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DL JP Morgan Analyst Presentation & Capacity Cuts  
User currently offlinePSU.DTW.SCE From United States of America, joined Jan 2002, 7563 posts, RR: 28
Posted (3 years 5 months 1 week 2 days 9 hours ago) and read 7792 times:

Below is the link to DL's presentation for the JP Morgan Transportation & Defense Conference, March 22, 2011
http://www.sec.gov/Archives/edgar/da...01968711000926/delta_8k-ex9901.htm

A few key/new points that haven't been covered elsewhere:

Fuel:
- Up $3B / 35% over May 2010

Capacity:
- Revised 2nd half 2011 capacity guidance, down 4% from plan, was to be 2% increase now going to be 2% decrease
- Pulldown 15-20% of Japan capacity through May, including suspension of HND
- 25% reduction in MEM departures (which we began to see in some of the more recent schedule updates)
- Reduction of capacity in underperforming TATL markets

Japan:
- Pulldown 15-20% of Japan capacity through May, including suspension of HND
- Pullback on NRT - Beach market capacity
- Selectively Upgauge non-Japan Asia overflights
- Net impact $250-400M

35 replies: All unread, showing first 25:
 
User currently offlinebsteph From United States of America, joined Sep 2008, 55 posts, RR: 0
Reply 1, posted (3 years 5 months 1 week 2 days 8 hours ago) and read 7628 times:
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Thank you for that EDGAR pull.

I wonder if CVG-CDG is an underperforming TATL? I note that last week the CVG airport appointed a P&G executive to the Board. Her first priority, apparently, is to bring back additional TATL service, specifically mentioning AMS due to its "hub"-to-hub connectivity.


User currently offlineenilria From Canada, joined Feb 2008, 7138 posts, RR: 13
Reply 2, posted (3 years 5 months 1 week 2 days 8 hours ago) and read 7534 times:

Quoting PSU.DTW.SCE (Thread starter):
- 25% reduction in MEM departures (which we began to see in some of the more recent schedule updates)

I think that deserves its own thread. I'm going to start one.


User currently offlinejetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Reply 3, posted (3 years 5 months 1 week 2 days 8 hours ago) and read 7531 times:

Quoting bsteph (Reply 1):
I wonder if CVG-CDG is an underperforming TATL? I note that last week the CVG airport appointed a P&G executive to the Board. Her first priority, apparently, is to bring back additional TATL service, specifically mentioning AMS due to its "hub"-to-hub connectivity.

I doubt it. CVG-CDG has NEVER been an underperforming market. Quite the opposite.


User currently offlineTOMMY767 From United States of America, joined Aug 2003, 6584 posts, RR: 9
Reply 4, posted (3 years 5 months 1 week 2 days 8 hours ago) and read 7490 times:

Quoting bsteph (Reply 1):
I wonder if CVG-CDG is an underperforming TATL?

All JV TATL routes are be evaluated. I wouldn't be surprised to see something like PIT-CDG go the wayside before CVG-CVG (although maybe a downgrade to a 757 from CVG?)

I'm very curious as to what they plan to do over in Narita. Maybe SFO/PDX-NRT will go? Very sad news. I enjoy seeing all the trip reports and seeing DL's name all over Narita.

MEM downgrade of 25% is actually not horrible. Quite a few regional routes will be trimmed though and maybe the MEM-AMS flight



"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlinePSU.DTW.SCE From United States of America, joined Jan 2002, 7563 posts, RR: 28
Reply 5, posted (3 years 5 months 1 week 2 days 8 hours ago) and read 7426 times:

Quoting TOMMY767 (Reply 4):
I'm very curious as to what they plan to do over in Narita. Maybe SFO/PDX-NRT will go? Very sad news. I enjoy seeing all the trip reports and seeing DL's name all over Narita.

I doubt it, and its only going to be temporary through the end of May for now. Asia had been doing very well prior to this point, and DL is going to want to continue to maintain its hub over there while balancing out some of the temporary short term slack in demand for local Japan O&D.

Cutting DTW/LAX-HND with the 744s, cutting some of the beach markets and maybe some gauge change (e.g. swapping 777s & 744s between the NRT and overflying flights can help balance out capacity. I don't see any suspensions in NRT - TPAC cities.


User currently offlineCubsrule From United States of America, joined May 2004, 22910 posts, RR: 20
Reply 6, posted (3 years 5 months 1 week 2 days 8 hours ago) and read 7395 times:

Quoting PSU.DTW.SCE (Reply 5):
I don't see any suspensions in NRT - TPAC cities.

Agreed, unless there is a city - and I'm not aware of one - where cuts to beyond NRT flying will make the flight untenable because DL doesn't pick up enough O&D. In most US-NRT routes, though, there's plenty of room for gauge changing if necessary; the 763 can do any of the west coast routes.

Quoting TOMMY767 (Reply 4):
(although maybe a downgrade to a 757 from CVG?)

The 752 can't make it.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinecommavia From United States of America, joined Apr 2005, 11555 posts, RR: 61
Reply 7, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7294 times:

Quoting TOMMY767 (Reply 4):
I'm very curious as to what they plan to do over in Narita. Maybe SFO/PDX-NRT will go? Very sad news. I enjoy seeing all the trip reports and seeing DL's name all over Narita.

Agreed.

Where is the 20% coming from? It doesn't seem possible to me that you could generate that substantial of a capacity pull-down purely from smaller aircraft - it seems like that would have to come from fewer actual flights. What is the plan for flights getting cut?


User currently offlineTOMMY767 From United States of America, joined Aug 2003, 6584 posts, RR: 9
Reply 8, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7259 times:

Quoting DTW.SCE" class="quote" target="_blank">PSU.DTW.SCE (Reply 5):
Cutting DTW/LAX-HND with the 744s, cutting some of the beach markets and maybe some gauge change (e.g. swapping 777s & 744s between the NRT and overflying flights can help balance out capacity. I don't see any suspensions in NRT - TPAC cities.

When they say cut the "beach markets" from NRT, what are they referring to? I'm confused...

Quoting Cubsrule (Reply 6):

The 752 can't make it.

I think it can but barely.

Quoting commavia (Reply 7):
Where is the 20% coming from?

That's where some of the NRT-US flights might have to be trimmed.



"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlinenwaesc From United States of America, joined Aug 2007, 3386 posts, RR: 9
Reply 9, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7259 times:

Dunno, but maybe we'll see a return to what NW's interport system looked like during the SARS crisis, with lots of 757 and A320 flying?


"Nothing ever happens here, " I said. "I just wait."
User currently offlineCubsrule From United States of America, joined May 2004, 22910 posts, RR: 20
Reply 10, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7244 times:

Quoting TOMMY767 (Reply 8):
I think it can but barely.

In the summer, yes. Almost certainly not in the winter.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinenwaesc From United States of America, joined Aug 2007, 3386 posts, RR: 9
Reply 11, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7197 times:

Quoting TOMMY767 (Reply 8):
When they say cut the "beach markets" from NRT, what are they referring to? I'm confused...

HNL, GUM, SPN, and (I assume) ROR.



"Nothing ever happens here, " I said. "I just wait."
User currently offlineDAL767400ER From , joined Dec 1969, posts, RR:
Reply 12, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7118 times:

Quoting commavia (Reply 7):
Where is the 20% coming from? It doesn't seem possible to me that you could generate that substantial of a capacity pull-down purely from smaller aircraft - it seems like that would have to come from fewer actual flights. What is the plan for flights getting cut?

Well, it will probably be a combo of all factors. IIRC, Delta currently still has 4 daily 744 flights from NRT to the mainland US, which could all be reduced to 777s. Also, save for ROR all flights are daily as well, so going 5/6x weekly should result in some capacity drop as well.

Where I expect to see actual flight cuts is the beach markets. NRT-HNL is at 3 daily flights (744, 333, 767) for example. Cutting the 744 and downgrading the A333 would allow for quite a bit of capacity to be taken out of NRT. NRT-GUM (2 757, 1 767) and NRT-SPN (3x 757) are also candidates for flight cuts.


User currently offlinePSU.DTW.SCE From United States of America, joined Jan 2002, 7563 posts, RR: 28
Reply 13, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7118 times:

From what I know they are cutting:
DTW-HND
LAX-HND
NRT-HNL going from 3x -> 2x
NGO-HNL

I don't have the math in front me but the 2 HND flights cuts over 800 seats/day out of the Japan market. The other two flights get you an additional ~600 seats out of the market, depending on how they realign aircraft gauge.

No, you won't see they go to redeploying A320s over there, it would be impossible to start that up on such short notice, the 757s with the BE seats are going to stay to maintain the hub connectivity.


User currently offlinenwaesc From United States of America, joined Aug 2007, 3386 posts, RR: 9
Reply 14, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 7017 times:

Quoting PSU.DTW.SCE (Reply 13):
No, you won't see they go to redeploying A320s over there, it would be impossible to start that up on such short notice,

I was just throwing ideas out there, based on what we've seen before...

Why do you say it's impossible to redeploy the A320's (honest question)? I realize it can't be done tomorrow, but...

Not enough slack in the fleet to backfill them domestically?



"Nothing ever happens here, " I said. "I just wait."
User currently offlineTOMMY767 From United States of America, joined Aug 2003, 6584 posts, RR: 9
Reply 15, posted (3 years 5 months 1 week 2 days 7 hours ago) and read 6977 times:

Quoting nwaesc (Reply 14):
Not enough slack in the fleet to backfill them domestically?

What about the 319s? They have better range than the 320...



"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlinepanamair From United States of America, joined Oct 2001, 4896 posts, RR: 25
Reply 16, posted (3 years 5 months 1 week 2 days 6 hours ago) and read 6834 times:
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Honestly, it doesn't take too much to get the 15-20% capacity reduction out of Japan, especially with the 2 HND flights which were on 744s. Doing some quick and dirty calculations based purely on seat capacity (not ASMs), I can come up with a 17% cut for April/May based on the following scenario:

Drop HND-LAX 744
Drop HND-DTW 744
Drop 1x NRT-GUM frequency (from 3x daily)
Drop 1x NRT-SPN frequency (from 2x daily)
Downgauge 1x NRT-HNL from 744 to 333
Downgauge 1x NRT-HNL from 333 to 767
Downgauge 1x JFK-NRT from 744 to 777
Downgauge 1x NRT-Interport Asia from 744 to 777

To get a 19% cut, I can simply add:
Downgauge 1x SEA-NRT from 333 to 332
Downgauge 1x NRT-Interport Asia 333 to 332


User currently offlinemcdu From United States of America, joined Apr 2005, 1459 posts, RR: 17
Reply 17, posted (3 years 5 months 1 week 2 days 6 hours ago) and read 6769 times:

Quoting panamair (Reply 16):
Drop HND-LAX 744
Drop HND-DTW 744

Weren't these routes already being planned to be down gauged to a B777? If so it becomes creative arithmetic to use the reduction based on 747 capacity versus 777. The million dollar questions are; does DLget to sit on unused HND rights? IF Delta reenters the HND market will they do so with the 747 as they indicated they would in their filing when applying for the HND route authority? How much flexibility will Japan grant DL if they give the appearance of not supporting Japan in maintaining service,politically how will DL be dealt with in Japan?


User currently offlinepanamair From United States of America, joined Oct 2001, 4896 posts, RR: 25
Reply 18, posted (3 years 5 months 1 week 2 days 6 hours ago) and read 6666 times:
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Quoting mcdu (Reply 17):
Weren't these routes already being planned to be down gauged to a B777? If so it becomes creative arithmetic to use the reduction based on 747 capacity versus 777.

No, the downgauge is effective June 1. The 15-20% capacity reduction is for now through May, where the 744 was still scheduled for HND-LAX/DTW.

Quoting mcdu (Reply 17):
The million dollar questions are; does DLget to sit on unused HND rights?

They are ok for 90 days, and March 22 - May 31 (period of suspension) is under that threshold.

Quoting mcdu (Reply 17):
IF Delta reenters the HND market will they do so with the 747 as they indicated they would in their filing when applying for the HND route authority?

They are re-entering HND in June with the 777.

Quoting mcdu (Reply 17):
How much flexibility will Japan grant DL if they give the appearance of not supporting Japan in maintaining service,politically how will DL be dealt with in Japan?

Japan has much bigger things to worry about than whether DL downgauges or cuts some Japan services. You want support? Delta has already pledged up to US$1 million in support (including $250K cash up front) for the Japan relief effort.


User currently offlinetimf From United States of America, joined Mar 2003, 969 posts, RR: 1
Reply 19, posted (3 years 5 months 1 week 2 days 5 hours ago) and read 6433 times:
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Quoting panamair (Reply 16):
Downgauge 1x JFK-NRT from 744 to 777

Is this a real change or only a hypothetical? This would also have the side effect of downgauging JFK-TLV since the aircraft are the same.

I've noticed that after this week the 777 fleet gains a lot of slack with both DTW-PVG and DTW-NGO-MNL returning to 744. I haven't found any new routes that pick up 777 service until the HND flights resume. They do already have 2 aircraft at a time out of service for mods and I don't think this rate will be increasing, so I'm not sure what their plans are for the extra planes.


User currently offlineFlyguy89 From United States of America, joined Feb 2009, 1907 posts, RR: 9
Reply 20, posted (3 years 5 months 1 week 2 days 5 hours ago) and read 6367 times:

Quoting PSU.DTW.SCE (Thread starter):
Pullback on NRT - Beach market capacity

Does anybody know how this will affect SLC-NRT?

Quoting bsteph (Reply 1):
Her first priority, apparently, is to bring back additional TATL service, specifically mentioning AMS due to its "hub"-to-hub connectivity.

Interesting, I think London would make more sense though as far as serving the O&D market.

Quoting jetlanta (Reply 3):
I doubt it. CVG-CDG has NEVER been an underperforming market. Quite the opposite.

I suspected so but glad to hear it. Would you care to elaborate if you have load factor/yield info? I was curious about it lately

Quoting Cubsrule (Reply 6):
Quoting TOMMY767 (Reply 4):
(although maybe a downgrade to a 757 from CVG?)

The 752 can't make it.

It sure can, DL flew CVG-AMS on the 757.


User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3016 posts, RR: 2
Reply 21, posted (3 years 5 months 1 week 2 days 4 hours ago) and read 6226 times:

Hopefully this won't affect GSP, as DL is ramping up capacity here in response to WN's entry, and we lost MEM service years ago anyway.


Finally made it to an airline mecca!
User currently offlineCubsrule From United States of America, joined May 2004, 22910 posts, RR: 20
Reply 22, posted (3 years 5 months 1 week 2 days 4 hours ago) and read 6205 times:

Quoting Flyguy89 (Reply 20):
It sure can, DL flew CVG-AMS on the 757.

. . . and CVG-CDG is longer.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineFlyguy89 From United States of America, joined Feb 2009, 1907 posts, RR: 9
Reply 23, posted (3 years 5 months 1 week 2 days 4 hours ago) and read 5947 times:

Quoting Cubsrule (Reply 22):
Quoting Flyguy89 (Reply 20):
It sure can, DL flew CVG-AMS on the 757.

. . . and CVG-CDG is longer.

...only by 13 miles, it's still do-able


User currently offlineCubsrule From United States of America, joined May 2004, 22910 posts, RR: 20
Reply 24, posted (3 years 5 months 1 week 2 days 4 hours ago) and read 5934 times:

Quoting Flyguy89 (Reply 23):
...only by 13 miles, it's still do-able


Did CVG-AMS operate year-round on the 752?



I can't decide whether I miss the tulip or the bowling shoe more
25 panamair : Completely hypothetical - just looking a the downgauging of a 744 to 777 on a transpac route (and the subsequent downgauging of an interport route si
26 as739x : Unless SLC has a beach that I am unaware of, no. I think what is implied here is the NRT-HNL service and possible GUM,SPN where many Japanese tourist
27 deltal1011man : DTW-PEK, ATL-PVG will take up a good bit of the slack for mod work. Plus ICN going daily and HKG will get 1x weekly back. I don't see how DL can do H
28 dbo861 : What is Delta going to do with all of these freed up 747s? Before they started the HND service from DTW and LAX the 747 utilization was very light. Co
29 sxf24 : At least one is in NRT as a hot spare.
30 SLCUT2777 : I'll be very surprised if it is a go this summer as planned. I'm also wondering if SLC-CDG is on the chopping block.
31 PSU.DTW.SCE : Likely to see an additional DTW-Asia flight upgauged to a 744, probably ICN. Cabin refurbishments can't be moved up since the schedule there is dicta
32 Flyguy89 : I was wondering the same thing. SLC-NRT is definitely still a 'developing' route with seasonal less-than-daily service that I'm sure DL would be fine
33 toobz : I would think that PDX-NRT would go before SLC-NRT. But on the other hand the PDX flight does do good as far as loads normally. But due to the decreas
34 sxf24 : As indicated earlier in the thread, the HND and beach market suspensions make up the vast majority of the capacity cuts. If any other US-Japan routes
35 BD338 : Given the prices I keep seeing on TATL routings from SLC via CDG it must be doing OK if DL can charge as much as they seem to every time I check! Eve
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