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tphuang
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Re: Delta plans to emerge a "smaller" carrier

Fri Apr 03, 2020 11:35 pm

Delta is saying they are burning $60 million a day right now. That works out to be $5.5 billion in Q2. Even if they get all the federal grant they are eligible for, things are going to have to get much better for them to not go into chapter 11 before the end of this year.
 
FSDan
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:05 am

tphuang wrote:
Delta is saying they are burning $60 million a day right now. That works out to be $5.5 billion in Q2. Even if they get all the federal grant they are eligible for, things are going to have to get much better for them to not go into chapter 11 before the end of this year.


It would be interesting to see how much is operational vs overhead. I.e. how much does cutting the schedule to bare bones help with stemming the bleeding?

If AA and UA are burning cash at a similar rate, how much time do they have before they run out?
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RUIRCE
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:07 am

This marketwatch article says UA is losing 100 million per day which would be quite a bit more than DL is losing per day.
https://www.marketwatch.com/amp/story/g ... 208ED0D700
 
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Acey559
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:20 am

RUIRCE wrote:
This marketwatch article says UA is losing 100 million per day which would be quite a bit more than DL is losing per day.
https://www.marketwatch.com/amp/story/g ... 208ED0D700


We’re losing that much in revenue compared to last year, not literally losing $100 million a day. There is still some revenue coming in with cargo flights and a few military charters, etc. Either way it’s not good. Not sure what actual cash burn is per day, Oscar and Scott have been playing that pretty close to the vest.
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tphuang
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:43 am

FSDan wrote:
tphuang wrote:
Delta is saying they are burning $60 million a day right now. That works out to be $5.5 billion in Q2. Even if they get all the federal grant they are eligible for, things are going to have to get much better for them to not go into chapter 11 before the end of this year.


It would be interesting to see how much is operational vs overhead. I.e. how much does cutting the schedule to bare bones help with stemming the bleeding?

If AA and UA are burning cash at a similar rate, how much time do they have before they run out?

Also, I forgot to mention that they said they will be out of cash by June without bailout. I would assume AA/UA are on same trajectory.

btw, it's $100 million less revenue, but $60 million loss because they are saving some costs too from not flying.

Not sure the maturity on some of AA's debts. If they are within the next few months, then they have more than just interest payments to worry about.

Another thing to think about is all the travel credit these airlines are issuing. Meaning once people do start flying again, there is no cash coming in to these airlines.
 
ACA772LR
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:54 am

DL hasn’t announced if they were accelerating retirements of their 757s have they? Unless I’m jumping the gun
Last edited by ACA772LR on Sat Apr 04, 2020 12:58 am, edited 1 time in total.
 
jayunited
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:55 am

tphuang wrote:
Also, I forgot to mention that they said they will be out of cash by June without bailout. I would assume AA/UA are on same trajectory.

btw, it's $100 million less revenue, but $60 million loss because they are saving some costs too from not flying.

Not sure the maturity on some of AA's debts. If they are within the next few months, then they have more than just interest payments to worry about.

Another thing to think about is all the travel credit these airlines are issuing. Meaning once people do start flying again, there is no cash coming in to these airlines.


You are correct about UA it is around $60 million per day but hopefully UA can get that down now that we are in April and we are only flying around 45% of our normal schedule or less. UA is still doing last minute cancellations there is no need in sending an completely empty aircraft if the down-line station does need it and/or if the down-line station has no passengers booked on the return flight. Either way we are still burning through a ton a cash per day. According to Kirby the one thing UA has going for it is most of our debt will not mature for at least a year or more.
 
kavok
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 1:25 am

The other interesting aspect is that (generalizing) the last half of March consisted of airlines mostly still flying most of the schedule at low load factors, whereas April is flying much less of the schedule because of numerous cancellations.

The key difference is obviously operational costs will be somewhere lower in April because less birds are in the air, but less tickets are obviously being sold (in March, most of the flights were at one point mostly sold-full, but obviously many pax later chose to change/cancel). The other part is many of the previously purchased April tickets will have to be refunded in cash to the passenger, as many flights are now canceled by the airline. That was much less the case in March.

The other interesting aspect is how creative they are with the accounting. Do all those tickets purchase for late March that the pax canceled/changed count as revenue now, or revenue when the pax rebooks their flight (if they do). There is a lot of creative accounting that could be done with the significant number of “future flight credits” that were created when people essentially canceled in March.
 
n7371f
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 7:07 am

No.

753 are most profitable a/c type in domestic fleet on operating cost vs revenue. But, with everything, none of that means much right now - as the 753 numbers are based upon a 90%+ load factor.

The 752 still does routes that the 321 cannot. And most recently DAL was finding good profits running the 752 ATL-FL and other 1-2.5 hr runs with a crammed 199 seat configuration.

There is also the complete interior reconfiguration that DAL would like to amortize for a few more years. But I'd be surprised if a few dozen haven't already flown their last flights. As I stated in another thread, the very popular DAL "up-gauging" business plan overnight looks awful.

ACA772LR wrote:
DL hasn’t announced if they were accelerating retirements of their 757s have they? Unless I’m jumping the gun
 
n7371f
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 7:18 am

EA CO AS is spot on. Can you imagine the outrage, say in 5-7 years when all of this is forgotten, and DAL management is trying to explain to pompous heads like Jamie Baker on quarterly calls while it's keeping $9-$10 billion in cash just sitting in an account just in case? Wall Street would lose their s***!

That's not to say lessons won't be learned from this. This is not 9/11. I lived and worked through it. By now we were flying and the revenue was far better versus now.

We're at a point where there is no single regular domestic flight that is making money and there is zero timeframe on when the traffic might return. In fact 9/11 vs COVID-19 is now incomparable.

I know there are many execs/VPs at several US airlines who would prefer to shut the system down for (said) amount of time. But BLOTUS will never allow that because of his misguided belief he knows how to run (an unprofitable) airline, the messaging would be too big of a give up for him that society is woresning and the legislation ties the airlines to continue operations.

Yet, somehow, going forward airlines who claim they are investment grade better have a better way of responding to a pandemic. There are only more coming.



EA CO AS wrote:
delimit wrote:
You're kind of all over the place here. They had what was considered a very health amount of cash up until the world aviation market contracted by 75% inside of a month.

Hind sight is 20/20. I expect the conversations of what level of catastrophe an airline should expect will be interesting over the next few years. But it won't matter, because no Republican will ever allow those kinds of corporate restrictions to make it into law.


It has nothing to do with Republicans or Democrats, but rather the free market. Fact is, while keeping six months worth of expenses is great in theory for a household, it's a ridiculously poor use of investors' money when you're talking about a capital-intensive business like airlines. In many cases you'd be talking about requiring airlines to keep upwards of $10B in cash on hand, minimum, and investors would demand a good chunk of it be re-invested in the business, have dividends paid, or shares repurchased to make the outstanding shares worth more.
 
JA
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 12:55 pm

It is not about President Trump's ego.

The fastest way to move people and cargo across the US is still by air. The airlines run an airline better than the government. If they are paying for you to stay in the air, what is the issue? Trying to maintain air service on an ad-hoc basis would be a mess because you don't know what you need and where you need it until you do.
 
ACA772LR
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 2:56 pm

n7371f wrote:
No.

753 are most profitable a/c type in domestic fleet on operating cost vs revenue. But, with everything, none of that means much right now - as the 753 numbers are based upon a 90%+ load factor.

The 752 still does routes that the 321 cannot. And most recently DAL was finding good profits running the 752 ATL-FL and other 1-2.5 hr runs with a crammed 199 seat configuration.

There is also the complete interior reconfiguration that DAL would like to amortize for a few more years. But I'd be surprised if a few dozen haven't already flown their last flights. As I stated in another thread, the very popular DAL "up-gauging" business plan overnight looks awful.

ACA772LR wrote:
DL hasn’t announced if they were accelerating retirements of their 757s have they? Unless I’m jumping the gun



Thank you for the interesting information, I’ve always been curious about that aircraft and hope to fly on one after this blows over we don’t have any pax 757s in Canada
 
PANAMsterdam
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 4:33 pm

ACA772LR wrote:
n7371f wrote:
No.

753 are most profitable a/c type in domestic fleet on operating cost vs revenue. But, with everything, none of that means much right now - as the 753 numbers are based upon a 90%+ load factor.

The 752 still does routes that the 321 cannot. And most recently DAL was finding good profits running the 752 ATL-FL and other 1-2.5 hr runs with a crammed 199 seat configuration.

There is also the complete interior reconfiguration that DAL would like to amortize for a few more years. But I'd be surprised if a few dozen haven't already flown their last flights. As I stated in another thread, the very popular DAL "up-gauging" business plan overnight looks awful.

ACA772LR wrote:
DL hasn’t announced if they were accelerating retirements of their 757s have they? Unless I’m jumping the gun



Thank you for the interesting information, I’ve always been curious about that aircraft and hope to fly on one after this blows over we don’t have any pax 757s in Canada


The 757 is one of the more interesting birds Boeing has made, because she suddenly got a whole new career after the ETOPS requirements changed. Yeah, sexy miss longlegs isn't in production anymore but sure as heck not ready for her retirement.
Every country has an airline. The world has Pan Am.
 
Prost
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 4:55 pm

There is also the complete interior reconfiguration that DAL would like to amortize for a few more years. But I'd be surprised if a few dozen haven't already flown their last flights. As I stated in another thread, the very popular DAL "up-gauging" business plan overnight looks awful.


Yeah, but having a 110 seat airplane (A220-100) that can fly any flight in the lower 48 looks like a brilliant decision. Some hits, some misses.
 
tphuang
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 5:04 pm

btw, if anyone wants to see what DL will keep around and what it will not, you can just see where some of these stations are at after the latest round of cuts in April
CVG is down to ATL/DTW/MSP
RDU down to ATL/DTW/MSP/MCO
BOS down to ATL/DTW/MSP/SLC/LAX/JFK/LGA

At this point, SEA still has flights to SFO/PDX/ANC/LAX/LAS/SAN/SJC/PHX/ORD/DEN along with core hubs + JFK.

I maybe missing a few locations for SEA. But to me, it's pretty clear CVG/RDU/BOS are getting downgraded after this. Looks like they do intend to keep SEA around as a hub after this.

And obviously LAX/JFK/LGA + core hubs are all safe.
 
Dalmd88
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 5:56 pm

tphuang wrote:
btw, if anyone wants to see what DL will keep around and what it will not, you can just see where some of these stations are at after the latest round of cuts in April
CVG is down to ATL/DTW/MSP
RDU down to ATL/DTW/MSP/MCO
BOS down to ATL/DTW/MSP/SLC/LAX/JFK/LGA

At this point, SEA still has flights to SFO/PDX/ANC/LAX/LAS/SAN/SJC/PHX/ORD/DEN along with core hubs + JFK.

I maybe missing a few locations for SEA. But to me, it's pretty clear CVG/RDU/BOS are getting downgraded after this. Looks like they do intend to keep SEA around as a hub after this.

And obviously LAX/JFK/LGA + core hubs are all safe.

BOS, RDU and CVG will return back to close to the same number of cities once this is over. The gauge of plane and number of flights will likely be lower. All three have pretty good business travel. Right now there is virtually none to support flying. I would think their international travel will return, but might take longer.
 
tphuang
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 6:09 pm

Dalmd88 wrote:
tphuang wrote:
btw, if anyone wants to see what DL will keep around and what it will not, you can just see where some of these stations are at after the latest round of cuts in April
CVG is down to ATL/DTW/MSP
RDU down to ATL/DTW/MSP/MCO
BOS down to ATL/DTW/MSP/SLC/LAX/JFK/LGA

At this point, SEA still has flights to SFO/PDX/ANC/LAX/LAS/SAN/SJC/PHX/ORD/DEN along with core hubs + JFK.

I maybe missing a few locations for SEA. But to me, it's pretty clear CVG/RDU/BOS are getting downgraded after this. Looks like they do intend to keep SEA around as a hub after this.

And obviously LAX/JFK/LGA + core hubs are all safe.

BOS, RDU and CVG will return back to close to the same number of cities once this is over. The gauge of plane and number of flights will likely be lower. All three have pretty good business travel. Right now there is virtually none to support flying. I would think their international travel will return, but might take longer.

There are no support flying from any city right now but they haven't cut the other hubs in the same way.
 
PSU.DTW.SCE
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Re: Delta plans to emerge a "smaller" carrier

Sat Apr 04, 2020 11:39 pm

Not indicative at all of what will or will not come back when things come back.

Right now it’s a bare bones operation to maintain a minimum level of connectivity at the core hubs.

Nothing is making any money, load factors are 10-20%

Of course they are going to pull down all focus cities in this time, particularly anything that is based on O&D business travel.
 
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NWAROOSTER
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 1:13 am

Yes, this is my sarcasm. Maybe Delta should bring some of Northwest Airline's DC-9s out of storage and fly them for awhile. :old:
Procrastination Is The Theft Of Time.......
 
flyboy80
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 2:05 am

How will government equity warrants play in? Didn’t Delta apply to accept the “grants” attached to the equity warrants??
 
MartijnNL
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 8:12 pm

DocLightning wrote:
But there's more. During this crisis, people are already turning to telecommunication. Work-From-Home is working. I suspect that the demand for business travel will never go back to what it was as these technologies improve during this time.

I wouldn't be so sure about that. Work-From-Home isn't working for a lot of people. At least not in the Netherlands, where many parents just want to return to their offices after three weeks home with their children and a minimum of four weeks to come. Some have already developed physical and mental health problems.

https://nos.nl/artikel/2329237-steeds-m ... n-toe.html (in Dutch)

All those Skype work meetings and the endless stream of reply to all e-mails take a lot of energy. Doing business face to face is so much more efficient.
 
MartijnNL
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 8:21 pm

chonetsao wrote:
Instead of cutting all the hubs and focus cities, another way to be a smaller carrier, is to reduce two to three rows of seats from aircraft, get rid of the customer unfriendly space saver toilet and give a little more legroom to the torture seat rows. By doing that DL and other US3 can reduce capacity by 10% without any need to lay off too many staff and cut routes.

That sounds great. All airlines should do this.
 
MartijnNL
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 8:51 pm

WidebodyPTV wrote:
The lion's share of the unemployed have been out of work for just two to three weeks, and already American Express, Capital One, etc. are reporting a record number of calls from individuals unable to make their monthly credit card payment. Yikes!

On the other hand, when I was reading my credit card statement last week, it said something I haven't seen in a long time, amount to pay: € 0,00. Usually I spend a few hundred euro's each month on flights and hotels. Last month: nothing. This virus is terrible for businesses. Personally I spend much less on almost everything, except on food.
 
ehaase
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 10:53 pm

Do any of the experts see Delta cancelling or deferring its orders for A220's, 321's, 339's and 359's?
 
B757Forever
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 11:00 pm

ehaase wrote:
Do any of the experts see Delta cancelling or deferring its orders for A220's, 321's, 339's and 359's?


All new deliveries to DL have been deferred.
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acentauri
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 11:34 pm

If the airlines (particularly the big 3) determine that the recovery from this disaster may be unacceptably problematic, "merger mania" could ensue. Either voluntarily or forced by institutional investors.
 
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lightsaber
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Re: Delta plans to emerge a "smaller" carrier

Sun Apr 05, 2020 11:43 pm

B757Forever wrote:
ehaase wrote:
Do any of the experts see Delta cancelling or deferring its orders for A220's, 321's, 339's and 359's?


All new deliveries to DL have been deferred.

With Delta's negotiating leverage, I imagine they'll be conserving cash. There are separate threads for production rate changes. The reality is, Delta does not need a single new aircraft in 2020.

Lightsaber
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NateGreat
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 2:42 am

lightsaber wrote:
B757Forever wrote:
ehaase wrote:
Do any of the experts see Delta cancelling or deferring its orders for A220's, 321's, 339's and 359's?


All new deliveries to DL have been deferred.

With Delta's negotiating leverage, I imagine they'll be conserving cash. There are separate threads for production rate changes. The reality is, Delta does not need a single new aircraft in 2020.

Lightsaber

What about mods, especially for the 764s?
 
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lightsaber
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 3:45 am

NateGreat wrote:
lightsaber wrote:
B757Forever wrote:

All new deliveries to DL have been deferred.

With Delta's negotiating leverage, I imagine they'll be conserving cash. There are separate threads for production rate changes. The reality is, Delta does not need a single new aircraft in 2020.

Lightsaber

What about mods, especially for the 764s?

What mods are you referring to? Delta is in extreme cash conservation mode. Upgrades to product will be delayed. C checks and HMV being delayed. Engine overhauls minimized. External part buying is extremely limited.

Lightsaber
Winter is coming.
 
NateGreat
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 4:16 am

lightsaber wrote:
NateGreat wrote:
lightsaber wrote:
With Delta's negotiating leverage, I imagine they'll be conserving cash. There are separate threads for production rate changes. The reality is, Delta does not need a single new aircraft in 2020.

Lightsaber

What about mods, especially for the 764s?

What mods are you referring to? Delta is in extreme cash conservation mode. Upgrades to product will be delayed. C checks and HMV being delayed. Engine overhauls minimized. External part buying is extremely limited.

Lightsaber

The new 4-class cabin refurbishment.
 
questions
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 5:41 am

B757Forever wrote:
ehaase wrote:
Do any of the experts see Delta cancelling or deferring its orders for A220's, 321's, 339's and 359's?


All new deliveries to DL have been deferred.


Did DL still have 739 orders? Or have all been delivered?
 
Newark727
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 5:46 am

questions wrote:
Did DL still have 739 orders? Or have all been delivered?


I think they've all been delivered. But someone with more knowledge of the DL fleet may correct me on that.
 
DL777200LR
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 6:37 am

Newark727 wrote:
questions wrote:
Did DL still have 739 orders? Or have all been delivered?


I think they've all been delivered. But someone with more knowledge of the DL fleet may correct me on that.


Yup all 130 739s have been delivered
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B757Forever
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 12:13 pm

NateGreat wrote:
lightsaber wrote:
NateGreat wrote:
What about mods, especially for the 764s?

What mods are you referring to? Delta is in extreme cash conservation mode. Upgrades to product will be delayed. C checks and HMV being delayed. Engine overhauls minimized. External part buying is extremely limited.

Lightsaber

The new 4-class cabin refurbishment.


As mentioned upthread, DL is operating in extreme cash conservation mode. All aircraft mods and projects that are not AD related are being postponed with the only exception being the A220. No A220 aircraft are planned to be parked so mod work and scheduled maintenance will continue on those. Any aircraft due for a heavy check are being parked to avoid that cost. With the outlook for a slow rebound of international traffic, the near-term need for the 767-400 aircraft is in doubt. As of now, if a mod hasn't been started, it will not be accomplished until better economic times.
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questions
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 8:20 pm

B757Forever wrote:
As mentioned upthread, DL is operating in extreme cash conservation mode. All aircraft mods and projects that are not AD related are being postponed with the only exception being the A220. No A220 aircraft are planned to be parked so mod work and scheduled maintenance will continue on those. Any aircraft due for a heavy check are being parked to avoid that cost. With the outlook for a slow rebound of international traffic, the near-term need for the 767-400 aircraft is in doubt. As of now, if a mod hasn't been started, it will not be accomplished until better economic times.


1. What does “AD related” mean?

2. What mod work is being done on the A220’s?
 
B757Forever
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Re: Delta plans to emerge a "smaller" carrier

Mon Apr 06, 2020 9:21 pm

questions wrote:
B757Forever wrote:
As mentioned upthread, DL is operating in extreme cash conservation mode. All aircraft mods and projects that are not AD related are being postponed with the only exception being the A220. No A220 aircraft are planned to be parked so mod work and scheduled maintenance will continue on those. Any aircraft due for a heavy check are being parked to avoid that cost. With the outlook for a slow rebound of international traffic, the near-term need for the 767-400 aircraft is in doubt. As of now, if a mod hasn't been started, it will not be accomplished until better economic times.


1. What does “AD related” mean?

2. What mod work is being done on the A220’s?


AD = Airworthiness Directive. These are issued by the FAA to address critical safety of flight issues.

The A220 have a number of teething issues that Bombardier/Airbus are addressing. Among these are replacement of lower fuselage fairing longerons due to cracking, replacement of all the fuel plumbing internal to the tanks and modifying a fuel pump mount bracket and replacement of some aft horizontal stabilizer ribs due to cracks. In addition there are numerous mods being done to the PW GTF engines. These include replacement of gearbox mount hardware and updating engine software.
The Rolls Royce Dart. Noise = Shaft Horsepower.
 
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usdcaguy
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Re: Delta plans to emerge a "smaller" carrier

Tue Apr 07, 2020 9:11 pm

onwFan wrote:
usdcaguy wrote:
onwFan wrote:
What you just said has a big flip-side to it. Their fortress hubs (ATL, DTW, MSP, SLC) which you allude to as cash cows for DL mean absolutely nothing to any of their partners. How many of these DL partners actually fly (or are even are remotely interested in flying) to any of these airports? AA and UA on the contrary have hubs in one of the largest O/D markets in the US and are natural destinations for most of their partners. DL's partners are left to fly some of the most predominant O/D routes without feed and facing competition from larger carriers while DL flies DTW/MSP/ATL to their hubs. It makes sense for DL, but from the partners' perspective, DL brings little to the table in terms of network for them - which is why DL has been trying to create hubs in more important markets like BOS and SEA - and they are not even the biggest carrier in any of these markets; which leaves them heavily exposed during times like these...


AF/KL/VS/AM have all flown to ATL/DTW/MSP/SLC since the implementation of DL/NW's agreements with them and will continue to do so according to the scheduling decisions they make with DL. Markets like JFK/ORD/IAH/LAX/MIA require larger aircraft that DL historically did not have available as the few 747s/777s they had were already flying to places outside of Europe. The eventual retirement of the old NW 747s didn't help things, either. Keeping more 767s and the A330s at the main DL hubs to fly to Europe was therefore a given, as they could offer more frequencies with those aircraft with feed from multiple banks at their hubs. When you're in a JV, carriers are agnostic as to which carrier the passenger flies, as each carrier earns revenue regardless of who is operating the flight. Many variables go into scheduling aircraft, and they have nothing to do with whether a specific carrier will benefit. If AF/KL/VS/AM felt as though they did not benefit financially from being in a JV with DL, they would have dropped out years ago and would have never flown to the smaller DL hubs. Now they do, and they reap the benefits of doing so. Today, the CEOs of those companies know that their operations with DL are some of their most profitable, so they have a huge incentive to stay in the JVs they have set up with them.

I wasn’t suggesting that the partners were losing money because they were forced to fly to DL non-hubs. I was merely referring to the struggles that the carriers have had in sustaining some of the most relevant non-stop O/D routes for them. E.g. Take ORD-LHR, EWR-CDG/AMS/LHR... As far as VS/AF/KL are concerned, they have several times more passengers going to EWR or ORD than to MSP, DTW, SLC or ATL from not only CDG/AMS/LHR but from all over Europe. Connecting passengers through DTW or MSP from such important markets is not an attractive option - they just lose these customers. On the contrary, I sincerely doubt LH or BA cares about the minor O/D traffic from MSP or SLC to FRA or LHR who choose to fly DL or its partners.

But the fact remains that none of DL’s partners are profitable... It is easy to blame the partners for it, but all of them? I am not entirely convinced that is true. I just don’t see DL’s hub system being particularly beneficial to any foreign carrier....


DL had to be aggressive to accumulate a partner portfolio in the first place, as SkyTeam failed to attract some of these carriers in markets like Brazil and the UK to begin with. It wasn’t until consolidation happened that DL found itself to be the odd man out, and it was forced to do deals with relatively weak carriers in those markets. DL alone cannot save its partners from losing money if they were weak to begin with. JVs can bring in more money, but carriers like VS have historically been weaker players vs the competition. I just don’t see how making money flying to cities like ATL or DTW hinders the carriers’ profitability when costs and revenues are shared. The growth of LCCs combined with the collapse of Flybe and the lack of a new runway at LHR are the real problems DL’s partners are facing, not their decision to be in JVs.
 
LAOCA
Posts: 27
Joined: Wed Aug 21, 2019 3:18 pm

Re: Delta plans to emerge a "smaller" carrier

Tue Apr 07, 2020 11:18 pm

onwFan wrote:
usdcaguy wrote:
Blaming the problems these carriers have had on DL bringing them more passengers is mind-boggling. DL’s domestic network is a huge cash cow that makes carriers like BA envious. Let’s not forget where the real money is.

What you just said has a big flip-side to it. Their fortress hubs (ATL, DTW, MSP, SLC) which you allude to as cash cows for DL mean absolutely nothing to any of their partners. How many of these DL partners actually fly (or are even are remotely interested in flying) to any of these airports? AA and UA on the contrary have hubs in one of the largest O/D markets in the US and are natural destinations for most of their partners. DL's partners are left to fly some of the most predominant O/D routes without feed and facing competition from larger carriers while DL flies DTW/MSP/ATL to their hubs. It makes sense for DL, but from the partners' perspective, DL brings little to the table in terms of network for them - which is why DL has been trying to create hubs in more important markets like BOS and SEA - and they are not even the biggest carrier in any of these markets; which leaves them heavily exposed during times like these...


Markets that have enough O&D traffic to support a nonstop flight from a partner's hub, they fly themselves. For all the other cities that can only support connecting flights, they love DL hubs.A connection, is a connection.
 
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flymco753
Posts: 3385
Joined: Fri Jun 10, 2016 2:09 am

The fate of Delta's 757

Fri Apr 10, 2020 3:31 pm

https://thepointsguy.com/news/delta-air ... ssion=true

I've seen quite a few of these articles recently saying that Delta has made the decision to retire it's MD-88/90 fleet due to the coronavirus.

However, that leaves the 757 in an interesting place. In the past, it has been speculated that the 757 is the workhorse of DL's fleet.

The airline has explained that they would emerge as a "smaller carrier". I question whether the 757 will continue in a large scope from this point forward.

The questions are: (a) will DL continue to use the 757 at a large scope? (b) what fleet type would take over the roll of the 757 even after a previously speculated retirement time of ~2030?
...the carriage of liquids, gels, and aerosols are prohibited through the screening checkpoint except for travel size toiletries of 3 ounces or less...
 
JAMBOJET
Posts: 293
Joined: Tue Dec 11, 2018 6:23 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 3:37 pm

https://thepointsguy.com/news/delta-air ... ronavirus/
TPG and a Delta webinar must love this a.net topic...
 
FWAERJ
Posts: 2810
Joined: Wed Jun 07, 2006 1:23 am

Re: The fate of Delta's 757

Fri Apr 10, 2020 3:38 pm

Domestically, the A321neo. No contest.

Internationally, DL wants Boeing to launch the NMA and launch it now to replace the 757 and 767 mid-decade. That won’t happen given Boeing’s position, so I feel that DL will be forced into an A321XLR/A330-800 mix that Ed Bastian has publicly said he doesn’t want. He feels that only the NMA can replace it.


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Boof02671
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Joined: Sun Jul 10, 2016 12:15 am

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 4:12 pm

DL was just downgraded to junk by fitch.

https://finance.yahoo.com/news/delta-cu ... 43730.html
 
jordanh
Posts: 325
Joined: Fri Sep 08, 2017 11:56 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 4:20 pm

Boof02671 wrote:
DL was just downgraded to junk by fitch.
https://finance.yahoo.com/news/delta-cu ... 43730.html


When you post an inflammatory comment, you should also quote what the article actually says:

"Fitch on Friday lowered its rating on Delta’s debt to “BB+” from “BBB-” and warned that another downgrade is possible as air travel suffers with the spread of the coronavirus. The airline does, however, have more financial flexibility than some rivals, Fitch said in an assessment of the industry.

Delta, Alaska Air Group Inc. and Southwest Airlines Co. are the “better-positioned U.S. carriers to weather the expected downturn,” Fitch said.

Other downgrades by Fitch on Friday include:

Alaska Air downgraded to “BB+” from “BBB-”American Airlines downgraded by one notch to “B”JetBlue Airways downgraded to “BB” from “BB+”Southwest downgraded to “BBB+” from “A-”United Airlines Holdings Inc. downgraded to “BB-” from “BB”



Poor AA is in really bad shape.

And JetBlue... sad.
Last edited by jordanh on Fri Apr 10, 2020 4:31 pm, edited 2 times in total.
 
tphuang
Posts: 5226
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 4:21 pm

Boof02671 wrote:
DL was just downgraded to junk by fitch.

https://finance.yahoo.com/news/delta-cu ... 43730.html


I'm really curious what happens when these people come back to work from their voluntary leave. I'm not sure the people who have taken the voluntary off realize that Delta at this point basically has to furlough come Oct 1. Would they have taken their voluntary leave if they realized there is no job to come back to?
 
jordanh
Posts: 325
Joined: Fri Sep 08, 2017 11:56 pm

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 4:33 pm

tphuang wrote:
I'm really curious what happens when these people come back to work from their voluntary leave. I'm not sure the people who have taken the voluntary off realize that Delta at this point basically has to furlough come Oct 1. Would they have taken their voluntary leave if they realized there is no job to come back to?


You are making assumptions which are not evidence. I would be more worried about the people at AA and JetBlue, who are in an even more precarious position.
 
Boof02671
Posts: 2110
Joined: Sun Jul 10, 2016 12:15 am

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 4:38 pm

jordanh wrote:
Boof02671 wrote:
DL was just downgraded to junk by fitch.
https://finance.yahoo.com/news/delta-cu ... 43730.html


When you post an inflammatory comment, you should also quote what the article actually says:

"Fitch on Friday lowered its rating on Delta’s debt to “BB+” from “BBB-” and warned that another downgrade is possible as air travel suffers with the spread of the coronavirus. The airline does, however, have more financial flexibility than some rivals, Fitch said in an assessment of the industry.

Delta, Alaska Air Group Inc. and Southwest Airlines Co. are the “better-positioned U.S. carriers to weather the expected downturn,” Fitch said.

Other downgrades by Fitch on Friday include:

Alaska Air downgraded to “BB+” from “BBB-”American Airlines downgraded by one notch to “B”JetBlue Airways downgraded to “BB” from “BB+”Southwest downgraded to “BBB+” from “A-”United Airlines Holdings Inc. downgraded to “BB-” from “BB”



Poor AA is in really bad shape.

And JetBlue... sad.

It’s not inflammatory it’s the headline from the article, take it up with its author.

“ Delta Cut to Junk by Fitch as 35,000 Workers Take Leave”
 
0newair0
Posts: 417
Joined: Fri Jun 01, 2007 12:21 am

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 4:49 pm

tphuang wrote:
Boof02671 wrote:
DL was just downgraded to junk by fitch.

https://finance.yahoo.com/news/delta-cu ... 43730.html


I'm really curious what happens when these people come back to work from their voluntary leave. I'm not sure the people who have taken the voluntary off realize that Delta at this point basically has to furlough come Oct 1. Would they have taken their voluntary leave if they realized there is no job to come back to?
Delta has made it clear that furloughs/layoffs are a possibility in the (near) future but are not currently planned. They have said that anyone who has taken leave before or is on leave when a furlough/layoff takes place will be treated no differently than those with an active status throughout the crisis.

Come fall, it is very likely you will have workers who volunteered to take leave get let go, and it is also likely you will have workers that did not volunteer to take leave get let go. These decisions will be based on merit for some and on longevity and other factors for other positions - whether or not you volunteered to take leave will not be a factor.
That's not how this works! That's not how any of this works!
 
tphuang
Posts: 5226
Joined: Tue Mar 14, 2017 2:04 pm

Re: Delta plans to emerge a

Fri Apr 10, 2020 6:11 pm

0newair0 wrote:
tphuang wrote:
Boof02671 wrote:
DL was just downgraded to junk by fitch.

https://finance.yahoo.com/news/delta-cu ... 43730.html


I'm really curious what happens when these people come back to work from their voluntary leave. I'm not sure the people who have taken the voluntary off realize that Delta at this point basically has to furlough come Oct 1. Would they have taken their voluntary leave if they realized there is no job to come back to?
Delta has made it clear that furloughs/layoffs are a possibility in the (near) future but are not currently planned. They have said that anyone who has taken leave before or is on leave when a furlough/layoff takes place will be treated no differently than those with an active status throughout the crisis.

Come fall, it is very likely you will have workers who volunteered to take leave get let go, and it is also likely you will have workers that did not volunteer to take leave get let go. These decisions will be based on merit for some and on longevity and other factors for other positions - whether or not you volunteered to take leave will not be a factor.


Probably most domestic airlines are going to furloughing. I was looking up NK pilot forum and they think even NK will furlough come Oct. If even NK is shrinking and deferring deliveries (they had planned 20% capacity increase), then everyone is shrinking. Of course, nobody can furlough right now.if they are taking the grant, but unless things really improve, legacy carriers are really going to shrink coming out of this. One exec told Neeleman that if this lasts a few month, they are 25% smaller coming out. If it lasts more than a year, they are going to be 50% smaller coming out. Now, I assume LCCs and ULCCs which normally grow faster and are less reliant on international travel will shrink less than that. But as an industry, it will probably take until 2023 to get back to 2019 size. And of course the airline execs know this.

DL apparently told its employees that it has $6 billion of cash left and that will last 90 days (think about the burn rate over Q2. AA has said nobody is planning a trip even 3 to 5 months out from now. Do we want to guess what the burn rate in Q3/Q4 will look like? Probably not Q2 level, but it won't be pretty.

So for all those airline employees who took the voluntary leave, would they have done this had they know that furlough is basically a certainty? It's a lot easier to not bring back people who are already not around vs laying off people who have active duties. for all those people that took early retirement, would they have done that if they know that DL might have to file chapter 11 this year if it doesn't get more loans. DL, given that it has fewer unions, probably have lower furloughing cost than AA/UA. Some airlines are in better position than others, but everyone is basically in the same shoe if airlines are not cash positive by next summer.
 
0newair0
Posts: 417
Joined: Fri Jun 01, 2007 12:21 am

Re: Delta plans to emerge a

Fri Apr 10, 2020 7:00 pm

tphuang wrote:

So for all those airline employees who took the voluntary leave, would they have done this had they know that furlough is basically a certainty?


Did you read my post? The answer is yes, they would have done it because they know the airline will be smaller coming out of this crisis than it was going in.
That's not how this works! That's not how any of this works!
 
GalaxyFlyer
Posts: 6108
Joined: Fri Jan 01, 2016 4:44 am

Re: Delta plans to emerge a "smaller" carrier

Fri Apr 10, 2020 7:19 pm

Depends where they are on the seniority list. You’re a B777 captain, it’s a vacation; probationary F/O, yes a lose. I doubt many that are in danger of being furloughed took a LOA.

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