Originally Posted by
shiznit
Just a WAG on numbers but here's an estimate on why:
DAL cost for a 777 roughly $210 million. (list 230-270 million)
Looking at 10Q: terms are quarterly payments on a 12 year note.
Commercial loans even in good economies are 7-10%.
So: 210mil at 8.5% over 12 years paying quarterly =
Payments of $5,951,716 quarterly
Interest over the life of the note: $107,682,391
x2 airplanes = $215,364,782 INTEREST EXPENSE!
Or in other terms: The cost of yet another 777-200LR.
Dave Ramsey would be proud of Delta for this.
Loan Amortization Schedule
True, but they're already financing billions. So the only reasons (that I can think of) you would finance these (and thus repay some other debt) would be that a) you can't get good terms on these two, b) you want to reduce your current profits.
The notion that this is for balance sheet rebuilding doesn't make sense to me. Sure, you're not adding to debt, but you're also depleting your cash by an equivalent amount.
My guess is that Delta wants to show just enough profit to satisfy investors, but not so much they have to share with labor right away. We'll be "profitable" as soon as we sign contracts while we're "not profitable".