iahflyr

Right after Doug Parker announced he would give up on his bid for Delta, more bad news has arose for Delta Airlines.


Delta Air Lines Inc. said on Thursday it will sell 38 Boeing Co. airplanes after delivery as part of its bankruptcy, but that it will order 10 more planes and convert an existing order of five planes to longer-range aircraft to match its restructuring plans.

Delta, which has been operating under bankruptcy protection since September 2005, said it has agreed to sell 15 Boeing 737-800 aircraft to Aviation Capital Group, the airplane leasing company unit of Pacific LifeCorp., and 23 planes to Babcock & Brown Aviation Finance Ltd.

Delta said that it would order 10 Boeing 737-70 aircraft and convert five firm orders for 777-200ERs to longer-range 777-200LRs.

The company said the moves will enable it to expand internationally and fly new routes. The transactions are subject to bankruptcy court approval. The company reiterated that it plans to emerge from bankruptcy in the first half of 2007 as an independent carrier. US Airways is trying to buy the company.

Delta said it would provide more guidance on fleet plans in its reorganization plan to be filed later this month. Delta said it has booked $400 million in fleet savings out of a projected $450 million.

Delta agreed in December of 2005 to sell 10 Boeing planes to CIT Group Inc. after delivery, due to start in 2007.


So they have already have dropped 48 aircraft deliveries!

HSLD

It's never fun to see lift leave the airline because as pilots - it means losing jobs.

However, there is nothing in that press release that says DAL will cease operating those aircraft. As you know, chapter 11 is about restructuring debt and selling aircraft that carry a huge outstanding debt would be expected.

I wouldn't be surprised if the sale of these aircraft to the leasing company was conditional on allowing DAL to have first right of refusal to operate the jets.

This could actually be good news for DAL's restructuring as it allows them to shed debt and keep the lift. I guess "future guidance" on the fleet plan will tell.

ERJ135

ATLANTA, Dec. 7, 2006 – Delta Air Lines announced today that it has reached agreement with The Boeing Company to convert five firm orders for Boeing 777-200ER aircraft to longer-range Boeing 777-200LR aircraft (two conversions were previously announced), to order 10 Boeing 737-700 aircraft, and to assume its existing aircraft purchase agreements with Boeing. Delta has agreed to sell, immediately upon delivery, 38 future deliveries of Boeing 737-800 aircraft – 15 to Aviation Capital Group and 23 to Babcock & Brown Aviation Finance Limited. These actions support Delta’s planned international expansion, give it additional flexibility to fly new routes, and complete an important element of its restructuring. These transactions are subject to Bankruptcy Court approval.
“We’ve had a long-standing relationship with Boeing and the addition of these aircraft to Delta’s existing Boeing fleet allows the company to fulfill key elements of its long-term fleet plan, which is vital to Delta’s restructuring and plans to emerge from Chapter 11 in the first half of 2007 as a solid, independent carrier,” said Mel Fauscett, managing director of Fleet Planning and Acquisition for Delta. “These new aircraft are also an important part of Delta’s transformation, enabling Delta to fly customers to more international destinations in greater comfort. We continue to evaluate the needs of our network moving forward and plan to provide more guidance on the fleet when we file our Plan of Reorganization later this month.”
All five of the new 777 aircraft will be delivered with fully horizontal personal sleeper suites in BusinessElite® featuring on-demand in-flight entertainment systems in every suite. Customers flying in Economy class also will enjoy more room and nine-inch personal entertainment screens in every seat back, complementing Delta’s efforts to retrofit its fleet of 777s and more than 100 737-800 and 767-300 aircraft with on-demand, in-seat entertainment at every customer’s seat by the end of 2008.
These transactions with Boeing will introduce the first 737-700 aircraft to Delta’s fleet, replacing 10 future options for Boeing 737-800s with the 737-700. “The 737-700 is a better fit for the current needs of our network, providing flexibility in our fleet to fly longer, thinner domestic routes while at the same time supporting our international expansion to Latin America and the Caribbean,” Fauscett said.
The 737-700 will operate with a common cockpit type to the 71 737-800s in Delta’s fleet, but will be configured with 124 seats vs. the 150-seat 737-800s to serve smaller and developing markets. The 737-700 also will be delivered to Delta with winglets to deliver additional fuel savings and efficiencies.
During the Chapter 11 process, Delta has achieved $400 million of a projected $450 million in fleet savings by entering into agreements for lower lease payments; retiring four older, less-efficient aircraft types; and by rejecting, returning or selling 138 aircraft (as of October 31, 2006). Should these agreements be approved by the Court, Delta’s mainline fleet, order and options will be:
Delivery in Calendar Year Ending
Aircraft on Firm order 2007(a,c)
2008(b,c)
2009(b,c)
2010(b,c)
Total

B 737-800 10 7 14 19 50
B 737-700 - 7 3 - 10
B 777-200LR - 2 3 - 5
Total 10 16 20 19 65

(a) We have a definitive agreement, which was approved by the Bankruptcy Court, with a third party to sell 10 B737-800 aircraft immediately after those aircraft are delivered to us by the manufacturer in 2007.
(b) We have agreements, subject to approval by the Bankruptcy Court, with two separate third parties to sell 38 B737-800 aircraft immediately after those aircraft are delivered to us by the manufacturer - including seven aircraft in 2008, 14 aircraft in 2009 and 17 aircraft in 2010.
(c) These agreements are included in the above table because we continue to have a contractual obligation to purchase these aircraft from the manufacturer.
Delivery in Calendar Year Ending
Aircraft on Option 2007 2008 2009 2010 After
2010 Total Rolling Options
B 737-600/700/800 - - - 14 46 60 120
B 767-300/300ER - 1 2 2 5 10 2
B 767-400ER - 1 2 2 13 18 -
B 777-200ER/200LR - 1 - 2 8 11 13
Total - 3 4 20 72 99 135


Delta Air Lines (Other OTC: DALRQ) offers customers service to more destinations than any global airline with Delta and Delta Connection carrier service to 290 destinations in 46 countries. With more than 50 new international routes added in the last year, Delta is America’s fastest growing international airline and is a leader across the Atlantic with flights to 28 trans-Atlantic destinations. To Latin America and the Caribbean, Delta offers more than 400 weekly flights to 49 destinations. Delta's marketing alliances also allow customers to earn and redeem SkyMiles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Including its SkyTeam and worldwide codeshare partners, Delta offers flights to 445 worldwide destinations in 92 countries. Customers can check in for flights, print boarding passes and check flight status at delta.com.

ERJ135

So, I got the article above and was reading it through it. It seems as though they are keeping the 737-800's they have and getting rid of any that are being delivered starting from 2007 and on. Its interesting....

NGINEWHOISWHAT

They dropped 48, but are accepting delivery of numberous TWA/AA 757's, about 10 in all with an option for 6 more in addition to the firm orders for 777's. One other thing is a fact that I'll quote from Harry L. Nolan's book, Airline Without A Pilot.

On January 31, 2005 51% of Delta Flights were
rescheduled , a mammoth undertaking and
arguably the most complex one day rescheduling
in the history of the airline industry. This schedule
restructuring converted Hartsfield-Jackson into a
continuous 24-hour operation. This initiative was
essential to complement Simplifares so that Delta
can provide service that is more reliable. This piece
was considered important to retain those customers
drawn to the airline or enticed back by the new pricing.
Because of the more efficient operation, Delta gained
the equivalent of 22 new aircraft with no capital investment.

Everyone must mimic Southwest in order to survive and that means
maximum utilization of all aircraft and personnel.

Spongebob

Too bad they didn't have the motivation to do that before bankruptcy. Glad they knew what to do but didn't bother to. That's right up there with all the recently retired generals and admirals speaking out about how jacked up things are in Iraq - nice to see that when their career was on track before they retired and they could have done the right thing, they didn't.

NGINEWHOISWHAT

I absolutely agree. The pilot group was so upset with their leadership that it would not have been possible. Only time will tell if that pilot group cut off their nose to spite their face. Let's hope not.

whitt767

Ok, Einsteins. Those are orders. Not airplanes on property. NO LESS FLYING. They are called placeholders. Those orders were made long before bankruptcy. They are selling some of the -800 ORDERS to someone else and converting others to 10 -700's and changing 5 777ER's to 777LR's. This is good news, not bad news. Delta has been looking for a 100 seat A/C. They were weighing the E190 and the -700. It seems they chose the latter. BTW the -700 has very good range and is ETOPS certified. Good news.

cactusmike

Hey, we are getting buttons, too. They will say " Keep Delta Your Delta".

Doogie's dreaming if he thinks he can do this without ALPA (big unsecured creditor) or Boeing. Guess how many Boeing a/c we have ordered in the last 10 years.

ToiletDuck

How can they sell aircraft that have a big outstanding debt and yet afford a brand new one?