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Delta Reports Big Loss In 1st Weeks Of Case  
User currently offlineJumbojet From United States of America, joined Dec 2003, 1159 posts, RR: 0
Posted (8 years 10 months 3 weeks 3 days 22 hours ago) and read 4385 times:

Here comes the fall out from ch. 11. The numers are staggering and I dont think anyone thought they would be this bad.

A small excerpt

ATLANTA Dec 1, 2005 — Delta Air Lines Inc., the nation's third-largest carrier, said it lost a whopping $1.14 billion in the first six weeks of its bankruptcy case.



http://abcnews.go.com/Business/wireS...ry?id=1362588&CMP=OTC-RSSFeeds0312

8 replies: All unread, jump to last
 
User currently offlineStarrion From United States of America, joined Jul 2003, 1126 posts, RR: 2
Reply 1, posted (8 years 10 months 3 weeks 3 days 21 hours ago) and read 4315 times:

Am I doing my math wrong?

"The airline also said in its filing that it spent $2.61 billion in the first six weeks of its bankruptcy case, much of it on fuel, salaries and interest expense. It said it spent $17 million on professional fees associated with its bankruptcy case during the period. The company reported revenue of $1.95 billion for the six-week period."


2.61b - 1.95b = .66b or 660 million dollars. Is the rest in asset devaluation?



Knowledge Replaces Fear
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6625 posts, RR: 24
Reply 2, posted (8 years 10 months 3 weeks 3 days 21 hours ago) and read 4291 times:

Quoting Starrion (Reply 1):
Is the rest in asset devaluation?

Most likely. As DL dumps planes and renegotiates contracts, there is a slew of non-cash charges they must take.


User currently offlineLuv2fly From United States of America, joined May 2003, 12118 posts, RR: 49
Reply 3, posted (8 years 10 months 3 weeks 3 days 20 hours ago) and read 4208 times:
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The ironic thing is, bankruptcy is a very and I mean VERY expensive process, almost defeats the purpose of bankruptcy if you ask me.


You can cut the irony with a knife
User currently offlineJumbojet From United States of America, joined Dec 2003, 1159 posts, RR: 0
Reply 4, posted (8 years 10 months 3 weeks 3 days 18 hours ago) and read 4112 times:

It seems as if Delta is on a spiraling wand of destruction that will only end with its liquidation. Its bad news after bad news. I realize that Ch. 11 isn't a fun place to be nor does it breed much good news, but comparing all the legacies that have been in or or currently in ch. 11, Delta seems to be fairing the worst. Almost as if its to late to stop a liquidation. I sure as heck hope it doesn't happen, and if I could have one wish for Christmas, it would be for Delta to emerge from ch. 11 a better and more strongly oranized airline.

User currently offlinePanamair From United States of America, joined Oct 2001, 4920 posts, RR: 25
Reply 5, posted (8 years 10 months 3 weeks 3 days 17 hours ago) and read 4050 times:
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Quoting Jumbojet (Reply 4):
It seems as if Delta is on a spiraling wand of destruction that will only end with its liquidation. Its bad news after bad news. I realize that Ch. 11 isn't a fun place to be nor does it breed much good news, but comparing all the legacies that have been in or or currently in ch. 11, Delta seems to be fairing the worst. Almost as if its to late to stop a liquidation. I sure as heck hope it doesn't happen, and if I could have one wish for Christmas, it would be for Delta to emerge from ch. 11 a better and more strongly oranized airline.

Bear in mind that DL is currently in a battle to cut pilot costs so it certainly doesn't hurt them to publish numbers like that that give a real sense of urgency. When people don't bother to look into the details, headlines like "Delta loses $1.1 billion in 6 weeks" certainly conveys a sense of doom. I'm not saying that DL is fudging the numbers but it's the way these numbers are communicated. If you look closely, about $660 million of the total loss are in bankruptcy-related charges. The loss before reorganization items was about $472 million. Yes, the numbers are bad but don't forget this was also the period where the post-Katrina effects hit hardest (where jet fuel was over $3 a gallon; it has since moderated to about $1.70 a gallon). Also, non-pilot cost cuts of $605 million annually also went into effect in November, after this reporting period.

BTW, UA's numbers when they went into Ch.11 were horrific as well. With bankruptcy-related charges, UA was showing a net loss of over $600 million in October 2005 alone. Extrapolate that to the same six-week period that DL is reporting, you would get about $900 million net loss for UA in 6 weeks, not far behind DL's $1.16 billion. So yes, the net loss number looks horrible but you really need to look at the operational numbers more importantly. Starting with November 2005, DL will be reporting monthly financial/operating numbers as well...that would be interesting to watch as well.


User currently offlineJohnboy From United States of America, joined Aug 1999, 2594 posts, RR: 7
Reply 6, posted (8 years 10 months 3 weeks 3 days 14 hours ago) and read 3912 times:

I always think fondly of Padcrasher when numbers like these come out.

User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 7, posted (8 years 10 months 3 weeks 3 days 11 hours ago) and read 3819 times:

Quoting Johnboy (Reply 6):
I always think fondly of Padcrasher when numbers like these come out.

Ha Ha Ha...... exactly..... you know Padcrasher still lurks.....
Hi Padcrasher!!!!! What up?



Wally Bird Ruled the Skys!
User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 8, posted (8 years 10 months 3 weeks 3 days 11 hours ago) and read 3807 times:

Quoting Luv2fly (Reply 3):
The ironic thing is, bankruptcy is a very and I mean VERY expensive process, almost defeats the purpose of bankruptcy if you ask me.

In that respect, not much different than a strike. Everyone loses, and it's very expensive in terms of time and cost.

Better to invest in a good management team and value your employees in order to run a profitable operation in the first place.


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