and surely things are happening behind closed doors that will DAL back in the hunt in no time flat.

Where are you omnipresent one?

Last seen over on the Regionals board gloating about his job to the "little people".

 

[a320drivr]

Wheres the general? I need to hear its not true and the numbers were just massaged.

 

[General Lee]

A320drivr,


Yes, it is all a lie. We actually MADE $17 billion this MONTH.


What? I stated yesterday that we would have a huge loss. A lot of this loss is paper, but $750 million or so is not, and that does hurt big time. The savings from our paycuts and the non-union employees paycuts has NOT been shown since they came late in the quarter. We don't hedge anymore, and we have been pulling down our DFW base and losing a bunch of senior Captains to early retirements. We had 480 or so leave in the 4th quarter alone, and each one leaving early takes some from the pot. I can see why we have a bunch of one time charges, and I can see why we lost a lot of "actual" money---with high fuel prices and a slow quarter---plus the Comair computer outage and the ice storm in CVG. Yeah, it was a terrible quarter.


Bye Bye---General Lee

 

[jbucpt]

how could delta lose so much when Song's flights are full??? is Song part of delta or is delta part of Song? General....could you enlighten me??

 

[skykid]

GL,


An article said that Delta finished the 4th qtr with 2.1bil - do you know how much they started the qtr with? For anybody, did any 121 besides Southwest make money last qtr? I have not seen Airtrans numbers.

 

[General Lee]

JBUCAPT,


Man alinve, you really do seem to rellish our misfortune. That is ok, I can understand that. The Song flying MAY BE our only profitable flying, since we really do not know. It can't be the savings grace, though.


Here is part of an article describing some of the losses or peper losses---looks like a lot is blamed on RJs:



"The bulk of the charges Delta reported in the quarter relate to reductions in the fair value estimates of two of its feeder carriers - Atlantic Southeast Airlines Inc. and Comair Inc. Delta said this resulted from increased fuel prices, low fares and costs associated with its turnaround plan.

On Christmas, Comair had to cancel all 1,100 of its flights because of a computer glitch and chief financial officer Michael Palumbo estimated Thursday that the incident cost the airline $20 million in lost revenue and added operating expenses.

In the quarter, Delta said its passenger unit revenue decreased 5.6 percent compared with a year ago as fares were 7.7 percent lower. Fuel expenses increased $385 million in the quarter.

Delta nearly fell into bankruptcy 2 1/2 months ago before winning deep concessions from pilots and fresh financing from creditors.

Analysts say it will take several more months to determine if Delta's transformation plan is working. If it does, Delta could turn a quarterly profit by the fall, some analysts say. Wild cards that remain: fuel prices, the economy and the company's recent fare overhaul.

The 32.5 percent pay cut pilots at the nation's third-largest airline accepted in November did not take effect until Dec. 1, so not much of those benefits were realized in the fourth-quarter 2004 results. And the financing agreements the airline secured around the same time called for some of the money to be provided in installments.

The most recent element of Delta's transformation plan - cutting its most expensive fares by up to half on routes nationwide - has met mixed reviews from analysts and industry observers since it was announced Jan. 5.

Another element of its transformation plan has been more job cuts and the shedding of its Dallas hub. In September, Delta said it would cut up to 7,000 jobs over 18 months. Delta said Thursday that 3,400 employees have opted to participate in voluntary work force reduction programs."




Bye Bye---General Lee

 

[surplus1]

Delta's statement has effectively reduced the "book value" of ASA and Comair to zero. That means if they are both "sold" tomorrow, whatever is generated would be a "gain" for Delta. If they were both closed tomorrow, it would cost Delta nothing. The "write off" accounts for 1/9 billion of the 2.2 billion dollar loss.

"Goodwill" is a hypothetical value that can be whatever the accountant says it is. The computer fiasco at CMR may well have cost 20 millions but it doesn't come close to the 1.9 billion that Delta has decided to "write off". The actual operating loss of about 750 millions is the focus. That's bad, but as the General says it does not account for any of the recent changes made at Delta, which will be seen in the first quarter of 2005.

Anybody want to buy CMR or ASA or both?

 

[spinproof]

JBUCAPT,


Here is part of an article describing some of the losses or peper losses---looks like a lot is blamed on RJs:



"The bulk of the charges Delta reported in the quarter relate to reductions in the fair value estimates of two of its feeder carriers - Atlantic Southeast Airlines Inc. and Comair Inc. Delta said this resulted from increased fuel prices, low fares and costs associated with its turnaround plan.


Bye Bye---General Lee

Fair market write downs of assets are accounting standards practice and has nothing to do with that assets ability to return profits. The word "blame",as it relates to RJ's, is hardly a fair assessment of the foregoing and your attempt to paint it as so is disingenous and uninformed.

 

[#1 Windmilling]

Delta Air sees increased capacity in 2005
Thu Jan 20, 2005 10:04 AM ET
NEW YORK, Jan 20 (Reuters) - Delta Air Lines (DAL.N: Quote, Profile, Research) on Thursday said it expects capacity to increase by 6 percent to 8 percent in 2005 as a result of its restructuring efforts, adding the increase will not require any capital investment.

Capacity will increase 6 percent to 8 percent in the first quarter, 4 percent to 6 percent in the second quarter, 6 percent to 8 percent in the third quarter, and 7 percent to 9 percent in the fourth quarter, Chief Financial Officer Michael Palumbo said on a conference call with analysts.

Continental Airlines sees capacity up in 2005
Thu Jan 20, 2005 11:01 AM ET
CHICAGO, Jan 20 (Reuters) - Continental Airlines Inc. (CAL.N: Quote, Profile, Research) sees its mainline system capacity, or the number of seats it puts up for sale, up 2.7 percent in the first quarter and up 5 percent for all of 2005, an airline executive said during a conference call on Thursday.


I am not sure I get it. These companies complain over capacity in the marketplace is placing undue pressure on revenue AND announce fare cuts, yet are poised to add more capacity! It looks to me like Delta's fare war is squarely aimed at driving weaker carriers to liquidate while positioning themselves to fill the void. General, thoughts?

#1 W

 

[General Lee]

Spinproof,

Thank you for not finding any misspellings in my last post. I know you really love to point them out, and if you look again you probably will find some. Here is a brief look at what some of our losses today mean: (as posted on the Dalpa website)


Delta's announcement today is an "impairment charge" against Goodwill (amount paid in excess of fair value - when buying an asset). Delta today took a charge against goodwill of 1.9 billion against the ASA and Comair goodwill. This is more than the combined buying price of both entities. Thus saying they have negative value. In other words the purchase of ASA and Comair was a total waste of money and they have No value or Negative value today.

(1) A $1.9 billion goodwill impairment charge in accordance with SFAS 142 (4). This standard requires a company to assess, at least annually, whether the book value of an entity is at least equal to its fair value. If not, an impairment charge must be recorded. Increased fuel prices, the difficult revenue environment and the implementation of certain initiatives pursuant to our recently completed strategic review resulted in reductions to Atlantic Southeast Airlines, Inc. (ASA) and Comair, Inc. fair value estimates. This resulted in the requirement that we write off ASA and Comair goodwill.



Could this mean a probable sale in the near term? I don't know. But, I hope we see a bunch of ASA pilots on our property eventually regardless.




Bye Bye--General Lee

 

[BID]

"Here is part of an article describing some of the losses or peper losses---looks like a lot is blamed on RJs:"


Comair's computer glitch cost the company money, but I don't think it was the RJ's?

RJ's make money, Delta Connection makes money.

Traffic is up, fares are too low and fuel prices are too high. We read about this just about every other day. Your wage reduction will help, but it will only buy time. So what is management doing? Was there not to be a big announcement at Delta? Was the fare structure it? Great.

Lets assume the price of fuel will not drop this year and the price of tickets will remain low, what needs to be done to make money? I have very little faith in the managment skills at both United and DAL, and guess who we feed!

One word "bummer"