JammyBritton27
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DAL Q4 2019 earnings thread

Tue Jan 14, 2020 12:10 pm

Total revenue grew to $11.4 billion, up 7% over prior year when prior year period is adjusted for sale of DAL Global Services (DGS). Adjusted EPS of $1.70, a 31% increase year over year; above guidance of $1.20 to $1.50.

https://ir.delta.com/news/news-details/ ... fault.aspx

Q4 profit rises 8% beats estimates. For fiscal 2020, DAL expects to deliver another year of strong results, including EPS of $6.75-7.75 as the demand for travel is healthy and its brand preference is growing.

LIVE UPDATE: https://news.alphastreet.com/delta-air- ... dal-stock/
 
MIflyer12
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 12:27 pm

The earnings report notes that DL completed the sale of its stake in GOL, consistent with plans when it announced the intent of the LATAM transaction.

... a nine-cent net gain (per share) related to the unwinding of the GOL relationship
 
x1234
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:10 pm

I'm wondering why DL revenues in Asia Pacific keep falling considering the network that DL has with KE (KE is the foriegn airline that serves the MOST Chinese & Asian destinations by a landslide). They continue to see China softness, maybe the trade war is having an impact even though a deal is going to be signed very soon?
 
x1234
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:12 pm

Also another factor is that their partner KE STILL doesn't have 1-2-1 direct aisle access in J. Even China Eastern's new deliveries are 1-2-1 (A350, B787, B777).
 
MIflyer12
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:16 pm

It's not a trade war thing - U.S. business people and tourists still have reasons to visit China. The problem is Chinese carriers dumping capacity to the U.S.

For example, there are now flights from LAX to over a dozen cities in mainland China. You’d think fares for a 16,000 mile journey shouldn’t cost $320 in economy…

Or $1,700 (or often much less) in business class.

But the focus seems to be entirely on market share rather than profitability.

https://onemileatatime.com/chinese-airl ... -billions/
 
jetwet1
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:17 pm

x1234 wrote:
I'm wondering why DL revenues in Asia Pacific keep falling considering the network that DL has with KE (KE is the foriegn airline that serves the MOST Chinese & Asian destinations by a landslide). They continue to see China softness, maybe the trade war is having an impact even though a deal is going to be signed very soon?


I don't want to drag this thread to far off topic but, IMHO, when you have the major Chinese airlines and QR dumping fares into the market that DL and it's partners can't / don't match you will see weakness.

I'm seeing LAX-PEK-XXX for about $2200 RT, at those fares even the most loyal customer is going to think hard about flying anyone else.
 
MIflyer12
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:19 pm

It's not a trade war thing - U.S. business people and tourists still have reasons to visit China. the problem is Chinese carriers dumping capacity to the U.S.

For example, there are now flights from LAX to over a dozen cities in mainland China. You’d think fares for a 16,000 mile journey shouldn’t cost $320 in economy…


Or $1,700 (or often much less) in business class.


But the focus seems to be entirely on market share rather than profitability.

https://onemileatatime.com/chinese-airl ... -billions/

Even United is seeing declines in Pacific fares per passenger. http://ir.united.com/static-files/05e46 ... c3ce4a84d1
 
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zkojq
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:26 pm

Like I said years ago, the CN3 (and the tier two carriers) are far more of a threat to the ME3's profits than the ME3 ever would be
First to fly the 787-9
 
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enilria
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 2:28 pm

x1234 wrote:
I'm wondering why DL revenues in Asia Pacific keep falling considering the network that DL has with KE (KE is the foriegn airline that serves the MOST Chinese & Asian destinations by a landslide). They continue to see China softness, maybe the trade war is having an impact even though a deal is going to be signed very soon?

Here’s my opinion.

Delta bet on the wrong horse. While China has more potential than Japan, the Chinese are not going to allow USA carriers to dominate the market. So, their first strategy was to kill NRT for Chinese alliances and that has blown up IMHO. The fallback was Korean which is a great connect point, but the local market to Japan dwarfs Korea. So they have switched over to a hub that is much more connecting traffic dependent and those types of hubs are pretty much always less profitable.

I also don’t think NRT is going to be wiped off the map in terms of USA service. I think we are at a low point and it may start building again. It would be fantastic if DL abandoning NRT allowed a new USA carrier to add Japan, but even if it doesn’t I think DL may regret giving away their position in NRT in 5 years.
 
PSU.DTW.SCE
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 3:34 pm

Honestly, part of me wonders if DL isn't really just saying screw Pacific. Just fly HND, PEK/PXX, PVG from their core hubs, and flow the rest over ICN (AMS-style). The yield pressures are enormous and there is high opportunity cost. Double-down on domestic, Atlantic, and grow in Latin America.
 
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Polot
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 3:45 pm

PSU.DTW.SCE wrote:
Honestly, part of me wonders if DL isn't really just saying screw Pacific. Just fly HND, PEK/PXX, PVG from their core hubs, and flow the rest over ICN (AMS-style). The yield pressures are enormous and there is high opportunity cost. Double-down on domestic, Atlantic, and grow in Latin America.

Except for MNL, SYD, and a couple Japanese airports with maybe one flight to a DL hub that is essentially what DL does over the pacific.
 
SteelChair
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 3:51 pm

enilria wrote:
x1234 wrote:
I'm wondering why DL revenues in Asia Pacific keep falling considering the network that DL has with KE (KE is the foriegn airline that serves the MOST Chinese & Asian destinations by a landslide). They continue to see China softness, maybe the trade war is having an impact even though a deal is going to be signed very soon?

Here’s my opinion.

Delta bet on the wrong horse. While China has more potential than Japan, the Chinese are not going to allow USA carriers to dominate the market. So, their first strategy was to kill NRT for Chinese alliances and that has blown up IMHO. The fallback was Korean which is a great connect point, but the local market to Japan dwarfs Korea. So they have switched over to a hub that is much more connecting traffic dependent and those types of hubs are pretty much always less profitable.

I also don’t think NRT is going to be wiped off the map in terms of USA service. I think we are at a low point and it may start building again. It would be fantastic if DL abandoning NRT allowed a new USA carrier to add Japan, but even if it doesn’t I think DL may regret giving away their position in NRT in 5 years.


Hasn't the conventional wisdom to this point been that given the way the alliances fell out with ANA and JAL they had no other choice?

Doesn't seem to be hurting them too badly, since the entire Pacific segment seems to be struggling industry-wide.
Last edited by SteelChair on Tue Jan 14, 2020 3:54 pm, edited 1 time in total.
 
PSU.DTW.SCE
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 3:52 pm

Exactly. They aren't going to be flying secondary China, US Mainland - Southeast Asia or launching a bunch of stuff from other US gateways (e.g, JFK & BOS)

What you basically see is what you get.
I guess you could say the LAX stuff is essentially a loss-leader for market position/presence in LAX and maybe even SEA to an extent.
 
PSU.DTW.SCE
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 3:54 pm

I also suspect, that DL is going to go full-throttle on domestic capacity during peak summer 2020. I don't think we've seen all the capacity/frequency loaded into the schedules yet from the core hubs. Particularly more so if the MAX continues to stay grounded through peak summer.
 
ethernal
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 3:55 pm

Polot wrote:
PSU.DTW.SCE wrote:
Honestly, part of me wonders if DL isn't really just saying screw Pacific. Just fly HND, PEK/PXX, PVG from their core hubs, and flow the rest over ICN (AMS-style). The yield pressures are enormous and there is high opportunity cost. Double-down on domestic, Atlantic, and grow in Latin America.

Except for MNL, SYD, and a couple Japanese airports with maybe one flight to a DL hub that is essentially what DL does over the pacific.


I was going to say the same thing. Delta's ex-JV APAC network is basically nonexistent. Which is both good and bad for Delta: good right now since it reduces their margin pressure in the blood bath right now but bad in the sense that APAC has nearly half of the world's population and most GDP growth potential. So good right now, potentially long term bad.
 
LCDFlight
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 4:02 pm

It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.
 
PSU.DTW.SCE
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 4:05 pm

We've heard for close to 25 years now how Asia / Pacific was going to be the next goldmine, the horn-of-plenty, the new frontier for US-based carriers. By and large over that course of time, it has basically been a money loser, to mediocre at best.

Its highly cyclical, highly impacted by currency rates, highly impacted by economic factors, now highly competitive from carriers that have much different cost structures and the ability to flood low fares into certain markets, and the US carriers struggle to get lucrative Asian originating traffic.

Thats the story we heard in the 90s, and the same thing now. This isn't just a DL thing, just look at AA and ORD too.
 
PSU.DTW.SCE
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 4:08 pm

For perspective - in 4Q DL made less than 6% of passenger revenue in Pacific & 74% domestic.
They made 13 times more revenue domestically than they do in the Pacific.
 
tphuang
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 4:33 pm

Keep in mind they have to keep flying to Asia since corporate contracts and ff demand it. Someone in LA or Seattle may very well pick their domestic airline based on the service they can get out of that airline or its partners to Asia. The impact of TPAC is a lot more than just the 6% in revenue.

As for core hub growth, this must be a reaction to UA growth in middle of the country. Hard to see UAs' DEN700 plan not affect DL hubs at MSP and SLC. Also hard to see AA's plans at DFW/CLT not affect DL at ATL.
 
airtechy
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 5:09 pm

Well, I contributed my share of revenue to Delta's Pacific routes. A great year for Delta and I'm sure the employees will love the 1.6 billion in profit sharing!
 
DoctorVenkman
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 5:26 pm

LCDFlight wrote:
It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.


Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.
 
ethernal
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 5:44 pm

DoctorVenkman wrote:
LCDFlight wrote:
It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.


Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Well, Delta publicly says that the Atlanta hub is the "world's most profitable". We all broadly know/assume that LAX, JFK, BOS, and SEA are barely in the green due to the heavy competition in those markets.

So, from that perspective, I'd say that LCDFlight is right: it is ATL-CHS, ATL-JAX, and ATL-RDU that is making them money (scaled to the whole region).

Obviously a network does not operate in isolation, so it is wrong to say that LAX, JFK, BOS, and SEA are not critical to Delta's current network (many of those people in JAX may be connecting onwards to LAX or BOS for example) and their future growth. But let's be clear: cities like ATL, MSP, and DTW flying "boring" routes are what make most of Delta's bottom line - and that subsidizes (to an extent) their coastal hubs.
 
global1
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 5:47 pm

$1.6 Billion to be paid out as profit sharing to employees, equivalent to nearly a 17% bonus.
Unprecedented.

Congratulations to all my Delta colleagues for a stellar 2019, and thank you to all our customers who made this possible.
 
DoctorVenkman
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 6:03 pm

ethernal wrote:
DoctorVenkman wrote:
LCDFlight wrote:
It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.


Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Well, Delta publicly says that the Atlanta hub is the "world's most profitable". We all broadly know/assume that LAX, JFK, BOS, and SEA are barely in the green due to the heavy competition in those markets.

So, from that perspective, I'd say that LCDFlight is right: it is ATL-CHS, ATL-JAX, and ATL-RDU that is making them money (scaled to the whole region).

Obviously a network does not operate in isolation, so it is wrong to say that LAX, JFK, BOS, and SEA are not critical to Delta's current network (many of those people in JAX may be connecting onwards to LAX or BOS for example) and their future growth. But let's be clear: cities like ATL, MSP, and DTW flying "boring" routes are what make most of Delta's bottom line - and that subsidizes (to an extent) their coastal hubs.


I'd be more inclined to believe this argument with some solid numbers behind it. What's to say ATL isn't making all its money serving tier 1 cities both domestically and abroad?
 
FSDan
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 6:05 pm

DoctorVenkman wrote:
LCDFlight wrote:
It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.


Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


The thing is that it's not just some tier 2/3 cities, it's a bunch of them. LAX, NYC, BOS, SEA, etc. have a ton of competition, including ample capacity on LCCs which lowers fares significantly. Sure, there's plenty of premium traffic, but DL has to compete for it with often 2-3 other airlines. When DL is the #1 or #2 carrier in dozens of markets across the Midwest and the South, they can capture an outsized portion of the high value traffic in those markets without having to worry about competing with WN, B6, NK, etc. That traffic adds up.

Anecdotally, I used to live in Madison, WI, which was dominated by DL. From MSN, you can connect conveniently to a heck of a lot of the country through MSP, DTW, or ATL, with nonstops to SLC, DCA, and LGA being a bonus. Probably 90% of the business trips I went on while in Madison were booked on DL at often incredibly high full fare economy rates (the worst I remember was a MSN-ATL-MIA-ATL-MSN roundtrip for about $900 in Y). My company was a huge driver of business travel out of MSN (making the Business Travel News Corporate Travel 100 list), but isn't the only one in town either. And many other similar small-to-medium Midwestern and Southern cities similarly have a strong local business market with a handful of big companies that drive lucrative business travel demand.

If you want some evidence that DL is making a ton of money in these markets, look at UA following DL's lead and working to beef up their presence in the interior of the country after years of neglect. In MSN over the last few years, UA has added nonstops to SFO, LAX, and this summer to IAD, and has beefed up aircraft gauge to DEN and ORD. Also, look at the places UA is sending their new premium-heavy CRJ-550s: MSN, GRR, XNA, CAK, FSD, ICT, etc. They're making a play for the not-so-insignificant business markets in the hinterland of the U.S.
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 6:40 pm

DoctorVenkman wrote:
ethernal wrote:
DoctorVenkman wrote:

Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Well, Delta publicly says that the Atlanta hub is the "world's most profitable". We all broadly know/assume that LAX, JFK, BOS, and SEA are barely in the green due to the heavy competition in those markets.

So, from that perspective, I'd say that LCDFlight is right: it is ATL-CHS, ATL-JAX, and ATL-RDU that is making them money (scaled to the whole region).

Obviously a network does not operate in isolation, so it is wrong to say that LAX, JFK, BOS, and SEA are not critical to Delta's current network (many of those people in JAX may be connecting onwards to LAX or BOS for example) and their future growth. But let's be clear: cities like ATL, MSP, and DTW flying "boring" routes are what make most of Delta's bottom line - and that subsidizes (to an extent) their coastal hubs.


I'd be more inclined to believe this argument with some solid numbers behind it. What's to say ATL isn't making all its money serving tier 1 cities both domestically and abroad?

Those tier 2/tier 3 cities have little to no competition, so DL can command average fares much higher than they can to competitive destinations like JFK, LAX, and BOS. Someone used to post fare numbers for the major carriers. This was before all the big mergers, but DLs top ten were almost all ATL routes, and they weren't routes to the major cities, but rather smaller South Eastern cities with little to no option but to fly to ATL or CLT to connect elsewhere.
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LCDFlight
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 6:42 pm

DoctorVenkman wrote:
ethernal wrote:
DoctorVenkman wrote:

Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Well, Delta publicly says that the Atlanta hub is the "world's most profitable". We all broadly know/assume that LAX, JFK, BOS, and SEA are barely in the green due to the heavy competition in those markets.

So, from that perspective, I'd say that LCDFlight is right: it is ATL-CHS, ATL-JAX, and ATL-RDU that is making them money (scaled to the whole region).

Obviously a network does not operate in isolation, so it is wrong to say that LAX, JFK, BOS, and SEA are not critical to Delta's current network (many of those people in JAX may be connecting onwards to LAX or BOS for example) and their future growth. But let's be clear: cities like ATL, MSP, and DTW flying "boring" routes are what make most of Delta's bottom line - and that subsidizes (to an extent) their coastal hubs.


I'd be more inclined to believe this argument with some solid numbers behind it. What's to say ATL isn't making all its money serving tier 1 cities both domestically and abroad?


Some people have good industry connections. I worked in a legacy over a decade ago (prefer not to dox myself, just a minor management job) & had all the profit/loss from the finance department back then.

Other posters accurately described that the US has a large number of tier 2-3 cities with about 200M people and probably a majority of North America's business activity. General public don't see this, but pros know it. It is difficult to be the _best_ service provider in tier 2-3 cities. It is something JetBlue cannot do. WN competes in their own limited way. DL has good moats around its tier 2-3 business (generating fantastic pricing power and profit margins across that space), which is the mother of all reasons why it can be the formidable, almost unstoppable tier 1 player that it is. Wouldn't a tier 1 customer also want the provider with the best tier 2-3 network? In the US, yes, that is key.

DL's crown jewel is their tier 2-3 fortress hubs; that is something competitors cannot seem to dislodge, even over fantastically long time periods like 60-70-80 years. That's the key to the US business. Numbers? You can infer and deduce them, knowing these general trends. Key thoughts are any route with 4+ nonstop competitors is going to have trash coach yields. You can verify this yourself. I just picked some random dates of JFK-LAX and I see $197 RT on DL and B6. That is a terribly long trip for under 100 bucks each way. Yet DL makes all this money... :scratchchin:
 
SteelChair
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 6:55 pm

Its interesting to me that many here are focusing upon the geographic Delta airline market segments that made the most money. While I agree that the domestic segment most likely accounted for the lion's share of profitability, one should remember ancillary revenue from fees, Techops, onboard sales, JV's, Delta Connection, and especially American Express. I find it fascinating that ALPA in the current negotiation wants to claim their perceived share of the revenue when no one really know how much the actual airline operation produces. Does ALPA deserve a share of the AMEX or Techops money for example? My guess is that Delta mainline produces less than 50% of the total, yet it must be admitted, is the "flagship."
Last edited by SteelChair on Tue Jan 14, 2020 6:57 pm, edited 1 time in total.
 
FlyHPN
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 6:55 pm

enilria wrote:
x1234 wrote:
I'm wondering why DL revenues in Asia Pacific keep falling considering the network that DL has with KE (KE is the foriegn airline that serves the MOST Chinese & Asian destinations by a landslide). They continue to see China softness, maybe the trade war is having an impact even though a deal is going to be signed very soon?

Here’s my opinion.

Delta bet on the wrong horse. While China has more potential than Japan, the Chinese are not going to allow USA carriers to dominate the market. So, their first strategy was to kill NRT for Chinese alliances and that has blown up IMHO. The fallback was Korean which is a great connect point, but the local market to Japan dwarfs Korea. So they have switched over to a hub that is much more connecting traffic dependent and those types of hubs are pretty much always less profitable.

I also don’t think NRT is going to be wiped off the map in terms of USA service. I think we are at a low point and it may start building again. It would be fantastic if DL abandoning NRT allowed a new USA carrier to add Japan, but even if it doesn’t I think DL may regret giving away their position in NRT in 5 years.

I thought I read somewhere that China is carved out of the DL/KE JV. Anyone know if there is truth to that?
 
dstblj52
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:02 pm

SteelChair wrote:
Its interesting to me that many here are focusing upon the geographic Delta airline market segments that made the most money. While I agree that the domestic segment most likely accounted for the lion's share of profitability, one should remember ancillary revenue from fees, Techops, onboard sales, JV's, Delta Connection, and especially American Express. I find it fascinating that ALPA in the current negotiation wants to claim their perceived share of the revenue when no one really know how much the actual airline operation produces. Does ALPA deserve a share of the AMEX or Techops money for example? My guess is that Delta mainline produces less than 50% of the total, yet it must be admitted, is the "flagship."

That's the union's job to get as much for their members as possible, and given the highly cyclical nature of the industry it creates a feast famine mentality so when times are good the union wants to get as much as possible cause when times are bad their going to have to give it all back.
 
HunterATL
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:04 pm

FlyHPN wrote:
enilria wrote:
x1234 wrote:
I'm wondering why DL revenues in Asia Pacific keep falling considering the network that DL has with KE (KE is the foriegn airline that serves the MOST Chinese & Asian destinations by a landslide). They continue to see China softness, maybe the trade war is having an impact even though a deal is going to be signed very soon?

Here’s my opinion.

Delta bet on the wrong horse. While China has more potential than Japan, the Chinese are not going to allow USA carriers to dominate the market. So, their first strategy was to kill NRT for Chinese alliances and that has blown up IMHO. The fallback was Korean which is a great connect point, but the local market to Japan dwarfs Korea. So they have switched over to a hub that is much more connecting traffic dependent and those types of hubs are pretty much always less profitable.

I also don’t think NRT is going to be wiped off the map in terms of USA service. I think we are at a low point and it may start building again. It would be fantastic if DL abandoning NRT allowed a new USA carrier to add Japan, but even if it doesn’t I think DL may regret giving away their position in NRT in 5 years.

I thought I read somewhere that China is carved out of the DL/KE JV. Anyone know if there is truth to that?


China is excluded from all Pacific JVs with US carriers because China does not permit foreign carriers to code share with each other on flights to and from China.
 
SteelChair
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:06 pm

dstblj52 wrote:
SteelChair wrote:
Its interesting to me that many here are focusing upon the geographic Delta airline market segments that made the most money. While I agree that the domestic segment most likely accounted for the lion's share of profitability, one should remember ancillary revenue from fees, Techops, onboard sales, JV's, Delta Connection, and especially American Express. I find it fascinating that ALPA in the current negotiation wants to claim their perceived share of the revenue when no one really know how much the actual airline operation produces. Does ALPA deserve a share of the AMEX or Techops money for example? My guess is that Delta mainline produces less than 50% of the total, yet it must be admitted, is the "flagship."

That's the union's job to get as much for their members as possible, and given the highly cyclical nature of the industry it creates a feast famine mentality so when times are good the union wants to get as much as possible cause when times are bad their going to have to give it all back.


Understood but my point was within the context of the discussion about which segment produces the most revenue or the most profitability it would seem that the airline itself doesn't actually produce the majority of the revenue although i admit we don't know for sure
 
LCDFlight
Posts: 59
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:40 pm

DL's credit card deals are a part of their loyalty program, which is just another part of running the airline. It is not some sort of separate business.
 
dstblj52
Posts: 154
Joined: Tue Nov 19, 2019 8:38 pm

Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:49 pm

LCDFlight wrote:
DL's credit card deals are a part of their loyalty program, which is just another part of running the airline. It is not some sort of separate business.

No but delta has a lot of other bits of the business which aren't conventionally airline business, tech ops contracts, predictive maintenance stuff, delta products group sales and licensing, running an oil refinery, plus a few others im forgetting. Delta seems to believe the way you survive as an airlines is to diversify, both in terms of where your flying and whose doing the flying, IE JV's and ownership stakes,
 
dstblj52
Posts: 154
Joined: Tue Nov 19, 2019 8:38 pm

Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:50 pm

LCDFlight wrote:
DL's credit card deals are a part of their loyalty program, which is just another part of running the airline. It is not some sort of separate business.

No but delta has a lot of other bits of the business which aren't conventionally airline business, tech ops contracts, predictive maintenance stuff, delta products group sales and licensing, running an oil refinery, plus a few others im forgetting. Delta seems to believe the way you survive as an airlines is to diversify, both in terms of where your flying and whose doing the flying, IE JV's and ownership stakes,
 
MIflyer12
Posts: 6471
Joined: Mon Feb 18, 2013 11:58 pm

Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:50 pm

SteelChair wrote:

Understood but my point was within the context of the discussion about which segment produces the most revenue or the most profitability it would seem that the airline itself doesn't actually produce the majority of the revenue although i admit we don't know for sure


We don't know what produces the majority of REVENUE? Sure we do. If you don't know the difference between revenue and profit, just stop.
 
IPFreely
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:55 pm

SteelChair wrote:
Does ALPA deserve a share of the AMEX or Techops money for example? My guess is that Delta mainline produces less than 50% of the total, yet it must be admitted, is the "flagship."


Why wouldn’t the ALPA-represented airline employees deserve a share of credit card and other revenue? Without the airline business there is no credit card revenue.

Flight Attendants and employees of Endeavor, Skywest, Republic, Compass, DGS, Argenbright, etc., can make the same argument. And probably will, someday, when they get representation.
 
SteelChair
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 7:58 pm

MIflyer12 wrote:
SteelChair wrote:

Understood but my point was within the context of the discussion about which segment produces the most revenue or the most profitability it would seem that the airline itself doesn't actually produce the majority of the revenue although i admit we don't know for sure


We don't know what produces the majority of REVENUE? Sure we do. If you don't know the difference between revenue and profit, just stop.


Please show us how much revenue bag fees or Techops or AMEX produced in 4Q 2019. Please show us how profitable each of those segments were. Waiting with baited breath.
 
777Mech
Posts: 865
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Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 9:55 pm

SteelChair wrote:
MIflyer12 wrote:
SteelChair wrote:

Understood but my point was within the context of the discussion about which segment produces the most revenue or the most profitability it would seem that the airline itself doesn't actually produce the majority of the revenue although i admit we don't know for sure


We don't know what produces the majority of REVENUE? Sure we do. If you don't know the difference between revenue and profit, just stop.


Please show us how much revenue bag fees or Techops or AMEX produced in 4Q 2019. Please show us how profitable each of those segments were. Waiting with baited breath.


AMEX is an insane revenue generator for DL.

https://www.google.com/amp/s/thepointsg ... table/amp/

This year TechOps expects to do 1 billion in business alone.
 
Atlwarrior
Posts: 449
Joined: Sun Jul 29, 2012 3:42 am

Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 11:18 pm

DoctorVenkman wrote:
LCDFlight wrote:
It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.


Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Northerns and retirees with wealth are flocking to those cities and the South in droves. I would add Myrtle Beach as well.
 
dstblj52
Posts: 154
Joined: Tue Nov 19, 2019 8:38 pm

Re: DAL Q4 2019 earnings thread

Tue Jan 14, 2020 11:40 pm

Atlwarrior wrote:
DoctorVenkman wrote:
LCDFlight wrote:
It always made me laugh that pundits and some industry executives thought China is "the key to profitability" or something like that. Delta makes its money the old fashioned way. Cities like CHS, JAX and RDU, IND, DSM, BHM, FAR, these are the cities that are essential to the large P&L of Delta Air Lines. Not Beijing or Mumbai. Delta is a great business and still misunderstood to a degree.


Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Northerns and retirees with wealth are flocking to those cities and the South in droves. I would add Myrtle Beach as well.

Simple major cities have LCC and ULCC competition whereas the people in smaller towns and cities generally don't it's not uncommon to see airfares premiums of 100-200 percent when connecting in somewhere like new york and LA vs starting your trip there, its not a lot of demand each but there is a reason 63% of airports in the US only see service on regional airlines.
 
User avatar
fanoftristars
Posts: 1655
Joined: Mon Jul 17, 2000 9:03 am

Re: DAL Q4 2019 earnings thread

Thu Jan 23, 2020 7:40 pm

Amazing results for 2019. I wonder just how long they can keep this up!?
"FLY DELTA JETS"
 
MIflyer12
Posts: 6471
Joined: Mon Feb 18, 2013 11:58 pm

Re: DAL Q4 2019 earnings thread

Thu Jan 23, 2020 8:19 pm

dstblj52 wrote:
Atlwarrior wrote:
DoctorVenkman wrote:

Do you have any source for this assertion? I struggle to see how some tier 2 and tier 3 cities in the south are making Delta all of its money as opposed to the enormous amount of premium traffic that flows through LAX, JFK, BOS, SEA, etc.


Northerns and retirees with wealth are flocking to those cities and the South in droves. I would add Myrtle Beach as well.

Simple major cities have LCC and ULCC competition whereas the people in smaller towns and cities generally don't it's not uncommon to see airfares premiums of 100-200 percent when connecting in somewhere like new york and LA vs starting your trip there, its not a lot of demand each but there is a reason 63% of airports in the US only see service on regional airlines.


If you're not pointing to data you're not making an effective argument. What fraction of total U.S. passenger count do those 63% of airports seeing only regional service represent? Mouse nuts. LAX gets 35x the domestic traffic of number 98 MHT, and even MHT gets some mainline passenger flights. There aren't enough people departing those airports to hose to drive a significant revenue premium systemwide.

https://www.transtats.bts.gov/airports. ... rier=FACTS

This is basic, basic stuff for anyone with an education in economics, statistics, math or finance.
 
Sightseer
Posts: 976
Joined: Mon Jan 12, 2015 6:04 am

Re: DAL Q4 2019 earnings thread

Thu Jan 23, 2020 8:45 pm

MIflyer12 wrote:
LAX gets 35x the domestic traffic of number 98 MHT, and even MHT gets some mainline passenger flights. There aren't enough people departing those airports to hose to drive a significant revenue premium systemwide.

MHT isn't the only small airport in the country. For every airport in LAX's ballpark, there are dozens that are closer to MHT's.
 
dstblj52
Posts: 154
Joined: Tue Nov 19, 2019 8:38 pm

Re: DAL Q4 2019 earnings thread

Thu Jan 23, 2020 9:47 pm

Sightseer wrote:
MIflyer12 wrote:
LAX gets 35x the domestic traffic of number 98 MHT, and even MHT gets some mainline passenger flights. There aren't enough people departing those airports to hose to drive a significant revenue premium systemwide.

MHT isn't the only small airport in the country. For every airport in LAX's ballpark, there are dozens that are closer to MHT's.

Their are 424 airports in the US in total with commercial service, if you calculate the average origin fair of 101 through 424 you get an average fair of 444.13 dollars which is approximately 100 dollars more than the national average fair of 345.09.

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