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Delta Sees 'Substantial Loss' In 2005  
User currently offlineGreenguy01 From United States of America, joined Aug 2003, 235 posts, RR: 0
Posted (9 years 9 months 3 weeks 2 days 19 hours ago) and read 5381 times:

http://biz.yahoo.com/ap/050310/delta_outlook_2.html

Looks like another Legacy Carrier is on the brink of bankrupcy!


Never argue with an idiot. They drag you to their level and beat you with experience.
66 replies: All unread, showing first 25:
 
User currently offlineAA7573E From United States of America, joined Nov 2003, 475 posts, RR: 2
Reply 1, posted (9 years 9 months 3 weeks 2 days 19 hours ago) and read 5363 times:

Perphaps it has something to do with their irrational approach to pricing in the face of increased operating and fixed expenses? Way to go Delta, way to go.


See you up front!
User currently offlineThrust From United States of America, joined Sep 2003, 2691 posts, RR: 10
Reply 2, posted (9 years 9 months 3 weeks 2 days 19 hours ago) and read 5360 times:

lol, that's funny...they are already losing a substantial amount...and so western civilization in the airline industry crumbles  Wink


Fly one thing; Fly it well
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6733 posts, RR: 24
Reply 3, posted (9 years 9 months 3 weeks 2 days 19 hours ago) and read 5326 times:

Perphaps it has something to do with their irrational approach to pricing in the face of increased operating and fixed expenses?

Yeah....because the old pricing scheme was working so well.  Yeah sure

While Simplifares have temporarily dinged DL's revenues, the larger problem is costs. Had fuel prices dropped into the $30's, we wouldn't be having this conversation right now.

I also believe that DL did not do enough to cut costs. DL is still heavy with management employees. I also think DL should have gotten more cuts from its employees. DL only took the bare minimum cut from the non-union employees in an effort to keep unions off the property.


User currently offlineIndy From United States of America, joined Jan 2005, 4596 posts, RR: 18
Reply 4, posted (9 years 9 months 3 weeks 2 days 17 hours ago) and read 5244 times:

Perhaps its Delta's backwards way of thinking (or perhaps a poorly worded article)

http://www.indystar.com/articles/7/228104-5687-223.html

It says that Delta is "boosting prices on alcoholic beverages and eliminating pillows on many flights as the struggling carrier seeks to improve customer service" . Ok. How is that boosting customer service? Lets charge more and provide less. But it does go on to say that Delta "will replace its food-for-sale program, which was launched on selected flights in July 2003, with a wider assortment of free snacks in coach class on most domestic and some Latin American and Caribbean flights of more than 90 minutes." But this is also the company that provided light beverage service on domestic flights even if you had to sit through hours of delays. But if I recall right the beverage service was expanded again. The initial selection of water, tea, oj and some other juice was just pathetic. Besides those juice bottles had to cost a bit more than a can of soda. So I never understood that move.



Indy = Indianapolis and not Independence Air
User currently offlineBurnsie28 From United States of America, joined Aug 2004, 7566 posts, RR: 8
Reply 5, posted (9 years 9 months 3 weeks 2 days 17 hours ago) and read 5196 times:

Congrats Delta, it looks like those Simplifares are really working...


..dipshits, whoever the idiot is that came up with this should be relieved, hes going to cause the airline to go into a hole that it cant come out of, all at the expense of the employees, including my uncle  Sad



"Some People Just Know How To Fly"- Best slogan ever, RIP NW 1926-2009
User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 6, posted (9 years 9 months 3 weeks 2 days 17 hours ago) and read 5188 times:

Delta is admitting it's in real trouble. It doesn't have enough cash to run its operations... and it doesn't have any more unencumbered assets, which means a) it has nowhere to get more money, and b) bankruptcy would not be pretty.

Delta is in REALLY bad shape.

http://www.startribune.com/stories/535/5284591.html



An unexamined life isn't worth living.
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13766 posts, RR: 61
Reply 7, posted (9 years 9 months 3 weeks 2 days 17 hours ago) and read 5155 times:
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Congrats Delta, it looks like those Simplifares are really working...


DL admitted their new pricing structure would be revenue negative at first, but that it would go revenue positive 12-18 months down the line, IIRC.

While it sounds like a dumb idea, it isn't - the changes in the industry are structural in nature, not cyclical - and that means the low-fare environment isn't going away. As such, EVERYONE needs to find a way to get more people paying higher-yielding walkup fares, so they discount them to the point where the high-yield fares are more attractive to travelers.

For example, DL's walkup fare ATL-LGA was $726.00 one way a few months back. Now, it's a far more attractive $394.00 - and keep in mind, this is the last-seat-on-the-aircraft fully unrestricted walkup fare.

So odds are business travelers who would have balked at $726 might not think twice about $394 - and DL will probably get 4 or 5 of these customers per flight now instead of the MAYBE one customer they used to get at $726.

It just takes time for a structural pricing change like this to take root though, which is why DL projected going revenue-negative at first. Believe me, they wouldn't have gone ahead with the change if they didn't strongly believe there was evidence to support stronger revenues and yields as a result of the change.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineDrerx7 From United States of America, joined Jun 2000, 5209 posts, RR: 8
Reply 8, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5141 times:

Simplifares was a foolish idea--now they are scrambling to cut further costs--so out go the pillows and food for sale--in with the Southwestized snack service. Well, if it wasn't for OnePass mile accrual I would have absolutely no incentive to fly delta over Southwest.


Third Coast born, means I'm Texas raised
User currently offlineRNOcommctr From United States of America, joined Jan 2001, 830 posts, RR: 3
Reply 9, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5126 times:

Well, DL is certainly not being helped by its latest asinine touchy-feely "feel good" advertising campaign.

A question: ATL is currently the world's busiest airport in terms of pax: 83 million in 2004. If DL can't do Chapter 11 and has to liquidate, what percent decline in pax would we see at ATL? A huge chunk of ATL's pax has got to be DL connecting traffic, as the ATL O&D population base isn't THAT big-- metro area of about 4 million, I believe.



Active loading only, ma'am, keep it moving!
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6733 posts, RR: 24
Reply 10, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5125 times:

Simplifares was a foolish idea

Why was it so foolish? Under the old pricing scheme DL lost $5.2 Billion dollars....and you call that a success.

Simplifares isn't why DL is having liquidity problems...costs are.


User currently offlineLono From United States of America, joined Apr 2004, 1337 posts, RR: 1
Reply 11, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5110 times:

The new pricing structure needs 18 months to be effective for DL.... However what concerns me in this latest news DL admits it does not have even 12 months.... I fear DL will go into B/R and not come out.... which will be very sad indeed... However many saw this coming... DL was too slow in adapting to the new environment....


Wally Bird Ruled the Skys!
User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 12, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5086 times:

I'm not at liberty to say how, but I have access to Delta's 5 year business plan, dated 9/04, which includes the assumptions they used when formulating their cost and revenue projections. I'm reviewing it now. My initial observation: they made some major mistakes in their assumptions... more detailed thoughts to come.


An unexamined life isn't worth living.
User currently offline1MillionFlyer From , joined Dec 1969, posts, RR:
Reply 13, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5080 times:

No ariline the size of DL will be allowed to liquidate. The banks and Leasing companies cannot re-lease or sell 400 airplanes, there is no market. They will bend over backwards to renegoitiate (Look at US and UA), before they start repo-ing planes.

Also, from a government income perspective and economic impact, the gov't will also be keen to keep DL in business (Also like US and UA)


In the scheme of things the Airline CEO's are really working for the banks at this point!


User currently offlineAtltraveler From United States of America, joined Nov 2004, 44 posts, RR: 0
Reply 14, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5075 times:

Just goes to show that Airlines are still not doing enough to cut costs. I guess I don't understand. If Revenues are X, Why cant Delta cut costs till they at least reach X. I blame the share holders. They should demand that the board of directors forces wages down in both management and union till the costs are in control. Why the discussion around oil. Its not like there is anything the airlines can do about it. Just adjust that in the costs. It is what it is.

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13766 posts, RR: 61
Reply 15, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5049 times:
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I need to ask a very serious question - why are so many people wringing their hands and going into full-on "OMIGOD!" mode over DL?  confused 

Look - US doesn't even have a viable business (apparently no one has bothered to tell them yet), and yet they're STILL around like a bad penny, reinventing themselves time and again while trashing yields for everyone in the process...and odds are they'll still be around for at least another six months.

Now do you honestly believe that Delta Air Lines, a company that actually DOES have a very viable business won't survive going forward?

Their costs are coming down, but - to paraphrase Clinton's famous campaign line - It's their debt, stupid. They're hoping to solve their problems outside of Chapter 11, but if they WERE to enter Ch11 they'd re-emerge as a leaner, stronger company.

Why? Because they've got a viable business that works - just not right now while we're in this "Perfect Storm" of low yields, high fuel costs, etc.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineDAL767400ER From , joined Dec 1969, posts, RR:
Reply 16, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5033 times:



Quoting Atltraveler (Reply 14):
If Revenues are X, Why cant Delta cut costs till they at least reach X.

Because then DL would get into big trouble with DALPA. Just look how long it too DALPA to accept their paycuts. Had DALPA accepted those paycuts sooner, it would have saved Delta millions, if not billions of dollars. What most people also seem to ignore is the fact that pay cuts were companywide, including management. E.g. Grinsteing only made 250K last year. Now compare that number to other airline CEOs, and expecially compare it with the 13 million Mullin made last year. Delta is still on a good way, even though it doesn't look like it now.
Oh, and to Burnsie: Let's not forget that it was your airline that blocked basically all fare hike attempts by other Major's.


User currently offlineBucky707 From United States of America, joined Aug 2000, 1028 posts, RR: 3
Reply 17, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 5004 times:

"DL was too slow in adapting to the new environment...."


truer words have never been written. Bottom line for Delta, management there kept thinking the good old days would return until it was too late to make the structural changes they needed to survive in todays market.


User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 18, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 4977 times:

>>I need to ask a very serious question - why are so many people wringing their hands and going into full-on "OMIGOD!" mode over DL? <<

Ummmm...maybe because the company is wringing its hands and going into full-on "OMIGOD!" mode???.....

"...the company, which has $3.4 billion in obligations in 2005 related to leases, interest on debt, debt maturities and funding of employee pensions, said its fate is uncertain."



An unexamined life isn't worth living.
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 19, posted (9 years 9 months 3 weeks 2 days 16 hours ago) and read 4961 times:

The SEC filing is nothing new.

It makes clear there will be no Chap. 11 fiing in 2005

Simplifares has nothing to do with it.

The cost cutting continues.

Delta still has flexiblity to lower non-contract labor costs.

US Airway's and FLYI's Chapter 7 will stabilize the industry long before Delta is near bankruptcy.


User currently offlineNWAFA From United States of America, joined Dec 2003, 1893 posts, RR: 16
Reply 20, posted (9 years 9 months 3 weeks 2 days 15 hours ago) and read 4950 times:

Padcrasher,

Yes US Airways will, but not Indy..it will be UA and US that will stabilize the industry.



THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 21, posted (9 years 9 months 3 weeks 2 days 15 hours ago) and read 4940 times:

Indy? They're worse off than US Airways. They lose 50 cents on the Dollar.

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13766 posts, RR: 61
Reply 22, posted (9 years 9 months 3 weeks 2 days 15 hours ago) and read 4933 times:
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"...the company, which has $3.4 billion in obligations in 2005 related to leases, interest on debt, debt maturities and funding of employee pensions, said its fate is uncertain."


The passage in boldface are the media report's words, not DL's. They're not predicting their own demise, the media is.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 23, posted (9 years 9 months 3 weeks 2 days 15 hours ago) and read 4897 times:

>>The passage in boldface are the media report's words, not DL's. They're not predicting their own demise, the media is.<<

Wrong.

The subject of the sentence is "the company". The verb is "said". Thus, "The company said". What did the company say? That its fate is uncertain.



An unexamined life isn't worth living.
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 24, posted (9 years 9 months 3 weeks 2 days 15 hours ago) and read 4880 times:



Quoting 1MillionFlyer (Reply 13):
No airline the size of DL will be allowed to liquidate. The banks and Leasing companies cannot re-lease or sell 400 airplanes, there is no market. They will bend over backwards to renegotiate (Look at US and UA), before they start repo-ing planes.

here is the quote from the startribune.com article:

""A restructuring under Chapter 11 of the U.S. Bankruptcy Code may be particularly difficult because we pledged substantially all of our remaining unencumbered collateral in connection with transactions we completed in the December 2004 quarter as part of our out-of-court restructuring,'' Delta said in the filing"

they do not have too many assets left...they have already pledged them away, i.e., the creditors probably own most of Delta's assets already......



"Up the Irons!"
25 FlyPNS1 : A restructuring under Chapter 11 of the U.S. Bankruptcy Code may be particularly difficult because we pledged substantially all of our remaining unenc
26 OttoPylit : Being that your not a Delta employee, I don't expect you to understand. The worries of a union coming onto the property is the least of Delta's worri
27 Padcrasher : When push comes to shove. Additional paycuts should and will be on the table. US Airway's predicament is also due it's small size and lack of a viable
28 FlyPNS1 : There would be no need into taking anymore unless it was an absolute last resort and there was no way out. Unfortunately, I believe DL may be rapidly
29 PVD757 : Quick and painful (for DL employees), but if DL really wants to be proactive in the industry i.e.Simplifares, etc., they need to downsize a bit. They
30 FlyPNS1 : Well, what was the next couple of years is quickly becoming NOW! The 732's, M90's, 733's, and the 762's need to go now. There are two problems with th
31 TWFirst : Interestingly, as of 6 months ago, Delta's plan was to elimnate the 732 by 07, the 733s by the end of this year, and take delivery of 90 73Gs and 16 7
32 SHUPirate1 : Here's a question, one that is probably going to be rejected out of hand, but a question nonetheless. What if Delta decided to put those 767-400's int
33 Padcrasher : There are just not alot of markets where a larger plane would work. The 757 is a bit oversized right now. The ideal aircraft is in the 160 seat range.
34 SHUPirate1 : Padcrasher-What about ATL-FLL, ATL-LAS, ATL-MCO, ATL-TPA, and all of the Hawaii routes...do that, and convert the remainder of the 757's to Song and f
35 QuestAir : Perhaps they could change their slogan to 'Bankruptcy Goes Around'.
36 PVD757 : FlyPNS: if DL is losing that much flying around those planes, then parking them may be cheaper. The lease payments alone might be less than the relate
37 DAL767400ER : Might I ask where you got those numbers, especially the 'as of 6 months ago'? AFAIK, DL never place orders for 73Gs nor 739s, only 738s. And about th
38 Scotron11 : Where is the money going? We are now 3 1/2 years past 9/11, TWA is gone, so how do you lose $5.2Billion dollars in one year? And it's still not enough
39 MD-90 : Huh? The trans-Atlantic shuttle service (almost) that Delta operates is what's keeping them afloat right now. And the money is buying Jet A at very h
40 Skibum9 : This idea is rediculous. The RJ, in particular the RJ-50s have some of the highest CASM of any plane flying today. They need to dump all those RJs an
41 Alb222 : DL will sell Comair and ASA. This will bring in much needed cash and lowered costs. Asset sales are a viable recourse. DL can sell both of these airli
42 PVD757 : Skinburn: It's not rediculous at all, take a look at the fare premiums DL gets on it's CVG routes. Reducing seat capacity by using the RJs will help l
43 Midway2AirTran : I agree with the happy employees needed, but Delta did no reinventing with Simpli-fares. They took the basic LCC pricing model and tweaked it by incr
44 Skibum9 : If you recall, DL introduced Simplifares first at CVG, because much of the CVG O&D were driving to nearby airports like DAY, LEX, IND, CMH and SDF. T
45 OttoPylit : If I were you, I wouldn't bet any money on that statement. Do not expect to see Delta sell ASA and Comair. As I said in another statement, Delta has
46 Scotron11 : Huh? The trans-Atlantic shuttle service (almost) that Delta operates is what's keeping them afloat right now. And the money is buying Jet A at very h
47 Post contains images BigB : Hey Otto If DL were to sell EV and OH outright to OO Who said Skywest were going to buy EV and OH. If Delta was putting EV and OH out on the market fo
48 Padcrasher : bb your post makes no sense. In order for ASA/Comair to be sold it would not need to involve the NYSE.
49 BigB : Ok padcrasher, your right, I was bit dosed up on some sinus medicine, but the selling of Comair and ASA wouldn't necessarily be sold to Skywest.
50 Padcrasher : Let's just stick with more useful numbers here. Delta lost 5+ Bil last year on paper only. 2 Bil of that was a write down of goodwill which is a paper
51 DAL767400ER : If you read the articles, you'd know that a Skywest spokesman said that.
52 Jumbojet : Any reasonable person, like myself, is basically dumbfounded and left shaking their head at Delta after reading the article by Yahoo in the original p
53 TWFirst : >>Might I ask where you got those numbers, especially the 'as of 6 months ago'?
54 Post contains images Thrust : Burnsie28, sadly DL is probably already in a hole they can't get out of. They are the only airline lacking China routes, they only have one flight to
55 Alb222 : [quote=Thrust,reply=54]Burnsie28, sadly DL is probably already in a hole they can't get out of. They are the only airline lacking China routes, they o
56 PVD757 : That's kind of my point. How can DL go back to the employees for more money, when their operation has plenty of room to improve. They need to introduc
57 Alb222 : PVD757..............in my opinion you summed it up correctly.............get rid of Comair and ASA, simplfy the fleet, add int'l where you can compete
58 JumboJet : regarding Delta and their lack of China routes, it is understandable that the market from Atlanta to China isnt there, but why can't Delta fly China r
59 Post contains images OttoPylit : As Padcrasher stated, the post makes no sense. I was making that point with Skywest because everyone is speculating that Delta will sell EV and OH to
60 Miami1 : Im asuming DL loses most of its money on domestic operations. Where does DL make money? are its Europe flights making the bucks? or Latin America?
61 Post contains images Lightsaber : The only airline ever too large to fail was Pan-Am. I don't want to be negative, but DL has years before it dumps 400 aircraft on the market. After a
62 Scbriml : Looks like DL is in deep doodoo. Unfortunately, the US airline industry needs at least two of the legacy majors to fail. Looks like DL might be the fi
63 UAL747DEN : I personally believe that DL is in a lot worse shape than UA. DL doesn't have a lot to work with. Their cash on hand is extremely low compared to thei
64 Post contains images SESGDL : Right... Cause we all see DL in bankruptcy like UA don't we? DL's cash on hand is more than UA's. And DL's international network is great, they're th
65 Flightopsguy : Uh, Didn't DL in their report say that a Chapter 11 would be hard to pull off? Not enough cash on hand, and also every paperclip they own is mortgaged
66 Post contains images ANNOYEDFA : SCBRIMAL: Um DL first? Try UAL or Airways..... UAL is still going on their 3rd year in chapter 11 with still no set in stone business plan and Airways
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