Wow, Delta's Earnings

[General Lee]

Delta is paying to early out of some 50 seat lift and "upgauge" to larger aircraft (including the B717). Southwest is paying to early out some 120 seat lift and "upgauge" to larger B737-700s and -800s. Southwest and Delta aren't the only two airlines "upgauging" right now due to higher fuel prices. What is your point General?

Paying to early out 50 seaters? You mean the manufacturers are taking a bunch of them to secure a fewer number of larger RJs. FEWER...... But, then mainline comes in and adds 88 717s, and recaptures current 70/76 seater routes. Most of the routes will continue, on larger planes. You are dropping 17 total cities, gone. One airline is replacing planes with larger ones to build up routes, and the other is willing to cut and run from 17 communities.


Bye Bye---General Lee

 

[Twisted Mind]

Delta has discontinued service to a lot more that 17 cities in the last 5 years.

 

[xjhawk]

Not every plane can fit on every route, Wave. Southwest didn't want 717s, so they are paying DL to get rid of them. As a result, SWA is dropping 17 cities that AT used to fly to. Obviously, SWA 737s can't make money on all routes.

Hawaiian will be outsourcing to several islands using Empire Airlines, utilizing ATR-42s. Even though they used to fly DC9s to Lanai and Molokai, and used to fly Dash-7s into those two and Kapalua, they will now use ATRs flown by Empire. Hawaiian Airlines made the decision to return to those cities, but at a certain price. Should Hawaiian avoid those 3 airports if they can't afford putting mainline planes (717s) into Lanai, Molokai, and Kapalua (couldn't handle a 717 anyway)??? SWA doesn't seem to care about those 17 ex AT cities, but the 3 in Hawaii might make a difference for Hawaiian.



Bye Bye---General Lee

I agree with you mostly Lee but most of the routes flown by 50 seat jets were once served by much larger mainline planes. Just around MSP even the small towns of LSE, RST, FSD, the list goes on were all served by mainline. The difference being the frequency and profit margin the mainline carriers can get with cheaper labor. The small jets serve a purpose, but the mainline carriers used bankruptcy and legacy pilots greed and ego to accomplish their goal.

 

[Twisted Mind]

Exactly the RJ are a union busting tool that is working very good.

 

[waveflyer]

ATLMGM daily service one off the top of my head. Goes to MGM in the evening and flys back to ATL the following morning.

You're right-

There's one -

 

[Freebrd]

You only asked for one!

 

[maxblast72]

Paying to early out 50 seaters? You mean the manufacturers are taking a bunch of them to secure a fewer number of larger RJs. FEWER...... But, then mainline comes in and adds 88 717s, and recaptures current 70/76 seater routes. Most of the routes will continue, on larger planes. You are dropping 17 total cities, gone. One airline is replacing planes with larger ones to build up routes, and the other is willing to cut and run from 17 communities.


Bye Bye---General Lee

Go take a look at Delta's Q3 and Q4 2012 earnings releases. There are some one time expenses above $100 million for each quarter with respect to Comair shutdown (ie a bunch of 50 seaters) and domestic fleet restructuring. So Delta will "eat" some one time expenses to get rid of 50 seat CRJs early while Southwest will "eat" a one time expense to get rid of some 120 seat BRJs. Both Richard Anderson and Gary Kelly feel it is worth the one time expense to increase their average seats per departure of their domestic fleet.

What is the big deal about dropping routes like AVL-MCO, LEX-MCO, and ATL-ACY and reallocating the lift to DEN-SJD, SNA-MEX, and MDW-CUN? Sounds like good revenue management to me. Southwest's goal is to make a profit. I know that may be foreign to you since Delta's goal is marketshare.

 

[General Lee]

Go take a look at Delta's Q3 and Q4 2012 earnings releases. There are some one time expenses above $100 million for each quarter with respect to Comair shutdown (ie a bunch of 50 seaters) and domestic fleet restructuring. So Delta will "eat" some one time expenses to get rid of 50 seat CRJs early while Southwest will "eat" a one time expense to get rid of some 120 seat BRJs. Both Richard Anderson and Gary Kelly feel it is worth the one time expense to increase their average seats per departure of their domestic fleet.

What is the big deal about dropping routes like AVL-MCO, LEX-MCO, and ATL-ACY and reallocating the lift to DEN-SJD, SNA-MEX, and MDW-CUN? Sounds like good revenue management to me. Southwest's goal is to make a profit. I know that may be foreign to you since Delta's goal is marketshare.

How many of the FL communities were dropped completely Max? 17. You guys are DROPPING 17 total. DL very rarely does that, primarily because of the different sized planes that can be tried. Some to Europe are seasonal, but usually return for Spring/Summer. A few have been dropped to Europe in favor of the codeshares, but not 17.

And please don't try to compare profits MAX. DL's 2nd quarter profit will probably be larger than SWA's full year. Bag fees, like the ones you guys still feed SWA to fund your merger, really help. You may have to paint over a bunch of the SWA 737s that say "Bags fly free here." Otherwise, management may look for other ways to increase profitability. You know, SWA isn't really a LCC anymore, longevity is starting to affect the bottom line. Not as many new hires over there, and your certain stagnation will not help the situation. I would be "for" extra fees if I were you.

Btw, have you seen pictures of the DL 717 in the MIA paint shop? It looks pretty good, and it will pay well. ($195 an hour for 12th year longevity, or almost all the captains, by 2015 when they will all be on the property, and that will be the smallest plane at DL)


Bye Bye---General Lee

 

[redflyer65]

DL very rarely does that, primarily because of the different sized planes that can be tried.

Bye Bye---General Lee

What?

I guess your right General. Delta hasn't 'officially' closed cities like CVG and MEM but just continued to outsource them to some carriers with Connection in their name.

So how many departures has both CVG and MEM lost in the past 4 years? Mainline flights please. Those numbers have to be pretty stark.

 

[K-Mart]

What happens when the 717 leases end? What is the replacement?

 

[General Lee]

What?

I guess your right General. Delta hasn't 'officially' closed cities like CVG and MEM but just continued to outsource them to some carriers with Connection in their name.

So how many departures has both CVG and MEM lost in the past 4 years? Mainline flights please. Those numbers have to be pretty stark.

Do you know how many RJs were cut? But, were the cities dropped? No, the cities that had nonstops from CVG and MEM still have flights to ATL, maybe DTW, maybe MSP, maybe JFK, maybe SLC...... Get it Red? The cities weren't dropped, they got better connections to other hubs. That helps passengers who want to go from smaller communities to destinations far, far away. They used to go on AT 717s, and now they may go on DL 717s. Thanks for paying for the new paint and C-Checks, btw! And yes, mainline still flies to CVG and MEM.


Bye Bye---General Lee

 

[General Lee]

What happens when the 717 leases end? What is the replacement?

A deal was made with Boeing that when the leases end DL will be able to buy them outright, at the "then" current prices. What will they be worth in 10 years? Well, the MD90s DL is buying from Japan and China are supposedly worth $8-9 million each, including the engines.


Bye Bye---General Lee

 

[maxblast72]

And please don't try to compare profits MAX. DL's 2nd quarter profit will probably be larger than SWA's full year. Bag fees, like the ones you guys still feed SWA to fund your merger, really help. You may have to paint over a bunch of the SWA 737s that say "Bags fly free here." Otherwise, management may look for other ways to increase profitability. You know, SWA isn't really a LCC anymore, longevity is starting to affect the bottom line. Not as many new hires over there, and your certain stagnation will not help the situation. I would be "for" extra fees if I were you.well. ($195 an hour for 12th year longevity, or almost all the captains, by 2015 when they will all be on the property, and that will be the smallest plane at DL)

Let's compare profitability and financial health General. Due to Delta still carrying forward years of unprofitability, Delta paid no corporate taxes during Q2 while Southwest paid $140 million. So let's take a look at Delta and Southwest's pre-tax margins excluding special items for both carriers (an apples to apples comparison):

Delta Q2 pre-tax profit: $844 million
Delta Q2 revenue: $9.71 billion
Delta Q2 pre-tax margin: 8.7%

Southwest Q2 pre-tax profit: $413 million
Southwest Q2 revenue: $4.64 billion
Southwest Q2 pre-tax margin: 8.9%

That's right General. Without bag fees, Southwest posted a higher pre-tax margin than Delta. Maybe customers don't like being nickeled and dimed to death and choose Southwest over the other guys.

While we are comparing, let's take a look at cash levels and the big liabilities on the balance sheet as of June 30, 2013:

Delta Long Term Debt: $10.5 billion
Delta Unfunded Pension Obligation: $15.4 billion
Delta unrestricted cash and short term investments: $3.9 billion

Southwest Long Term Debt: $2.7 billion
Southwest Unfunded Pension Obligations: $0
Southwest unrestricted cash and short term investments: $3.4 billion

So General, which airline do you want to be working for the next time this country go into a recession? The one with a lot of liabilities or the one with a lot of cash and paid off assets?

 

[waveflyer]

You only asked for one!

I'd never seen one before

You're right-

Here you go- ill break up the contraction so you get it-

You are right.

Can you find 5?

 

[waveflyer]

So general--

Are you saying that SWA should outsource those 17 cities to republic or Skywest? Is that the basis of your critique?

Talking out of both sides of your mouth