PBS min staffing is a formula based upon block hrs. The staffing reports go off of the min staffing needs that use the PBS min staffing metric. The headcount report is separate, and will always show more bodies than what is required contractually. Why? The airline cannot run at PBS min staffing.

They tried it back in the mid part of last decade and it did not work.

 

I get that, but by looking at the 22d2 reports from 11 to 12 should give you an idea where the bid is going to go. As an example, the May 11 22d2 showed 225 ca spots on the 744 and the aug 11 bid had 246 bodies. If the block hours were reduced to only need 180 Ca it would make no sense that they carry 245 bodies when they were able to get away with carry 10 over min the year before. Or am I missing something.

 

I am not saying you are missing anything. I was discussing the staffing models. Of note is this is a May 2012 report. I would suspect that the ones going forward will show an increase in staffing as the whales come out of mods.

Also MAC flying is generally not known and therefore not included in the block hr and staffing plans.

 

If you had $200,000 in the bank and a $200,000 mortgage, your net debt is zero. You could take the money out of the bank and pay off your mortgage and your net worth would not have changed. You could then take another mortgage on your house and get $200,000 cash and your net worth still hasn't changed.

Delta needs to have cash on hand to deal with day to day operations and they also have reserve cash to deal with unforeseen events. They also have cash on hand to be able to take advantage of any investment opportunities that are available or will be available.

Right now they have about $3.3 billion in real cash and another $1.8 in a revolver (like a revolving home equity loan, except a lot bigger) that they can draw on whenever they like. In order to report net debt, they subtract the $3.3 billion from their real debt number to deal with the fact that, theoretically, they could take all that cash and use it to reduce debt.

That is why "cash on hand" is often reported, but it is a next to useless statistic most of the time. In a case like American, sitting on the doorstep of the bankruptcy court, the cash can make all the difference in the world. Delta right now is producing a lot of free cash flow and they look to continue to produce that cash flow well into the future, so their cash on hand is lower, percentage-wise, than many other carriers. Delta could borrow more money and increase their cash on hand but that wouldn't affect their financial condition one iota other than to increase interest payments. Delta's focus on reducing debt is reducing their monthly interest payments which increases profits. That is smart in my opinion.

 

^^^^^
Agreed, and to continue DALPA's (somewhat misplaced) poker analogy, this would equate to walking into the casino saying "I want to win tonight. I want to win badly, and I deserve to win." That has no impact on the outcome of the game - just lets the opponent know you mean business.

 

Good explanation, and as George pointed out, cash on hand allows they to go after possible opportunities when they present themselves.

You talk about AMR, and imo, if they enter CH11, the result will be a industry changer.

 

Understatement of the month.

 

ACL you are the master of the nebulous non-statement... of course I mean that in a good way

 

It was meant to be an understatement. I personally do not see them leaving CH11 as an intact carrier.

One airline will be parted out. LCC or AMR, it depends on if AMR avoids CH11, or not.

 

Alfa that's a well written explanation of an accounting practice. It's too bad that you didn't write accounting textbooks because Ferd and I would've gotten better grades.

But they wouldn't have let you write them anyways because if you make it too good kids pass and there is never a need for another expensive updated edition.