DL warns on losses and liquidity

[chperplt]

General,

IF those guys in the GO knew what they were doing, Delta wouldn't be in the situation they are in.

I never said a plan wasn't in place. What I did say was that I hope there was more to the immanent plan than selling off DCI.

You seen to have a one track mind. You're like a little kid who wants to go to McDonalds. All you can talk about is McDonalds until you get to go.

There has to be more to the short term survival than sell DCI. Yes, selling DCI will generate some much needed cash while preserving the feed. It will not however give Delta the cash that you think it will.

Look at the last few IPOs.. what they sold for and what they are worth today.

 

[MedFlyer]

Neidl says Comair/ASA aren't worth much. Isn't he your favorite analyst, General? You're always quoting him in the past....except now when he says something you don't like.

What I don't understand is why you think Comair/ASA are worth so much? You're always complaining that customers don't like RJ's, RJ's have too high costs, RJ's are uncomfortable, RJ's can't compete in this low-fare environment,etc.

So if you really believe all this, then how could Comair/ASA be worth so much?

Your saying Comair/ASA are worth almost a billion when DL's own market valuation is less than that? Do you really believe Comair/ASA are worth more than DL mainline?

 

[General Lee]

Neidl says Comair/ASA aren't worth much. Isn't he your favorite analyst, General? You're always quoting him in the past....except now when he says something you don't like.

What I don't understand is why you think Comair/ASA are worth so much? You're always complaining that customers don't like RJ's, RJ's have too high costs, RJ's are uncomfortable, RJ's can't compete in this low-fare environment,etc.

So if you really believe all this, then how could Comair/ASA be worth so much?

Your saying Comair/ASA are worth almost a billion when DL's own market valuation is less than that? Do you really believe Comair/ASA are worth more than DL mainline?

I'll start with you. First, that Neidl quote Dizel8 brought up was older than his latest quote, in which he stated his confidence in DL. He then added an upgrade, and he does talk to the powers at be. As far as DCI being worth so much, I think they are worth at least half of their write down price, but that is just a guess, and what Susan Donofrio thinks, and she talks to the management people. I think that would still be ahuge loss compared to what we purchased them for, but probably reasonable with the assets that Comair and ASA own. With a guaranteed 10 year agreement on top of that, it probably warrents a certain amount. I don't really have the facts in front of me, though. And, I didn't come up with that $1 billion---Delta's write down showed their perceived worth, and even Donofrio came up with that price---I didn't pull that out of nowhere. How can you say otherwise? We are paying $1 billion for our new BOS terminal.....Since we are worth less with the current stock price, does that mean the terminal isn't worth that much? How much are our 777s worth now that our stock price is so low? Could you buy a 777 for $20 million? Can you see where I am coming from here? Can you see where you are wrong?

Bye Bye---General Lee

 

[General Lee]

General,

IF those guys in the GO knew what they were doing, Delta wouldn't be in the situation they are in.

I never said a plan wasn't in place. What I did say was that I hope there was more to the immanent plan than selling off DCI.

You seen to have a one track mind. You're like a little kid who wants to go to McDonalds. All you can talk about is McDonalds until you get to go.

There has to be more to the short term survival than sell DCI. Yes, selling DCI will generate some much needed cash while preserving the feed. It will not however give Delta the cash that you think it will.

Look at the last few IPOs.. what they sold for and what they are worth today.

First off, I am a Wendy's freak....


Second, there is a huge plan in place, and that selling parts of or all of DCI was in the plan. Here are some highlights:

1. labor concessions---$1 billion a year from pilots, another $1 billion from everyone else.

2. Airplane lease concessions----somewhere around $300 million a year so far

3. Closing unprofitable bases---DFW

4. Concessions from suppliers, banks, etc.

5. Maybe selling DCI

6. Simplifares, Operation Clockwork, new advertising campaign

7. Ousting the old management, bringing in the new, giving them options to give them a large incentive (lack of bonuses available--lack of $$)

8. Achieving a $5 billion a year savings plan BY 2006

9. Getting to 2006 without going to court......


Got it?


Bye Bye--General Lee

 

[General Lee]

Do you think, that SKYW wants to take all the debt? I personally doubt it!

Maybe 2.9B was too much to pay and certainly now it is not worth anywhere that much. Plenty of talk about to many 50 seaters flying around and that larger a/c are needed, perhaps that is part of the reason AWA invested in U, to have some place to place them.

Even if DAL signs a deal with SKYW and manages to off load a DCI, it will more than likely be under a cost plus plan similar to Mesa and U. Well, Mesa is making money on that, U is losing. So DAL could potentially see an increase in cost for feed, then what? It may work for short term gain and long term pain for DAL.

Well, if you get the planes you get the debt. We don't keep the debt, that is crazy. SkyWest said they are in the best position to take advantage of this situation, and Delta wants the cash. Something will happen, and when it does it will help our situation out somehow. As far as a money losing proposition, you and I don't know that. We will probably get needed cash to stay afloat, and they will get size and a future agreement. Was $2.9 billion too much to pay in the late 90's? Maybe. But, we had the cash then. Now, we need the cash and we will get it. If we went into Chap 11 we could try to trim down the current SkyWest agreement with pay for departure, and that would hurt them too. It is a better deal for them to keep us around and keep us giving them guaranteed revenue---and they get a smokin deal.


Bye Bye--General Lee

 

[av8tor4239]

Wonder how much old Leo Mullins and his elite team of managers is taking from Delta on an anual basis?

 

[~~~^~~~]

General:

Someone very smart wrote that "selling ASA and Comair is like burning the furniture to keep the house warm through the winter." None the less, 1 Billion ( which nobody has & the value is intrinsically linked to Delta's well being ) would fund less than three quarters' losses if oil hits the numbers anticipated.

I fully expect another round of mainline barganing, probably the loss of all pensions - not that it will make enough difference to significantly delay the outcome.

If oil hits $80, we can expect airlines to cease operations simply because the revenue from operating the flights will not even cover the variable cost of operating the airplane.

No airline can survive this, except Southwest in the short term. Delta has around 5.5Bn in obligations this year - a miracle is required.

 

[DaveGriffin]

First off, I am a Wendy's freak....


Second, there is a huge plan in place, and that selling parts of or all of DCI was in the plan. Here are some highlights:

1. labor concessions---$1 billion a year from pilots, another $1 billion from everyone else.

2. Airplane lease concessions----somewhere around $300 million a year so far

3. Closing unprofitable bases---DFW

4. Concessions from suppliers, banks, etc.

5. Maybe selling DCI

6. Simplifares, Operation Clockwork, new advertising campaign

7. Ousting the old management, bringing in the new, giving them options to give them a large incentive (lack of bonuses available--lack of $$)

8. Achieving a $5 billion a year savings plan BY 2006

9. Getting to 2006 without going to court......


Got it?


Bye Bye--General Lee

GL;

You forgot to add:

10. Enriching our senior top-third pilots for 3 years after 9/11 by scr*wing the bottom-third.

11. Piss our funds away on legal bills to the losing campaign to grieve FM

12. Allowing our most senior pilots to take early retirement AND continue flying, at the expense of furlough recalls.

13. Continue to blame CMR pilots for not doing enough for our furloughs while DALPA went all out on COBRA and secret Santa.

14. Keep bashing all the airlines who are kicking our *ss.

These are huge components of the survival/recovery plan

 

[DDpaysoff]

Well, she sounded about 90 so she is probably stuck in the PAA flying boat days!

She is probably a delta flight attendant that took the recent "early retirement offer."

 

[General Lee]

General:

Someone very smart wrote that "selling ASA and Comair is like burning the furniture to keep the house warm through the winter." None the less, 1 Billion ( which nobody has & the value is intrinsically linked to Delta's well being ) would fund less than three quarters' losses if oil hits the numbers anticipated.

I fully expect another round of mainline barganing, probably the loss of all pensions - not that it will make enough difference to significantly delay the outcome.

If oil hits $80, we can expect airlines to cease operations simply because the revenue from operating the flights will not even cover the variable cost of operating the airplane.

No airline can survive this, except Southwest in the short term. Delta has around 5.5Bn in obligations this year - a miracle is required.

IF oil hits $80, we are all $crewed, except SW. That is true. I doubt and hope it won't hit that high, but who knows. ANWAR is looking better and better everyday. Think of the airlines that will be gone if that happens? USAir, United, and INDY will cease. Then Chap 11s will be DL, CO, NW, AA, Frontier, AWA, Spirit, and maybe some other of the LCCs like Airtran, Jetblue, etc.

As far as ASA/Comair being furniture, you may be right. IF we need time, then we will sell them and use the cash for time. We will probably outlast some other airlines in the mean time. That is the point. We still have furniture to burn. We are getting the rest of the house in order---you and some of the others think we haven't made large changes. Those are underway, but it does take awhile to see the results, and we need the cash to get to that point.

Selling ASA and Comair would help shrink some of that debt load, and at this point anything is better than the status quo. I think Ray Neidl and Susan Donofrio have talked with our management and both have stood by Delta. That has to tell you that there is some sort of method to their madness...


Bye Bye--General Lee