OCT 8th DL announcement

[General Lee]

Upanddownguy and RJCAP,

Our CFO, Michele Burns, has repeatedly said that we are not close to Chap11 and that we are the "healthiest" of the Majors. We have more cash on hand and more mortgageable assets--including planes, terminals, and ASA/Comair---which we could sell or mortgage. I think there are other Majors that could go Chap 11 or Chap 7 first, which inturn would help the rest of the industry by reducing a lot of the capacity. I am not saying we are bulletproof, but we are in better shape overall than UAL, AA, NW, CO (with no assets of their own), USAir, etc.. The Summer was good to us (along with everyone else), and our main deal now is to focus on our debt problem. But, as long as you can service the debt (AOL has $24 billion in debt)--you can survive---and Delta is trying to come up with ways to slowly pay it off---including paycuts to help with the yearly interest payments. We shall see, but I think we are looking better than most Majors.


Lowecur,

I do not make up rumors. I try to post credilble rumors that I actually hear---and they may be inaccurate. The "purchasing" rumor was one I saw on the Dalpa.net---and I cannot verify if it is true or not. I have heard that management is trying to narrow the 100 seater to two airplanes, and that the decision may be soon. As far as which one, I don't think the 737-600 is an option because we have 737s in our current pay scale that management thinks is way too high. I think the A318 might be Fred Reid's choice because he knew the Airbus people when he was at Lufthansa, and he has said that he likes the plane. The EMB-190 (not 170) might be a good choice because it is cheaper, but Jetblue has taken most of the initial slots. I also heard that Delta asked boeing if they could make a 717 that would have the range to fly from CVG to SEA (????why those cities??). I honestly don't know, and I have been flying over the last 3 days, and haven't heard anything about the "Oct 8th" announcement. I hope it is a good announcement if there is one, and maybe it will concern the return of more of our furloughs......We can only hope...

Bye Bye---General Lee

 

[General Lee]

Sorry I made it a different thread----I wasn't trying to Make it my own--sorry. General Lee

 

[ReportCanoa]

ALPA president to speak in Cincinatti on the 9th, a supposed announcement on the 8th from DAL...

Maybe an ERJ 190 fleet going to Comair staffed by DAL furloughees? Lets hope not...

 

[General Lee]

Doubtful. Dalpa would not allow that, and Delta could not just do it. Although, the Delta furloughs flying them does sound good.

Bye Bye--General Lee

 

[lowecur]

General Lee

Yeah, what's with the new thread?

Glad to hear that it's a viable rumor. With my ERJ holdings, I have my fingers crossed. Anyway, not to worry about the mfg slots. Embraer will be able to do 6 month on the 190 by 2005, and B6 is only asking for 1.5 per month till 2011. I wouldn't count out some 86 seat 175's as part of the purchase. The beauty of the 170/190 package is the ability to move the fleet based on demand. Besides the 175 will be available in the 3Q of 04.

I can't imagine why anyone would choose the 318. It's performance is similar to the 319, and carries fewer passengers. Can't see the 717 either, as I would think DL mgt wants that plane to remain an orphan. Besides BA is offering the 713, but that just increases pax to 130, and doesn't help the range. On top of that, the order may cannibalize the 737.

Being able to turn the a/c to the left coast from both hubs is a major factor. I have my fingers crossed.

 

[General Lee]

Lowecur,

Yeah, I originally had a problem with my computer, and I had to do a new thread---seriously. Anyways, Boeing has supposedly been working us over lately with higher fees for software, and asking for twice the price of winglets (737-800) as they offered to European LCCs (I have heard...). It might be best that we do NOT put all of our eggs in one basket---and currently we have an ALL Boeing fleet. (With the MCDon planes also....now Boeing) I bet Airbus would give us a great deal, and that may be the deciding factor---price. I do know that Delta did want to simplyfy the fleet with identical cockpits--and the 737-600 would do that---but the deal would have to be great. I hope we do order some planes, get more healthy with the $$$ eventually, and everyone is able to expand. Whether or not that will become true is a mystery. I hope so.

Bye Bye--General Lee

 

[lowecur]

Also mentioned on the yahoo board was 10/8 could be an announcement about the SLC hub. The poster mentioned that the new a/c announcement would come in December.

 

[General Lee]

Lowecur,

From what I have read on the Dalpa.net, it says that there might be some aircraft swaps between SLC and DFW--likely moving the 737-300s based in DFW to SLC, and moving some 737-800 time from SLC to DFW, creating a new 737-800 base there and closing the 737-300 base. The guy said that the DFW chief pilot said there might be a slight displacement, but then there would be clean up bids with positive movement after that. There is also some speculation that there might be a 757 SONG crew base (or Song lines) at the NYC ER base. I can't confirm any of this, but that is what is floating around. I think they are trying to find the right plane for each base, and I have heard that they might have taken too much time out of DFW, so they are adding some of it back with more 737-800 time. Of course, that could be totally wrong.

Bye Bye--General Lee

 

[lowecur]

Sounds like more internal type news than something the PR people would want to release. I was thinking along the lines of a reduction of flights at SLC. Let's hope not.

 

[General Lee]

Lowecur,

I think there will be an eventual reduction in flights, but there will always be a mainline presence. I think the majority of the flights will be 757/767s to the hubs, and 737-300s or 100 seaters to regionals cities close by--like DEN, LAS, and SFO etc. I think the DCI RJs will fill in most of the other services. I still believe that Delta is primarily an East Coast airline, and will focus on ATL, CVG, JFK for INTL, and SONG up and down the Coast. Who knows?

Bye Bye--General Lee

 

[lowecur]

What do you think about a totally domestic Song, with DL only used for selected first class flights and international routes?

 

[Cardinal]

All this talk about Airbii...what happened to that Boeing exclusivity deal with AA, CO, and DL a few years back?

 

[Cpt. Over]

Well I work on the CAL side of the fence and heard there is to be a big announcement over here around that time also. Hmm... The story goes, the union was going to have 1 year contract-negotiation rally, but they stopped because the company has some big announcement. Take it also for what its worth, but hmm...
And I agree that CAL has no more assets to mortgage and they dont own much, but lease. Scarey stuff.

 

[General Lee]

Capt Over,

I wasn't putting CO down, I think you have a great airline. I have also heard rumors that we---CO and DL---may merge someday--even though I don't think the Feds would allow it. It is amazing that we are both looking for good rumors--and I hope we all get some good news soon.



Lowecur,

I think that it could be possible that Song does most of the domestic stuff, but there would have to be more than one aircraft type. (other than the 757) I still think that we will eventually have 737-800s (we have something like 125 more on order I believe), 100 seaters, and 767s (300 DOM and 767-400s) flying into the hubs to feed the INTL flights, along with 500 or more RJs. Song will take all of the 125 757s---and fly lots of point to point stuff. The 777s and 767ERs will fly the INTL stuff, along with plenty of code-share flights with Korean, Air France, etc...
That is what I see in the future. I hope they don't seperate the mainline and Song pilots---which they might do, although Dalpa will oppose that for as long as they can....

Bye Bye--General Lee

 

[ATR-DRIVR]

General,
what possible reason would they want to separate them?

 

[General Lee]

ATR-driver,

I think they might want to seperate them to have seperate rules etc. Look what they have done with the flight attendants. The Song flight attendants make less, work a lot more, and have fewer benefits. Also, except for the first 700 or so flight attendants at Song that came from mainline, the rest will be hired with 5 year contract that may or may not be renewed, and they leave with a little lump sum---or no retirement. Now, I don't think Dalpa would allow that, and I think if Song does become profitable, they probably wouldn't sell it. But, I can see them making it a different category, like a Delta Express, where they pay 15% less than mainline, but let you work 10 more hours a month to make up the difference. That seems plausible.

Bye Bye--General Lee

 

[GVFlyer]

Re: General Lee

Yeah, what's with the new thread?

Glad to hear that it's a viable rumor. With my ERJ holdings, I have my fingers crossed. Anyway, not to worry about the mfg slots. Embraer will be able to do 6 month on the 190 by 2005, and B6 is only asking for 1.5 per month till 2011. I wouldn't count out some 86 seat 175's as part of the purchase. The beauty of the 170/190 package is the ability to move the fleet based on demand. Besides the 175 will be available in the 3Q of 04.

I can't imagine why anyone would choose the 318. It's performance is similar to the 319, and carries fewer passengers. Can't see the 717 either, as I would think DL mgt wants that plane to remain an orphan. Besides BA is offering the 713, but that just increases pax to 130, and doesn't help the range. On top of that, the order may cannibalize the 737.

Being able to turn the a/c to the left coast from both hubs is a major factor. I have my fingers crossed.

I know this is way outside of my bailiwick, but how does the duribility of the product enter into the equation?

The EJ135 was certified in large part on the ramp at Savannah by the FAA's Atlanta ACO during the time we were doing GV developmental testing (Embraer had wanted Gulfstream to be a risk-sharing partner in their jet development; the Big G passed). That Jungle Jet, at least, was positively delicate. The CRJ is not exactly robust. I was at the Long Beach Boeing, nee Douglas, facility several times during 717 development (their chief test pilot for the project was the former chief test pilot for GV development). The 717 is a typical Douglas airliner that will last for 50,000 hours of multi-cycle airline use – short fields, hard landings, heavy braking.

Northwest is just now discovering that the AirBus is a 15 year airplane as their A300’s become maintenance intensive (and expensive). Compare this to the 50 Ex-Delta DC-9’s that they bought for $2 million each then spent $2 million an airframe to refurb. These DC 9’s have played a large part in Northwest’s economic recovery (they just cancelled a planned furlough) because the jets are reliable and Northwest doesn’t have to send money off to ILFC or GE Cap to pay for them.

Just my opinion, but I think that with either the Canadian product or the Brazilian airplane maintenance costs will skyrocket at the end of the warranty period and that should be a consideration when determining which jet to acquire. Is it?

GV

 

[lowecur]

GV

These new generation EMB mainliners are supposed to have a very stout airframe. I think Neeleman was quoted as saying they expected to get 60,000 hrs from them.

Maintenance Cost per flight hour is also less. The 170 is 19% less than the CRJ700. The 175 is 31% less than the CRJ900. The 190 is 25-27% cheaper than the 717, 736, and 318.

In other words, the NG of Embraer a/c are not built like an RJ. Now do they have a track record? No, so the final word will evolve over time. But keep in mind that B6 has had their engineers look at the a/c along with hired consulting engineers before their purchase.

Every day more and more credibility is achieved as many of the worlds airlines are lining up to purchase these new planes. You'll see a new IPO from China is evolving that will build the ERJ and EMB a/c in China (50-110 seats) just for their market.

 

[Bad-Andy]

lowecur,

You are kind of right about the IPO and big announcement. There is one coming (maybe as soon as today or tomorrow). But, it isn't China, it's Malaysia. I'm sitting at LIMA '03, and I've been shuttling VIPs back and forth (from the Minister of Defense to the heads of several airlines to the CDF) all week. Embraer chartered us to come over in the Legacy for a week to "show Embraer quality" to these guys. From all the conversations I've been sitting in on, it looks like Malaysia Airlines is going to lock up the market on the 190s and 195s. They are asking about how many delivery slots they can get, as soon as possible. So, if whoever comes in after them wants any orders, good luck getting them. The China deal is a little farther down the road. (Possibly early next year).

As for Delta, these guys have said with straight faces (both sober and after a drink or 3) that they have heard nothing about a big Delta-Embraer order. (Considering the President of Embraer is here, I think he'd have heard something by now if it was true...) The A-Bus guys have also said that they don't know about any big announcements either. (But, I haven't been able to ply them with drinks yet, either). The Boeing guys just smile and say "maybe, maybe not". Sounds to me like this whole "big order" thing is just a rumor...

 

[lowecur]

ba

Embraer folks are very good poker players. The B6 deal was under wraps so tight, that Wall St was really taken by surprise.

The fact that DL could possibly be going BA would be a stunner to me. The only a/c that fit are the 717 & 736. Airtran would like nothing better than to advertise the fact that the 717 has a future, and they would be licking their chops if DL picks the 736.

The possible Malaysia deal would not surprise me. The fact that they could tie up 8 to 10 slots per month on the 190/195 would be distressing. That certainly would send more business to BA and Airbus by default.

Another possible foreign order is the Qantas LCC startup. They are supposed to name an a/c soon. See if you can gleen any info on that deal.

Thanks for the heads up.