touché!

Cheers
George

 

One loan is to refinance some BK exit financing (forget which company's BK it was, but who cares), the revolver is like a home equity line of credit, you can borrow against it when the need arises. It can be a war chest or just an insurance policy. If oil stays high, there is more consolidation to come.

 

Well lets consider this:

DAL has 2.5 billion of debt maturing next year (Last weeks conference call)

Of that 2.5 billion Ed commented that we had a 1.2 billion revolver that our creditors have already agreed to.

So, the question becomes; Is this added financing above the 1.2 billion or is this include it? If it does not include this 1.2 billion, I would submit that DAL is going to restructure debt early, or they are going to not pay down 1.3 billion in debt that they planned to. I guess we will have to tune in to the call to find out.

 

Maybe he was looking for a Snickers.

 

Alfa;
There is more consolidation to come whether if oil stays high or not. Simple fact is that there are two majors out there that will have a very hard time competing with DAL and UAUA. AMR is a financial mess, and will need to restructure and or merge with someone. LCC is not much better, has low cash margins and frankly has not been doing what other companies have; shoring up its loose ends. DAL and UCAL's route structures both domestically and internationally are going to be very hard to compete with.

I would suspect once again for DAL to play a significant role in industry consolidation. As for AMR and LCC, it is about survival.

 

Well, let's hope the guy making the above financial decision has better luck than the guy who's running the Fuel Hedging Program. Whoever that is made a tough luck bet on WTI as a hedging instrument and while it did have a run-up, it hasn't risen nearly as quick as other hedging instruments....and certainly not enough to cover the large crack spread (Man, I giggle every time I say crack spread).

Should have bet on Heating Oil futures and now that they're dumping the whole WTI portfolio and plowing it into Brent and HtOil, I think it's too late to benefit from much more price instability unless the Mid-East really goes to hell.

FT.com / Commodities - Delta Air Lines shifts fuel hedges out of US benchmark

Edit....Sorry, bad link...the upshot is that Delta had to cash in it's whole WTI portfolio for lack of performance as a hedging instrument compared to Jet fuel's rise and is plowing it into Brent and Heating oil contracts which have tracked jet fuel's rise much more closely....but it may be too late.

 

Anyone having trouble getting on Icrew or Ecrew? Every time I try it logs me out of Deltanet.

 

I've been using the Snider Method for 6 years. So far so good. I recommend it.

 

Sorry to quote the whole thing, don't know how to break it out.

At the meeting in Atlanta last week RA said that we hired a guy specifically to do our hedging/fuel planning. He said it was amazing that we spend $7 billion a year on gas and we didn't have someone who was responsible for buying our gas. This might be his first shot across the bow.

 

The amount of money our management squanders trying to hedge jet fuel is astronomical.

Standby for another memo on APU usage.