DL warns on losses and liquidity

[doh]

If Delta sells CMR and ASA to SKYW and Delta then declares bk anyway, I see a big problem for Delta. They will want to renegotiate the feeder contract. What if SKYW tells them to pound sand? If Mesa is stil tied to it's contracts with U and UAL there isn't anyone to come to Delta's rescue for feed. All the feed belongs to one player. It sort of violates the portfolio concept. I think Delta will ipo us rather than take the risk. But I do believe they will try to raise funds with us.

 

[spinproof]

An IPO would certainly(at this time) make more sense, when you consider the new crew bases announced by Comair. I would hardly think DAL would "muddy" the water of selling an asset by such a move. The more likely move would be to spread the resources for growth.

Then again the "General" would vehemently disagree and would rather have the cash. What is lost in all this is the possibillity of an asset like Comairs suddenly being used as a "PTP"" carrier in certain markets....Hmmmm...oh well SWA not to worry...acccording to the general the cost would be prohibitve to a long term position....or would it?

 

[Ty Webb]

A chapter 11 filing isn't all that bad. Look at UAL and US Airways.

Hmmm, you really are an idiot, aren't you? Mommy drop you on your head when you were little?

I don't know who you expect to believe that you are actually a SWA guy.What a freak.

Do me a favor, though, and quit sending me the PM's with the homosexual invitations, or I will start forwarding them to the Webmaster.

 

[737 Pylt]

Hey General,

Why don't you get management to sell the shuttle as well as ASA/CMR? You could raise a few more bucks there.

Also I was thinking, since GG reportedly didn't like Song you could sell that too. A ready made LCC. That should raise a lot of bucks, don't you think?

Actually, we were hoping to get rid of just you surplus!
737

 

[sleepy]

We do own quite a few of the planes, like all CR7s and over 100 CRJ50s. We also own facilities (gates, huffers, etc.) All of that would be counted. I am still looking for the exact number I read, and I will get that to you as soon as I can. I am off on a 4 day early tomorrow (today).


Bye Bye--General Lee

General,

I could say that after the obvious glee you showed last week at the prospect of the ASA pilots being sold to non-union Skywest and stapled to the bottom of the list, you are getting your just dues, but I won't.

I am a bit puzzled by your reasoning that all DAL has to do is sell ASA and/or Comair, and everything will be ok. In the first place, ASA doesn't own any ground equipment that actually works. The majority of their aircraft are leased: DAL bought them, then sold them to a leasing company, and leases them back. ASA doesn't own anything any longer, all of their services come from DAL. I am willing to bet that even the office furniture is leased.

The real problem for you is that DAL can't borrow any money, fuel prices are going up, you can't hedge, you don't have enough cash to keep operating until simplifares works (if it ever will?), and you labour costs are still too high.

 

[doh]

Hmm, don't know about the labor cost thingy. If labor was such a big deal, U would be making a pile of dough. The rest of your post sounds like ugly reality though. Good luck to the Delta folks.

 

[Tim47SIP]

Michaels right!

Personally, I would rather restructure the retirement than take another pay cut. I can fund my own retirement, but I don't want to take pay cut after pay cut trying to save a pension which is toast no matter what we do.

This is the most realistic statement I have read here in a long time. The problem is that DALPA will not instigate this as they will not only want to keep their pension, but also their pay (I would do the same). So they wont make the first move to save their buts in this deal. Delta will eventually go for another pay decrease and then file BK, wipe out the pension funds, reduce their monitary obligations dramatically, and then emerge from BK. My guess is a 10-15% across the board (everyone) reduction in pay and benefits.

I really cant see Delta selling off one or both of their WO's as it would be a short time before they reached the break even point. They put themselves at risk for increased costs and possible manipulation by the contract carrier. But if one will go, my bet is ASA.

 

[General Lee]

General,

I could say that after the obvious glee you showed last week at the prospect of the ASA pilots being sold to non-union Skywest and stapled to the bottom of the list, you are getting your just dues, but I won't.

I am a bit puzzled by your reasoning that all DAL has to do is sell ASA and/or Comair, and everything will be ok. In the first place, ASA doesn't own any ground equipment that actually works. The majority of their aircraft are leased: DAL bought them, then sold them to a leasing company, and leases them back. ASA doesn't own anything any longer, all of their services come from DAL. I am willing to bet that even the office furniture is leased.

The real problem for you is that DAL can't borrow any money, fuel prices are going up, you can't hedge, you don't have enough cash to keep operating until simplifares works (if it ever will?), and you labour costs are still too high.

Sleepy,

Not everyone flies corporate for Lowes.......

Anyway, I was not gleeful about ASA going to Skywest, and still said we hopefully will hire many ASA pilots in the future. I wondered how the ALPA ---non ALPA thing would work...


And, as far as not borrowing any money or the ability to do so, there are still plenty of ways to get money, namely from Skyteam members if we needed to. We still have the strongest network out there, and we make a lot of money for our partners. We are the biggest airline at the busiest airport in the world. I have a feeling we could get some help if we had to. Did you ever think Mesa would invest another large sum into USAir? How many people have been saying it would be dead right now? I think I did. Amazing. We aren't even to that point yet. We will probably sell ASA and Comair and make some money to tide us over through this year, and then our cost savings measures (which are many) will hopefully kick in. Here are some more people that agree with me from a CBS Marketwatch article:


"This is not new news because high oil prices put the whole industry at risk, but we believe Delta shares are oversold," Calyon Securities analyst Ray Neidl told clients. "We believe a springtime rally in airline stocks is possible (depending on the price of oil), in which we would expect DAL to participate."

Susan Donofrio, analyst at Fulcrum Global Partners, also downplayed reports. She cut her price target from $16 to $13 a share, but maintained a "buy" rating, claiming that "none of the news headlines are new pieces of information."

She said that she feels "comfortable with the estimated future level of liquidity at Delta and would take the current weakness in the airline's stock price as a buying opportunity."



We shall see. Have fun at Lowes, they are my favorite home hardware store.


Bye Bye--General Lee

 

[zonker]

We will probably sell ASA and Comair and make some money to tide us over through this year, and then our cost savings measures (which are many) will hopefully kick in.

Tell me again who's buying?

 

[General Lee]

Tell me again who's buying?

I would say there are probably a few buyers that may be interested. Someone who wants a good deal. I would think SkyWest is very interested (after Comair gets its union situations irons out---Pilots already bought it) and maybe Mesa. Delta wants to sell obviously, and will attach 10 year agreements to the buy probably.


Bye Bye--General Lee