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Delta, US Airways Are Boosting Their Cash Piles  
User currently offlineIliriBDL From Germany, joined May 2007, 1205 posts, RR: 14
Posted (4 years 12 months 4 days 22 hours ago) and read 6089 times:

Delta, US Airways are boosting their cash piles

Forbes link for DL and for US

Quote:
Delta Air Lines said Tuesday it is "planning a private offering of $500 million in aggregate principal amount of senior second lien notes due 2015. Delta intends to use the net proceeds of this offering for general corporate purposes."

And US Airways says it is selling 26,315,790 shares of common stock to Citi, with an option of another 3,947,369 shares for over-allotments if any. Based on Tuesday's closing price, that would raise $158 million for US Airways

Sign that the economy is improving or...?


delta.com
15 replies: All unread, jump to last
 
User currently offlineSTT757 From United States of America, joined Mar 2000, 16872 posts, RR: 51
Reply 1, posted (4 years 12 months 4 days 22 hours ago) and read 6084 times:



Quoting IliriBDL (Thread starter):
Sign that the economy is improving or...?

Storing up for the long Winter.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 2, posted (4 years 12 months 4 days 20 hours ago) and read 5739 times:

Considering the environment, the stocks are up, time to get some chips. I love planes, I love going through airports looking at planes, how they are loaded, unloaded, the service vehicles, the crews working on the planes getting them ready to leave or unloading them when they arrive, looking in the maintenance hangers, but what an awful, value destroying business for investors.

User currently onlineDeltal1011man From United States of America, joined Sep 2005, 9435 posts, RR: 14
Reply 3, posted (4 years 12 months 4 days 19 hours ago) and read 5574 times:



Quoting STT757 (Reply 1):
Storing up for the long Winter.

 checkmark   checkmark   checkmark   checkmark 
they are all doing it.



yep.
User currently offlineAA737-823 From United States of America, joined Mar 2000, 5828 posts, RR: 11
Reply 4, posted (4 years 12 months 4 days 16 hours ago) and read 5343 times:

This winter promises to be particularly brutal. Several airlines have made very gloomy predictions in past earnings calls regarding the upcoming seasons.
Best to raise cash now while they still can!


User currently offlineTharanga From United States of America, joined Apr 2009, 1865 posts, RR: 1
Reply 5, posted (4 years 12 months 4 days 9 hours ago) and read 5076 times:



Quoting AA737-823 (Reply 4):
This winter promises to be particularly brutal. Several airlines have made very gloomy predictions in past earnings calls regarding the upcoming seasons.
Best to raise cash now while they still can!

Knowing that, why would investors put in more money, when the airlines are just going to lose it, anyway?


User currently offlineIncitatus From Brazil, joined Feb 2005, 4015 posts, RR: 13
Reply 6, posted (4 years 12 months 4 days 8 hours ago) and read 4945 times:



Quoting Deltal1011man (Reply 3):
they are all doing it.

United did it first and its liquidity boost pales in comparison to competitors. If they don't want the winter bear to catch them, they need to run faster than at least another airline.



Stop pop up ads
User currently onlineUnited1 From United States of America, joined Oct 2003, 5960 posts, RR: 9
Reply 7, posted (4 years 12 months 4 days 7 hours ago) and read 4800 times:



Quoting Incitatus (Reply 6):
United did it first and its liquidity boost pales in comparison to competitors. If they don't want the winter bear to catch them, they need to run faster than at least another airline.

UA isn't done with adding liquidity.



Semper Fi - PowerPoint makes us stupid.
User currently offline2175301 From United States of America, joined May 2007, 1071 posts, RR: 0
Reply 8, posted (4 years 12 months 4 days 6 hours ago) and read 4127 times:

But where does this all end..... I think it ends with the people/companies holding worthless paper.


What I do not understand - is that I just booked a flight out west for about $200 round trip (and I could have gotten $165 for a less desirable schedule): I tend to fly to that same location a couple times a year - and it always used to run $400+; at least untill these last several years.

The planes are just as full - and the airlines are loosing $$$ hands over fist. So why are they selling tickets at half of what they used to several years ago.

It seems to me to be a game of we are going to loose money until we bankrupt our competition - and then go bankrupt ourselves because the only way to compete with a company with forgiven debt is to also have the same debt forgiven.

In the end a lot of people will be hurt.


User currently offlineLipeGIG From Brazil, joined May 2005, 11438 posts, RR: 58
Reply 9, posted (4 years 12 months 4 days 5 hours ago) and read 3800 times:
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I don't think is just the winter. The fact that a lot of airlines are trying to boost liquidity is just a sign that they believe that current market conditions for debt probably is closer to its end (higher interest rates) and the price of shares (for secondary share issues) is on a good moment.
In my view they will continue to show loss on their results and are trying to build up before the market conditions become worst.

Just to complement, if a corporation is expecting better results and continued market conditions, they would not access the market now. The fact that they are looking into more debt and capital just show that probably market conditions and results will not (or could not) be as good as now.

It's not only in the U.S., in Brazil GOL decided to raise more capital issuing shares. They expect to get US$ 500 million.



New York + Rio de Janeiro = One of the best combinations !
User currently offlineJAAlbert From United States of America, joined Jan 2006, 1600 posts, RR: 1
Reply 10, posted (4 years 12 months 4 days 5 hours ago) and read 3738 times:



Quoting Tharanga (Reply 5):
Knowing that, why would investors put in more money, when the airlines are just going to lose it, anyway?

I agree. Really, with everything the banks/investments companies have gone through (or perhaps put themselves through) in the past year, why would Citibank subject itself to such risk by investing in an industry that is notorious for losing money and has lost billions already this year alone?

Quoting PlaneAdmirer (Reply 2):
Considering the environment, the stocks are up, time to get some chips. I love planes, I love going through airports looking at planes, how they are loaded, unloaded, the service vehicles, the crews working on the planes getting them ready to leave or unloading them when they arrive, looking in the maintenance hangers . . . .

Me too! I love it all. Maybe seeing the hundreds of tails parked at Atlanta each day is just too inspiring for Citi to resist!


User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 11, posted (4 years 12 months 4 days 5 hours ago) and read 3715 times:



Quoting Tharanga (Reply 5):
Knowing that, why would investors put in more money, when the airlines are just going to lose it, anyway?

When hasn't this been the case?


User currently offlineSocalfive From , joined Dec 1969, posts, RR:
Reply 12, posted (4 years 12 months 4 days 2 hours ago) and read 3061 times:



Quoting 2175301 (Reply 8):
What I do not understand - is that I just booked a flight out west for about $200 round trip (and I could have gotten $165 for a less desirable schedule): I tend to fly to that same location a couple times a year - and it always used to run $400+; at least untill these last several years.

The planes are just as full - and the airlines are loosing $$$ hands over fist. So why are they selling tickets at half of what they used to several years ago.

It seems to me to be a game of we are going to loose money until we bankrupt our competition - and then go bankrupt ourselves because the only way to compete with a company with forgiven debt is to also have the same debt forgiven.

,,,Just going to lose a little on each flight but then make it up in volume!  Wink


User currently offlineCARST From Germany, joined Jul 2006, 820 posts, RR: 2
Reply 13, posted (4 years 12 months 4 days 2 hours ago) and read 2991 times:



Quoting Tharanga (Reply 5):
Knowing that, why would investors put in more money, when the airlines are just going to lose it, anyway?

It can be a win-win situation for the investment banks and the airlines.

The airlines get money NOW to have enough cash for the next half year and some seem to need the money to survive.
But all the airlines which survive this global downturn will be stronger than they are now when the next economy boom is coming (in spring/summer 2010?!).
And so the airlines will have profited from the cash they got and the investments banks will be able to sell of the airlines stocks at much higher prices.


User currently offlineNwarooster From United States of America, joined Feb 2005, 1091 posts, RR: 3
Reply 14, posted (4 years 12 months 3 days 19 hours ago) and read 2005 times:
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The airlines are piling up the cash by piling UP the DEBT.
Makes good sense before filling bankruptcy.  old 


User currently offlineMax Q From United States of America, joined May 2001, 4525 posts, RR: 18
Reply 15, posted (4 years 12 months 3 days 18 hours ago) and read 1966 times:



Quoting Nwarooster (Reply 14):
51 secs ago) and read 30 times:


The airlines are piling up the cash by piling UP the DEBT.
Makes good sense before filling bankruptcy.

That's the reality, this is a finite path..



The best contribution to safety is a competent Pilot.
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