Also on the call:

An interesting exchange between an analyst (missed the name) and RA over what they will do once they hit $10 billion in debt. RA deflected, and asked for suggestions, to which the guy says (I'm paraphrasing): I talk to your owners a lot (the big institutional investors), and they're quite eager to get dividends (top of their list), or share buybacks. Funding pensions is at the bottom of their list. And they think $10/share isn't good enough. RA said more clarity will come at investor day, December (2012 and especially 2013).

Interesting exchange.

They will want money too, when the goose gets cranking. Who knew?

Buried in the report:

YTD Profit sharing expenses up 75% vs 2011 (309 vs 175 total for 2011 was 264)
YTD Pre Tax income up almost three fold vs 2011 (1,014 vs 352)
YTD EPS are up more that double 2011 earnings (1.19 vs 0.51)

Back out the profit sharing from YTD income and Delta has already exceeded 1.3B Profit for the year in the first 9 months of 2012....

Even if 2012 Q4 is only half as good as q4 2011 annual profit will be above 1.5B...

Cheers
George

Spin? Why would I bring this exchange up, if I was trying to spin the discussion? I spinning was my purpose, and I did for the union, I would have quietly blended in with the background, and said nary a peep.

I've been in these parts a while. I'm a guy that wants us to do better. I'm open to all discussions that accomplish this. Can't stand the DPA. Not thrilled with some of the actions of ALPA, but not buying every anti-ALPA argument either. I think ultimately, the only important issue is whether or not the group is informed, and participates. I'm not on Slow's rolodex, nor Carl's. When someone says something, I consider it. If it's smart, I buy it. End of story.

I voted for the TA. I made a call. I wasn't ecstatic, but I'm not ashamed either. I've tried to handle myself fairly and honestly in our discussions here, even if we all have different slants, and even if we all disagree.

But spin?

Welcome to my ignore list.

Did you also listen to the call, George? What was your impression?

The tone seemed somewhat defensive to me. Some pressure on yields in some of the bright spots (LATAM, cargo, Pacific) due to capacity increases by competition. Atlantic sounds very positive. ATL sounds positive. Everyone just obsessed with Trainer. Seems like additional upside possible there.

I thought an interesting tidbit is that we're already starting to make payments on the 737-900's.

Where I was a little distracted, is in the middle of the discussion about $1 billion of cost-savings. Did you follow that?

And more importantly, you raise spending (and increase debt) in order to get out of a spending induced debt crisis.

I wish that were really as funny as it sounds.

Buzz
Thanks for the info, and sounds good.
FTS

If we do buyback shares it better be tactical valley buybacks only on the big dips.

I haven't had a chance to listen on the call so I just looked at the published data.

My read is one of very favorable results for the Q3 and 2012 YTD.
With the fuel hedges, pulldown of Comair, Pinnacle BK, etc. I feel the longer term metrics have more value in gauging the real financial position vs a quarterly snapshot...

Analysts are notorious for having their "metrics," but dig below the surface and the financial picture is significantly brighter than what the analysts would have you believe.

The refinery will be break-even to +25M by year's end. That should bode very well for 2013...

It's really not as easy as "just buying a refinery" as Smizek suggested...
Our fairly complex fuel hedging program is an integral part of making the refinery work for Delta...

Cheers
George

They're defensive because Delta's non-fuel costs grew faster than revenue (about twice as fast), and they're predicted to continue to grow until the 2nd half of 2013.

For '80's alter ego drank's "Cost Neutral?" How is it that costs are growing if they're "neutral?":rolleyes:

The $1B in cuts are targeted to address cost growth. The revenue to cover the increased costs of our contract (refleeting) doesn't start coming in until late next year with the delivery of the B717.

As to paying for airplanes, advance payments are required when an order is confirmed (generally 18 months out) and progress payments come after that. Final payments are generally due on delivery for aircraft purchased outright.

If only that was our track record. I don't think RA said anything about buybacks, just the analyst. RA certainly did make the right noises to convey the board and management's interest in making the shareholders happy. Hell, they want everyone to be happy: customers, employees, shareholders. Everyone.

I just wonder if there will be enough happiness for everyone to be truly happy...