SWA solidly passes their TA2
11-10-2016 | 03:15 AM
#61
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Actually as management has stated at roadshows UAL SWA and AMR can't afford to adjust capacity downward fast because of the cost of leases and payments on their newer fleets. Delta on the other hand can very quickly send aircraft to the desert with little to no financial penalty. The 4th floor even calls the 88 fleet the accumulator aircraft.
11-10-2016 | 04:40 AM
#62
Sick of whiners
Joined: Jun 2015
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From: 767 VEOP
Actually as management has stated at roadshows UAL SWA and AMR can't afford to adjust capacity downward fast because of the cost of leases and payments on their newer fleets. Delta on the other hand can very quickly send aircraft to the desert with little to no financial penalty. The 4th floor even calls the 88 fleet the accumulator aircraft.
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AMR's debt will peak next year at approx $30B. At the same time, DAL's will reach the neighborhood of $5B and stay there. (That's a nice neighborhood). Consider the debt service on $30B that must be paid before any profit is realized. That, coupled with our owning a large portion of our fleet gives us a huge cushion to be flexible during a downturn.
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11-10-2016 | 05:50 AM
#63
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Joined: Nov 2013
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From: A320 Left seat
I guess it is impossible to know or argue about this because it will all depend on the severity of the downturn. I agree we will be in a better position financially.
I think we will do everything necessary to limit the bleeding, which will include decreasing service to meet demand, and thus, parking aircraft. I hope we never find out.
Edit: I reread my original post and I said we would park an equal amount of aircraft, which might not be accurate. If we were smart, we could grow into markets abandoned by UAL and AAL to prevent the LCC's from taking advantage of the downturn. Again, I hope we never find out.
Last edited by Big E 757; 11-10-2016 at 06:06 AM.
11-10-2016 | 06:12 AM
#64
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From: DAL 330
True, but it is about more than parking aircraft, its about the long term strength of the company. If there was a huge downturn requiring aircraft to be parked then UAL/AMR could have serious troubling meeting debt obligations - DAL much less so.
Yes it sucks for all of us to have aircraft parked but if people are not flying what choice do we have?
All other things being equal the company with the lower debt burden will be under much less pressure to come up with $$$$ elsewhere in the company - think furloughs and compensation cutbacks.
Yes all the airlines will have a tough time if people stop flying but some airlines will be affected less and recover more quickly.
Scoop
11-10-2016 | 06:22 AM
#65
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Joined: Feb 2008
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True, but it is about more than parking aircraft, its about the long term strength of the company. If there was a huge downturn requiring aircraft to be parked then UAL/AMR could have serious troubling meeting debt obligations - DAL much less so.
Yes it sucks for all of us to have aircraft parked but if people are not flying what choice do we have?
All other things being equal the company with the lower debt burden will be under much less pressure to come up with $$$$ elsewhere in the company - think furloughs and compensation cutbacks.
Yes all the airlines will have a tough time if people stop flying but some airlines will be affected less and recover more quickly.
Scoop
Yes it sucks for all of us to have aircraft parked but if people are not flying what choice do we have?
All other things being equal the company with the lower debt burden will be under much less pressure to come up with $$$$ elsewhere in the company - think furloughs and compensation cutbacks.
Yes all the airlines will have a tough time if people stop flying but some airlines will be affected less and recover more quickly.
Scoop
Keep up n mind Delta's pension obligations, we carry them off the books. AMR and UAL are refleeting faster then Delta which accounts for a portion of their debt. Delta will have to pay the same piper. We have just delayed it for short term stock gains.
11-10-2016 | 08:49 AM
#66
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Joined: Jul 2010
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From: window seat
I agree with debt. And when interest rates start climbing above the near zero level, the cost of carrying it will soar. I hope our new fleets aren't being put on the credit card to the same extent as our competition. As for product, we do run a good ship and that's probably the single most important part. But we lag way behind even LCC's on many routes. Forger RNAV, we should take the dogs out of NYC at least every route we compete with JB on.
11-12-2016 | 03:31 PM
#69
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Joined: May 2015
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From: Power top
Do you have a comparison on interest paid on debt? That's big.
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