GL credibility in question

[OState597]

Delta Air Lines To Profit From Low Oil Price
Nov. 9, 2014 9:57 AM ET | 3 comments | About: Delta Air Lines, Inc. (DAL), Includes: AAL, LUV, UAL by: Alan Longbon. Seeking Alpha
Disclosure: The author has no positions in any stocks mentioned



"Summary

Oil price heading for decade-long low prices, with historical parallels to oil industry developments in the 1980s and the Rockefeller era.
Delta Air Lines emerging from massive restructuring and rebuilding phase, now pushed by low oil price tailwind to improve prospects even further.
Every dollar saved on fuel by any airline adds directly to profitability.
Current Situation

Since July 2014, the price of crude oil has been sliding steadily downwards.

The reasons for the recent decline in the price of oil are:

Increased oil supply, particularly from US shale oil production.
Falling oil global demand.
Rise of alternative energy sources such as solar and wind power.
No reduction in supply as a response to falling global demand from traditional oil suppliers such as OPEC."

Skipping ahead a bit in the article:


"In a environment of falling oil prices, and therefore much lower operating costs which could last a decade, DAL offers outstanding value with a lot of upside future potential; some highlights are:

Enterprise value is 16.6% below market cap.
Forward P/E of over 10.
ROE an amazing 158%
Going Forward

Based on the metrics as they are now, DAL is an outstanding stock offering good value for money. Oil is falling in price and I believe will reach about $50 per barrel and stay there for about ten years. This means that DAL's main operating cost will be cut in half. That will add an estimated $5b directly onto profits and make gross income increase by about 25% (DAL's fuel bill is about $10b per year). Increased earnings will capitalize into an increased share price.

At present Delta has an industry-leading fuel-purchasing and hedging strategy. The chart below is taken from a presentation by Delta Air Lines made this month."





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Bye Bye---General Lee

Go back to watching your "History of Delta Air Lines" movie you arrogant pr!ck.

 

[General Lee]

Go back to watching your "History of Delta Air Lines" movie you arrogant pr!ck.

Ahahahaha! You are miserable and it shows.


Bye Bye---General Lee

 

[OState597]

I'm perfectly happy. Couldn't be better.

You're an arrogant pr!ck and it shows

 

[General Lee]

I'm perfectly happy. Couldn't be better.

You're an arrogant pr!ck and it shows

You're also a jealous loser, and it really does show. Bye now!



Bye Bye---General Lee

 

[OState597]

You're also a jealous loser, and it really does show. Bye now!



Bye Bye---General Lee

I got hired on 2 years ago at one of the big 3. I'm still in my 20's.

How am I jealous? You pompous pr!ck.

 

[nwaf16dude]

I wish only the best for any new prospective pilot searching for their final destination. I have great mates at United and Delta and the truth is all of the big 3 labor contracts are subpar compared to compensation decades ago. The landscape has changed and I believe the new contracts will get us closer to where we should be. There is obviously more to compensation than just hourly rates. There are just too many details that effect a pilot's quality of life and total pay - they are too numerous to list.

I would like to see a JCBA that contains nothing of the past bankruptcy contracts. Profit sharing was created out of bankruptcies due to low compensation. What would be best, in the long run, is a total contract for APA that exceeds the total of United and Delta. This is not to say simply we are the greatest but to build upon the current foundations and then pass the torch to Delta then United pilots to keep building. If total pay does not have current profit sharing "built in", when times get tough again, and they will, you can kiss the Valentine's Day check good bye. When that happens, and rest assured it will, the other guys will look to the APA contract and will then need to reassess how to negotiate for more.

Will United and Delta negotiate a 16.7% pay increase to "capture" profit sharing compensation? It is unlikely. If you are of the mindset that these profit checks will be sustainable for 10,20,30 years, there would be no need to capture that pay within a pilot contract. I have faith that my union, APA will capture this "profit pay" in our new contract, especially in this brief snapshot in time of high profits so we sustain it when the bad times come yet again. The APA in these final days of building the proposal has an important decision to make - profit check or add it to total compensation. I hope we DO NOT have a separate profit sharing check that can be taken away (and taxed at 42%!) and we have it built in making it very difficult for AAG to take it back down the road. We shall see in the near future what path the APA takes. They know my opinion.

I genuinely hope that you guys pass our pay rates by a big margin, and I hope you do it before our opener next April.

Profit sharing is not taxed differently from ordinary income. The IRS mandates that there is a higher amount withheld from profit sharing checks, but on the 1040 it is taxed like all ordinary income.

I'm a realist. Some may call me a pessimist. I've been around the airline business long enough to know that the good times don't last, and when the losses come, the company will come after us for relief. I would rather have a couple of years without profit sharing than have to go through negotiations that put work rule gains at risk, followed by trying to re-negotiate for pay raises when the economy improves again. Sure, you lose when the economy goes bad, but gains are automatic when things are good.

I live on my regular income, and treat the profit sharing as gravy. That being said, I'm pretty confident that there will be large profits for the next couple of years. There is huge upside potential for Delta right now, predicting as much as 6 billion in profit for 2015, even higher if fuel stays low. Am I banking on that? Of course not, but as long as we don't negotiate it away I could be looking at a 25+% bonus a year from next Feb.

I like where I'm sitting.

 

[General Lee]

I got hired on 2 years ago at one of the big 3. I'm still in my 20's.

How am I jealous? You pompous pr!ck.

I got hired at one of the big 3 in my 20's also, but 18 years ago, while you were still peeing your pants. I win.


Bye Bye---General Lee

 

[SplitBar]

I got hired at one of the big 3 in my 20's also, but 18 years ago, while you were still peeing your pants. I win.


Bye Bye---General Lee

But he is 28ish and you are pushing 50. I'd say he is winning.

 

[redflyer65]

I got hired at one of the big 3 in my 20's also, but 18 years ago, while you were still peeing your pants. I win.


Bye Bye---General Lee

Haha, haha.

What a self absorbed idiot. This post pretty much says it all.

 

[General Lee]

But he is 28ish and you are pushing 50. I'd say he is winning.

Uhhhhhh, and he has 2 years and I have almost 18? Uhhhhh, riiiight. Say what?


Bye Bye---General Lee