DL warns on losses and liquidity

[Dizel8]

"You keep lowballing it"

I did not, your friend Ray did and I am sure he is on a first name basis with management too.

As for the loss, maybe you could take all 5.2B and call it a paperloss. Hey, be proud, it is the largest loss in aviation history, so you are the biggest in something

A report from your CEO states that the 5B in savings may not be enough and that DAL could face a hard time if Ch.11 happens due to no money to exit.Then again, maybe plenty will line up to finance.

P.S. If you do not think 700M in a quarter is overwhelming, maybe you need to let the wife handle the checkbook!

 

[General Lee]

Here you go AGAIN DIZEL8,

2/15/2005 10:49 AM EST



Delta Air Lines (DAL:NYSE - commentary - research) shares gained Tuesday after Calyon Securities upgraded them on a rosy assessment of the company's turnaround plan.

Shares were up 9 cents, or 1.6%, at $5.67 after rising by as much as 7.2%.

Ray Neidl, Calyon's airline analyst, raised his rating on the stock to add from neutral. "After meeting with management, our confidence that Delta can execute its plan to address its cost structure and overly leveraged balance sheet has increased," Neidl wrote in a research note explaining the upgrade. (Calyon has not received compensation for investment banking from Delta in the last year and does not expect to receive or seek such compensation in the next three months.)

After achieving $1 billion in annual savings from a new pilots contract late last year, Delta last month rocked the industry with its SimpliFares program, which simplified pricing and reduced maximum fares. The airline also executed a major rescheduling at its Atlanta hub.

"We believe that, over the next 12 months, while the company addresses its overly leveraged balance sheet, Delta will also realize the benefits from its recent cost cuts, schedule changes and streamlined operations," Neidl wrote. "As a result, we believe that Delta could have substantial upside potential in returning to profitability and in its stock price. We believe that Delta will now survive the slow winter period, even with the dilutive impact of SimpliFares, and then benefit from the higher cash flow typically seen during the spring and summer seasons."

The Atlanta-based carrier had a fourth-quarter net loss of $2.2 billion, or $16.58 a share, including noncash charges totaling $1.4 billion, vs. a loss of $327 million, or $2.69 a share, a year ago. The airline industry has been plagued with high fuel prices, overcapacity and cutthroat price competition.



So, would Ray change his mind after 3 weeks? Well, fuel is going up, but we might also make some money on DCI, so would he change his mind? Unlikely chief.



Bye Bye--General Lee

 

[chperplt]

General,

Had one of your Lieutenants on our jumpseat tonight. He says that you guys are about to get hit with another pay cut and your pensions are probably going the way of US Air and UAL.. Any truth to that??

 

[jetflyer]

Jet,

I read $9 billion of that debt is associated with the 500 RJs we own. IF we sell that to SkyWest etc, we will have $12 billion in debt, which is more manageable. We have also cut expenses right now by $2.3 billion a year, and are aiming to have a $5 billion a year savings by 2006, but until then we need to stay afloat, and selling off ASA or Comair (or both) will help. Our VP of Flt Ops said in the lounge meeting that we are in a debt hole, and it would take some years to climb out, but it was doable.


Bye Bye--General Lee

General,

500 RJs?? ASA and Comair together only have about 320 at the most. Plus I don't think Delta OWNs these RJs. I think they're leased. I've heard Comair's RJs are atleast.

I seriously doubt $9 BILLION of the DEBT is from RJs as well.

Plus, this is where you are DREAMING:

Skywest is going to pay $1 BILLION to buy ASA and Comair to ASSUME $9 BILLION in debt. THAT WOULD BE PRETTY STUPID.

Hmmm, let's give Delta $1 billion so we can go in debt by $9 billion.

I DON'T THINK SO. THAT debt is Delta's and NO SALE is going to change that.

Jet

 

[General Lee]

General,

Had one of your Lieutenants on our jumpseat tonight. He says that you guys are about to get hit with another pay cut and your pensions are probably going the way of US Air and UAL.. Any truth to that??

I haven't heard that. Lots of speculation, mainly on this board. I am glad one of my "lieutenants" said that. I am sure people are expecting it. As far as the pensions thing goes, if anyone even mentions that---another 1000 Captains will probably bail, and I will be a Captain. And, if you were an ASA guy, you could probably get hired and be my FO..... Where is fins?


Bye Bye--General Lee

 

[General Lee]

General,

500 RJs?? ASA and Comair together only have about 320 at the most. Plus I don't think Delta OWNs these RJs. I think they're leased. I've heard Comair's RJs are atleast.

I seriously doubt $9 BILLION of the DEBT is from RJs as well.

Plus, this is where you are DREAMING:

Skywest is going to pay $1 BILLION to buy ASA and Comair to ASSUME $9 BILLION in debt. THAT WOULD BE PRETTY STUPID.

Hmmm, let's give Delta $1 billion so we can go in debt by $9 billion.

I DON'T THINK SO. THAT debt is Delta's and NO SALE is going to change that.

Jet

Jet,

You don't understand the situation. We don't sell planes and keep the debt. It doesn't work that way. All airlines have some sort of debt, and expanding ones create more. SkyWest would grow by a lot, and assume more debt. The cash would be for the operations and holdings. I will try to find the exact number for you.


Bye Bye--General Lee

 

[jetflyer]

General,

But since most of the planes are LEASED, don't they just assume the LEASES??

There would be no debt in this instance would there?

Jet

 

[General Lee]

General,

But since most of the planes are LEASED, don't they just assume the LEASES??

There would be no debt in this instance would there?

Jet

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

 

[michael707767]

General,

Had one of your Lieutenants on our jumpseat tonight. He says that you guys are about to get hit with another pay cut and your pensions are probably going the way of US Air and UAL.. Any truth to that??

I'll answer that one too. Lots of talk about it, nothing from the company. But, I would expect them to come after the pension and ask for about 10-15% pay cuts. Not eliminate the pension, but make more changes to it, effectively cutting in half what the guys with 25 years will get. The rest of us are ****** anyway.

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.

 

[michael707767]

Skywest is going to pay $1 BILLION to buy ASA and Comair to ASSUME $9 BILLION in debt. THAT WOULD BE PRETTY STUPID.

Hey if you believe Delta management, the RJs are self financing, which is why they went into debt to buy them in the first place.
PS I have some land in Florida......