$4 Billion Dollar Debt Goal Reached
 

In the next 24 months our execs will reach their $4 billion dollar debt goal.

Then what?

Where will the additional billions go?

We all know the answer.

To our execs through additional stock buy backs.

NOT ONE PENNY OF PROFITS SHOULD EVER HAVE BEEN RETURNED TO THE SHAREHOLDERS UNTIL THE DELTA PILOTS BANKRUPTCY CONCESSIONS WERE RESTORED

Delta has paid $10B+ in debt reduction in 6 years now saving $700M in interest a year.

$1.6B per year in debt reduction continues

$2B in shareholder returns per year continues

$1.5B+ invested in other airlines

$2B in fuel savings this year even after hedge losses

$2.5 -$3B annually into fleet, facilities and tech

$1B in pension funding (which 65% of pilots don't benefit from)

•Strong operating cash flow, combined with disciplined capital spending, produces sustainable free cash flow of $4-5 billion annually

We believe there is no more money on the table, clear and simple,” he said. Mike Donatelli.

Source: WSJ, July 22, 2015.

He didn't mention what was happening under that table.

Hey guys, I would take a look at what your health care plans are going to look like next year, before you go back to the table. ObamaCare is really going to do a number on us(9E will have same plan).

With the election shaping up to be Trump vs Biden, big changes on the horizon are coming.

Actually that 4 billion target is "net" debt. This excludes pension under funding amount.

How much of a bankruptcy claim did the pilots get? Also was the retun on it?

Net debt of $4B is about $6B in obligations minus liquid assets of about $2B. This is completely achievable within the next 2 years. This will probably trigger a corporate debt rating of investment grade or better by the major ratings agencies. (Moody's and S&P) This will allow them to finance business activities via the bond market saving them even more money and increasing access to funds. They recently collateralized 15 new 737's to retire higher interest debt. The amount of money available to them in 18 to 24 months could be enough to take activist stakes in all the airlines they have already made investments in.

That's when the last widebody flying for Delta pilots will disappear.

"You guys did such a good job for us, we don't need you anymore."

That's why enforceable production balances are so important. The follow on action would be 1E9 from the TA. As we lose our relevance they would have been able to go to the MEC chairman alone, the one person designated in the TA, and negotiate brand scope relief. China Eastern then is allowed to fly Delta livery within China and the camel has officially gotten his nose in the tent. Precedent set. Game over.

Trump may be ahead in the polls now but, by the time it gets down to 2 Republican candidates, he will lose. The party faithful will gravitate to Bush or whomever is the other mainstream Republican candidate.

You may be right about Biden............Heaven forbid!

Denny

Jeb!! Bush is still running? That's what he's doing? :p


Now speaking of politics, see if this sounds like what is going on with DALPA right now:

Now change the names.

The complaint is that the antiestablishmentarians do nof respect the MEC Craftsman.

So the parallels are there, but who is The Trump? :D

*irony not withstanding
**read Tim Parkers C44 email yesterday

The ones who have been Antidisestablishmentarianistically named, dumbass rocket surgeon; So Carl.

Longest word in English ftw.

Fitch upgraded Delta credit. All the major ratings agencies now have DAL just one level below investment grade. Investment grade is achievable and probable by at least one agency in 2016. In their report they already account for moderate pilot cost increases in 2016 - 2017.

The three major credit rating agencies for commercial paper are S&P, Moody's, and Fitch similar to the consumer credit ratings of TU, Experian and Equifax. Now that all three are in agreement and have positive outlooks, the stage is set for one of them (probably Moody's) to upgrade Delta to investment grade. This is a substantial achievement 7 years out of bankruptcy. This also shows sustainability. Unlike stock ratings, debt ratings are a more conservative and business focused evaluation. Stock recommendations can be based on fundamentals of the company but also industry trends, momentum, cyclicality, and the opinion of the analyst.

Delta is very well positioned financially and improving. Affordability of pay restoration is well within their ability while keeping the pilots PS. (pension substitute) Profit sharing reductions will only offset our ability to benefit from ancillary revenue generated by outside investments and outscoring. The next step in building a global industrial transportation company is to take significant positions in markets outside the U.S. This is most likely done through JV and equity stakes in airlines around the world which is already happening. The investment grade rating gives Delta the access to capital it needs to continue the expansion.
https://www.fitchratings.com/site/fi...ease?id=990795

Delta just completed their purchase of Gol and China Eastern shares.

The 3.55% of China eastern is actually 10% of the H shares. H shares are the shares traded on the Hong Kong exchange, only H shares can be purchased by non Chinese entities. This means if Delta bought all the H shares they would own 35.5% of China Eastern. This is unlikely but other U.S. carriers will follow suit to lock up a Chinese partner. Quantas is already trying to buy shares of China Eastern.

Delta now owns 16.2% of Gol preferred stock. JV partner Air France-KLM has made a similar investment in Gold. Current stock price is $1.13 and could be an opportunity to buy more.

Aeromexico ownership is rumored to be about 20% through derivatives.

You are witnessing the beginnings of Skyteam airlines

I think that began with the AF/KLM JV. Now we are being introduced to our future "co-workers."


Of course DALPA/ALPA thinks this is good for you and me...so long as they aren't based in a predominantly Muslim country.

#Whatareyouwillingtogiveupforthat

Why do you think they wanted permission to paint the Delta livery on foreign planes?

Yep. And they only would have a had to bribe one guy of questionable judgment to get it.

That fact didn't make it into the roadshows or lounge visits.

Right now, they don't need permission.

They don't need it now. They can paint away. We wanted to write approval into the contract. Compromise was MEC chairman approval.

So at least we had the Patriot MD11 watching our best interests..
That would have been sooooo comforting!?!?!????

We have been making fun of Skyteam by Delta for a long time. The language should have been in there a long time ago and it should never have had such watered down language as to allow a Moakie to permit it on his own. That's memrat territory if you ask me.

From 2011:

That was a big compromise that made the change worthless.

FTB, stop speaking French, you're making me hard!

Double post

Sacrebleu.

Yes they do. They cannot do this under our current Section 1. That's why they wanted the failed TA to specifically allow it.

Carl

See above. You're wrong.

Carl

What about section 1.C.2.d?

All flying performed by or for the Company or any Company affiliate will be performed by pilots in accordance with the terms and conditions of this PWA. Section 1 C. 1. includes without limitation all passenger flying, cargo flying, freight flying, positioning flights, and ferry flights (scheduled and non-scheduled, revenue and non-revenue) and non-scheduled flights as defined in Section 2 of this PWA:
d. performed by any air carrier under or utilizing a designator code, trade name, brand, logo, trademarks, service marks, aircraft livery or aircraft paint scheme currently or in the future utilized by the Company or any Company affiliate, or performed on aircraft on which the Company or any Company affiliate has purchased or reserved blocked space or blocked seats for sale or resale to customers of the Company or any Company affiliate

Denny

Yes, and no, they don't need permission via the contract, however, labor law prevents it, unless they have specific permission in section 1. You have to look at section 1 as, "all flying is covered by dalpa pilots except _____". Section 1 doesn't read, "all flying is permitted except these aircraft will be flown by dalpa pilots". Unless you work for Alaska Airlines, who has the worst scope contract in history.

Since Midwest Express.

I'm not a Delta guy, but I am a reformed accountant-turned Continental [ok...United] pilot. See my explanations in RED, above.

Not to pick nits here, but to say $10B+ in debt reduction is a bit misleading to the general public.

As you may (or may not) know, the Balance Sheet is a simple formula:
TOTAL ASSETS (STUFF YOU HAVE)=TOTAL LIABILITIES (STUFF YOU OWE) + TOTAL EQUITY (NET DIFFERENCE) +/- CURRENT PERIOD NET INCOME (or LOSS)

All that being said, I'm not bashing Delta, quite the opposite. They are performing like mad currently, and I hope you folks get everything you can [and the rising tide helps us, too]. That's also not to say that the Delta management couldn't use those monies shown above to reduce debt by $10B+, just that they aren't currently. I'm just clarifying a bit.

fb

http://static.cdn-seekingalpha.com/u...19185_rId9.png

They went from $17B in debt in 2009 to $7B in debt this year and estimate to be at $4B in debt by the end of 2017.

In addition to that, they're doing all the other things Enuf mentioned. Borrowing from the 10K

FB, Enuf was just listing the other stuff and not meaning they total to $10B. The $10B has already happened, the rest happened in 2014 and this year alone. I yield back to you though, it is your expertise.

Gee, that seems like a lot of money to throw around. Maybe even enough to give the pilots a decent contract. Or, take it to vegas and gamble on the ever losing oil futures. The oil thingy sounds more fun.

Done. Tickets were booked. I mean passengers were bumped.

Your notes are 100% correct. I did not intend to create a ledger.

The $10B is total debt reduction since 2009.

The list following is an abbreviated statement of cash flows if you prefer. I was not intending for the total to be $10B but if you add them up its close and I can see how that could be read as you saw it. The ongoing use of cash is evidence of the ability to afford a restorative contract without concessions.

Good to know there are accountants challenging and vetting this information. If you want to help explain the ancillary revenues and how their growth is captured in profit sharing and not in pay rates that would be great. The 10Q from the June quarter has all the info, 22% growth YOY. The truth only affirms our case, Thanks.

FTB thank you as well.

Here's my source if you would like to see where I got most of the numbers. The info is in the 2014 10K and the 2015 June 10Q also but this is easier to look at.

http://ir.delta.com/files/doc_presen...esentation.pdf

Fbc90, don't go far. We could use your expertise. :D

No worries, my friend. My hope is that both DAL and UAL can keep their liabilities paid off and move forward towards record pilot contracts.

fb