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Why Does DL Only Fly 8 777s?  
User currently offlineFXramper From United States of America, joined Dec 2005, 7364 posts, RR: 85
Posted (7 years 9 months 3 weeks 5 days 12 hours ago) and read 9315 times:
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 confused 

DL took seven in 1999 and one more frame in 2002.

They have a surprisingly nice international network from ATL, JFK, etc.

Why not more 772 from the get go (before chp 11)?

They took 21 - 764 and only 8 - 772; right...

Who was drunk at the wheel when this decision was made?!

DL would be light years ahead of UA, AA, and CO if they were smarter on fleet management.  twocents 


postscript: Only two LRS on order?! (converted) I found it also laughable they are still taking order on 38 firm 738s to sell immediately to Aviation Capital Group and Babcock & Brown Aviation Finance Group. ???

20 replies: All unread, jump to last
 
User currently offlineRwSEA From Netherlands, joined Jan 2005, 3135 posts, RR: 2
Reply 1, posted (7 years 9 months 3 weeks 5 days 12 hours ago) and read 9295 times:

Quoting FXramper (Thread starter):
Who was drunk at the wheel when this decision was made?!

The pilots, who got greedy. DL originally ordered 13 772s, which were planned to replace the MD-11's almost 1:1. However, DL was extremely profitable and DALPA demanded unsustainably high rates to fly it. DL had to delay deliveries while these issues were sorted out, and then 9/11 happened leading to deferral of the remainder on order. Obviously an agreement with the pilots was eventually made. I'm sure someone with a little more background can add some detail.

Quoting FXramper (Thread starter):
postscript: Only two LRS on order?! (converted) I found it also laughable they are still taking order on 38 firm 738s to sell immediately to Aviation Capital Group and Babcock & Brown Aviation Finance Group. ???

Well, actually this isn't too bad for them. First, they're taking 5 777LR's, not 2 (all remaining 777s on order were converted to the LR). With respect to the 738, they will take delivery and then immediately sell the planes at a profit. Not too bad for them.


User currently offlineMovingtin From United States of America, joined Oct 2006, 183 posts, RR: 0
Reply 2, posted (7 years 9 months 3 weeks 5 days 8 hours ago) and read 9093 times:

When you go to buy a car, do you get a 60 passenger bus to carry your family around?! Why would they buy an aircraft they didn't need? If the routes your flying show you need a 200 seat plane then that is what you buy! With a 60 + million dollar difference in price, only a drunk would buy a bunch of A/C that they know they can't fill.

As far as the 737's, they are selling each frame at a profit, so why should they keep A/C they don't need?


User currently offlineBobnwa From United States of America, joined Dec 2000, 6535 posts, RR: 9
Reply 3, posted (7 years 9 months 3 weeks 5 days 7 hours ago) and read 9024 times:

Quoting FXramper (Thread starter):
DL would be light years ahead of UA, AA, and CO if they were smarter on fleet management

In what category would they be light years ahead?


User currently offlineDl_mech From United States of America, joined Feb 2000, 1987 posts, RR: 9
Reply 4, posted (7 years 9 months 3 weeks 5 days 6 hours ago) and read 8944 times:

During the pilot negotiations, ships 7003 and 7004 went directly from the factory (unpainted) to desert storage while 7001 and 7002 were shopped around to buyers.


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This plane is built to withstand anything... except a bad pilot.
User currently offlineAirCanada014 From Canada, joined Oct 2005, 1513 posts, RR: 0
Reply 5, posted (7 years 9 months 3 weeks 5 days 5 hours ago) and read 8761 times:

Quoting RwSEA (Reply 1):
all remaining 777s on order were converted to the LR

Thats not what I heard, I heard they are taking 2 LRs not all remaining orders but its possible they will take the remaining orders. Where is the source for all remaining orders will be LRs?


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 9 months 3 weeks 5 days 4 hours ago) and read 8565 times:

Quoting FXramper (Thread starter):
Why not more 772 from the get go (before chp 11)?

...they originally planned on 35+

Quoting FXramper (Thread starter):
They took 21 - 764 and only 8 - 772; right...
Who was drunk at the wheel when this decision was made?!

Combination on inept management and those who'dve brought, what was at the time, the world's most (gross) profitable airline to its knees.


User currently offlineAlitalia744 From United States of America, joined Mar 2000, 4763 posts, RR: 44
Reply 7, posted (7 years 9 months 3 weeks 5 days 4 hours ago) and read 8561 times:

Quoting AirCanada014 (Reply 5):
Thats not what I heard, I heard they are taking 2 LRs not all remaining orders but its possible they will take the remaining orders. Where is the source for all remaining orders will be LRs?

All remaining 777 orders (5 a/c total) have been converted to -232LRs. There are multiple press releases that have indicated this available on delta.com in addition to their POR which has been filed with the court.



Some see lines, others see between the lines.
User currently offlineFXramper From United States of America, joined Dec 2005, 7364 posts, RR: 85
Reply 8, posted (7 years 9 months 3 weeks 4 days 23 hours ago) and read 7526 times:
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Quoting Bobnwa (Reply 3):
In what category would they be light years ahead?

see below quote.

Quoting ConcordeBoy (Reply 6):
the world's most (gross) profitable airline


User currently offlineBobnwa From United States of America, joined Dec 2000, 6535 posts, RR: 9
Reply 9, posted (7 years 9 months 3 weeks 4 days 22 hours ago) and read 7029 times:

Quoting FXramper (Reply 8):
see below quote.

On the contrary, if they had taken 30+ 777's they would be in more debt than they already were and it would have hastened the Chap 11.
In what way do think all those 777's would have improved Delta. They already are the largest across the Atlantic.


User currently offlineGeorgiaAME From United States of America, joined Aug 2005, 1000 posts, RR: 6
Reply 10, posted (7 years 9 months 3 weeks 4 days 20 hours ago) and read 6285 times:

Thank the unions; they will never turn down a self serving deal at your expense. When Delta was flush with cash, they wanted the biggest hunk of the pie in the country. Well, some of us remember what happened a few years after that 1999 event. The rest is history, and Delta is close to being history.


"Trust, but verify!" An old Russian proverb, quoted often by a modern American hero
User currently offlineFlyDreamliner From United States of America, joined Jan 2006, 2759 posts, RR: 15
Reply 11, posted (7 years 9 months 3 weeks 4 days 19 hours ago) and read 5651 times:

Quoting Bobnwa (Reply 9):
On the contrary, if they had taken 30+ 777's they would be in more debt than they already were and it would have hastened the Chap 11.
In what way do think all those 777's would have improved Delta. They already are the largest across the Atlantic.

DL is hurting for widebodies pretty badly. They have pulled all 777s from T-ATL service to service their longer flights that only the 777 has the range for. The extra capacity of the 777 would be helpful on a number of their T-ATL flights, and they would, it seems, like to expand further overseas. ATL-JNB should not be on a 763ER. I am certain they would like to open up more T-PAC flights. AA finds use for nearly 50 777s on top of their 767 and A300 fleets, I'm sure DL could find somewhere to send the 777s.

Long story short, DL needs more long haul metal, the 777 would be the best solution, letting them cover new thinner routes with the 767s.



"Let the world change you, and you can change the world"
User currently offline474218 From United States of America, joined Oct 2005, 6340 posts, RR: 9
Reply 12, posted (7 years 9 months 3 weeks 4 days 19 hours ago) and read 5557 times:

Quoting FlyDreamliner (Reply 12):
Long story short, DL needs more long haul metal, the 777 would be the best solution, letting them cover new thinner routes with the 767s.

That may be true but Boeing wants money for 777's and Delta just doesn't have the cash to buy more.


User currently offlineItsnotfinals From , joined Dec 1969, posts, RR:
Reply 13, posted (7 years 9 months 3 weeks 4 days 19 hours ago) and read 5544 times:

Here is what happened:


from the SEC filing:

Deferral of Boeing 777 Aircraft
On June 11, 1999, Delta announced it has notified The Boeing Company that Delta is deferring deliveries of all eleven B-777-200IGW aircraft (777s) on order. Delta made this decision to protect against schedule disruptions that would result if Delta pilots implemented their announced plans to invoke a contractual provision which effectively provides that pilots may stop flying 777 aircraft as early as November 1, 1999 if Delta and its pilots have not agreed to pilot pay rates and working conditions for 777 aircraft (777 Pay Rates) by that time.

In February 1999, Delta and the Air Line Pilots Association, International (ALPA), the collective bargaining representative of Delta pilots, began negotiations on 777 Pay Rates. ALPA has previously informed Delta that a tentative agreement on 777 Pay Rates would have to be reached by May 28, 1999 to achieve a pilot-ratified 777 Pay Rate agreement by August 1, 1999, which is the approximate date on which Delta will publish its winter schedule in computer reservations systems. Delta and ALPA have not reached a tentative settlement on 777 Pay Rates and the parties remain far apart. Accordingly, Delta deferred its eleven 777 orders and is marketing its 777 aircraft.

For additional information concerning this matter, please refer to "Pilot Collective Bargaining Agreement Matters" on pages 23-25 of Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.



http://investor.delta.com/EdgarDetai...27904&FID=950144-99-8769&SID=99-00



And an article form the NY Times


http://select.nytimes.com/gst/abstra...fAir%20Line%20Pilots%20Association

DL pilots did indeed end up limiting the 777 order in 1999. After 2001 and the multi-billion dollars of losses DL couldn't afford the 777.


User currently offlineB6sfinest From , joined Dec 1969, posts, RR:
Reply 14, posted (7 years 9 months 3 weeks 4 days 19 hours ago) and read 5532 times:

Why does Delta only have 8 777's. Simple...It takes money....

User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 15, posted (7 years 9 months 3 weeks 4 days 19 hours ago) and read 5495 times:

Quoting FlyDreamliner (Reply 12):
They have pulled all 777s from T-ATL service

...then what do you call ATL-TLV, JFK-BOM, and the future ATL-DXB?

Quoting 474218 (Reply 13):
and Delta just doesn't have the cash to buy more.

Curious: what makes you think this?


User currently offlineEvan767 From United States of America, joined Aug 2005, 2957 posts, RR: 2
Reply 16, posted (7 years 9 months 3 weeks 4 days 19 hours ago) and read 5495 times:

Quoting GeorgiaAME (Reply 10):
Delta is close to being history.

Mmmm, not quite.



The proper term is "on final" not "on finals" bud...
User currently offlineItsnotfinals From , joined Dec 1969, posts, RR:
Reply 17, posted (7 years 9 months 3 weeks 4 days 18 hours ago) and read 5445 times:

Quoting ConcordeBoy (Reply 15):
Curious: what makes you think this?

Because Delta has no liquidity or debt service to get financing for new aircraft in the open market.

http://investor.delta.com/EdgarDetai...27904&FID=1188112-07-582&SID=07-00

Delta had this to say themselves about the cash situation:

Our substantial indebtedness may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.

We will have substantial indebtedness even if our Plan is consummated. Our substantial indebtedness could have important consequences. For example, our substantial indebtedness could:

· require us to dedicate a substantial portion of cash flow from operations to the payment of principal, and interest on, indebtedness, thereby reducing the funds available for other purposes;


· make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events;


· limit our ability to withstand competitive pressures;


· reduce our flexibility in planning for or responding to changing business and economic conditions; and/or


· place us at a competitive disadvantage to competitors that have relatively less debt than we have.


In addition , a substantial level of indebtedness could limit our ability to obtain additional financing on acceptable terms or at all for working capital, capital expenditures and general corporate purposes. We have historically had substantial liquidity needs in the operation of our business. These liquidity needs could vary significantly and may be affected by general economic conditions, industry trends, performance and many other factors not within our control. Substantial indebtedness, along with other factors, will limit our ability to obtain financing to meet such liquidity needs.

Our exit financing credit facility will include financial and other covenants that will impose restrictions on our financial and business operations.

As part of the Plan, we expect to enter into an exit financing credit facility with various lenders from whom we have received commitments. This credit facility will contain financial covenants that will require us to maintain a minimum fixed charge ratio, minimum unrestricted cash reserves and minimum collateral coverage ratios. In addition, our exit financing credit facility will restrict our ability to, among other things, incur additional secured indebtedness, make investments, sell assets if not in compliance with coverage ratio tests, pay dividends or repurchase stock. These covenants may have a material impact on our operations. In addition, if we fail to comply with the covenants in the exit financing credit facility and are unable to obtain a waiver or amendment, an event of default would result under the exit financing credit facility.

2006 Income:
Revenue: 17.171 Billion
Expenses: 17.113 Billion
Operating Income: 58 (million) or 1/3 of 1 percent operating profit (Before selling, adminsitrative, reorganization charges...etc)

Interest Expense: 801 Million

743 million short on paying interest expense form operations much less covering SG&A.

Would you lend them money for a 777?

[Edited 2007-03-04 02:16:29]

User currently offline474218 From United States of America, joined Oct 2005, 6340 posts, RR: 9
Reply 18, posted (7 years 9 months 3 weeks 4 days 17 hours ago) and read 4821 times:

Thanks, Itsnotfinels;

I could not have said it better myself.

Carl


User currently offlineWestJetForLife From Canada, joined Jun 2005, 814 posts, RR: 1
Reply 19, posted (7 years 9 months 3 weeks 4 days 17 hours ago) and read 4668 times:

Why does DL only fly 8 triple-7s?

Well, there are two reasons that I see are relevant.

One is that, like the other legacy carriers (UA, NW, AA, etc.), DL is still recovering from post-9/11 follies. Perhaps Delta just didn't have the finances to not only purchase, but maintain more than 8 of these birds.

The second reason, that I see, is demand. I mean, sure, you could use a 777-200/300 on trans-Atlantic routes, but why use 777s when you can use perfectly good 767-300/400s?

Just my two cents.

Cheers,
Nik



I need a drink.
User currently offlineJetdeltamsy From United States of America, joined Nov 2000, 2987 posts, RR: 7
Reply 20, posted (7 years 9 months 3 weeks 4 days 13 hours ago) and read 3503 times:

Quoting RwSEA (Reply 1):
The pilots, who got greedy. DL originally ordered 13 772s, which were planned to replace the MD-11's almost 1:1. However, DL was extremely profitable and DALPA demanded unsustainable high rates to fly it. DL had to delay deliveries while these issues were sorted out,

Exactly, precisely correct. Since 9/11, Delta hasn't had a pot to pi$$ in financially. There has been no money to acquire these extremely expensive aircraft and DALPA priced their services to fly the equipment right out the window.



Tired of airline bankruptcies....EA/PA/TW and finally DL.
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