Delta Execs: We're losing $50 million per day
05-01-2020, 07:30 AM
#1
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Delta Execs: We're losing $50 million per day
Most recent communications from execs say that we're burning thru $50 million per day. They also say our operating costs are down more than 50%.
So how are we losing $50 million per day if our operating costs alone are less than half what they were before?
In 2Q19 Delta reported operating costs of $10.3 billion. If our costs are done more than half then that means our costs are $5 billion (or less) for the quarter.
Now throw in the revenue from charters, cargo, AmEx, and the passengers that are flying (they said 25% load factor in the most recent townhall).
$50 million loss per day x 90 days in a quarter = $4.5 billion loss
Is it me or does the math just not add up?
So how are we losing $50 million per day if our operating costs alone are less than half what they were before?
In 2Q19 Delta reported operating costs of $10.3 billion. If our costs are done more than half then that means our costs are $5 billion (or less) for the quarter.
Now throw in the revenue from charters, cargo, AmEx, and the passengers that are flying (they said 25% load factor in the most recent townhall).
$50 million loss per day x 90 days in a quarter = $4.5 billion loss
Is it me or does the math just not add up?
05-01-2020, 07:37 AM
#2
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Originally Posted by DALFA
Most recent communications from execs say that we're burning thru $50 million per day. They also say our operating costs are down more than 50%.
So how are we losing $50 million per day if our operating costs alone are less than half what they were before?
In 2Q19 Delta reported operating costs of $10.3 billion. If our costs are done more than half then that means our costs are $5 billion (or less) for the quarter.
Now throw in the revenue from charters, cargo, AmEx, and the passengers that are flying (they said 25% load factor in the most recent townhall).
$50 million loss per day x 90 days in a quarter = $4.5 billion loss
Is it me or does the math just not add up?
So how are we losing $50 million per day if our operating costs alone are less than half what they were before?
In 2Q19 Delta reported operating costs of $10.3 billion. If our costs are done more than half then that means our costs are $5 billion (or less) for the quarter.
Now throw in the revenue from charters, cargo, AmEx, and the passengers that are flying (they said 25% load factor in the most recent townhall).
$50 million loss per day x 90 days in a quarter = $4.5 billion loss
Is it me or does the math just not add up?
Simple numbers for easy math
Annual revenue = $45B ($123M per day)
Annual cost = $40B ($110M per day)
(123*10%) - (110*53%) = $46M loss per day
Additionally, 60% of the reduced cost (110*53%*60%) is wages and benefits.
Last edited by AUP09; 05-01-2020 at 07:47 AM.
05-01-2020, 07:42 AM
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Originally Posted by DALFA
Most recent communications from execs say that we're burning thru $50 million per day. They also say our operating costs are down more than 50%.
So how are we losing $50 million per day if our operating costs alone are less than half what they were before?
In 2Q19 Delta reported operating costs of $10.3 billion. If our costs are done more than half then that means our costs are $5 billion (or less) for the quarter.
Now throw in the revenue from charters, cargo, AmEx, and the passengers that are flying (they said 25% load factor in the most recent townhall).
$50 million loss per day x 90 days in a quarter = $4.5 billion loss
Is it me or does the math just not add up?
So how are we losing $50 million per day if our operating costs alone are less than half what they were before?
In 2Q19 Delta reported operating costs of $10.3 billion. If our costs are done more than half then that means our costs are $5 billion (or less) for the quarter.
Now throw in the revenue from charters, cargo, AmEx, and the passengers that are flying (they said 25% load factor in the most recent townhall).
$50 million loss per day x 90 days in a quarter = $4.5 billion loss
Is it me or does the math just not add up?
05-01-2020, 08:13 AM
#5
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Posts: 167
Originally Posted by AUP09
Because revenue is down +90%.
Simple numbers for easy math
Annual revenue = $45B ($123M per day)
Annual cost = $40B ($110M per day)
(123*10%) - (110*53%) = $46M loss per day
Additionally, 60% of the reduced cost (110*53%*60%) is wages and benefits.
Simple numbers for easy math
Annual revenue = $45B ($123M per day)
Annual cost = $40B ($110M per day)
(123*10%) - (110*53%) = $46M loss per day
Additionally, 60% of the reduced cost (110*53%*60%) is wages and benefits.
05-01-2020, 08:22 AM
#6
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Originally Posted by AUP09
Because revenue is down +90%.
Simple numbers for easy math
Annual revenue = $45B ($123M per day)
Annual cost = $40B ($110M per day)
(123*10%) - (110*53%) = $46M loss per day
Additionally, 60% of the reduced cost (110*53%*60%) is wages and benefits.
Simple numbers for easy math
Annual revenue = $45B ($123M per day)
Annual cost = $40B ($110M per day)
(123*10%) - (110*53%) = $46M loss per day
Additionally, 60% of the reduced cost (110*53%*60%) is wages and benefits.
Our annual expenses in 2019 were $40.389 billion. That's $110.6 per day.
If revenue is down 90% (I think it's less since 1/2 billon per quarter is from Amex mileage purchases) then that leaves us with $12.8 million in revenue per day.
The statement made was that expenses were down over 50%, but if we just use 50% that's $55.3 million per day.
$55.3 million in expenses
minus
$12.8 million in revenue
Total is $42.5 million per day in losses. About 15% short of the $50 million statement that is being thrown around. That's a $3.8 billion loss per quarter rather than a $5 billion loss per quarter which is another number they're throwing around.
05-01-2020, 08:28 AM
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Originally Posted by sailingfun
I agree it does not save jobs. It does however save companies. If Delta had failed to act to cut costs and was still burning 10 billion a quarter how long do you think we would last?
05-01-2020, 08:41 AM
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Originally Posted by DALFA
Our annual revenue in 2019 was $47.007 billion. That's $128M per day.
Our annual expenses in 2019 were $40.389 billion. That's $110.6 per day.
If revenue is down 90% (I think it's less since 1/2 billon per quarter is from Amex mileage purchases) then that leaves us with $12.8 million in revenue per day.
The statement made was that expenses were down over 50%, but if we just use 50% that's $55.3 million per day.
$55.3 million in expenses
minus
$12.8 million in revenue
Total is $42.5 million per day in losses. About 15% short of the $50 million statement that is being thrown around. That's a $3.8 billion loss per quarter rather than a $5 billion loss per quarter which is another number they're throwing around.
Our annual expenses in 2019 were $40.389 billion. That's $110.6 per day.
If revenue is down 90% (I think it's less since 1/2 billon per quarter is from Amex mileage purchases) then that leaves us with $12.8 million in revenue per day.
The statement made was that expenses were down over 50%, but if we just use 50% that's $55.3 million per day.
$55.3 million in expenses
minus
$12.8 million in revenue
Total is $42.5 million per day in losses. About 15% short of the $50 million statement that is being thrown around. That's a $3.8 billion loss per quarter rather than a $5 billion loss per quarter which is another number they're throwing around.
If you plug in in 9% rev and 54% expenses you come to 48M loss per day. Puts you within 5% of stated. Not a big deal when taking everything into consideration.
05-01-2020, 08:48 AM
#9
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Originally Posted by Yoohoo1
Curious what you think our revenue would be if things improve and we were able to get close to our 50/60% load factor limit.
Operating a "precovid" schedule at 60% may be a 20M loss per day (assuming majority of the cost savings are not able to continue if schedule was normal and Aircraft were at 60% loads).
05-01-2020, 08:50 AM
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Originally Posted by DALFA
It's mathematically impossible to lose $10 billion per quarter. That's how much our expenses are when we're flying a full schedule. We are seeing fuel costs that are $2-2.5 billion less per quarter with the lower prices and less flights. So with everything else staying the same that's a cap of $8 billion per quarter. Now throw in the 35-40,000 employees on leave, the $5 billion in grants from our tax dollars, and all the other savings by reducing schedule values of active employees by 10-20% for crews and 25% for agents. Less landing fees, lower MTC costs etc.
I'm not disagreeing with you. I think Delta uses round numbers. I can see expenses are $50 million a day x 90= around 4.5 billion
If we bring in 40 million in revenue a month then Delta is loosing 4.3 billion a quarter before the CARES $$.
Worst case 4.3 x 3= 12.9 billion - 4 billion grant $ from CARES = 8.9 billion lost in 2020 if revenue stays the same. It won't. I'm guessing we loose 7 billion in 2020. The government loan and private loans. Should help with cash flow.
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