DAYflyer
Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 1:47 am

Read the following article-Analysis of DL financial situation which appeared today:

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050121/BIZ01/501210348/1076

Is DL bankruptcy imminent?
One Nation Under God
 
skidmarks
Posts: 6614
Joined: Fri Dec 10, 2004 7:51 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 1:50 am

They better not, I am flying to SLC with them in September!!  Angry
Growing old is compulsory, growing up is optional
 
Boeing7E7
Posts: 5512
Joined: Sat Jul 31, 2004 9:35 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 1:50 am

$1.4 Billion was in special charges that they won't see in the coming months.
 
User avatar
foxecho
Posts: 606
Joined: Tue Dec 12, 2000 12:43 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 2:15 am

Dayflyer-
no.

The pilots and our pay cuts had not kicked in for the Majority of Q4, the pilots paycut did not kick in till Dec 1 and any benefit of that was probably negated by the Comair disaster.....The rest of the company's paycuts came Jan 1 05...we may see the changes for the better on the next report for Q1. I know there are more factors so don't flame me for leaving out stuff I can't think of right now.....but no one seems to have brought these factors up either...

Fly Widget Fly!

Andrew

JFK/MEM/MCI
..uh, we'll need that to live......
 
Indy
Posts: 3979
Joined: Thu Jan 20, 2005 1:37 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 2:16 am

The article says they went through $300 million in cash in the quarter. Anyone know how much cash they have left?
Indy = Indianapolis and not Independence Air
 
ual747den
Posts: 1472
Joined: Sat Dec 27, 2003 1:29 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 2:18 am

Yes I think it is. I dont know why they haven't done it yet, its obvious that they need to renegotiate in order to be competitive and stop loosing so much money. I think that the only reason that they have not is for pride and that is the wrong reason. Today business use Chap. 11 as another business tactic and they need to realize this and use it before its too late and they end up with a little amount of cash on hand have to titter on the edge of liquidation like US is now.
/// UNITED AIRLINES
 
Indy
Posts: 3979
Joined: Thu Jan 20, 2005 1:37 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 2:20 am

Waiting too long was nearly the death penalty for TZ.
Indy = Indianapolis and not Independence Air
 
DAYflyer
Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 2:38 am

I think that foxecho makes some good points in reply 3 that are worth considering; however, $20 Billion is a crapload of debt. Yes there were some very hefty 1 time charges this qtr, but they lost $400 Million without those charges I believe.
One Nation Under God
 
LongbowPilot
Posts: 526
Joined: Mon Jan 17, 2005 4:16 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 3:38 am

However, Delta hasn't taken out the Government loans like US and UA has it?

 
NWAFA
Posts: 1843
Joined: Wed Dec 31, 2003 10:30 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 3:40 am

No Delta has not like US..United did not get a loan from the Government..they just keep getting extension after extension after extension after extension form the BK judge to file a plan.
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
LongbowPilot
Posts: 526
Joined: Mon Jan 17, 2005 4:16 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 3:47 am

It shows great character of the board to not sink to the chapter 11 before you are at the wits end. It shows the financial world that Delta is trying to kick start the car without callin time out.

 
User avatar
ERJ170
Posts: 5498
Joined: Thu Apr 15, 2004 11:15 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 3:58 am

When is Delta going to announce the new Song flights? Are there supposed to be new domesticate destinations also, new international destinations, or just added frequency?
Aiming High and going far..
 
ltbewr
Posts: 12500
Joined: Thu Jan 29, 2004 1:24 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 4:03 am

I would suggest that it isn't imminent, but could be possible if economic and other issues continue to press them, like an upward spiral of oil prices, a stagnating economy, a failure of management to cut some money losing routes, not being able to get long term labor costs control then we could see it later this year.
 
727LOVER
Posts: 6796
Joined: Tue Oct 09, 2001 12:22 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 4:49 am

However, Delta hasn't taken out the Government loans like US and UA has it?

Those loans were available in 2001 and 2002. They have expired now. If they were still available, DL probably would apply. So using the US/UA comparison is apples and oranges.
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
aa777jr
Posts: 2269
Joined: Tue Feb 17, 2004 12:03 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 4:50 am

When will DL run out of $$$


Regards
A liberal is a man who is right most of the time, but he's right too soon.
 
panamair
Posts: 3774
Joined: Fri Oct 12, 2001 2:24 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 6:17 am

Delta's cash position at Dec 31, 2004 was $2.1 billion, of which $1.8 billion was unrestricted cash. So, no they are not going to file for Chpt. 11 in the next two quarters at least. If the economy and traffic hold up and if fuel prices do not go up further, they may never need to, especially since the cost savings will start kicking in throughout 2005.

If you look at the numbers closely (after clearing all this smoke about the "largest loss in history", etc.) - I tend to look at the Operating Expenses vs. Operating Revenues numbers since that reflects the core of how Delta is functioning, their operating expenses for Q4 2004 after subtracting the one-time "Impairment of intangible assets" of $1.9 million, was $4.02 billion compared to $3.98 billion for Q4 2003 - and this was with a whopping increase in fuel costs from $510m in 2003 to $895m. Their operating loss for Q4 2004 came in around the same as Q4 2003 despite the 76% rise in fuel costs. If fuel prices remained at the Q4 2003 level, they would have reported a much smaller operating loss of $21m this quarter, compared to $365m in the same quarter last year.

Once the labor savings and additional cuts take effect throughout 2005, you should see improvements (though still probably losses) progressively through the 2005 quarters.

Another hopeful sign is that early results after the rollout of Simplifares is that yields and bookings have been largely in line with expectations, and there has been a "significant improvement" in the load factor
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 6:59 am

What's funny about Simplifares is that all Delta did was do away with a number of fare classes that they very rarely used at all.
http://www.aviationplanning.com/predict2005.htm
Scroll about 2/3rds down, under "Airline Trends"

A $2.2 Billion loss in one quarter does not bode well for DL. I say that a June or July filing could be possible if they have another 10-figure loss for the quarter, even with the employee cuts. The bulk of the current quarter includes some of the slowest travel times of the season, and coupled with the ever flucuating fuel costs (DL is not hedged), things could rough for DL.
 
777STL
Posts: 2770
Joined: Mon Dec 13, 2004 8:22 am

Bankruptcy

Sat Jan 22, 2005 7:38 am

"Yes I think it is. I dont know why they haven't done it yet, its obvious that they need to renegotiate in order to be competitive and stop loosing so much money. I think that the only reason that they have not is for pride and that is the wrong reason. Today business use Chap. 11 as another business tactic and they need to realize this and use it before its too late and they end up with a little amount of cash on hand have to titter on the edge of liquidation like US is now."

You do realize there's reprecussions to entering bankruptcy don't you?

Bankruptcy isn't something you do and then everything is hunky dorry. Just ask TWA...

-77
PHX based
 
panamair
Posts: 3774
Joined: Fri Oct 12, 2001 2:24 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 9:17 am

"A $2.2 Billion loss in one quarter does not bode well for DL. I say that a June or July filing could be possible if they have another 10-figure loss for the quarter, even with the employee cuts. The bulk of the current quarter includes some of the slowest travel times of the season, and coupled with the ever flucuating fuel costs (DL is not hedged), things could rough for DL. "

For the umpteenth time, the 10-figure loss for the quarter included a large accounting NON-CASH item. Whether one enters Chapter 11 is dependent on your CASH position, not your net losses, etc. Delta did not lose 10 figures in cash or from an operational standpoint.
 
ual777contrail
Posts: 2914
Joined: Sun Feb 17, 2002 11:33 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 11:06 am

If you have so much money, BK isn't an option.


United did not get a loan from the Government..They just keep getting extension after extension after extension after extension form the BK judge to file a plan.

NWAFA, You are always so vocal how much you think UAL is playing the game. Wouldn't NWA if they were in the same boat? Of coarse they would, you know that, I know that, but you don't want to believe that.

UAL 777 CONTRAIL
 
ouboy79
Posts: 4114
Joined: Sun Nov 18, 2001 1:48 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 11:51 am

United didn't get a loan from the government, and funny...neither did US Airways. People's inability to understand the ATSB process is completely mind boggling. ATSB is nothing but a co-signer when it comes down to it. If the airline defaults on the loan, then the government is stuck with paying it. So none of your precious tax dollars have gone to any airline...US Airways, America West, etc.

For the record...as most should know, the ATSB turned down United's application for the guarantee 3 times.
 
Tango-Bravo
Posts: 2887
Joined: Sun Jun 17, 2001 1:04 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 12:06 pm

They better not, I am flying to SLC with them in September!!

Not to worry! If Delta does indeed file for bankruptcy, and has been paying any attention to United's exploitation of bankruptcy laws, Delta will be around for at least two more years... and after that be receiving extension upon extension upon extension upon extension... to its bankruptcy protection scam.
 
User avatar
ERJ170
Posts: 5498
Joined: Thu Apr 15, 2004 11:15 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 12:19 pm

Does anyone know if Song has already taken hold of their 12 new aircraft? The transition is in 9 days.. and the Song aircraft are supposed to be changed over by then, correct?
Aiming High and going far..
 
planemaker
Posts: 5411
Joined: Mon Aug 25, 2003 12:53 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 12:23 pm

As Panamair has already pointed out, DL has $1.8-billion in unrestricted cash... up from $1.5-billion a year ago. So Chap. 11 is not imminent!

IMHO, I speculate that perhaps a completely "unintended" part of the Simplifare strategy is to "help" US Air exit the scene (of course helped along by the "unintended" frontal attack by SWA). DL & US have a 60% overlap of revenues.


"What's funny about Simplifares is that all Delta did was do away with a number of fare classes that they very rarely used at all."

Just how many transcon unrestricted 'walk-up' DL fares were $499 or less... and didn't require a Sat night stay???
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
WindowSeat
Posts: 1200
Joined: Tue Sep 23, 2003 3:01 am

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 12:30 pm




Delta's position may be bad, but nothing that will force them to go for Chap 11 in the near future. Fuel costs continue to be unpredictable and there's nothing anyone can do about it. With Delta's cash hovering around $2 billion, they are in a sound position inspite of losing $5m a day. It is when the cash gets below the $1.4 billion mark, that their fingers inch towards the panic button. The huge savings in pilot costs will kick in during Q1 2005 and the new fares structure will bring in the business travelers which they need right now. So, lets not jump the gun here. Delta maybe struggling, but there is light at the end of the tunnel.

cheers


I'm all in favour of keeping dangerous weapons out of the hands of fools. Let's start with keyboards.
 
RyanAFAMSP
Posts: 144
Joined: Mon Nov 08, 2004 4:24 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 5:42 pm

I just have to point it out.

Delta has the lowest level of unionization in the industry except for jet Blue and Skywest. The employees have given back everything Delta has asked for, union and non-union.

Yet Delta lost more money in a single quarter than Eastern lost in the entire Frank Lorenzo debacle. Meanwhile WN is making money, and NW is much more stable than their southern, non-union brothers at DL.

The bottom line is I think we need to think past blaming employees for the crisis in the airline industry. Employees can be forced to give back all the gains they have earned in their careers, and surprise! Their non-union airline, if the rate continues, could lose all the money the industry has made in its history in a single year.
 
planelymad
Posts: 20
Joined: Mon Jun 28, 2004 6:15 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 7:39 pm

RyanAFAMSP

Interesting then that the unionized pilots at Delta are the most highly paid in the industry and pretty well remain so even after the pay cuts, with pilots from competitors also sacrificing pay - driven by economic realities and nothing else. I would not be surprised to see them having to make further sacrifices later in the year or next to avoid a DL Chapter 11 filing. Clearly the current savings are not enough to generate profitability, but perhaps just enough to reach breakeven.

The negotiating power held by pilot groups is out of proportion to that of other employee groups. Note that the Comair pilot strike and subsequent shutdown took months of income away from every employee group including the relatively poorly paid ground staff. Pilots work only a fraction of the hours of other groups (particularly senior pilots at mainline) - although granted they carry responsibility and sometimes stress as part of the daily routine. A ground agent being ganged up on by even just a few angry delayed passengers is just as stressful to them but they handle it on relatively low pay.

Does this all seem fair to you? I don't think a call for sympathy for relatively highly paid pilots (and in this I exclude junior pilots at the regionals who I would agree are badly paid) is going to get much attention - it's tough out there for all employees and most don't have their lifestyle and perks.

And more on topic, no DL bankruptcy is not imminent, but must be seen as a high probability towards the end of the year/early next if fuel prices remain high and they don't get cost savings beyond those planned.
 
Zweed
Posts: 435
Joined: Fri Apr 23, 2004 8:31 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 8:17 pm

Boys

its all up to the market. If the market believes/wants Delta to go down. Delta will go down.
Luckily this is not the case. Many bankers believe that DElta in a short matter of time will ahve their finances back to healthy status.

Delta is not at all concidered to be a risk when it comes to asset management as United or US Airways.

 
GSPITNL
Posts: 342
Joined: Tue Oct 28, 2003 1:10 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 10:54 pm

Yes I agree with Zweed.

Delta is in a very bad position today, but guess what...Delta
will pull right back to the strongest airline they have always been.
The thing that irks me about most of you guys is you are waiting
for someone to fall. Get a life, Delta is here to stay and they will
always be here!

This unites us Delta people even more when we read these kinda
posts. So Keep on, all you self proclaimed DL haters are just making
us a stronger company and we will be here to wipe your eyes when
we come back to #1 in financial strength.

DL is always #1!
Fly Delta - The Only Way To Fly! Silver Medallion Baby :)
 
Zweed
Posts: 435
Joined: Fri Apr 23, 2004 8:31 pm

RE: Is DL Bankruptcy Imminent?

Sat Jan 22, 2005 11:24 pm

What Delta actually has managed to do is to create a great economic plan that will bring the numbers back in black.
These changes has been done in all fields i.e cutting wages, saving costs where it is possible. Splitting up costs to see where they come from and where they go.
This is what the market wants.

So you guys who think that Delta might go down even this year. I'd suggest you think before you write or get some education in finance/economics.
If they would continue at this pace, it would take less than 2 years before a chap. 11 would become an issue for Delta.
But this will not be the case since we have seen some very drastic and good changes in Delta already. And these changes have started to take effect already.
 
planemaker
Posts: 5411
Joined: Mon Aug 25, 2003 12:53 pm

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 12:27 am

But this will not be the case since we have seen some very drastic and good changes in Delta already. And these changes have started to take effect already.

FYI, I already said that Chap. 11 is not imminent.

All these changes are all good and well BUT...... no one is highlighting the very obvious fact that ALL the legacy carriers are "copying" every other airlines' "drastic changes" so that in the end none has an advantage.

As soon as one airline drops their fares... the rest have to match them. As soon as one airline cuts employee costs... the rest "have" to match them. The legacy carriers seem to be in a suicidal death-spiral of cuts, cuts, cuts...

And to add to the legacy woes, take a gander at LCC aircraft deliveries for the next 5 years!! (Not to mention any potential new LCC entrants.) The capacity glut only stands to get much worse.

The losses obviously can't continue... so when will it end???????
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
bucky707
Posts: 954
Joined: Sat Aug 19, 2000 2:01 am

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 1:03 am

The author of this article (James Pilcher) has had it in for Delta for years. Do a search of his articles and see if you can find one complimentary thing he has said about Delta. I stopped paying attention to his articles about long ago.
 
isitsafenow
Posts: 3413
Joined: Sun Feb 01, 2004 9:22 am

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 1:18 am

Comparing PANAMAIR's post number 12, NWA had 2.61 billion dollars with 2.46 unrestricted after Dec 31st. This is good news if you work for or fly NWA like I did and do. NW is a smaller company than DL with more cash on hand. NW in my opinion of American business, will survive this ordeal the carriers are in with a little help from management, employees and their faithful clients. CO should be another survivor when this problem goes away but I do not hold the same believes for the other 4 of the "big six".
Alaska could either grow and prosper or be purchased.
HP will probably be purchased before they close up shop. They are NOT in serious shape today.It's a good company with smart leaders.
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
DAYflyer
Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 1:26 am

I cetainly hope DL does not go bankrupt. That would trigger a lot of layoffs and such that the hard working people do not need. I am NOT anti-Delta. I have flown them many times out of CVG.

As for the cash position of the company, $1.5 Billion is pretty good, but we are still talking about a cash-intensive industry here. As many of you have pointed out, it can go quick depending on many factors.

I do hope the pay cuts and sacrafices turn around this airline, and I hope that the management team get's it's act together to prevent another huge loss like this. If they continue to brun through cash at $300 Million a qtr, $1.5B wont really last that long, so let's all hope the plan works!
One Nation Under God
 
GSPITNL
Posts: 342
Joined: Tue Oct 28, 2003 1:10 pm

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 3:52 am

Now that is the best thing you could have said Dayflyer!

Here is to Delta Air Lines!
Fly Delta - The Only Way To Fly! Silver Medallion Baby :)
 
ual777contrail
Posts: 2914
Joined: Sun Feb 17, 2002 11:33 am

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 4:21 pm

~~~~~The author of this article (James Pilcher) has had it in for Delta for years. Do a search of his articles and see if you can find one complimentary thing he has said about Delta. I stopped paying attention to his articles about long ago.

Kind of like Michael Boyd is to United. Smile

ANALyst is more like it.

UAL 777 CONTRAIL
 
MD-90
Posts: 7835
Joined: Mon Jan 17, 2000 12:45 pm

RE: Is DL Bankruptcy Imminent?

Sun Jan 23, 2005 6:12 pm

I don't think that Michael Boyd has it in for United. It seems to me that their situation really is that grim.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos