Any "Latest & Greatest" about Delta?
07-23-2009, 08:00 AM
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Yes that is what we are referring to.
07-23-2009, 08:45 AM
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Wasn't the MAT the original PanAm terminal for the old Clipper seaplanes...I think the mural was part of an WPA project.
07-23-2009, 08:50 AM
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Originally Posted by acl65pilot
Like I said, second or third hand. Someone wanted an answer and I gave an honest response.
07-23-2009, 08:53 AM
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Here is a cut and paste from the Second Quarter Conference call. I've been flying through Hotels that do not offer internet service, so my apologies this has taken so long.
Good news, it appears our Company is being run responsibly. Bad news, my forecast for significant furloughs in December 2010 holds unless there is a surprising economic turn around. I expect the gloves to come off as soon as SOC is achieved. Recall that this prediction was made back after issuance of the JPWA and the deadline for the furlough protections. As you will read, 30 or 40 757 and larger jets were figured into management's predictions very early, arguably before the economic recession:
Domestically, our passenger unit revenue was down 17%, entirely driven by yield pressure. While there were a couple of fare increases in June, we faced a lot of sale activity and a very weak pricing environment for most of the quarter.
Our unit revenue on the international side was down 25% year over year, with the yields down 23% and load factor down 2 points. While transatlantic loads were on par with last year, our yields were considerably weaker. Pacific is killing Delta's profitability (both pre merger DAL and NWA Pacific flying, the flu pandemic has been an issue in Asia which has been ignored by a press fixated on the drama in the Jackson family)
In addition to economic weakness, our Pacific unit revenue was also significantly impacted by the H1N1 virus, predominantly on our point of sale Asian traffic. Our Latin operations were also impacted by H1N1 but to a much lesser extent.
Based on ATA data received year-to-date through June, Delta continues to produce a unit revenue premium to the industry. A VERY important point
Moving on to liquidity, we have a solid liquidity balance and are well-positioned to manage our cash requirements. Despite the challenging revenue environment, we grew our liquidity balance $400 million during the June quarter and had $5.4 billion in unrestricted liquidity on June 30th.
We generated positive cash flow from operations of $834 million for the quarter and free cash flow of $509 million.
We paid approximately $400 million in debt obligations during the quarter.
Delta took delivery of six aircraft and issued $330 million in aircraft debt.
So far this year, Delta has produced nearly $1.5 billion in operating cash flow and $600 million in free cash flow. Our operating cash flow in the first half of the year has enabled us to pay down about $1 billion in debt, make investments in our products and services, and grow liquidity. We’ve already covered about two-thirds of our expected full-year debt maturities and capital expenditures.
Looking ahead, we have very manageable debt obligations of less than $300 million in the third quarter and $350 million in the fourth quarter. We expect net CapEx of about $270 million in the September quarter, with approximately $150 million for aircraft parts and modifications.
And we have limited aircraft deliveries remaining this year -- three Boeing 737-700 aircraft with two coming in the September quarter and one in the December quarter, as well as two MD90 aircraft in the fourth quarter. We have committed financing in place for all of those deliveries.
We are expecting our unrestricted liquidity balance at the end of the September quarter to be $5 billion. No mention of 777's or the 737-800's still on the books....
.... Q&A ...
Hank Halter:
Mike, those MD90s are used aircraft and they provide a very good cost effective lift for us. As this point, we are not commenting on the price of the aircraft or the delivery schedule beyond what we’ve mentioned today but certainly we are not looking to grow capacity but when there’s very inexpensive opportunities for lift, such as that MD90, we will certainly consider it.
Richard H. Anderson
That airplane has far superior economics to a 737-800 and very similar range and customer attributes and the capital cost is a small fraction of the capital costs of a new airbus or a Boeing 737-800.
....
Richard H. Anderson:
Well, I think we have built and we’ll continue to build a pretty conservative plan going forward. We have the ability to continue to right-size capacity because we have a large number of owned and fully depreciated airplanes, and if you look out over the past year or so, we’ve reduced overall headcount about 11%. look out below!
So the key is to continue to right-size capacity to demand and we have the fleet and the flexibility in the business to continue to do that. While at the same time, Jamie, we’ve got to keep our cash balances high.
....
Richard H. Anderson
On the capacity front, we haven’t given 2010 official guidance yet. Obviously if you look at our fourth quarter, we are looking at a net 10 points of capacity down, so as we head into 2010, you’d expect our capacity to be down in 2010 but the size of that is really going to be much more dependent on the revenue and demand environment we see closer to that time. We’ll be providing that guidance as we get closer to the end of this year.
....
Richard H. Anderson
It’s really both of those but we have unencumbered assets in our fleet and we have a pretty significant number of regional jets that we are going to be -- and regional airplanes that are going to be coming off lease over the course of the next 12 months, so between both utilization flying and reduction in the fleet overall, we do have the opportunity to continue to be pretty flexible about adapting supplies to demand.
Edward H. Bastian
And Bill, don’t forget these are two companies that both went through a restructuring over the course of the last several years, so on both the Delta side as well as on the Northwest side, our fleets have been marked down to market with significant savings. So the cost of taking those actions is obviously much lower for us, which provides us that flexibility as compared to some of our peers with newer, more current fleets. Realize that this is not the answer to our scope problems. Scope is to protect OUR jobs, not take comfort from others losing their jobs!
....
Glen Hauenstein
I think you really asked two questions there -- one is about the recovery of the revenue on flights that we are going to cease operating this fall and certainly the JV and the way it’s structured allows us to recapture a significant amount of that revenue, not only on the transatlantic sector but any traffic that’s transiting into or beyond Amsterdam or Paris as well, so we believe that the recapture rates on the revenue on displaced revenue will be very, very high. ... and here's my point about scope explained. We are outsourcing that big airplane flying and management expects to be able to recapture that revenue through the Joint Venture agreement. As ACL has been pointing out, our scope has problems on the upper and lower ends....
....
We are assuming no recovery because that’s the conservative approach to take in terms of how we build our business and candidly to your question or the earlier question about what 2010 looks like, we have no plans to be adding capacity in 1Q and in fact would budget and begin the planning process into 2010 keeping all the capacity out that we have out through the end of the fourth quarter.
....
I think Ed answered your second question, which is we have over the course of the past couple of years managed our capacity very aggressively. There are fewer people flying today so we have to have fewer airplanes and fewer seats available for sales. And as we take that capacity out, it’s important that we take out all of the costs in that regard, and we have I think distinguished ourselves among the network carriers as having done all of those reductions voluntarily through various programs and I would highlight the 11% number that Ed spoke of. And we are proud of the fact that we’ve been able to do that through voluntary retirement, voluntary early outs. We’ve in-sourced a fair amount of work in our call centers. We’ve brought our calls back into the U.S. from India. We’ve in-sourced work in the cargo facilities in Atlanta.
So we are continually looking at those opportunities so that our frontline employees are safe and secure and we are going to continue to do our very best to purse that policy and we hope that the economy cooperates.
...
John Wellesie - Media
Looking at some airport operation stats, it looks like some of your capacity has been shifted from the mainline to the regionals. There’s a significant amount here at MSP. Will you do more of that or have you gone as far as you can with that movement?
Edward H. Bastian
Well, I think we have right now been taking delivery of the [76-seat] regional RJ as we’ve grounded some of the older DC930s. Compass and a few CRJ900's That is largely complete and we will not be taking any delivery of any additional 76-seat RJs as we move into the future. So that trade-off from the older DC9s into the two class regional jets is pretty much complete at this point.
Richard H. Anderson
And I would add to that that actually the trend will probably start going the other way as we begin having a number of regional jet retirements that start commencing -- some have commenced and we’ll have more next year so you’ll actually see the 50-seat jet count at Delta continue to decline.
...
Mary Jane Credeur - Bloomberg News
Can you tell us a little bit more about how the reduction in capacity will be reflected in year-end fleet numbers? It certainly looks like a big grouping of aircraft are going to come out, presumably some of the wide bodies. What can we expect -- a dozen, more, less?
Edward H. Bastian
We had previously announced that we were anticipating grounding somewhere between 30 to 40 of our mainline aircraft and that’s where we probably expect the year to end up. So you’ll see it in terms of lower aircraft utilization. You’ll also see it in terms of grounding of various equipment types across the board. There’s no one specific type that we are going to concentrate the reductions in.
Mary Jane Credeur - Bloomberg News
So the 30 to 40 still holds, even with some of the additional international pull-downs?
Edward H. Bastian
That’s right. That was already predicated in our thinking, that we’d have some international pull-downs. ... merger synergies, IMHO ...
....
Of course, Narita, one of the issues of non-stop service from Salt Lake to Narita was the unfortunate timing of the H1N1 virus. A lot of the traffic we had counted on to be on that flight was coming from Asia to the Western U.S. and particularly Japan into the Western U.S., including large cities like Phoenix and Las Vegas, where that is the best connection, the best online connection.
Unfortunately that traffic has not materialized and we are reducing to 4X weekly this winter. We will adjust that capacity and that frequency as we see, if H1N1 eases and the Japanese return to traveling.
Good news, it appears our Company is being run responsibly. Bad news, my forecast for significant furloughs in December 2010 holds unless there is a surprising economic turn around. I expect the gloves to come off as soon as SOC is achieved. Recall that this prediction was made back after issuance of the JPWA and the deadline for the furlough protections. As you will read, 30 or 40 757 and larger jets were figured into management's predictions very early, arguably before the economic recession:
Domestically, our passenger unit revenue was down 17%, entirely driven by yield pressure. While there were a couple of fare increases in June, we faced a lot of sale activity and a very weak pricing environment for most of the quarter.
Our unit revenue on the international side was down 25% year over year, with the yields down 23% and load factor down 2 points. While transatlantic loads were on par with last year, our yields were considerably weaker. Pacific is killing Delta's profitability (both pre merger DAL and NWA Pacific flying, the flu pandemic has been an issue in Asia which has been ignored by a press fixated on the drama in the Jackson family)
In addition to economic weakness, our Pacific unit revenue was also significantly impacted by the H1N1 virus, predominantly on our point of sale Asian traffic. Our Latin operations were also impacted by H1N1 but to a much lesser extent.
Based on ATA data received year-to-date through June, Delta continues to produce a unit revenue premium to the industry. A VERY important point
Moving on to liquidity, we have a solid liquidity balance and are well-positioned to manage our cash requirements. Despite the challenging revenue environment, we grew our liquidity balance $400 million during the June quarter and had $5.4 billion in unrestricted liquidity on June 30th.
We generated positive cash flow from operations of $834 million for the quarter and free cash flow of $509 million.
We paid approximately $400 million in debt obligations during the quarter.
Delta took delivery of six aircraft and issued $330 million in aircraft debt.
So far this year, Delta has produced nearly $1.5 billion in operating cash flow and $600 million in free cash flow. Our operating cash flow in the first half of the year has enabled us to pay down about $1 billion in debt, make investments in our products and services, and grow liquidity. We’ve already covered about two-thirds of our expected full-year debt maturities and capital expenditures.
Looking ahead, we have very manageable debt obligations of less than $300 million in the third quarter and $350 million in the fourth quarter. We expect net CapEx of about $270 million in the September quarter, with approximately $150 million for aircraft parts and modifications.
And we have limited aircraft deliveries remaining this year -- three Boeing 737-700 aircraft with two coming in the September quarter and one in the December quarter, as well as two MD90 aircraft in the fourth quarter. We have committed financing in place for all of those deliveries.
We are expecting our unrestricted liquidity balance at the end of the September quarter to be $5 billion. No mention of 777's or the 737-800's still on the books....
.... Q&A ...
Hank Halter:
Mike, those MD90s are used aircraft and they provide a very good cost effective lift for us. As this point, we are not commenting on the price of the aircraft or the delivery schedule beyond what we’ve mentioned today but certainly we are not looking to grow capacity but when there’s very inexpensive opportunities for lift, such as that MD90, we will certainly consider it.
Richard H. Anderson
That airplane has far superior economics to a 737-800 and very similar range and customer attributes and the capital cost is a small fraction of the capital costs of a new airbus or a Boeing 737-800.
....
Richard H. Anderson:
Well, I think we have built and we’ll continue to build a pretty conservative plan going forward. We have the ability to continue to right-size capacity because we have a large number of owned and fully depreciated airplanes, and if you look out over the past year or so, we’ve reduced overall headcount about 11%. look out below!
So the key is to continue to right-size capacity to demand and we have the fleet and the flexibility in the business to continue to do that. While at the same time, Jamie, we’ve got to keep our cash balances high.
....
Richard H. Anderson
On the capacity front, we haven’t given 2010 official guidance yet. Obviously if you look at our fourth quarter, we are looking at a net 10 points of capacity down, so as we head into 2010, you’d expect our capacity to be down in 2010 but the size of that is really going to be much more dependent on the revenue and demand environment we see closer to that time. We’ll be providing that guidance as we get closer to the end of this year.
....
Richard H. Anderson
It’s really both of those but we have unencumbered assets in our fleet and we have a pretty significant number of regional jets that we are going to be -- and regional airplanes that are going to be coming off lease over the course of the next 12 months, so between both utilization flying and reduction in the fleet overall, we do have the opportunity to continue to be pretty flexible about adapting supplies to demand.
Edward H. Bastian
And Bill, don’t forget these are two companies that both went through a restructuring over the course of the last several years, so on both the Delta side as well as on the Northwest side, our fleets have been marked down to market with significant savings. So the cost of taking those actions is obviously much lower for us, which provides us that flexibility as compared to some of our peers with newer, more current fleets. Realize that this is not the answer to our scope problems. Scope is to protect OUR jobs, not take comfort from others losing their jobs!
....
Glen Hauenstein
I think you really asked two questions there -- one is about the recovery of the revenue on flights that we are going to cease operating this fall and certainly the JV and the way it’s structured allows us to recapture a significant amount of that revenue, not only on the transatlantic sector but any traffic that’s transiting into or beyond Amsterdam or Paris as well, so we believe that the recapture rates on the revenue on displaced revenue will be very, very high. ... and here's my point about scope explained. We are outsourcing that big airplane flying and management expects to be able to recapture that revenue through the Joint Venture agreement. As ACL has been pointing out, our scope has problems on the upper and lower ends....
....
We are assuming no recovery because that’s the conservative approach to take in terms of how we build our business and candidly to your question or the earlier question about what 2010 looks like, we have no plans to be adding capacity in 1Q and in fact would budget and begin the planning process into 2010 keeping all the capacity out that we have out through the end of the fourth quarter.
....
I think Ed answered your second question, which is we have over the course of the past couple of years managed our capacity very aggressively. There are fewer people flying today so we have to have fewer airplanes and fewer seats available for sales. And as we take that capacity out, it’s important that we take out all of the costs in that regard, and we have I think distinguished ourselves among the network carriers as having done all of those reductions voluntarily through various programs and I would highlight the 11% number that Ed spoke of. And we are proud of the fact that we’ve been able to do that through voluntary retirement, voluntary early outs. We’ve in-sourced a fair amount of work in our call centers. We’ve brought our calls back into the U.S. from India. We’ve in-sourced work in the cargo facilities in Atlanta.
So we are continually looking at those opportunities so that our frontline employees are safe and secure and we are going to continue to do our very best to purse that policy and we hope that the economy cooperates.
...
John Wellesie - Media
Looking at some airport operation stats, it looks like some of your capacity has been shifted from the mainline to the regionals. There’s a significant amount here at MSP. Will you do more of that or have you gone as far as you can with that movement?
Edward H. Bastian
Well, I think we have right now been taking delivery of the [76-seat] regional RJ as we’ve grounded some of the older DC930s. Compass and a few CRJ900's That is largely complete and we will not be taking any delivery of any additional 76-seat RJs as we move into the future. So that trade-off from the older DC9s into the two class regional jets is pretty much complete at this point.
Richard H. Anderson
And I would add to that that actually the trend will probably start going the other way as we begin having a number of regional jet retirements that start commencing -- some have commenced and we’ll have more next year so you’ll actually see the 50-seat jet count at Delta continue to decline.
...
Mary Jane Credeur - Bloomberg News
Can you tell us a little bit more about how the reduction in capacity will be reflected in year-end fleet numbers? It certainly looks like a big grouping of aircraft are going to come out, presumably some of the wide bodies. What can we expect -- a dozen, more, less?
Edward H. Bastian
We had previously announced that we were anticipating grounding somewhere between 30 to 40 of our mainline aircraft and that’s where we probably expect the year to end up. So you’ll see it in terms of lower aircraft utilization. You’ll also see it in terms of grounding of various equipment types across the board. There’s no one specific type that we are going to concentrate the reductions in.
Mary Jane Credeur - Bloomberg News
So the 30 to 40 still holds, even with some of the additional international pull-downs?
Edward H. Bastian
That’s right. That was already predicated in our thinking, that we’d have some international pull-downs. ... merger synergies, IMHO ...
....
Of course, Narita, one of the issues of non-stop service from Salt Lake to Narita was the unfortunate timing of the H1N1 virus. A lot of the traffic we had counted on to be on that flight was coming from Asia to the Western U.S. and particularly Japan into the Western U.S., including large cities like Phoenix and Las Vegas, where that is the best connection, the best online connection.
Unfortunately that traffic has not materialized and we are reducing to 4X weekly this winter. We will adjust that capacity and that frequency as we see, if H1N1 eases and the Japanese return to traveling.
Last edited by Bucking Bar; 07-23-2009 at 09:07 AM.
07-23-2009, 08:57 AM
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Joined APC: Jun 2008
Position: LAX 350 A
Posts: 564
Originally Posted by Superdad
I don't normally like to repeat rumors but I heard the other day that Delta will be eliminating the separate categories on the 75/76 fleet. No more strictly domestic or international. Word is this will happen post SOC. Any truth to this? Is there anything thing in the CBA that requires them to have a separate category?
07-23-2009, 09:15 AM
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Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
IMHO Bar, I to am worried about a furlough at the end of next year, but and there are a few of them..
1) There is a lot of things that are happing that will change the dynamic going forward. Time will let these play out
2) We may not hire but I do not think that they will furlough. The bottom may never move in percentage just in number down to about 10700 pilots.
3) DAL needs to buy new metal, and it will not be in the form of 76 seat jets. That train has left the station as well.
4) They are actively looking for a DC-9 replacement. There are a few options on the table that will be available to us in the next few years. The timing works out well.
5) Because of the way they are going to Net the route structure, they are going to need larger aircraft to do the flying. Not large as in 757 large, but large as in 100 to 140 seats.
I am cautious moving forward, but when this economy turns and it will sooner or later, we are in the right position to take full advantage of it. I have great confidence in the fact that we will. Our share holders demand it.
1) There is a lot of things that are happing that will change the dynamic going forward. Time will let these play out
2) We may not hire but I do not think that they will furlough. The bottom may never move in percentage just in number down to about 10700 pilots.
3) DAL needs to buy new metal, and it will not be in the form of 76 seat jets. That train has left the station as well.
4) They are actively looking for a DC-9 replacement. There are a few options on the table that will be available to us in the next few years. The timing works out well.
5) Because of the way they are going to Net the route structure, they are going to need larger aircraft to do the flying. Not large as in 757 large, but large as in 100 to 140 seats.
I am cautious moving forward, but when this economy turns and it will sooner or later, we are in the right position to take full advantage of it. I have great confidence in the fact that we will. Our share holders demand it.
07-23-2009, 09:19 AM
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Originally Posted by Superdad
I don't normally like to repeat rumors but I heard the other day that Delta will be eliminating the separate categories on the 75/76 fleet. No more strictly domestic or international. Word is this will happen post SOC. Any truth to this? Is there anything thing in the CBA that requires them to have a separate category?
07-23-2009, 09:22 AM
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Joined APC: Oct 2005
Position: Left, left, left right left....
Posts: 911
Originally Posted by Burn Notice
A NYC ER friend said the rumors he is hearing up there is upwards of 150 slots and some gate swappage in exchange for survival cash for LCC. It may be a brave new world, but, I think, we as an industry are ultimately doomed to repeat history, ala Pan Am/TWA piecemealing themselves off. But, as always, we'll see what really happens down the road and respond with an "oh @&it" or disinterested "whatever".
07-23-2009, 09:32 AM
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Originally Posted by Fly4hire
Does not pass the smell test - even if we wanted the gates and they were available why would we give cash (in the form of a sale) to a competitor to help them survive?
Carl
07-23-2009, 09:34 AM
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Posts: 18,563
Originally Posted by Fly4hire
Does not pass the smell test - even if we wanted the gates and they were available why would we give cash (in the form of a sale) to a competitor to help them survive?
The only way we will pay for assets is in an asset sale in CH 11. (Minus airframes that others are selling of course)
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