DL sees 2nd Q profit, plans 13% capacity cut for 2nd half 2008

General Lee

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Reuters
Delta sees second-quarter profit, plans capacity cuts
Wednesday June 18, 200 pm ET
CHICAGO (Reuters) - Delta Air Lines (NYSE:DAL - News) on Wednesday said it expected to post a profit in the second quarter, excluding special items, and plans to cut its domestic capacity by 13 percent in the second half of 2008
In a government filing, the airline, which plans to merge with Northwest Airlines (NYSE:NWA - News), said it has hedged 43 percent of its anticipated 2008 fuel consumption.
(Reporting by Kyle Peterson, editing by Phil Berlowitz)


Does anyone remember how much Delta initially planned on cutting? Was it 10%? Hopefully more RJs will go. Also, I think we will have a "special charge" for the quarter, concerning severence packages for the 4000 people who took an early out. I think it was about $103 million for the 3000 initial workers, so 4000 will cause it to rise.


Bye Bye--General Lee
 
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Jack Schitt

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Reuters
Delta sees second-quarter profit, plans capacity cuts
Wednesday June 18, 200 pm ET
CHICAGO (Reuters) - Delta Air Lines (NYSE:DAL - News) on Wednesday said it expected to post a profit in the second quarter, excluding special items, and plans to cut its domestic capacity by 13 percent in the second half of 2008
In a government filing, the airline, which plans to merge with Northwest Airlines (NYSE:NWA - News), said it has hedged 43 percent of its anticipated 2008 fuel consumption.
(Reporting by Kyle Peterson, editing by Phil Berlowitz)


Does anyone remember how much Delta initially planned on cutting? Was it 10%? Hopefully more RJs will go. Also, I think we will have a "special charge" for the quarter, concerning severence packages for the 4000 people who took an early out. I think it was about $103 million for the 3000 initial workers, so 4000 will cause it to rise.


Bye Bye--General Lee

Don't worry, there won't be any furloughs at Delta. They have millions of 777's on firm order and they can't cancel any of them. Those airplanes are staffed at 500 pilots per airplane so Delta will be hiring for the next millenium.
 

General Lee

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Press ReleaseSource: Delta Air Lines, Inc.

Delta President and CFO Provides Update On Response to Record Fuel Prices, Ongoing Steps to Build Industry-Leading Global Airline
Wednesday June 18, 2:28 pm ET

Delta adds to previously announced capacity changes, now expects to reduce domestic capacity 13 percent in second half of 2008; international growth remains on track Company guides to profitable June quarter, excluding special items

NEW YORK, June 18, 2008 (PRIME NEWSWIRE) -- Delta Air Lines (NYSE:DAL - News) President and Chief Financial Officer Edward H. Bastian today at the Merrill Lynch Global Transportation Conference will provide updated guidance on the company's efforts to fight rising fuel costs and its long-term approach to building a sustainable, profitable business model. Proactive initiatives focus on: * Improving profitability through continued domestic capacity rationalization and building a diverse international network which includes service to unique and emerging markets. Delta consolidated domestic capacity is now expected to be down 13 percent during the second half of the year, an increase from the 10 percent reduction announced in March; international capacity expected to be up 14 percent for the same period. * Maintaining a strong liquidity position, despite the $4 billion impact in 2008 of unprecedented fuel prices. * Completing the proposed merger with Northwest Airlines to build a strong global competitor with increased cost and revenue synergies.

`Delta has been a first-mover to aggressively respond to the challenges facing our industry with domestic capacity cuts, associated cost reductions, and a focus on preserving liquidity,'' Bastian said. ``These actions combined with our game-changing merger with Northwest are positioning Delta for long-term success as a strong competitor against any airline around the globe.''

Improving profitability through international growth, domestic capacity reductions

By successfully realigning its network to rationalize domestic capacity while expanding globally, Delta's revenue per available seat mile has improved from 86 percent of industry average in 2005 to 102 percent of industry average through the first four months of 2008. International flying continues to be a strong component of the carrier's business plan with service to five continents and 20 new international routes launched in 2008. International capacity for the year is expected to be up 15-17 percent -- in line with previous guidance.

In response to rising fuel costs, the company is adding to previously announced plans to reduce domestic capacity by 10 percent year over year in the second half this year and now plans for total domestic capacity reductions of 13 percent in the second half of 2008. As previously announced, Delta plans to remove the equivalent of 15-20 mainline and 60-70 regional jet aircraft from its operation by the end of 2008.

While capacity reductions have resulted in some market cancellations, most are being made through frequency and point-to-point reductions, as well as seasonal adjustments. Delta will continue to monitor the economic and fuel environment and make additional adjustments as necessary.

``The diversity of Delta's network has provided the financial balance we need to counteract the soft U.S. economy and tough fuel environment. International routes continue to be a boon for us as we carefully manage domestic capacity. While it's important to maintain a broad domestic presence for our customers and employees, as well as to feed international routes, we remain flexible and will make additional adjustments if needed,'' said Bastian.
Delta in December began adjusting domestic capacity in light of record fuel costs.

Previously announced route cancellations have included service between Orlando and cities such as Las Vegas; Fort Lauderdale, Fla.; and Little Rock, Ark., as well as nonstop flights between Boston and cities such as Charleston, S.C. and Greensboro, N.C.
While a small number of additional market cancellations are expected as fall schedules are finalized, most reductions are being achieved through frequency reductions and by eliminating a number of unprofitable routes with particular focus on point-to-point flights that can more profitably and efficiently be served via Delta's hubs. Sample cancellations, effective late summer, include flights between: * Orlando, Fla. and Nashville, Tenn.; Key West, Fla.; Raleigh- Durham, N.C.; Birmingham, Ala.; Columbus, Ohio; Lexington, Ky.; New Orleans, La.; Panama City, Fla.; Richmond, Va.; Louisville, Ky.; and Knoxville, Tenn.; * Boston and Jacksonville, Fla. and Norfolk, Va.; * Las Vegas and Los Angeles; and * Pensacola, Fla. and Fort Lauderdale and Tampa, Fla.
As part of Delta's commitment to both provide employees with flexibility and remove costs associated with capacity reductions, the airline in March was the first U.S. carrier to announce voluntary retirement and early out programs for employees. With more than 4,000 Delta and Delta Technology employees electing to participate in the programs, the airline is positioned ahead of the industry to achieve cost reductions associated with capacity pull downs.

Expecting profitable June quarter, excluding special items; maintains strong liquidity position
Delta expects a profitable June quarter excluding special items(1), and expectations remain in line with previous guidance. Despite a $4 billion increase in fuel costs in 2008, the airline's liquidity remains strong thanks to a solid operating cash flow, controlled capital expenditures and aggressive fuel hedge program. The airline expects to end 2008 with $3.2 billion in unrestricted liquidity, down just $600 million from Dec. 31, 2007.
Delta's aggressive, multiyear fuel hedge strategy is expected to offset nearly $1 billion in fuel cost impact for 2008 and continue to provide benefits in subsequent years. The airline's hedge portfolio through 2010 is currently valued at approximately $1.5 billion.

June 2008 Quarter Second Half: 2008 ----------------- ----------------- Operating Margin 3 - 4% Fuel Price $3.18 $3.63 Mainline Non-Fuel CASM (vs. prior year) Up 1 - 2% System Capacity (vs. prior year) Up 1 - 2% Down 4% Domestic Down 6 - 7% Down 13% International Up 16 - 17% Up 14%

Merger strengthens long-term outlook by creating strong, global competitor
Delta continues to focus on the proposed merger with Northwest Airlines to create a global airline better positioned for strength and profitability over the long term with greater customer preference and a worldwide, geographically balanced network. Bastian said. A merger of strength, the airlines will combine best-in-class cost structures, industry-leading balance sheets and complementary networks. With integration planning under way, Delta and Northwest expect to find opportunities to both reduce one-time costs and increase synergies. Delta expects the merger to receive required regulatory approvals by the end of the year.

Bye Bye--General Lee
 
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johnboy99

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Reuters
Delta sees second-quarter profit, plans capacity cuts
Wednesday June 18, 200 pm ET
CHICAGO (Reuters) - Delta Air Lines (NYSE:DAL - News) on Wednesday said it expected to post a profit in the second quarter, excluding special items, and plans to cut its domestic capacity by 13 percent in the second half of 2008
In a government filing, the airline, which plans to merge with Northwest Airlines (NYSE:NWA - News), said it has hedged 43 percent of its anticipated 2008 fuel consumption.
(Reporting by Kyle Peterson, editing by Phil Berlowitz


Bye Bye--General Lee

Excluding special items, you mean like the cost of the fuel bill. Dream on dude, let me know what the front page of the USA Today says sometime in July when the second quarter results are announced.
 

General Lee

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Excluding special items, you mean like the cost of the fuel bill. Dream on dude, let me know what the front page of the USA Today says sometime in July when the second quarter results are announced.


Thanks Johnboy. Read above first, and call Ed Bastain and ask him some questions....


Bye Bye--General Lee
 

General Lee

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Don't worry, there won't be any furloughs at Delta. They have millions of 777's on firm order and they can't cancel any of them. Those airplanes are staffed at 500 pilots per airplane so Delta will be hiring for the next millenium.

So far, you appear to be right. Fingers crossed!

Bye Bye--General Lee
 

FDJ2

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It doesn't look like any additional mainline aircraft being parked. Consolidated(mainline and RJ) domestic capacity reductions increased from previous 10% to 13%. A 3% increase from what was previously announced. International still expected to rise 14 %.

Expected cash at the end of 2008 expected to be $3.2B.

NEW YORK, June 18, 2008 – Delta Air Lines (NYSE: DAL) President and Chief Financial Officer Edward H. Bastian today at the Merrill Lynch Global Transportation Conference will provide updated guidance on the company’s efforts to fight rising fuel costs and its long-term approach to building a sustainable, profitable business model. Proactive initiatives focus on:

Improving profitability through continued domestic capacity rationalization and building a diverse international network which includes service to unique and emerging markets. Delta consolidated domestic capacity is now expected to be down 13 percent during the second half of the year, an increase from the 10 percent reduction announced in March; international capacity expected to be up 14 percent for the same period........

Improving profitability through international growth, domestic capacity reductions
By successfully realigning its network to rationalize domestic capacity while expanding globally, Delta’s revenue per available seat mile has improved from 86 percent of industry average in 2005 to 102 percent of industry average through the first four months of 2008. International flying continues to be a strong component of the carrier’s business plan with service to five continents and 20 new international routes launched in 2008. International capacity for the year is expected to be up 15-17 percent – in line with previous guidance.
In response to rising fuel costs, the company is adding to previously announced plans to reduce domestic capacity by 10 percent year over year in the second half this year and now plans for total domestic capacity reductions of 13 percent in the second half of 2008. As previously announced, Delta plans to remove the equivalent of 15-20 mainline and 60-70 regional jet aircraft from its operation by the end of 2008.
While capacity reductions have resulted in some market cancellations, most are being made through frequency and point-to-point reductions, as well as seasonal adjustments. Delta will continue to monitor the economic and fuel environment and make additional adjustments as necessary.......

Expecting profitable June quarter, excluding special items; maintains strong liquidity position
Delta expects a profitable June quarter excluding special items1, and expectations remain in line with previous guidance. Despite a $4 billion increase in fuel costs in 2008, the airline’s liquidity remains strong thanks to a solid operating cash flow, controlled capital expenditures and aggressive fuel hedge program. The airline expects to end 2008 with $3.2 billion in unrestricted liquidity, down just $600 million from Dec. 31, 2007.
Delta’s aggressive, multiyear fuel hedge strategy is expected to offset nearly $1 billion in fuel cost impact for 2008 and continue to provide benefits in subsequent years. The airline’s hedge portfolio through 2010 is currently valued at approximately $1.5 billion.
 
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bravodude

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Delta's aggressive, multiyear fuel hedge strategy is expected to offset nearly $1 billion in fuel cost impact for 2008 and continue to provide benefits in subsequent years. The airline's hedge portfolio through 2010 is currently valued at approximately $1.5 billion.


Just wait untill everyone starts to chime in about how this is going to kick you in the arse when fuel comes back down. (oh wait thats only with SWA).
The real question is what price these hedges are at.
 

ip241au

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Reuters
Delta sees second-quarter profit, plans capacity cuts
Wednesday June 18, 200 pm ET
CHICAGO (Reuters) - Delta Air Lines (NYSE:DAL - News) on Wednesday said it expected to post a profit in the second quarter, excluding special items, and plans to cut its domestic capacity by 13 percent in the second half of 2008
In a government filing, the airline, which plans to merge with Northwest Airlines (NYSE:NWA - News), said it has hedged 43 percent of its anticipated 2008 fuel consumption.
(Reporting by Kyle Peterson, editing by Phil Berlowitz)


Does anyone remember how much Delta initially planned on cutting? Was it 10%? Hopefully more RJs will go. Also, I think we will have a "special charge" for the quarter, concerning severence packages for the 4000 people who took an early out. I think it was about $103 million for the 3000 initial workers, so 4000 will cause it to rise.


Bye Bye--General Lee
Thank goodness this was announced after the market closed.
 

General Lee

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Thank goodness this was announced after the market closed.


The market closes at 2pm? Really? I thought it was later than that? Hmmm.


Bye Bye--General Lee
 

General Lee

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Looks like we will start JFK--Buenos Aires in December....

Press ReleaseSource: Delta Air Lines, Inc.

Delta Air Lines Grows in Latin America With New Service Between New York-JFK and Buenos Aires
Wednesday June 18, 3:14 pm ET
Customers invited to enjoy summer in the Southern Hemisphere as nonstop flights between New York-JFK and Argentina start Dec. 18, 2008
NEW YORK, June 18, 2008 (PRIME NEWSWIRE) -- Delta Air Lines (NYSE:DAL - News) announced today new nonstop daily service between New York's John F. Kennedy International Airport (JFK) and Buenos Aires, Argentina, starting Dec. 18, 2008.*
The new Delta flight to Buenos Aires complements the airline's existing daily service to Argentina from Atlanta's Hartsfield-Jackson International Airport.
Delta's schedule between New York-JFK and Buenos Aires starting Dec.18, 2008: Flight Departs Arrives Frequency DL 193 New York-JFK at Buenos Aires at Mon/Thu/Fri/Sat/Sun 10 p.m. 12:20 p.m. DL 192** Buenos Aires at New York-JFK at Mon/Tue/Fri/Sat/Sun 10:15 p.m. 6:25 a.m. ** Flight begins Dec. 19, 2008.
In celebration of the new JFK-Buenos Aires service, Delta offers a special one-way introductory fare of $459*** for travel between Jan. 5 and Feb. 27, 2009. Round-trip ticket purchase required. Tickets must be purchased by July 1, 2008. Additional taxes/fees/restrictions/baggage charges may apply. Details are included below.

``Delta continues to move forward with its international expansion despite current challenges of escalating fuel costs, and today we are a strong, competitive leader in the industry,'' said Christophe Didier, vice president of Sales and Government Affairs for Latin America and the Caribbean for Delta. ``This new flight between New York and Buenos Aires is a tremendously important step as we add more routes and destinations throughout Central and South America and the Caribbean.'' Delta recently announced its new flight between New York-JFK and Bogota, Colombia, scheduled to begin Aug. 19. From New York, the airline also offers year-round and seasonal nonstop service to 18 destinations in Latin America and the Caribbean, including Guatemala City, Panama City, Sao Paulo, and San Jose and Liberia, Costa Rica.



Bye Bye--General Lee
 

ip241au

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GL,

My mistake. The market was open when this announcement was made. The stock was still down a little less than 5% today. Guess the market needs time to digest this good news.
 

FDJ2

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GL,

My mistake. The market was open when this announcement was made. The stock was still down a little less than 5% today. Guess the market needs time to digest this good news.

Looks like Delta wasn't alone.

http://money.cnn.com/data/sectors/Airlines/

You don't think this had anything to do with it do you?

Crude oil: 136.68 +2.67



"Crude oil futures rose for the first time in four days after a statement that US President George W. Bush is not expecting announcements of increased oil production at a June 22 conference in Saudi Arabia.

''No one is expecting to see announcements of increased production,'' White House spokesman Tony Fratto said. The meeting to discuss ways to stabilize prices will be held in the Red Sea port of Jeddah and involve producers, major industrial nations and banks.

''There were some hopes that there would be some substantive moves from Saudi Arabia from the meeting, but it looks like it's going to be something more akin to group therapy than moves to quell the market's fears about sufficiency of supplies,'' said John Kilduff, vice president of risk management at MF Global.

Crude oil for July delivery rose $US2.67, or 2%, to settle at $US136.68 a barrel on the New York Mercantile Exchange. The price reached a record $US139.89 a barrel on June 16.

Oil also rose as a weakening US dollar increased the appeal of commodities as an inflation hedge and after Chevron workers in Nigeria threatened to strike.

''The dollar collapsed this afternoon,'' said William Adams, managing director of JKV Global. ''That's going to correlate inversely to the energy market.''

Oil has risen 97% in the past year as investors shielded themselves from the dollar's declining value. The currency traded at $US1.5525 to the Euro, down from $US1.5511 yesterday."

http://business.theage.com.au/oil-climbs-as-output-to-stay-steady-20080619-2t18.html
 
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scarlet

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Well terriost speculating driving the fuel up..and pumping money into the obama campaign....??? They said they would destroy the U.S. from the inside..???
 

INIT REF

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Thanks Johnboy. Read above first, and call Ed Bastain and ask him some questions....


Bye Bye--General Lee

Fer crissakes Gen'l-

As much as you post you should really try to spell the guy's name correctly.

It's Bastian.
 

General Lee

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Fer crissakes Gen'l-

As much as you post you should really try to spell the guy's name correctly.

It's Bastian.

Your write Inni Fer, I misssspellled it. Sury.

Bye Bye--General Lee
 

Tanker Clown

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Good fo you Delta guys. Hopoefully you'll post a $6.7 Billion second quarter profit. Then you'll be even going into the second half of the year.
 
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