Airline Pilot Central Forums - Any "Latest & Greatest" about Delta?

Airline Pilot Central Forums (https://www.airlinepilotforums.com/)

- Delta (https://www.airlinepilotforums.com/delta/)

- - Any "Latest & Greatest" about Delta? (https://www.airlinepilotforums.com/delta/36912-any-latest-greatest-about-delta.html)

Quote:

Originally Posted by forgot to bid (Post 959202)

Oil, $105.70 now. Climbing.

The sky is falling, furloughs are scheduled (j/k) and the world is going to collapse, lol. We better start stockpiling amo, seeds and gold. Or better yet build that bomb shelter.

Nothing we can do, so its best we just stop feeding the fire and ALLOW our very talented management team to find "original" ways to increase Revenues. After all, we are hedged, arent we?

TYG

Quote:

Originally Posted by TenYearsGone (Post 959253)

Well, not furloughs but maybe not hiring either and worse the accelerated parking of 34 mainline aircraft. The not hiring I heard the other day on the 2nd floor, not 4th, just 2nd. But it was someone who other people were asking for his answer and who was confident in his answer. I'm not sure he meant through the end of 2011 at this point or until the fall but they asked about hiring and it was an emphatic no.

We shall see if that is the case.

Quote:

As for fuel hedging, Keay said Delta has the most advantageous position, with 39% of 2011 hedged at $85 a barrel. Delta recently provided 2011 fuel cost guidance of $2.47 a gallon, less than Southwest(LUV _) guidance of $2.70 to $2.75 a gallon. In general, he said, airlines including Southwest have limited hedging positions, meaning that fuel cost increases are more likely to be passed on to consumers.

Quote:

United may need to trim flying this year if fuel stays at current prices, CEO Jeff Smisek told investors on Jan. 26. Chicago-based United and Delta, the world’s two largest airlines, used 7.9 billion gallons of fuel in 2010 at a cost of $17.2 billion.

Quote:

Passenger airlines should adopt the practice of freight carriers United Parcel Service Inc. and FedEx Corp. and abandon hedging, said Hunter Keay, a Stifel Nicolaus & Co. analyst in Baltimore. UPS and FedEx offset price swings with fuel surcharges, which airlines have been more reluctant to use.

“If this industry all stopped hedging, there would be a much more rational pricing environment,” Keay said in an interview. “It would be a landscape that would be far more conducive to fuel surcharges and would save airlines hundreds of millions of dollars in expense.”

As of January 31, 2011, our open fuel hedge position is as follows:
Contract Fair
Value at
January 31,
Weighted Percentage of 2011
Average Contract Projected Based Upon
Strike Price Fuel Requirements $92 per Barrel of
(in millions, unless otherwise stated) per Gallon Hedged Crude Oil
Year ending December 31, 2011
Crude Oil
Call options $ 2.05 19% $ 239
Collars — cap/floor 2.10/1.78 10 84
Swaps 2.12 9 58
Total 38% $ 381
Year ending December 31, 2012
Crude Oil
Call Options $ 1.97 1% $ 29
Swaps 2.30 1 3
Total 2% $ 32
For 2010, aircraft fuel and related taxes, including our Contract Carriers under capacity purchase agreements, accounted for $8.9 billion, or 30%, of our
total operating expense, including $89 million of net fuel hedge costs. The following table shows the projected impact to aircraft fuel expense and fuel hedge
margin for 2011 based on the impact of our open fuel hedge contracts at January 31, 2011, assuming the following per barrel prices of crude oil:
Fuel Hedge
Year ending December 31, 2011 Margin
(Increase) Received from
Decrease to Hedge Gain (Posted to)
(in millions) Fuel Expense(1) (Loss)(2) Net impact Counterparties
$60 / barrel $ 2,786 $ (496) $ 2,290 $ (126)
$80 / barrel 1,054 (230) 824 4
$100 / barrel (677) 345 (332) 387
$120 / barrel (2,409) 996 (1,413) 999
(1) Projections based on the decrease (increase) to fuel expense as compared to the estimated crude oil price per barrel of $92 and estimated aircraft fuel
consumption of 3.6 billion gallons for the 11 months ending December 31, 2011.
(2) Projections based on average futures prices per gallon by contract settlement month.

Thanks ACL.

That clears it right up.

;)

Disregard. Delta is the greatest airline in the world.

Well under 80 gross? How the heck did you pull that off? I only had 4 months that were over guarantee and grossed 105...

Quote:

Originally Posted by contrails (Post 959278)

Thanks ACL.

That clears it right up.

;)

Lol. That's what I was thinking. :D

Simplified for those of us such as myself who have large foreheads and eyes positioned very close together:

Quote:

Originally Posted by acl65pilot (Post 959277)

As of January 31, 2011, our open fuel hedge position is as follows:

1. Hedge Fuel.
2. Make fun of Southwest.
3. ???
4. Profit

I remember a little while back, people making fun of DAL for hedging at what they perceived were high oil prices. It looks like DAL might have made the correct bet this time around.

Quote:

Originally Posted by forgot to bid (Post 959202)

Oil, $105.70 now. Climbing.

Amusing, considering that consumption is down and inventory is overflowing.

Reminds me of gold...sure it has inherent value, but if it's THAT self evident, why do you need gold infomercials running 24/7 on the radio stations? You don't pour money into advertising something people are buying anyway.

Last time I saw this was the run up to the real estate bubble...

Nu