stlgph From United States of America, joined Oct 2004, 9744 posts, RR: 25 Posted (3 years 11 months 2 weeks 5 days 20 hours ago) and read 17096 times:
Highlights from this morning -
- 4th quarter profit margin outlook boosted on increase of fares
- lost money on Europe this year, expects profit return in 2012
- int'l. travel demand falls 7.4% for Delta, above industry rate of 3%
- Latin America travel demand rising, outperforming Atlantic/Pacific
- Japan is 10% of revenue
- fuel costs rose 30% this year
- expects 2011 profit of $800 million
- expects full profit in 2012
- will continue to 2/3% network cuts
- expects $150-$200m savings in smaller jets in coming years
- financial services bookings up 19% in last four weeks
- corporate travel revenue up 14% in past month
- DAL sees opportunities in AMR restructuring
- DAL expects more industry consolidation
if assumptions could fly, airliners.net would be the world's busiest airport
AMR being in bk or not, I don't see then encroaching on the true hubs like DFW or MIA. I do, however, see them cherry picking others and capitalizing on their state but grabing more corporate contracts in LAX and LGA. With the LGA swap, it's almost certain that AA will loose out on a lot more traffic and contracts than they already have over the past 12 months. I think LAX will be a huge focus for Delta in 2012. And as i've stated before, rumor is they've been trying to pry the RDU-LHR subsidy from them for almost 2 years now. DL has grown a pretty nice operation at RDU over the years and the station hovers around 50 flights a day; a little more during the summer months.
Quoting 727LOVER (Reply 4): I'm curious if Japan traffic has recovered since the disaster.
It has but not fully. That should speak volumes with the fact that they say it accounts for 10% of revenue. That's HUGE. They've also been doing nicely on Asia-Hawaii.
My biggest question. It may simply mean, we will steal more of their traffic and corporate contracts, or it may mean something bigger. Who knows. I've also 'heard' that US has been eyeing SkyTeam for a while. Let's face it. they are the ugly redhead stepchild, much like CO was in ST. As the old saying goes, if you can't beam-em, join-em.
FlyASAGuy2005 From United States of America, joined Sep 2007, 7308 posts, RR: 7
Reply 10, posted (3 years 11 months 2 weeks 5 days 18 hours ago) and read 16189 times:
Quoting panamair (Reply 7): Made lots of money on transatlantic during peak season, but the low winter season always comes back and eats away all the summer profits. Hence the big transatlantic capacity cuts for this winter.
RA himself said earlier in the year that they are done with making tons of money over the summer only to give away the farm towards the end of the year. Makes sense IMHO.
Quoting panamair (Reply 7): Overall Q4 2011 RASM growth of 11-12%:
October saw 10% growth year-over-year
November saw 14.5% growth year-over-year
December coming in at 11-12% growth.
The numbers are truly exciting to watch and I look forward to what 2012 has in store. 2011 also proved to be a great year operationally. 2011 summer vs 2010 was like night and day. All hubs have been breaking internal records as far as bag deals, on-time performance, customer complaints, etc. Have to keep the momentum going through next year.
Definitely. No doubt in my mind.
It may even involve DL, as union issues with PMNW are resolved, for now.
This industry is extremely costly to operate. More consolidation makes sense. It would also help the CRJ "issue". Will it benefit some, hurt others? Sure.
Cubsrule From United States of America, joined May 2004, 24137 posts, RR: 21
Reply 13, posted (3 years 11 months 2 weeks 5 days 18 hours ago) and read 16017 times:
Quoting FlyASAGuy2005 (Reply 6): I've also 'heard' that US has been eyeing SkyTeam for a while. Let's face it. they are the ugly redhead stepchild, much like CO was in ST. As the old saying goes, if you can't beam-em, join-em.
The trouble is that US brings nothing to Skyteam. CLT is a weaker version of ATL. PHL is a weaker version of LGA/JFK. PHX isn't good for much of anything that SLC and LAX aren't.
I can't decide whether I miss the tulip or the bowling shoe more
stlgph From United States of America, joined Oct 2004, 9744 posts, RR: 25
Reply 14, posted (3 years 11 months 2 weeks 5 days 17 hours ago) and read 15825 times:
More tidbits to share --
Delta sees "lots of opportunities" in markets AirTran dropped
Delta execs see AirTran as "less aggressive" than usual
NYC aviation market is worth $14 billion in total
Pilot deal expected by end of 2012
84% of 160 million annual passengers check in digitally
Bookings up at Delta.Com by 4%
More than 1 million people a day visit Delta.com
if assumptions could fly, airliners.net would be the world's busiest airport
peanuts From Netherlands, joined Dec 2009, 1586 posts, RR: 4
Reply 17, posted (3 years 11 months 2 weeks 5 days 17 hours ago) and read 15604 times:
Quoting BoeingGuy (Reply 9): I wonder what they are expecting in terms of further consolidation, that they buy out AS and then gut it like US PSA or AA QQ, which is what likely would happen.
Not always. It depends on the reasons as to why a carrier is being merged/acquired.
I think we need to take another look at how this is done in the US. Sometimes we are just too focused on changing (integrating) everything over too quickly in order to get the maximum synergy cost savings as quickly as possible.
Ignoring any potential regulatory road blocks, here are my two theoretical examples as crazy as they may seem, just to get my point across:
US Airways. A merger with DL would likely result in full integration/dismantlement of US. CLT and PHL are just too close to existing hubs. US doesn't serve a "niche". they are a full blown east coast competitor.
The stronger brand of the two should remain.
AS and/or HA: These are successful carriers that have a "niche", "boutique" feel to them. DL would be foolish to tarnish with that image. At the expense of not getting full synergy cost savings with a merger, I would keep the brands intact. The pay off long term could be huge. AS is a great example of a carrier that needs to keep its identity within the larger company. It could work. Also, give them all the LOCAL/REGIONAL operations west of Denver, including hub SLC.
HA could also make money for DL as a somewhat autonomous operation.
I know, US carriers have an awful track record with their own "spin-offs". Let's look at Asia and maybe try something different this time around.
[Edited 2011-12-14 10:05:12]
Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
panamair From United States of America, joined Oct 2001, 5193 posts, RR: 24
Reply 18, posted (3 years 11 months 2 weeks 5 days 17 hours ago) and read 15477 times:
- $375m CapEx in Q4, including the $100m investment in GOL
- Q4 profit sharing expense expected to be $75m
- Interesting slide of DL's corporate business make up:
-19% Financial Services (last 4 wks booked revenue up 19% Y-O-Y)
-17% Manufacturing (up 10% Y-O-Y)
-14% Technology (up 16% Y-O-Y)
- 9% Health Care (up 20% Y-O-Y)
- 7% Auto (up 16% Y-O-Y)
- 3% Banking (up 5% Y-O-Y)
- 2012 non-fuel unit cost increases (est. up 2 to 4%) attributed to:
- Wage cost harmonization, industry standard rates, pension (low interest rates, etc.)
- LGA terminal renovation costs: connector between Terminals C and D, renovation of Terminal C (start March 2012)
- ATL Terminal F (ATL capacity to be flat year-over-year)
- Capacity reduction (fixed cost/overhead absorption)
- New 4-year agreement with AMEX for pre-purchase of miles: $675m to Delta every December for four years interest-free (with "payback" to AMEX in peak summer every year) will help smooth out cash flow during the year (cash to Delta at start of the weak winter period).
- Airport/reservations staff are now only 60% full-time postions and FA temp leave programs helps airline with huge capacity differential between summer peak and winter lows
- About 20-25% of revenue base is from 'managed' corporate traffic. Corp. traffic is down 10-15% relative to the peak of 2007-2008. Domestic is above and ahead of 2008 because of reduced capacity, better product, merger benefits. Premium international is still 10-15% below 2008.
- Flight attendants: strategy is for US-based FAs to do international flying, that's why hiring of language FAs continues. PMNW foreign-based FAs - numbers decreasing - didn't say whether will keep or eliminate them.
- Japan: $100m in revenue benefit anticipated for 2012 due to market recovery
- Looking to further develop alliance(s) with MU and CZ. DL's current slot portfolio at PEK and PVG does not allow for meaningful domestic connections to MU and CZ flights.
- No big new international markets for 2012. Fine-tuning and optimizing what's there now.
- Latin America growth is mostly coming from upgauging. North America - slow but positive growth and good earnings momentum. Europe - anticipating recession next year so planning accordingly (with capacity cuts in the JV)
- Interesting slide about RASM: DL vs industry average Q3 2007 vs Q3 2011:
- Domestic: Was 104%, now 105%
- Transatlantic: Was 93%, now 100%
- Transpacific: Was 98%, now 106%
- Latin: Was 87%; now 88%
- Overall System: Was 100%; now 102%
- LGA slot swap: beef up existing markets with some new markets. 100 new flights to 29 new destinations (I'm sure some of these destinations will be 'new' to DL, but were formerly served by US anyway). Expect >$100m investment in facilities
- NYC: given DL's capacity in NY, should really be getting an additional $200m in revenues. Gap closing (used to be around $300-$350m gap). DL's NY market share grown 3.5 pts from 2009 to 2011, which translates to about a $100m gain. Share gain in primary business markets has been bigger. Brand awareness of DL in NYC now is highest it has been.
- NYC travel market as a whole is $14bn; $8bn is domestic.
- Paid load factor in F (domestic) has risen to 30%; First Class upsells help
- 84% of DL pax check in digitally now. Mobile to account for 10% of check-ins in 2012. Revenues generated through booking on delta.com = >$8 billion in 2011.
- delta.com still on antiquated platform; new platform to debut in phases, starting in April 2012.
FURUREFA From United States of America, joined Feb 2004, 819 posts, RR: 2
Reply 20, posted (3 years 11 months 2 weeks 5 days 16 hours ago) and read 15311 times:
Quoting panamair (Reply 18): - Airport/reservations staff are now only 60% full-time postions and FA temp leave programs helps airline with huge capacity differential between summer peak and winter lows
I'm even further convinced that the Ready Reserve program gives DL a HUGE advantage in the area of labor costs. DL is really unique in that its much cheaper for the company do staff its own above-wing employees domestically than contract out.
Ready Reserve is unique in the industry, and I think that will be a major advantage against UA and AA.
Trust and believe that the entire union spat and keeping them out had almost everything to do with the RR program. I don't think they would loose it but the headcount would go down dramatically, with benefited positions going up.
Idk about that indiansbucs. DL will ALWAYS be left with the low hanging fruit in MIA. American Airlines is Miami and the bk will not change that. DL does not have the resources to but up the kind of agressive campaign needed to make a dent in the market. I think what RA/Bastian is talking about is crippling AA in LGA and LAX through corporate and premium traffic. If you look at corporate contract growth YoY for DL, the numbers are through the roof. They've bee. Taking a piece of the pie, little by little, quarter by quarter and it will only get worse IMHO.
A jewel that I don't see many talking about is JFK-LatAm/Caribbean. They've been relatively weak in the market compared to B6 and AA. In the DR for example, JetBlue has been printing money for quite a while now. I think DL could do much better in this arena and much of the growth can be made organically with what they have and won't take much resources.
[Edited 2011-12-14 10:58:23]
What gets measured gets done.
: Since the 2nd quarter saw $200M profit and the 3rd quarter saw $550M, that means they're only expecting a profit of $50M for the 4th quarter? How cou
: True, though DL is cutting Transatlantic capacity even for next summer. Remember though that DL had a loss in the 1st quarter, so I expect the profit
: What really disappoints me is that they are not planning any new big route announcements next year. With ATL to PVG now suspended I was hoping for an
: GAAP Net Profit: Q1 2011: -$318m (loss) Q2 2011: +$198m Q3 2011: +$549m Therefore Q4 2011 should be a Net Profit of $370million.[Edited 2011-12-14 11
29 DL WIDGET HEAD
: I must have missed this comment from the webcast. Despite the 2-3% capacity reduction planned for next year I wouldn't be surprised by a "big" route
: $318 million loss in the 1st quarter of this year. oh, and for what it's worth E-Bay & GoGo InFlight teaming up to offer 30 mins free wifi on Delt
: If you read panamair recap of the presentation it states no big international route announcements for 2012.
: That's what they say now, based on the current market. Doesn't mean they can't drop a bomb or two next year if the opportunity presents itself...
: I'm hoping that you are more then right. All those idling wide bodies need work, they belong in the air. Well something that I just realized is that
: I understand what you meant, but it's MEL. MLB is that smaller town in Florida with the same name. But yeah, it would be nice to see DL expand to AKL
: Eagerness for growth is understandable. DL is going to grow in a measured way, however. There are a lot of things going on behind the scenes. Some pa
: So what's on the possible list for international growth? SLC-AMS PDX-CDG SEA-PVG SEA-LHR (again) LAX-AKL SJC-NRT
: Upgrade some of the RJ routes to mainline and I would agree. RDU recently (last 4 months or so I believe) became a connection opportunity. I believe
: They mentioned that specifically in their winning in NYC slides. For those interested, the call on PDF below. Very interesting read and well put toge
: It's no surprise to me at least, that after DL focused so much on expanding international flying to the point where it is almost the only profitable v
: What are you talking about?? You have it backwards. Europe-USA has been booming because of the weak USD. Europeans have been able to afford relativel
: Which 140 less efficient aircraft does Delta plan on retiring? I know they want o eliminate the 50 seat RJs and the Saab 340s. I do not know the numbe