gloopy

I guess, but I'm still not seeing how the magic works out in the long run. Doesn't the combined DL/9E profit get reported as the same number at the end of the day? They could "pay" 9E a million dollars per flight, thus causing DL a huge loss, but that huge fake 9E "profit" would come right back to the DL bottom line and at the end of the day what would be reported would be the actual net profit or loss, right? Likewise they could pay 9E one dollar per flight thus having them gush red ink while showing a fake "profit" to DL, but again, at the end of the day nothing would change.

The one advantage I could see from this, I guess, would be if 9E was spun off to ignorant investors with a slight of hand that hid the pump and dump from them long enough to leverage their exuberance for the IPO but then went on to bleed the now separate entity while providing favorable terms for DL through the new code arrangement. But that doesn't look very likely at least right now.

DL could do things like this all the time within fleets as well as the refinery and a few other places like DGS etc. But what's the point if you're not going to spin something off?

DL can't send 9E to BK as long as its a WO can they? That and a very short term gain from a pump and dump are the only two reasons I could actually see them doing what you're suggesting to that extent. Even then the likely result would be rapidly re-assuming unsustainable attrition as they'd have to cut to the bone to "pinch a nickle" everywhere they could to survive day to day. That wouldn't do DL any favors. So I still don't see what's in it for them moving their own money from one pocket to another when the net result gets reported the same way anyway.

Mesabah

No, Endeavor is losing money right now, this is not reported to the shareholders as losses. It's reported as CapEx, which, doesn't affect the bottom line. The more money Endeavor loses, the more money Delta can report as profits. Obviously there are limits to this; You couldn't pay us $1 dollar per flight, how could you pay 9E employees, or buy fuel.

gloopy

So its just a tax advantage then? Because it still changes nothing in the end regardless of where they put the so called profits. The mother ship still only makes a certain amount at the end of the day/quarter/year and how DL costs itself has no bearing on that (other than tax advantages I guess, but I don't know the rules on that).

TalkTurkey

Endeavor has no money to lose. How are they losing money? DL only reports "regional" expenses and nothing indigenous to 9E. 9E is just a different department of DL with a budget.

Mesabah

We are our own company with an operating certificate, and ASA, we have stock, and everything, but it's privately held by Delta, and not reported. The employees are a different department of Delta, but there is still a separate company.

Mesabah

Yes and No, at the end of the day it's all together, however, the share price is based off of Delta profits, CapEx doesn't affect the share price like the bottom line. When you report more profits at the end of each quarter, under normal circumstances, the share price increases. For instance, shifting $850 million in ongoing expenses to capital expenditures from the cash Delta already has on hand from years ago, boosts earnings per share by $1. Does that make sense?

Delta has over a dozen businesses to shift money around including companies in the Cayman Islands. You can play the shell game all day long.

Joint Ventures work in a similar way. Delta takes its free cash on hand, and buys stock in the company it is about to code share with. The joint venture company then sees a capacity increase, and profit increase from the Delta partnership. The stock in the joint venture company goes up, and Delta reports that as investment profits. Skymarks could be the next target as Delta could acquire 49% of that company, pull it out of the ditch, and bank billions in profits.

WIPilot

A parent company can put a held company into bankruptcy without themselves being in bankruptcy.

For evidence of that, just look at the Trump empire.

Mesabah

Delta has enough money to do whatever the hell they want, that's basically what it comes down to. This was the reason I voted yes on our POS bankruptcy contract; As Delta had enough resources to make our lives even worse.

block30

Has anyone else been having problems with the crewpay website? For the last few days I can't get it to work. I tried reviewing my emails and memos and I don't see anything...I also have barely flown this spring/summer, so I don't have a chance to keep up with the latest at work... Thanks.

Avroman

I had to call I T and have them "unlock" it. The login screen changed and it (as usual) messed things up. Just give the I T peeps a call.