Originally Posted by
Sink r8
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".
1. Profit sharing is based on pre-tax income.
2. There is a "cost" with having cash on hand when you're $16.4 billion in debt. Delta is dealing with that cost. It will put you in a far better place when you're negotiating your next contract if Delta has $10 billion in long term debt. The aggregate savings is over $500 million per year. That's "free" money to buy airplanes, pay employees or attack your competition.