F U D. Fear Uncertainty Doubt


Nice try Tool. I'm not denying there are black swans and hazards to the economy and Delta out in the world.. There are. I'm just not going to subscribe to the argument you are posing to try and shape expectations.

It's not reasonable.

Let's look at this realistically.

The Great Recession. June 2007 to January 2010.

The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States' largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Citi Bank and AIG, as well as a crisis in the automobile industry.

The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package. The National Bureau of Economic Research declared the end of this recession over a year after the end date. The Dow Jones Industrial Average (Dow) finally reached its lowest point on March 9, 2009.


Now, let's look at reality.

DELTA AIR LINES REPORTS 2007 FINANCIAL RESULTS
INTERNATIONAL EXPANSION HELPS DRIVE MORE THAN $1 BILLION IMPROVEMENT IN 2007 ANNUAL PRE-TAX INCOME
Atlanta, GA
NYS-DAL
Jan 23, 2008

ATLANTA, Jan. 23, 2008 – Delta Air Lines (NYSE-DAL) today reported results for the quarter and year ended Dec. 31, 2007. Key points include:

Delta’s 2007 pre-tax income was $1.8 billion. Excluding reorganization related and certain items, pre-tax income was $625 million, a $1.1 billion improvement compared to 2006.1,2, 3
Due to a 26% rise in fuel price, Delta reported a pre-tax loss for the fourth quarter of $105 million.
Delta ended the year with $3.8 billion in unrestricted liquidity, including $1 billion available under its revolving credit facility.
Delta employees will receive $158 million in profit sharing in recognition of their critical role in achieving significant financial improvements in 2007.

And in 2008, the height of the Global Recession.


Delta's 2008 net loss was $503 million, or $1.08 per diluted share, excluding (1) special items that primarily consist of an over $900 million non-cash charge related to employee equity awards that were issued or vested in connection with the merger and $7.3 billion in non-cash goodwill and other intangible asset impairment charges reported earlier this year, and (2) a $91 million loss on out-of-period fuel hedges.

"I want to thank my 85,000 Delta colleagues for their outstanding achievements in 2008 - a year where we not only faced the severe challenges brought on by over $2 billion in increased fuel costs and the onset of a global recession, but also closed our merger with Northwest and began a smooth integration process," said Richard Anderson, Delta's chief executive officer. "Despite the difficult economic environment, we expect to be solidly profitable in 2009 driven by lower fuel costs, capacity discipline, and merger synergies. Delta people have a great track record for achieving their goals, and I am confident that 2009 will be another successful year." -


So, to make my point, in 2009 Delta had 6.14 billion dollars in gross income and a net income of 593 million dollars......

all before the end of the Great Recession.

Why?

The unbundling of fees.

We are in a new paradigm. Actually, we have been for a while.

You can put away the can of black paint and quit chasing the white swans in your attempt to paint something that's not all there.

Time to figure out how to work pay and compensation in the the new paradigm

Hint:

Cutting our profit sharing is not the answer