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Old 04-15-2021, 07:49 AM   #51  
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That's a pretty incredible accomplishment in the current environment.
How much of that incredible accomplishment is from government cheese 🧀?
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Old 04-15-2021, 08:19 AM   #52  
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How much of that incredible accomplishment is from government cheese 🧀?
Government cheese is available to all the industry players. So if the question is relative performance for significantly lower capacity, I agree with the incredible description.
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Old 04-15-2021, 08:48 AM   #53  
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I think the word minting is bothering you. Ignore it.

Delta is cashflow positive with middle seats blocked. That's a pretty incredible accomplishment in the current environment. Delta is beating AA while handicapped, will be interesting to see how our cashflow numbers compare against UAL

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Our management is doing this to differentiate us from our competition so I wouldn't call it a handicap - why would we intentionally handicap ourselves? Perhaps look at it as a long term investment in our brand. Originally it was put in place when flights were mostly empty and it may cost some now, but hopefully when the world stops being crazy it will pay benefits.

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Old 04-15-2021, 11:07 AM   #54  
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Our management is doing this to differentiate us from our competition so I wouldn't call it a handicap - why would we intentionally handicap ourselves? Perhaps look at it as a long term investment in our brand. Originally it was put in place when flights were mostly empty and it may cost some now, but hopefully when the world stops being crazy it will pay benefits.



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We would handicap ourselves because Delta is playing the long game. Delta Management decided chasing low yield revenue wasn't worth diluting the Delta brand. Here's a couple quotes from today's earning press release I found intriguing:

"Thanks to the incredible efforts of our people, we achieved positive daily cash generation in the month of March, a remarkable accomplishment considering our middle seat block and the low level of demand for business and international travel. " (Ed Bastian)

"Recent demand trends are encouraging with rising confidence in air travel as vaccination rates improve and travel restrictions ease, with current domestic leisure bookings 85% recovered to 2019 levels," said Glen Hauenstein, Delta's president. "In the June quarter, we expect significant sequential improvement in revenue as leisure demand accelerates into the peak summer period and we add capacity efficiently with the removal of our seat block May 1 with revenues recovering to 45 to 50 percent of 2019."


"Corporate demand declined 80 percent versus the March quarter 2019. The corporate recovery showed signs of improvement during the quarter with March volumes improving relative to February at a rate twice the normal seasonal growth between the two months."


" At the end of the March quarter, the company had total debt and finance lease obligations of $29.0 billion with adjusted net debt of $19.1 billion, $8.6 billion higher than December 2019. The company's total debt had a weighted average interest rate of 4.5 percent at March quarter-end. During the quarter, the company prepaid its $1.5 billion slots, gates and routes term loan. By the end of the June quarter, total debt repaid and pension funding since the end of September quarter 2020 is expected to total nearly $10 billion."

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Old 04-15-2021, 11:38 AM   #55  
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Blocking the middle seat is arguably what is allowing us to beat AA... not sure itís a handicap, but of course itís complicated. People have been paying significant premiums to have that empty seat next to them in SPITE of our lacking service and horrendous holiday performance.

I talked to one passenger who prefers our comfort plus with a blocked middle seat over our first class. I trust weíll get service back in line and hopefully fix our reliability pronto, but if we donít and also donít have breathing room to offer in coach I think weíll be in a world of hurt.
I haven't read the call transcripts nor am I likely to, but this is fascinating. If we are blocking, let's say 25% of our seats, AND generating more revenue than airlines that are filling them up, wouldn't that mean we are commanding a >33 percent premium on RASM?
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Old 04-15-2021, 03:28 PM   #56  
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I haven't read the call transcripts nor am I likely to, but this is fascinating. If we are blocking, let's say 25% of our seats, AND generating more revenue than airlines that are filling them up, wouldn't that mean we are commanding a >33 percent premium on RASM?
Yes. Majority of premium is likely due to non flying activity such as the Amex partnership and the MRO.
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