Any "Latest & Greatest" about Delta?
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Delta gets an outperform rating at Raymond JamesExplore related topics
Airlines Delta Air Lines Inc Story
NEW YORK (MarketWatch) -- Brokerage firm Raymond James initiated coverage of Delta Air Lines Inc. /quotes/comstock/13*!dal/quotes/nls/dal (DAL 6.09, -0.03, -0.50%) on Friday with an outperform rating, citing the company's recent merger with Northwest, its equity and a potential industry-wide recovery next year. "We are now 20 months into the current recession, and fuel prices, while volatile, remain substantially lower year-over-year," the firm said in a note. "We are inclined to be positive on airline stocks with sufficient liquidity, with an eye toward recovery in 2010." Raymond James gave Delta stock a 12-month target price of $8. Shares of Delta last traded at $6.08, down a fraction
Delta gets an outperform rating at Raymond JamesExplore related topics
Airlines Delta Air Lines Inc Story
NEW YORK (MarketWatch) -- Brokerage firm Raymond James initiated coverage of Delta Air Lines Inc. /quotes/comstock/13*!dal/quotes/nls/dal (DAL 6.09, -0.03, -0.50%) on Friday with an outperform rating, citing the company's recent merger with Northwest, its equity and a potential industry-wide recovery next year. "We are now 20 months into the current recession, and fuel prices, while volatile, remain substantially lower year-over-year," the firm said in a note. "We are inclined to be positive on airline stocks with sufficient liquidity, with an eye toward recovery in 2010." Raymond James gave Delta stock a 12-month target price of $8. Shares of Delta last traded at $6.08, down a fraction
look familiar
NEW YORK (MarketWatch) -- Brokerage firm Raymond James initiated coverage of Delta Air Lines Inc. /quotes/comstock/13*!dal/quotes/nls/dal (DAL 6.12, +0.00, +0.00%) on Friday with an outperform rating, citing the company's recent merger with Northwest, its equity and a potential industry-wide recovery next year. "We are now 20 months into the current recession, and fuel prices, while volatile, remain substantially lower year-over-year," the firm said in a note. "We are inclined to be positive on airline stocks with sufficient liquidity, with an eye toward recovery in 2010." Raymond James gave Delta stock a 12-month target price of $8. Shares of Delta last traded at $6.08, down a fraction.
Banned
Joined APC: Feb 2008
Position: The Beginnings
Posts: 1,317
Deltabound:
I respectfully disagree. SouthWest made it's market, initially, by creating demand for travel by offering fares cheap enough to make discretionary travel possible. Google the "southwest effect" for a summary. Delta's market strategy has been to create a network that customers could fly from anywhere to anywhere.
In effect, Southwest takes where you'd want to go if you could get there cheaply. Delta takes you where you NEED to go. If your business builds parts at an Asian factory, Delta can get you from Topeka to Taipei, or Minneapolis to Manilla. While there are other alternatives to driving from Dallas to Houston, there are no alternatives to flying from Atlanta to Narita. Over the past few years we have seen Southwest copy Delta more than the other way around. Southwest is now flying in and out of higher cost airports, like LGA, and has some limited international code share.
Thus in a future economy with high oil prices, I expect Delta to succeed while airlines like SWA fail. It will not be easy, it never is in this business, but overall the airlines remain a growth business as long as our planet's product increases. Airline travel has always correlated with GDP.
It is likely that there will be alternatives found for jet A, particularly at $8 a gallon. Turbine engines are not picky about what they burn and we could very well find ourselves burning some form of bio-Willy. The US military is already moving that direction. If you are Delta bound, you are headed for the right place.
I respectfully disagree. SouthWest made it's market, initially, by creating demand for travel by offering fares cheap enough to make discretionary travel possible. Google the "southwest effect" for a summary. Delta's market strategy has been to create a network that customers could fly from anywhere to anywhere.
In effect, Southwest takes where you'd want to go if you could get there cheaply. Delta takes you where you NEED to go. If your business builds parts at an Asian factory, Delta can get you from Topeka to Taipei, or Minneapolis to Manilla. While there are other alternatives to driving from Dallas to Houston, there are no alternatives to flying from Atlanta to Narita. Over the past few years we have seen Southwest copy Delta more than the other way around. Southwest is now flying in and out of higher cost airports, like LGA, and has some limited international code share.
Thus in a future economy with high oil prices, I expect Delta to succeed while airlines like SWA fail. It will not be easy, it never is in this business, but overall the airlines remain a growth business as long as our planet's product increases. Airline travel has always correlated with GDP.
It is likely that there will be alternatives found for jet A, particularly at $8 a gallon. Turbine engines are not picky about what they burn and we could very well find ourselves burning some form of bio-Willy. The US military is already moving that direction. If you are Delta bound, you are headed for the right place.
I don't disagree with anything you've written (or take offense!). However, the chapter of the book in question addresses each of your points in greater detail. The nature of a message board requires brevity, and long ranging plans or quickly summarized ideas are not well suited to the format.
I'd say check out the chapter yourself and draw your own conclusions. It's topical, and certainly relevant to our industry.
In brief, however, the general counters to your points from the recommended book would be:
- Delta has an enormous debt load ($25 billion, at least), as do most of the legacy carriers
- Legacy carriers are heavily unionized and have deeply seated corporate cultures that are not very nimble.
- Fuel costs for airlines in their most profitable years (late 1990's) only amounted to 13% of their overall costs. In recent years, it's been more like 40%, and extra fee's do not seem to have made up the difference. Now imagine gas at 200/barrel.
- Some legacy carriers have a huge amount of gas guzzlers in their fleets and no ability to modernize (AMR, for example, has 300 MD-80s, United has no new aircraft orders)
- At permanent $8 a gallon gas (and rising) consumers are going to pull back from leisure travel unlike anything we've seen before. The days of winging off to Vegas for a weekend or Europe for a summer vacation are likely to disappear.
- Ditto business travel. The internet and tele-commuting are only getting better, and high travel costs will only increase this trend.
- As fuel costs rise, shorter legs make no sense (up and down is what burns the most gas). As each $1 per gallon of gas goes up, shorter routes will disappear. Additionally, 20 flights a day from small cities with small planes will vanish. There will be one, maybe two, tops. . . a trend we're already seeing with CRJ's getting parked as quickly as they can.
The military will have options, of course. With virtually unlimited funds and a critical mission, they will certainly find a way. But cost won't be an object, as it must be with private businesses.
Heh. So much for brief! Like I said, good chapter and interesting. It's really a "what if peak oil is here?" kinda book with some extrapolations as to what long term (next 100 years) this will probably mean to the average American. Generally, it's pretty good. But there's going to be some real pain in the meantime, and pilots are very much going to be impacted.
Banned
Joined APC: Feb 2008
Position: The Beginnings
Posts: 1,317
Oy! So that stock given to the pilot group at $15/share then given to individual pilots at $7/share might actually be worth $8/share in a year?
I'm beginning to understand why Buffet is death on airline stocks . . .
I don't disagree with anything you've written (or take offense!). However, the chapter of the book in question addresses each of your points in greater detail. The nature of a message board requires brevity, and long ranging plans or quickly summarized ideas are not well suited to the format.
I'd say check out the chapter yourself and draw your own conclusions. It's topical, and certainly relevant to our industry.
In brief, however, the general counters to your points from the recommended book would be:
The military will have options, of course. With virtually unlimited funds and a critical mission, they will certainly find a way. But cost won't be an object, as it must be with private businesses.
Heh. So much for brief! Like I said, good chapter and interesting. It's really a "what if peak oil is here?" kinda book with some extrapolations as to what long term (next 100 years) this will probably mean to the average American. Generally, it's pretty good. But there's going to be some real pain in the meantime, and pilots are very much going to be impacted.
I'd say check out the chapter yourself and draw your own conclusions. It's topical, and certainly relevant to our industry.
In brief, however, the general counters to your points from the recommended book would be:
- Delta has an enormous debt load ($25 billion, at least), as do most of the legacy carriers
- Legacy carriers are heavily unionized and have deeply seated corporate cultures that are not very nimble.
- Fuel costs for airlines in their most profitable years (late 1990's) only amounted to 13% of their overall costs. In recent years, it's been more like 40%, and extra fee's do not seem to have made up the difference. Now imagine gas at 200/barrel.
- Some legacy carriers have a huge amount of gas guzzlers in their fleets and no ability to modernize (AMR, for example, has 300 MD-80s, United has no new aircraft orders)
- At permanent $8 a gallon gas (and rising) consumers are going to pull back from leisure travel unlike anything we've seen before. The days of winging off to Vegas for a weekend or Europe for a summer vacation are likely to disappear.
- Ditto business travel. The internet and tele-commuting are only getting better, and high travel costs will only increase this trend.
- As fuel costs rise, shorter legs make no sense (up and down is what burns the most gas). As each $1 per gallon of gas goes up, shorter routes will disappear. Additionally, 20 flights a day from small cities with small planes will vanish. There will be one, maybe two, tops. . . a trend we're already seeing with CRJ's getting parked as quickly as they can.
The military will have options, of course. With virtually unlimited funds and a critical mission, they will certainly find a way. But cost won't be an object, as it must be with private businesses.
Heh. So much for brief! Like I said, good chapter and interesting. It's really a "what if peak oil is here?" kinda book with some extrapolations as to what long term (next 100 years) this will probably mean to the average American. Generally, it's pretty good. But there's going to be some real pain in the meantime, and pilots are very much going to be impacted.
As far as doing business via e-mails and teleconferencing, there will always be situations where nothing less than a face to face meeting will do when you are trying to close that multi-million Dollar deal.
So what happens when the airline that owns us runs out of money?
Air France KLM may face cash challenge next year
July 17, 2009
A study of Air France KLM found that the airline will run out of cash next year if oil prices continue to climb and passenger traffic numbers do not improve, Reuters reported.
Citing a news report in Les Echos, the article said that a worst-case scenario would involve Air France KLM posting a wider loss in 2009-2010 than the $182 million loss posted the previous year. If the case, the airline would be short of cash within the year.
According to the study, another, more realistic scenario involves a sales drop of 9% with oil remaining at or around a $58 a barrel. Air France revealed this scenario as a target in May, the article said.
Ideally, Air France KLM hopes for a smaller 4% drop in sales and oil prices around $61 a barrel. Such a scenario would allow the carrier to reduce its loss and finance new investments. This scenario, however, is unlikely given air traffic drops in May and June, the article said.
Air France KLM said a statement Friday that the carrier’s “financial position is, and will remain, extremely healthy in the coming years.”
The Franco-Dutch group’s had some 4.5 billion euros (about $6.5 billion USD) in cash on June 30, “to which are added 1.2 billion euros in available credit lines, making a total of 5.7 billion euros following the recent, highly successful, 660 million euro convertible bond issue,” the statement said. “Annual debt repayment commitments are limited, and, moreover, the group has almost 40 unencumbered aircraft which can be refinanced at any time.”
Air France KLM may face cash challenge next year
July 17, 2009
A study of Air France KLM found that the airline will run out of cash next year if oil prices continue to climb and passenger traffic numbers do not improve, Reuters reported.
Citing a news report in Les Echos, the article said that a worst-case scenario would involve Air France KLM posting a wider loss in 2009-2010 than the $182 million loss posted the previous year. If the case, the airline would be short of cash within the year.
According to the study, another, more realistic scenario involves a sales drop of 9% with oil remaining at or around a $58 a barrel. Air France revealed this scenario as a target in May, the article said.
Ideally, Air France KLM hopes for a smaller 4% drop in sales and oil prices around $61 a barrel. Such a scenario would allow the carrier to reduce its loss and finance new investments. This scenario, however, is unlikely given air traffic drops in May and June, the article said.
Air France KLM said a statement Friday that the carrier’s “financial position is, and will remain, extremely healthy in the coming years.”
The Franco-Dutch group’s had some 4.5 billion euros (about $6.5 billion USD) in cash on June 30, “to which are added 1.2 billion euros in available credit lines, making a total of 5.7 billion euros following the recent, highly successful, 660 million euro convertible bond issue,” the statement said. “Annual debt repayment commitments are limited, and, moreover, the group has almost 40 unencumbered aircraft which can be refinanced at any time.”
Heh. So much for brief! Like I said, good chapter and interesting. It's really a "what if peak oil is here?" kinda book with some extrapolations as to what long term (next 100 years) this will probably mean to the average American. Generally, it's pretty good. But there's going to be some real pain in the meantime, and pilots are very much going to be impacted.
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
I don't disagree with anything you've written (or take offense!). However, the chapter of the book in question addresses each of your points in greater detail. The nature of a message board requires brevity, and long ranging plans or quickly summarized ideas are not well suited to the format.
I'd say check out the chapter yourself and draw your own conclusions. It's topical, and certainly relevant to our industry.
In brief, however, the general counters to your points from the recommended book would be:
The military will have options, of course. With virtually unlimited funds and a critical mission, they will certainly find a way. But cost won't be an object, as it must be with private businesses.
Heh. So much for brief! Like I said, good chapter and interesting. It's really a "what if peak oil is here?" kinda book with some extrapolations as to what long term (next 100 years) this will probably mean to the average American. Generally, it's pretty good. But there's going to be some real pain in the meantime, and pilots are very much going to be impacted.
I'd say check out the chapter yourself and draw your own conclusions. It's topical, and certainly relevant to our industry.
In brief, however, the general counters to your points from the recommended book would be:
- Delta has an enormous debt load ($25 billion, at least), as do most of the legacy carriers
- Legacy carriers are heavily unionized and have deeply seated corporate cultures that are not very nimble.
- Fuel costs for airlines in their most profitable years (late 1990's) only amounted to 13% of their overall costs. In recent years, it's been more like 40%, and extra fee's do not seem to have made up the difference. Now imagine gas at 200/barrel.
- Some legacy carriers have a huge amount of gas guzzlers in their fleets and no ability to modernize (AMR, for example, has 300 MD-80s, United has no new aircraft orders)
- At permanent $8 a gallon gas (and rising) consumers are going to pull back from leisure travel unlike anything we've seen before. The days of winging off to Vegas for a weekend or Europe for a summer vacation are likely to disappear.
- Ditto business travel. The internet and tele-commuting are only getting better, and high travel costs will only increase this trend.
- As fuel costs rise, shorter legs make no sense (up and down is what burns the most gas). As each $1 per gallon of gas goes up, shorter routes will disappear. Additionally, 20 flights a day from small cities with small planes will vanish. There will be one, maybe two, tops. . . a trend we're already seeing with CRJ's getting parked as quickly as they can.
The military will have options, of course. With virtually unlimited funds and a critical mission, they will certainly find a way. But cost won't be an object, as it must be with private businesses.
Heh. So much for brief! Like I said, good chapter and interesting. It's really a "what if peak oil is here?" kinda book with some extrapolations as to what long term (next 100 years) this will probably mean to the average American. Generally, it's pretty good. But there's going to be some real pain in the meantime, and pilots are very much going to be impacted.
If oil will go to $200 a barrel where do you think unleaded gas will be? Do you honestly think someone will drive instead of fly? People will have to travel. Sick people need to travel to specialty hospitals & clinics, families to weddings, funerals, graduations, etc. The economy will come back. It has to. Eventually supplies of products will decrease. They will have to be replenished. This will create more jobs. This will produce more spending. People will continue to travel. It's a natural cycle.
On top of that, the government will have a very hard time allowing the National Transportation system to fail. Some airlines may fall, but his author us being silly.
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
So what happens when the airline that owns us runs out of money?
Air France KLM may face cash challenge next year
July 17, 2009
A study of Air France KLM found that the airline will run out of cash next year if oil prices continue to climb and passenger traffic numbers do not improve, Reuters reported.
Citing a news report in Les Echos, the article said that a worst-case scenario would involve Air France KLM posting a wider loss in 2009-2010 than the $182 million loss posted the previous year. If the case, the airline would be short of cash within the year.
According to the study, another, more realistic scenario involves a sales drop of 9% with oil remaining at or around a $58 a barrel. Air France revealed this scenario as a target in May, the article said.
Ideally, Air France KLM hopes for a smaller 4% drop in sales and oil prices around $61 a barrel. Such a scenario would allow the carrier to reduce its loss and finance new investments. This scenario, however, is unlikely given air traffic drops in May and June, the article said.
Air France KLM said a statement Friday that the carrier’s “financial position is, and will remain, extremely healthy in the coming years.”
The Franco-Dutch group’s had some 4.5 billion euros (about $6.5 billion USD) in cash on June 30, “to which are added 1.2 billion euros in available credit lines, making a total of 5.7 billion euros following the recent, highly successful, 660 million euro convertible bond issue,” the statement said. “Annual debt repayment commitments are limited, and, moreover, the group has almost 40 unencumbered aircraft which can be refinanced at any time.”
Air France KLM may face cash challenge next year
July 17, 2009
A study of Air France KLM found that the airline will run out of cash next year if oil prices continue to climb and passenger traffic numbers do not improve, Reuters reported.
Citing a news report in Les Echos, the article said that a worst-case scenario would involve Air France KLM posting a wider loss in 2009-2010 than the $182 million loss posted the previous year. If the case, the airline would be short of cash within the year.
According to the study, another, more realistic scenario involves a sales drop of 9% with oil remaining at or around a $58 a barrel. Air France revealed this scenario as a target in May, the article said.
Ideally, Air France KLM hopes for a smaller 4% drop in sales and oil prices around $61 a barrel. Such a scenario would allow the carrier to reduce its loss and finance new investments. This scenario, however, is unlikely given air traffic drops in May and June, the article said.
Air France KLM said a statement Friday that the carrier’s “financial position is, and will remain, extremely healthy in the coming years.”
The Franco-Dutch group’s had some 4.5 billion euros (about $6.5 billion USD) in cash on June 30, “to which are added 1.2 billion euros in available credit lines, making a total of 5.7 billion euros following the recent, highly successful, 660 million euro convertible bond issue,” the statement said. “Annual debt repayment commitments are limited, and, moreover, the group has almost 40 unencumbered aircraft which can be refinanced at any time.”
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