General Lee, Spin This.......

Flying Freddie

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Delta Stock Plunges Anew on Downgrade
Tuesday August 9, 11:37 am ET
By Harry R. Weber, AP Business Writer Delta Air Lines' Battered Stock Plummets Anew on Analyst Downgrade, Bankruptcy Fears



ATLANTA (AP) -- Delta Air Lines Inc.'s battered stock plunged anew Tuesday after a Wall Street analyst advised clients to sell their shares on fears the nation's third-largest carrier will file for bankruptcy within the next two months.

In morning trading on the New York Stock Exchange, Delta's shares fell 24 cents, or 10.8 percent, to $1.99. The company's market capitalization -- the total value of the company's outstanding shares -- fell to $286 million, less than one-third the amount of discount carrier AirTran Airways despite Delta being 15 times larger in terms of annual revenue.

Prior to the dip, Delta's stock was already at a 43-year low.

The dip came on the heels of a research note by Merrill Lynch analyst Michael Linenberg, who lowered the Atlanta-based airline's rating from neutral to sell.

"We think the recent surge in fuel prices greatly increases the likelihood of a bankruptcy filing within the next two months," Linenberg said.

He said that while Delta, which has lost nearly $10 billion since January 2001, has been in talks with creditors about additional funding, he believes the surge in oil prices could keep lenders at bay for now.

He estimated that Delta's fuel bill this year could grow by more than $1 billion, wiping out the $1 billion of cost concessions provided by the airline's pilots last year.

"We think the probability of a Delta bankruptcy filing has grown, and we think investors should be mindful of Oct. 17, when more restrictive bankruptcy legislation becomes effective," Linenberg said. "That could be a key factor in a Delta deciding whether to file for Chapter 11 bankruptcy."

On Monday, Delta named a new treasurer after its previous treasurer left the company. Late Monday, J.P. Morgan analyst Jamie Baker said in a research note that "another potential shock" is close with Delta's quarterly filing to the Securities and Exchange Commission expected this week.

Baker said a Delta bankruptcy filing by the end of the year is "all but assured" if the airline doesn't get a significant infusion of cash in the near term.

Delta's chief executive has said the company's current transformation plan, which includes cutting annual costs by $5 billion by the end of next year, is not enough to save the struggling carrier.

CEO Gerald Grinstein says Delta is still working hard to avoid a Chapter 11 filing, but he has acknowledged there are risks affecting the airline's ability to do that. Delta, citing high fuel prices, reported late last month that it lost $388 million in the second quarter.
 

On Your Six

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Flying Freddie said:
Delta Stock Plunges Anew on Downgrade
Tuesday August 9, 11:37 am ET
By Harry R. Weber, AP Business Writer Delta Air Lines' Battered Stock Plummets Anew on Analyst Downgrade, Bankruptcy Fears



ATLANTA (AP) -- Delta Air Lines Inc.'s battered stock plunged anew Tuesday after a Wall Street analyst advised clients to sell their shares on fears the nation's third-largest carrier will file for bankruptcy within the next two months.

In morning trading on the New York Stock Exchange, Delta's shares fell 24 cents, or 10.8 percent, to $1.99. The company's market capitalization -- the total value of the company's outstanding shares -- fell to $286 million, less than one-third the amount of discount carrier AirTran Airways despite Delta being 15 times larger in terms of annual revenue.

Prior to the dip, Delta's stock was already at a 43-year low.

The dip came on the heels of a research note by Merrill Lynch analyst Michael Linenberg, who lowered the Atlanta-based airline's rating from neutral to sell.

"We think the recent surge in fuel prices greatly increases the likelihood of a bankruptcy filing within the next two months," Linenberg said.

He said that while Delta, which has lost nearly $10 billion since January 2001, has been in talks with creditors about additional funding, he believes the surge in oil prices could keep lenders at bay for now.

He estimated that Delta's fuel bill this year could grow by more than $1 billion, wiping out the $1 billion of cost concessions provided by the airline's pilots last year.

"We think the probability of a Delta bankruptcy filing has grown, and we think investors should be mindful of Oct. 17, when more restrictive bankruptcy legislation becomes effective," Linenberg said. "That could be a key factor in a Delta deciding whether to file for Chapter 11 bankruptcy."

On Monday, Delta named a new treasurer after its previous treasurer left the company. Late Monday, J.P. Morgan analyst Jamie Baker said in a research note that "another potential shock" is close with Delta's quarterly filing to the Securities and Exchange Commission expected this week.

Baker said a Delta bankruptcy filing by the end of the year is "all but assured" if the airline doesn't get a significant infusion of cash in the near term.

Delta's chief executive has said the company's current transformation plan, which includes cutting annual costs by $5 billion by the end of next year, is not enough to save the struggling carrier.

CEO Gerald Grinstein says Delta is still working hard to avoid a Chapter 11 filing, but he has acknowledged there are risks affecting the airline's ability to do that. Delta, citing high fuel prices, reported late last month that it lost $388 million in the second quarter.

There is no way to spin that. Delta SHOULD file for Chapter 11 before the rules change in October. Why take a risk - you never know if the fuel prices will continue to stay high for the next year or so... It isn't Delta's fault that fuel prices are so high - and nobody is immune... Airlines like SWA and JetBlue can reduce their exposure to high fuel prices, but in the end everyone will see an erosion of profits if fuel prices continue to stay this high (or higher)...

Delta should file to restructure debt (reduce debt expense) and to work on fleet simplification before the rules change in October. No brainer...
 
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Buckaroo

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DL's a goner

This is the final nail in the coffin. DL is a goner - no chance to emerge from CH11 if it files. This pig should be liquidated.
 

chazman

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After labor day. Don't need to scare the customers any more than necessary while the summer revenue is still coming in. After labor day, all bets are off, there is no reason to wait until October. Grinstein even said in the conference call that Oct 17th wasn't on his mind, reason.... because it will be done in September.


My guess, but its worth the paper or webspace its written on.

Chaz
 

FL000

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Buckaroo said:
This is the final nail in the coffin. DL is a goner - no chance to emerge from CH11 if it files. This pig should be liquidated.
All this from a genius who can't even spell the names of the planes he has flown, but apparently a fan of cartoons and kids' shows. Nice try.
 

Jetsetter

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FL000 said:
All this from a genius who can't even spell the names of the planes he has flown, but apparently a fan of cartoons and kids' shows. Nice try.
Good call, that d1ck has posted the same thing on another thread with no useful information just bull sh1t.
 

DL_Infidel

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Spin what?

What "wiped out" the savings from pilot concessions are the geniuses at Ft Widget not raising ticket prices. Instead, they gave us Simplifares....looks like DL didn't "make it up in volume".
 

stillflyn

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Delta Stock Falls Anew On Anaylst Downgrade, Bankruptcy Fears

Delta Air Lines' battered stock fell anew Tuesday after a Wall Street analyst advised clients to sell their shares on fears the nation's third-largest carrier will file for bankruptcy within the next two months. In morning trading on the New York Stock Exchange, Delta's shares fell 8 cents, or 3.6 percent, to $2.15. The shares had fallen as much as 15 percent in pre-market activity. Prior to the dip, Delta's stock was already at a 43-year low. The dip came on the heels of a research note by Merrill Lynch analyst Michael Linenberg, who lowered the Atlanta-based airline's rating from neutral to sell.
 

Ty Webb

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:mad: Who would have foreseen this quote five years ago?

The company's market capitalization -- the total value of the company's outstanding shares -- fell to $286 million, less than one-third the amount of discount carrier AirTran Airways despite Delta being 15 times larger in terms of annual revenue.
What really bothers me is that Delta got into this position by continuing to dump seats into the market at prices it couldn't make a profit at. They pissed away $6 billion trying to "protect market share". If you can;t serve that market segment at the going rate, it ain't your market to protect.

I said three years ago on this very board that if they kept pursuing that startegy, this is where they would end up, and others were ridiculing me for it, but here we are.

I think that if the gummint is going to let these companies operate in bankruptcy for years (UAL, US) then they should not be allowed to keep dumping seats at below their cost, which is what got them into this fix in the first place.

If this bankruptcy happens, don't expect much rejoicing from the south side of Concourse C, it will actually make things tougher for AirTran, not easier.
 
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michael707767

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Ty Webb said:
I think that if the gummint is going to let these companies operate in bankruptcy for years (UAL, US) then they should not be allowed to keep dumping seats at below their cost, which is what got them into this fix in the first place.

If this bankruptcy happens, don't expect much rejoicing from the south side of Concourse C, it will actually make things tougher for AirTran, not easier.


Very wise man. Yes, the government has largely caused the weakness in DAL and NWA. If they had allowed the market to rule, UAL and USAir would likely be gone now and the rest of the airlines stronger. To a certain extent, Delta is being penalized for trying to do the right thing and stay out of BK.

You are also correct in your assesment on the affects on AirTran. Like it or not folks, Delta is going no where. The employees will take more cuts, the airline will shrink a little more, but in the end Delta will survive. And while in BK, it will be able to hurt Airtran.
 
4

410dude

Buckaroo said:
This is the final nail in the coffin. DL is a goner - no chance to emerge from CH11 if it files. This pig should be liquidated.
:) We'll all get to retire at the regionals!!! Hooray!!!
 

jbDC9

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Buckaroo said:
This is the final nail in the coffin. DL is a goner - no chance to emerge from CH11 if it files. This pig should be liquidated.
And you post this drivel with a smiley face? You're an ass.

BTW, it's spelled Aeronca, not Aeronica.
 

cbrown1

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What kind of affect will this have on ASA and/or Comair?
 

Mikes Apartment

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Flying Freddie was turned down at Delta for being a fruit

Look what you are doing here Freddie, you are putting General Lee up on a pedestal. You just gave him all of the power in the WORLD. You are asking for his spin on an article posted online? I am sure he thanks you for it, making him seem so important. Some of you Jetblue guys are tools. Peace out freak.
 

Mikes Apartment

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On Your Six said:
There is no way to spin that. Delta SHOULD file for Chapter 11 before the rules change in October. Why take a risk - you never know if the fuel prices will continue to stay high for the next year or so... It isn't Delta's fault that fuel prices are so high - and nobody is immune... Airlines like SWA and JetBlue can reduce their exposure to high fuel prices, but in the end everyone will see an erosion of profits if fuel prices continue to stay this high (or higher)...

Delta should file to restructure debt (reduce debt expense) and to work on fleet simplification before the rules change in October. No brainer...



NERD NERD NERD NERD NERD!!!!!!! Nice Avatar Mr. Burns.....NERD!!
 

AV8700

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cbrown1 said:
What kind of affect will this have on ASA and/or Comair?
Skip Barnett announced today that he is leaving Sept 1
 

FL000

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cbrown1 said:
What kind of affect will this have on ASA and/or Comair?
I just typed out a lengthy reply, but it got zapped. In summary, don't worry about your class. You are still needed, and then some.
 

Mikes Apartment

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Jet,


Look at USAir. Did they have to sell Piedmont or Allegahny? No. Did they sell MDA? Yes. To get cash and get rid of debt. Comair and ASA will be sold to increase some liquidity and get rid of debt. Some of that liquidity will probably be used to pay off some creditors also I bet. Mesa will get Comair and Skywest will get ASA, and all of the pilots will get the shaft. Peace out.
 

jetflyer

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Thank you Mike,

So MDA was sold while US Airways was in BK. I didn't know that.

That gives me hope.

Jet
 
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