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

DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 3:05 am

Article today in newspaper (lost link...sorry about that) said two more analyst had downgraded DL stock on fuel cost issues, said "Bankruptcy very likely unless they get major cost concessions within 2 months".

Will DL be the first major to really tank??

[Edited 2005-08-10 20:05:45]
One Nation Under God
 
Guest

RE: Dl Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 3:13 am

Quoting DAYflyer (Thread starter):
Article today in newspaper (lost link...sorry about that) said two more analyst had downgraded DL stock on fuel cost issues, said "Bankruptcy very likely unless they get major cost concessions within 2 months".

There's a shock. They've been saying this for what...two years now?

Quoting DAYflyer (Thread starter):
Will DL be the first major to really tank??

Um, what does "really tank" mean? This doesn't sound like any economical description I've ever heard of. Do you mean liquidate? 500 things could happen before that's even a remote possibility.

How you can take an airline that hasn't even filed for BK yet and ponder if extinction will happen shows a huge lack of understanding of how the process works.

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

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 3:19 am

Quoting NonRevKing (Reply 1):
Um, what does "really tank" mean? This doesn't sound like any economical description I've ever heard of. Do you mean liquidate? 500 things could happen before that's even a remote possibility.

How you can take an airline that hasn't even filed for BK yet and ponder if extinction will happen shows a huge lack of understanding of how the process works

It was a speculatice question to be pondered not by bean counters; and yes there are things that could happen. And no I do not undestand, nor have EVER claimed to understand the entire BK process. However, I'm sure you will be happy to enlighten us with your magical all knowing ways....  Yeah sure

However, with the need for additional concessions in labor costs, and DL already having been to the trough several times for that already, where else can they cut ? Peanuts & Pretzles ??
One Nation Under God
 
Guest

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 3:28 am

Quoting DAYflyer (Reply 2):
However, I'm sure you will be happy to enlighten us with your magical all knowing ways....

Well, I'm no Wall Street guru, but with my modest college education, I can tell you first would be filing for Cpt 11, restructuring, coming out, possibly doing it again, then if all else fails, chapter 7, which would THEN mean stopping operations. We're talking YEARS here.

See topic: "USAirways" for a reference  Wink

B
 
panamair
Posts: 3761
Joined: Fri Oct 12, 2001 2:24 am

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 4:14 am

Quoting DAYflyer (Reply 2):
However, with the need for additional concessions in labor costs, and DL already having been to the trough several times for that already, where else can they cut ? Peanuts & Pretzles ??

Actually, DL has not been to the trough several times. Grinstein has resisted that route for a while now because of the potential impact on morale. The pilot concessions last year was the first and only time since their industry-leading contract ("United+1") during the heady days; the non-union employees' direct 10% cut earlier this year was also the first in a while. And frankly, 10% was not a huge chunk (though I'm sure some DL employees would disagree).

The talk now is that the non-union employees may get another 5-10%. Also an article in the Wall St. Journal about pilots considering additional concessions (as part of a broader DALPA election story)
 
DAYflyer
Topic Author
Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 4:45 am

Quoting Panamair (Reply 4):
Actually, DL has not been to the trough several times.

Really, I had thought that they had, with all the previous pilot concessions and the $5 Billion in published "labor and other savings" they boasted about last year.
One Nation Under God
 
User avatar
OzarkD9S
Posts: 4748
Joined: Tue Oct 23, 2001 2:31 am

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 4:52 am

Braniff tanked.

Eastern tanked.

Pan Am tanked.

Delta will go CH 11 before they are even close to "tanking".

So it would be the ummmm, FOURTH major to tank, hardly the first.
Next up: STL-OAK-RNO-LAS-ICT-STL
 
jetblueatjfk
Posts: 1556
Joined: Sun Jan 02, 2005 4:42 am

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 5:06 am

As Ozark said, Braniff, Easter, Pan Am, they tanked, TWA was bouth out and fell, all the old big carriers tnaked or left and now UA, US, DL all have problems (US is fixing but they won't be totally cured). So, I don't see anyone failing soon but someone will come very close in the next 2/3 years and may fold.

 airplane jetBlueAtJFK airplane 
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 5:29 am

if I can recall, a deal that DL had a while ago, including American Express, they have signed away quite a bit of their assests..so if they file for bankruptcy, they will have lots of problems...

they have $14 billion in debt and $5 billion in pension liabilities..

i've been saying all along, it will take the ending of one of the majours before this problem all is said and done..
"Up the Irons!"
 
hoya
Posts: 453
Joined: Wed Jun 23, 2004 2:25 pm

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 5:43 am

I don't know, I may be wrong here, but after reading about DL's financial woes, I have the opinion that DL might be in actual worse shape now than UA, and is more likely to fail than UA. Yes, UA is in bankruptcy now, but they have been able to cut a lot of costs, renegotiate the leases, and have made a small operational profit. DL keeps losing a ton of money, and I believe that many of their assets were used as collateral in the AMEX deal. Correct me if I'm wrong, but UA has survived bankruptcy for so long because it used its assets as collateral for the DIP financing. If DL did sign away many of their assets, they won't have much to use as collateral for DIP financing, making any potential(likely) Chapter 11 filing extremely difficult.
Hoya Saxa!!
 
Lono
Posts: 1136
Joined: Sun Apr 04, 2004 5:47 pm

RE: DL Lost More Cash Chap 11 Possible

Thu Aug 11, 2005 6:08 am

Quoting Hoya (Reply 9):
If DL did sign away many of their assets, they won't have much to use as collateral for DIP financing, making any potential(likely) Chapter 11 filing extremely difficult.

That is my recollection.... And Grinstein has stated numerous times they are hesitant to enter ch11 because of this.... It could get real ugly real fast....
Wally Bird Ruled the Skys!

Who is online