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kavok
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 5:24 pm

Westerwaelder wrote:
kavok wrote:
To me, this sounds more like an insurance policy on the JV.

With LATAMs Chpt 11 filing, by definition all creditors are not going to get paid their full amount owed. This “deal” basically tells the judge that Delta will provide $62m to offset some of the creditors losses as long as the JV deal with the “new LATAM” remains. Thus if the bankruptcy judge approves a reorganization without the JV, there is $62m more losses the judge has to account for. Again, it incentivizes that the JV deal still goes through.

Delta values the JV more than the value of 4x A350s frames, especially at a time when there is an abundance of unused planes in the aviation world.


Really? Nothing to do with DL actually not needing these frames in the short term? Where do you get that DL can pull out of the pull out? They have simply done the math and decided to cut their losses on these frames. The JV will or will not happen after CH11 regardless of these four frames.


I am in agreement that there is obviously benefit for Delta for the reasons you mentioned. Frankly, if there was no benefit or surface reason for Delta to do it, the deal would look highly questionable to any magistrate.

My argument is there is a deeper reason behind this deal, and that there is more to it then just getting off the hook of taking 4x A350s that aren’t needed.
 
Antarius
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 5:24 pm

MSPNWA wrote:
I have my doubts DL wanted these four aircraft in the first place. LATAM needed out of excess aircraft, but that doesn't mean DL would fly them. I was expecting DL move on from them in some way, but who knows if this was the original plan.


DL isn't in the habit of buying new aircraft for fun. Considering the a359 is their future longhaul mainstay and they have many on order, why would you think they wouldn't operate them?
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ScottB
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 5:28 pm

Antarius wrote:
Which still makes you a creditor. Unsecured and at the bottom of the totem pole, yes, but still a creditor.


Nope. They're not owed anything by the bankruptcy estate due to their equity stake. There is no promise to pay. Unsecured creditors are ahead of equity holders in a bankruptcy. The entities providing DIP financing are other equity stakeholders so that might bode well for some limited value of DL's equity stake but the best they can hope for is to maintain a likely diluted share of the company.
 
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scbriml
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 5:37 pm

frmrCapCadet wrote:
Aren't 4 350s even with discount about a billion $$? If they are 4 you don't need, $62 million is a lot less to 'waste'. Given corporate high finance and peculiar bankruptcy things this might be overly naive?


At DL level discounts, a fleet of 4 brand new A359s will likely set you back around $650-700 million depending on options and weight variant selected. The LATAM frames were not new, so correspondingly less. $62 million might represent about 15% of the value of those frames.
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MSPNWA
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 5:39 pm

Antarius wrote:
DL isn't in the habit of buying new aircraft for fun. Considering the a359 is their future longhaul mainstay and they have many on order, why would you think they wouldn't operate them?


It isn't for fun. It's business.

1) DL had previously significantly deferred deliveries of its new A350s (and also took on LATAM's order for new planes). Acquiring four used aircraft much sooner would run counter to the previous plan.

2) It's a safe assumption to assume that the used A350s have differences besides being older (planes are ordered with options we never notice) compared to DL's A350s, complicating operations.

3) DL would have paid a significant amount of integrate the aircraft in its fleet (e.g. a new interior), further calling into question the financial equation of operating them instead of moving them.

When we put together the fact that LATAM badly needed to shed excess aircraft and needed cash to move forward, and combine that with the expensive reversal of DL's fleet plan in order to operate them, I see it much more logical that DL wasn't intending on operating them. But who knows if this was the original plan to cancel the acquisition in this manner.
 
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c933103
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 5:53 pm

Polot wrote:
kavok wrote:
This “deal” basically tells the judge that Delta will provide $62m to offset some of the creditors losses as long as the JV deal with the “new LATAM” remains.

DL can’t make up leverage. If the contract says DL can cancel if LATAM goes bankrupt with the $62 million penalty and DL exercises that option then the deal is canceled. DL can’t add additional strings such as LATAM must then follow JV deal. That is a separate contract.

Delta values the JV more than the value of 4x A350s frames, especially at a time when there is an abundance of unused planes in the aviation world.


You know what would should even greater value towards the JV? Going through with the deal- because that would have provided LA with more money and get rid of their unwanted assets.



In reality the reason for this cancelation is simple and has nothing to do with the JV: DL no longer wants the 4 used A350s (and in this environment who can blame them?) and the LATAM bankruptcy provides DL with an easy and relatively low cost out from the contract.

You seems to be confused about the place LATAM is at, whoch have already declared bankruptcy and thus doesn't mean anything in themselves.
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kavok
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 6:50 pm

n9801f wrote:
Interesting argument, Kavok.

Although maybe it’s simpler? Here’s my thought:

None of the three airlines (Delta, LATAM, Qatar) wants the 4 A350’s right now.

QR dumps them back to LA at lease end.

DL sheds its obligation to buy them by paying a $62M break fee.

Now LA can probably get rid of them in Chapter 11.

(Edited to fix spelling.)


Very likely, and it could be that simple. I just think Delta has more at play here, in that they don’t want to see the JV fail. To me, Delta needs the JV more than LATAM does. And as such, they are doing everything they can to ensure that the post-bankruptcy LA is still willing (or forced) to go through with the JV.

As mentioned by other posters, the original reason for the JV was that DL needed the network and LA needed the money. Whether LA still needs DL post-bankruptcy remains to be seen. The truth is, AA with its MIA hub was always a better fit than DL. The fact that AA and IB (with MAD hub) are also partners made OneWorld a better fit also. There is no doubt that DL has got to be worried their $2B investment to get a LATAM JV is in jeopardy, and that they’d be out the $2B yet besides.
 
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lightsaber
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 6:52 pm

kavok wrote:
Westerwaelder wrote:
kavok wrote:
To me, this sounds more like an insurance policy on the JV.

With LATAMs Chpt 11 filing, by definition all creditors are not going to get paid their full amount owed. This “deal” basically tells the judge that Delta will provide $62m to offset some of the creditors losses as long as the JV deal with the “new LATAM” remains. Thus if the bankruptcy judge approves a reorganization without the JV, there is $62m more losses the judge has to account for. Again, it incentivizes that the JV deal still goes through.

Delta values the JV more than the value of 4x A350s frames, especially at a time when there is an abundance of unused planes in the aviation world.


Really? Nothing to do with DL actually not needing these frames in the short term? Where do you get that DL can pull out of the pull out? They have simply done the math and decided to cut their losses on these frames. The JV will or will not happen after CH11 regardless of these four frames.


I am in agreement that there is obviously benefit for Delta for the reasons you mentioned. Frankly, if there was no benefit or surface reason for Delta to do it, the deal would look highly questionable to any magistrate.

My argument is there is a deeper reason behind this deal, and that there is more to it then just getting off the hook of taking 4x A350s that aren’t needed.

I agree there is more than 4 aircraft at stake. The JV deal is probably tied to the payment. I couldn't prove it, but otherwise, why would DL pay to a company in CH11.

Lightsaber
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Vicenza
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 7:35 pm

lightsaber wrote:
kavok wrote:
Westerwaelder wrote:

Really? Nothing to do with DL actually not needing these frames in the short term? Where do you get that DL can pull out of the pull out? They have simply done the math and decided to cut their losses on these frames. The JV will or will not happen after CH11 regardless of these four frames.


I am in agreement that there is obviously benefit for Delta for the reasons you mentioned. Frankly, if there was no benefit or surface reason for Delta to do it, the deal would look highly questionable to any magistrate.

My argument is there is a deeper reason behind this deal, and that there is more to it then just getting off the hook of taking 4x A350s that aren’t needed.

I agree there is more than 4 aircraft at stake. The JV deal is probably tied to the payment. I couldn't prove it, but otherwise, why would DL pay to a company in CH11.

Lightsaber


Would the fact that DL cancelled the contract not have something to do with it.....as in paying the required penalty?
 
usflyer msp
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 8:04 pm

Vicenza wrote:
lightsaber wrote:
kavok wrote:

I am in agreement that there is obviously benefit for Delta for the reasons you mentioned. Frankly, if there was no benefit or surface reason for Delta to do it, the deal would look highly questionable to any magistrate.

My argument is there is a deeper reason behind this deal, and that there is more to it then just getting off the hook of taking 4x A350s that aren’t needed.

I agree there is more than 4 aircraft at stake. The JV deal is probably tied to the payment. I couldn't prove it, but otherwise, why would DL pay to a company in CH11.

Lightsaber


Would the fact that DL cancelled the contract not have something to do with it.....as in paying the required penalty?


I don't get it either. I don't know why they would think DL does not have to pay for violating a contract because the other party is in CH11 bankruptcy. There really is not more to it.
 
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scbriml
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 9:18 pm

MSPNWA wrote:
1) DL had previously significantly deferred deliveries of its new A350s (and also took on LATAM's order for new planes). Acquiring four used aircraft much sooner would run counter to the previous plan.


Yet DL’s purchase of the LATAM stake included taking the four A350s plus the 10 new ones in full knowledge of the previous plan.

Plans are made with the knowledge at that point in time. Things change, forcing the best plans to be changed. Indeed, we’ve just seen DL’s revised plan from the end of September changed thanks to Covid-19.
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strfyr51
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 9:22 pm

sxf24 wrote:
Great companies always honor their obligations! Promises made, promises kept.

that's pretty simplistic isn't it? Delta did what was right for their OWN shareholders. LATAM ordered them and it's more their problem than it is Delta;s
 
ShinyAndChrome
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 9:27 pm

kavok wrote:
n9801f wrote:
Interesting argument, Kavok.

Although maybe it’s simpler? Here’s my thought:

None of the three airlines (Delta, LATAM, Qatar) wants the 4 A350’s right now.

QR dumps them back to LA at lease end.

DL sheds its obligation to buy them by paying a $62M break fee.

Now LA can probably get rid of them in Chapter 11.

(Edited to fix spelling.)


Very likely, and it could be that simple. I just think Delta has more at play here, in that they don’t want to see the JV fail. To me, Delta needs the JV more than LATAM does. And as such, they are doing everything they can to ensure that the post-bankruptcy LA is still willing (or forced) to go through with the JV.

As mentioned by other posters, the original reason for the JV was that DL needed the network and LA needed the money. Whether LA still needs DL post-bankruptcy remains to be seen. The truth is, AA with its MIA hub was always a better fit than DL. The fact that AA and IB (with MAD hub) are also partners made OneWorld a better fit also. There is no doubt that DL has got to be worried their $2B investment to get a LATAM JV is in jeopardy, and that they’d be out the $2B yet besides.


AA was always a better fit until the Chilean government nixed their JV application. Ultimately, what LA needed was a JV and all of the additional US network and point-of-sale access that would have entailed. And there's no reason to believe just yet that those same competitive issues the Chilean authorities brought up vis-a-vis AA/LA wouldn't continue to be an impediment after the current crisis passes.
 
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LAX772LR
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 9:30 pm

sxf24 wrote:
Great companies always honor their obligations! Promises made, promises kept.

....which is why any contract worth its salt would have cancellation provisions, which is exactly what's being executed here. :roll:
I myself, suspect a more prosaic motive... ~Thranduil
 
Boof02671
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 9:33 pm

Interesting article on what happens to the stock.

https://www.investopedia.com/ask/answer ... icfirm.asp
 
dcajet
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 10:15 pm

ShinyAndChrome wrote:

AA was always a better fit until the Chilean government nixed their JV application. Ultimately, what LA needed was a JV and all of the additional US network and point-of-sale access that would have entailed. And there's no reason to believe just yet that those same competitive issues the Chilean authorities brought up vis-a-vis AA/LA wouldn't continue to be an impediment after the current crisis passes.


An observation: Chile's government had no saying in nixing the AA/IAG/LA JV. It was the Tribunal de Defensa de la Libre Competencia (TDLC), which is a special and independent Chilean jurisdictional body, operating under the Supreme Court, whose function is to prevent and correct issues detrimental to free and fair competition. And it was nixed twice. However good that JV may have been for the petitioning airlines it was plain bad for the consumer.
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val1
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 10:16 pm

I believe that 4 A350 are belong to Latam Brasil which is not under CH11 bankruptcy protection.
 
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prchan
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 10:25 pm

Yes, all LA A350 belong to Latam Brasil. QR had subleased 5 frames, and 4 of them were returned recently (A7-AMB, AQA, AQB, AQC)
Still curious to know their fate. A7-AMB was previously registered in Brazil as PR-XTF. The other 3 were not registered, but they would supposedly be PR-XTJ, XTK, XTL.
QR still has A7-AMA (previously PR-XTG).
As mentioned a few posts above, it seems they will return PR-XTA and XTB to lessors...
 
MSPNWA
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 10:25 pm

scbriml wrote:
Yet DL’s purchase of the LATAM stake included taking the four A350s plus the 10 new ones in full knowledge of the previous plan.

Plans are made with the knowledge at that point in time. Things change, forcing the best plans to be changed. Indeed, we’ve just seen DL’s revised plan from the end of September changed thanks to Covid-19.


So your evidence that DL wanted to operate these used airplanes is . . . because they acquired the used airplanes? Nice circular reasoning. It takes mental gymnastics to avoid the evidence I've presented indicated they didn't, and how unless it was one lucky coincidence that DL desired to operate used A350s at exactly the time it wanted to acquire a stake in LATAM and work towards a JV, their actions aren't following a logical pattern. It makes little sense to defer 10 new A350s, and then when extra capacity is desired not to work with Airbus again to reverse the previous action and instead rely on the chance occurrence of buying a stake in a future partner that just so happens to have the available used airplanes you want. Assuming DL does their homework when fleet planning, the only real explanation if DL actually wanted to operate these used A350s was because of blind luck that the need came at the same time with the opportunity to partner with LATAM. Sorry, I'm going to go with the hard evidence, not luck and an allegiance to disagree and confidently say that it's unlikely that DL ever intended to operate these frames.
 
ShinyAndChrome
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 10:31 pm

dcajet wrote:
ShinyAndChrome wrote:

AA was always a better fit until the Chilean government nixed their JV application. Ultimately, what LA needed was a JV and all of the additional US network and point-of-sale access that would have entailed. And there's no reason to believe just yet that those same competitive issues the Chilean authorities brought up vis-a-vis AA/LA wouldn't continue to be an impediment after the current crisis passes.


An observation: Chile's government had no saying in nixing the AA/IAG/LA JV. It was the Tribunal de Defensa de la Libre Competencia (TDLC), which is a special and independent Chilean jurisdictional body, operating under the Supreme Court, whose function is to prevent and correct issues detrimental to free and fair competition. And it was nixed twice. However good that JV may have been for the petitioning airlines it was plain bad for the consumer.


I meant "government" in a very broad sense but yes, your observation would be the more accurate way to put it.
 
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scbriml
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 10:40 pm

MSPNWA wrote:
scbriml wrote:
Yet DL’s purchase of the LATAM stake included taking the four A350s plus the 10 new ones in full knowledge of the previous plan.

Plans are made with the knowledge at that point in time. Things change, forcing the best plans to be changed. Indeed, we’ve just seen DL’s revised plan from the end of September changed thanks to Covid-19.


So your evidence that DL wanted to operate these used airplanes is . . . because they acquired the used airplanes? Nice circular reasoning. It takes mental gymnastics to avoid the evidence I've presented indicated they didn't, and how unless it was one lucky coincidence that DL desired to operate used A350s at exactly the time it wanted to acquire a stake in LATAM and work towards a JV, their actions aren't following a logical pattern. It makes little sense to defer 10 new A350s, and then when extra capacity is desired not to work with Airbus again to reverse the previous action and instead rely on the chance occurrence of buying a stake in a future partner that just so happens to have the available used airplanes you want. Assuming DL does their homework when fleet planning, the only real explanation if DL actually wanted to operate these used A350s was because of blind luck that the need came at the same time with the opportunity to partner with LATAM. Sorry, I'm going to go with the hard evidence, not luck and an allegiance to disagree and confidently say that it's unlikely that DL ever intended to operate these frames.


You haven't offered any hard evidence that that DL didn't intend to operate the four used A350s they agreed to take in addition to ten new ones. All you have is a decision to defer some A350s that was made three years ago. A lot has changed since then. As I said, a lot has changed since DL agreed to take 14 A350s from LATAM just a few months ago. There's no pattern to follow, plans change. DL has shown repeatedly that it is an opportunistic purchaser of aircraft. DL likely had no plan to retire its entire 777 fleet this year, but that changed as well.
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MSPNWA
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Tue May 26, 2020 11:07 pm

scbriml wrote:
You haven't offered any hard evidence that that DL didn't intend to operate the four used A350s they agreed to take in addition to ten new ones. All you have is a decision to defer some A350s that was made three years ago. A lot has changed since then. As I said, a lot has changed since DL agreed to take 14 A350s from LATAM just a few months ago. There's no pattern to follow, plans change. DL has shown repeatedly that it is an opportunistic purchaser of aircraft. DL likely had no plan to retire its entire 777 fleet this year, but that changed as well.


I most definitely have. You've just ignored it or blew it off as insignificant. On the contrary, you are the one without evidence in your rebuttal. You're making the assumption that because DL was going to purchase these airplanes, they intended to operate them. It's a false premise. It may be true, but it also may not be true. You need to provide evidence beyond the fact that DL entered into a purchase agreement. For example, this would be something like DL wanting to move up A350 deliveries prior to the LATAM/AA fallout. Or DL was scouring the used market for A350s prior to the LATAM deal. Etc. What isn't evidence is piling it on higher by stating unverified legends such as "DL has shown to be an opportunistic purchaser" (even if true, they haven't been buyers in the used widebody market). The irony of believing that is it indicates DL relies on random outside influence with their fleet planning. I give them much more credit than that when it comes to such an important decision.
 
CaliguyNYC
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 11:16 pm

Antaras wrote:
Couldn't Latam-Delta find a better solution that cancellation? Could they simply transfer the order to other carriers (who needs the A350) or to the lessors?


I think this is a legal way to essentially give LATAM more money to help save them. Delta pays $62M in cash and LATAM can sell / lease the planes
 
onwFan
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Tue May 26, 2020 11:20 pm

CaliguyNYC wrote:
Antaras wrote:
Couldn't Latam-Delta find a better solution that cancellation? Could they simply transfer the order to other carriers (who needs the A350) or to the lessors?


I think this is a legal way to essentially give LATAM more money to help save them. Delta pays $62M in cash and LATAM can sell / lease the planes

It is interesting that some have spun the news of DL backing out of the contract into a story of DL ‘giving’ money and saving LATAM. LATAM’s press release is telling, and as other have mentioned, there is not a single of mention of DL.
 
Lootess
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Wed May 27, 2020 12:48 am

CaliguyNYC wrote:
Antaras wrote:
Couldn't Latam-Delta find a better solution that cancellation? Could they simply transfer the order to other carriers (who needs the A350) or to the lessors?


I think this is a legal way to essentially give LATAM more money to help save them. Delta pays $62M in cash and LATAM can sell / lease the planes


LATAM is rejecting two of their leases in their Ch.11 filing, everyone wins. Except the lessor, but good thing they were leased.

On the flip side, Delta doesn't get the older, heavier A350s, they'll get 10 fresh from Toulouse.
 
Antarius
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 12:55 am

MSPNWA wrote:
scbriml wrote:
You haven't offered any hard evidence that that DL didn't intend to operate the four used A350s they agreed to take in addition to ten new ones. All you have is a decision to defer some A350s that was made three years ago. A lot has changed since then. As I said, a lot has changed since DL agreed to take 14 A350s from LATAM just a few months ago. There's no pattern to follow, plans change. DL has shown repeatedly that it is an opportunistic purchaser of aircraft. DL likely had no plan to retire its entire 777 fleet this year, but that changed as well.


I most definitely have. You've just ignored it or blew it off as insignificant. On the contrary, you are the one without evidence in your rebuttal. You're making the assumption that because DL was going to purchase these airplanes, they intended to operate them. It's a false premise. It may be true, but it also may not be true. You need to provide evidence beyond the fact that DL entered into a purchase agreement. For example, this would be something like DL wanting to move up A350 deliveries prior to the LATAM/AA fallout. Or DL was scouring the used market for A350s prior to the LATAM deal. Etc. What isn't evidence is piling it on higher by stating unverified legends such as "DL has shown to be an opportunistic purchaser" (even if true, they haven't been buyers in the used widebody market). The irony of believing that is it indicates DL relies on random outside influence with their fleet planning. I give them much more credit than that when it comes to such an important decision.


Actually no. The burden of proof lies with you, not someone asserting that someone who bought planes intends to use them.

Save for a lessor, that's true basically 100% of the time. So the absence of evidence does not need justification. Your theory does.
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tphuang
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Wed May 27, 2020 1:42 am

Lootess wrote:
CaliguyNYC wrote:
Antaras wrote:
Couldn't Latam-Delta find a better solution that cancellation? Could they simply transfer the order to other carriers (who needs the A350) or to the lessors?


I think this is a legal way to essentially give LATAM more money to help save them. Delta pays $62M in cash and LATAM can sell / lease the planes


LATAM is rejecting two of their leases in their Ch.11 filing, everyone wins. Except the lessor, but good thing they were leased.

On the flip side, Delta doesn't get the older, heavier A350s, they'll get 10 fresh from Toulouse.


Delta is negotiating with Airbus to defer those 10 fresh ones and other Airbus orders.

This is simply a matter of delta opting out of aircraft it really doesn't need for a long time.
 
B757Forever
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 2:03 am

MSPNWA wrote:
scbriml wrote:
You haven't offered any hard evidence that that DL didn't intend to operate the four used A350s they agreed to take in addition to ten new ones. All you have is a decision to defer some A350s that was made three years ago. A lot has changed since then. As I said, a lot has changed since DL agreed to take 14 A350s from LATAM just a few months ago. There's no pattern to follow, plans change. DL has shown repeatedly that it is an opportunistic purchaser of aircraft. DL likely had no plan to retire its entire 777 fleet this year, but that changed as well.


I most definitely have. You've just ignored it or blew it off as insignificant. On the contrary, you are the one without evidence in your rebuttal. You're making the assumption that because DL was going to purchase these airplanes, they intended to operate them. It's a false premise. It may be true, but it also may not be true. You need to provide evidence beyond the fact that DL entered into a purchase agreement. For example, this would be something like DL wanting to move up A350 deliveries prior to the LATAM/AA fallout. Or DL was scouring the used market for A350s prior to the LATAM deal. Etc. What isn't evidence is piling it on higher by stating unverified legends such as "DL has shown to be an opportunistic purchaser" (even if true, they haven't been buyers in the used widebody market). The irony of believing that is it indicates DL relies on random outside influence with their fleet planning. I give them much more credit than that when it comes to such an important decision.


Delta's original plan was to refresh the interiors (carpet, wall covering, seat covers etc.) on these four "non-standard" A350 aircraft and operate them as a subfleet on South American routes. Obviously that has now changed.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 2:44 am

So I am confused, perhaps someone can explain it better.

Wouldn't Chap. 11 been delta's way out of this deal? Someone mentioned the JV could be cancelled due to Chap. 11 wouldn't that end the whole deal that Delta put together? Leaving LATAM with none of the investment or the help with the 4 frames in question or the 10 from Airbus? Surely all of these obligations by Delta were contingent on a successful completion of the JV.

So instead of doing all of that DL re-committed to the JV buy cancelling the 4 frames pursuant to the agreement. I would also guess that this was the cheapest way for Delta to get rid of 4 350s. I thought I remember reading something about Airbus and Boeing not being very accommodating to airlines not interested in taking delivery of aircraft at the moment as they too are short on cash (something about Airbus forcing an airline to take delivery of a 320 or something).

So if airbus wasn't willing to play ball, delta looked at their other options, backing out of the JV could have saved them from 14 planes they don't want but it would also mean backing out of the JV, so instead they called LATAM and talked about their options to take fewer 350s and this was the result.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 3:26 am

MSPNWA wrote:
scbriml wrote:
You haven't offered any hard evidence that that DL didn't intend to operate the four used A350s they agreed to take in addition to ten new ones. All you have is a decision to defer some A350s that was made three years ago. A lot has changed since then. As I said, a lot has changed since DL agreed to take 14 A350s from LATAM just a few months ago. There's no pattern to follow, plans change. DL has shown repeatedly that it is an opportunistic purchaser of aircraft. DL likely had no plan to retire its entire 777 fleet this year, but that changed as well.


I most definitely have. You've just ignored it or blew it off as insignificant. On the contrary, you are the one without evidence in your rebuttal. You're making the assumption that because DL was going to purchase these airplanes, they intended to operate them. It's a false premise. It may be true, but it also may not be true. You need to provide evidence beyond the fact that DL entered into a purchase agreement. For example, this would be something like DL wanting to move up A350 deliveries prior to the LATAM/AA fallout. Or DL was scouring the used market for A350s prior to the LATAM deal. Etc. What isn't evidence is piling it on higher by stating unverified legends such as "DL has shown to be an opportunistic purchaser" (even if true, they haven't been buyers in the used widebody market). The irony of believing that is it indicates DL relies on random outside influence with their fleet planning. I give them much more credit than that when it comes to such an important decision.


And you've ignored the most obvious piece of evidence: DL acquires used airplanes frequently, and except for end-of-service-life types for which it sometimes brings in parts birds (inapplicable to the A350), it flies them. You've presented a highly unusual scenario - that an airline would acquire fairly new planes of a type it has in its fleet and...what, resell them? - with nothing but conjecture and circumstance for evidence and then gotten surly with people pointing out that your arguments are built on a foundation of sand. It's not a good look.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 3:51 am

mpdpilot wrote:
So I am confused, perhaps someone can explain it better.

Wouldn't Chap. 11 been delta's way out of this deal? Someone mentioned the JV could be cancelled due to Chap. 11 wouldn't that end the whole deal that Delta put together? Leaving LATAM with none of the investment or the help with the 4 frames in question or the 10 from Airbus? Surely all of these obligations by Delta were contingent on a successful completion of the JV.

So instead of doing all of that DL re-committed to the JV buy cancelling the 4 frames pursuant to the agreement. I would also guess that this was the cheapest way for Delta to get rid of 4 350s. I thought I remember reading something about Airbus and Boeing not being very accommodating to airlines not interested in taking delivery of aircraft at the moment as they too are short on cash (something about Airbus forcing an airline to take delivery of a 320 or something).

So if airbus wasn't willing to play ball, delta looked at their other options, backing out of the JV could have saved them from 14 planes they don't want but it would also mean backing out of the JV, so instead they called LATAM and talked about their options to take fewer 350s and this was the result.


The investment of 2 Billion went into equity. That was spent. So with bankruptcy, DL is now 2.3 billion in the red (350 million additional given for OW breakup etc) and will not get it back.

Their best bet is to hope Latam 2.0 continues the JV. If Latam 2.0, which is a brand new company, were to go to UA or back to AA, DL would be back to where they were with a few billion missing.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 4:00 am

Delta stubed their toe in buying these four A350s. Now Delta is trying to heal the owie. The fox outfoxed itself. I wonder if any heads will roll? :old:
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n7371f
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 4:11 am

DL didn't want the 4 used, early build A350's with the lower MTOW, after the decision to scrub the 777 fleet. DL wants the higher MTOW's new from Airbus going forward. Also the new business model also foresees far less wide body lift so this reduces another 4 from the plan.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 4:27 am

MSPNWA wrote:
You're making the assumption that because DL was going to purchase these airplanes, they intended to operate them. It's a false premise. It may be true, but it also may not be true.


Huh? First you say, "It's a false premise"... then you say, "It may be true, but it may also not be true."

If it is true - an option you admit is in play - then it is not a "false premise". You can't have it both ways.


Antarius wrote:
MSPNWA wrote:
scbriml wrote:
You haven't offered any hard evidence that that DL didn't intend to operate the four used A350s they agreed to take in addition to ten new ones. All you have is a decision to defer some A350s that was made three years ago. A lot has changed since then. As I said, a lot has changed since DL agreed to take 14 A350s from LATAM just a few months ago. There's no pattern to follow, plans change. DL has shown repeatedly that it is an opportunistic purchaser of aircraft. DL likely had no plan to retire its entire 777 fleet this year, but that changed as well.

I most definitely have. You've just ignored it or blew it off as insignificant. On the contrary, you are the one without evidence in your rebuttal. You're making the assumption that because DL was going to purchase these airplanes, they intended to operate them. It's a false premise. It may be true, but it also may not be true. You need to provide evidence beyond the fact that DL entered into a purchase agreement. For example, this would be something like DL wanting to move up A350 deliveries prior to the LATAM/AA fallout. Or DL was scouring the used market for A350s prior to the LATAM deal. Etc. What isn't evidence is piling it on higher by stating unverified legends such as "DL has shown to be an opportunistic purchaser" (even if true, they haven't been buyers in the used widebody market). The irony of believing that is it indicates DL relies on random outside influence with their fleet planning. I give them much more credit than that when it comes to such an important decision.

Actually no. The burden of proof lies with you, not someone asserting that someone who bought planes intends to use them.
Save for a lessor, that's true basically 100% of the time. So the absence of evidence does not need justification. Your theory does.


:checkmark: Next, we will hear that Delta never really wanted those 777's the bought 10 years ago, because they are getting rid of them now.


n7371f wrote:
DL didn't want the 4 used, early build A350's with the lower MTOW, after the decision to scrub the 777 fleet. DL wants the higher MTOW's new from Airbus going forward. Also the new business model also foresees far less wide body lift so this reduces another 4 from the plan.



That makes sense. Things have changed a lot in the past four three months.
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Westerwaelder
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Wed May 27, 2020 5:16 am

CaliguyNYC wrote:
Antaras wrote:
Couldn't Latam-Delta find a better solution that cancellation? Could they simply transfer the order to other carriers (who needs the A350) or to the lessors?


I think this is a legal way to essentially give LATAM more money to help save them. Delta pays $62M in cash and LATAM can sell / lease the planes


Or it's simply Delta not honouring a contract and paying the penalty stipulated within? The other big shareholders are coming up with $900million and Delta owning nearly 20% stumps up $62?
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 5:36 am

I keep reading in this thread that LATAM is now in bankruptcy, all contracts becoming void and equity worthless, and that somehow a new LATAM will emerge within a couple of years...

Correct me if I’m wrong but Chapter 11 is not bankruptcy as in liquidation (that would be Chapter 7) but just protection from creditors while the company is being given the chance to reorganize, including renegotiating debts and contracts based on a recovery plan that has to be approved by a court.

So how exactly is the “old LATAM” supposed to be replaced by a new one without the former’s liabilities? As far as I understand, Delta’s contracts with LATAM will continue to be valid during and after Chapter 11 if LATAM successfully re-emerges (which seems very likely), and in any case the A350s either belong or are leased by LATAM Brasil, which is not part of the Chapter 11 filing.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 7:17 am

Antarius wrote:
Actually no. The burden of proof lies with you, not someone asserting that someone who bought planes intends to use them.

Save for a lessor, that's true basically 100% of the time. So the absence of evidence does not need justification. Your theory does.


The old "burden of proof" diversion. First, I've already supported my argument to call the status quo into question and sent the ball into the other court. Second, the burden of proof here should be with those under a false premise that because DL agreed to purchase the airplanes, it means that they intended to operate them. Obviously that is not the only reason to acquire airplanes, particularly when engaging in an equity stake in a new partner under duress. So what we have here is a belief that has been turned into a pseudo-fact without the external supporting evidence to do so. So let's see your evidence supporting the belief that DL intended to operate them, and let's measure the two sides up.

B757Forever wrote:
Delta's original plan was to refresh the interiors (carpet, wall covering, seat covers etc.) on these four "non-standard" A350 aircraft and operate them as a subfleet on South American routes. Obviously that has now changed.


Where was this plan published? Internally?

IADCA wrote:
And you've ignored the most obvious piece of evidence: DL acquires used airplanes frequently, and except for end-of-service-life types for which it sometimes brings in parts birds (inapplicable to the A350), it flies them. You've presented a highly unusual scenario - that an airline would acquire fairly new planes of a type it has in its fleet and...what, resell them? - with nothing but conjecture and circumstance for evidence and then gotten surly with people pointing out that your arguments are built on a foundation of sand. It's not a good look.


Au contraire, since the evidence you present (DL frequently buys used aircraft for operation) can be shifted to support my position. I have a question for you. When was the last used widebody DL purchased and operated? (and also answer it for NW to cover for the fact that people from both airlines could be making these decisions)

DL's fleet planning prior to the LATAM deal is anything but conjecture and circumstance. It's hard evidence for the direction DL was going, and apparently you're choosing to ignore it's implications. The unusual scenario here was the situation involving LATAM. They needed cash. They needed out of excess airplanes. Who knows what conditions were placed in getting a deal done. Considering the result, it's clear that LATAM wanted a buyer for their airplanes. Taking a "normal" aircraft acquisition approach is short-sighted. This was not a "normal" transaction of two parties only dealing in airplanes, so to take past general transaction conclusions as evidence involving a special transaction and specific parties is overly broad. Thinking inside the box about it is a mistake. You know, I find that quite interesting when one of DL's reputations is for thinking outside the box. Often posters laud their unique actions, and then in these cases like this they put DL back into a box. Ironically I'm the one defending DL in that I believe they had a good plan to not operate the airplanes! That's what I think happened based on the evidence, and I haven't seen any strong specific DL/LATAM evidence to call that into serious question. A look doesn't make or break an debate. The facts do. I'll stick to them.

alfa164 wrote:
Huh? First you say, "It's a false premise"... then you say, "It may be true, but it may also not be true."

If it is true - an option you admit is in play - then it is not a "false premise". You can't have it both ways.


The "may be true, may not be true" refers to the conclusion. What I'm saying is that DL may indeed have intended to operate these frames. However they may not have intended that. That is the debate. What I pointed out was the false premise that since DL purchased the airplanes, it means they intended to operate them. I hope that is more clear for you.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 7:31 am

NWAROOSTER wrote:
Delta stubed their toe in buying these four A350s. Now Delta is trying to heal the owie. The fox outfoxed itself. I wonder if any heads will roll? :old:


Hindsight is wonderful. The deal was perfectly reasonable at the time it was made. Plenty of airlines will have made fleet decisions a few months ago which they now regret.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 8:28 am

MSPNWA wrote:
I most definitely have. You've just ignored it or blew it off as insignificant.


A plan made three years ago is insignificant today! Three years ago DL planned to be operating its 777s well beyond 2020 (otherwise why spend $100 million refurbishing them last year?) The World has turned upside down since then.

DL changed the old plan in September. Even the September plan has been changed by hurricane Covid. Why do you find the fact that plans can and do change to be so hard to accept? I don't doubt plans will change again.

MSPNWA wrote:
It may be true, but it also may not be true.


So it may be true that plans change and DL intended to operate the four A350s it has now paid $62 million to get rid of? :spin:

MSPNWA wrote:
The irony of believing that is it indicates DL relies on random outside influence with their fleet planning.


Talk about ignoring the evidence - DL taking a large stake in LATAM (including taking 14 A350s) was a planned business decision, not a "random outside influence". However, dumping their entire 777 fleet (and taking a significant charge to do it) due to Covid-19 is a perfect example of a random outside influence directly affecting fleet planning. Indeed, paying $62 million to not take these four A350s is another fleet planning decision that can be directly attributed to a random outside influence.

MSPNWA wrote:
When was the last used widebody DL purchased and operated? (and also answer it for NW to cover for the fact that people from both airlines could be making these decisions)


Past behaviours, just like past plans, can and do change.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 12:43 pm

NWAROOSTER wrote:
Delta stubed their toe in buying these four A350s. Now Delta is trying to heal the owie. The fox outfoxed itself. I wonder if any heads will roll? :old:

The problem of what to do with the ones who made the decision to purchase the heavy low MTOW incompatible A350s will be solved by transferring them to the refinery.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 1:02 pm

Revelation wrote:
NWAROOSTER wrote:
Delta stubed their toe in buying these four A350s. Now Delta is trying to heal the owie. The fox outfoxed itself. I wonder if any heads will roll? :old:

The problem of what to do with the ones who made the decision to purchase the heavy low MTOW incompatible A350s will be solved by transferring them to the refinery.

Not sure I agree with this, now that DL has retired its entire 777 fleet we know that the resale price of the 777 which DL harped on before is now done, however, the A350 is the new up and coming star, no one expects these 4 a/c to go to the scrap heap. DL being the astute investor that they are, one would have thought that they would have viewed these 4 A350's as a major investment that they could unload at a profit by next year, they have enough higher MTOW A350's to ensure that this sub-fleet would not be a millstone around their neck as they rebuild their operations.
I think I fall on the side of this being viewed as a sign of good faith to ensure that the creditors who invest will view the JV in a favorable light.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 1:17 pm

par13del wrote:
DL being the astute investor that they are, one would have thought that they would have viewed these 4 A350's as a major investment that they could unload at a profit by next year, they have enough higher MTOW A350's to ensure that this sub-fleet would not be a millstone around their neck as they rebuild their operations.
I think I fall on the side of this being viewed as a sign of good faith to ensure that the creditors who invest will view the JV in a favorable light.

I'm in the camp of thinking that these four would always be viewed as oddballs by whomever purchases them, unless you find a customer who wants exactly four aircraft in that exact configuration. Then add in the fact that A350 has really shed weight and improved MTOW since the early days, and these were not going to be easy to unload at a profit in a year or two.

I think DL did think they could fit them in to their fleet pre-covid and the incompatibility with factory ordered A350 could be managed. I think the big turn of events is of course covid. We went from an environment of DL creatively looking to acquire more airplanes earlier to one where most of its fleet is parked with the longhaul missions recovering later than shorthaul. This meant DL had to creatively look for ways to acquire fewer airplanes.
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 1:23 pm

MSPNWA wrote:

IADCA wrote:
And you've ignored the most obvious piece of evidence: DL acquires used airplanes frequently, and except for end-of-service-life types for which it sometimes brings in parts birds (inapplicable to the A350), it flies them. You've presented a highly unusual scenario - that an airline would acquire fairly new planes of a type it has in its fleet and...what, resell them? - with nothing but conjecture and circumstance for evidence and then gotten surly with people pointing out that your arguments are built on a foundation of sand. It's not a good look.


Au contraire, since the evidence you present (DL frequently buys used aircraft for operation) can be shifted to support my position. I have a question for you. When was the last used widebody DL purchased and operated? (and also answer it for NW to cover for the fact that people from both airlines could be making these decisions)


Why does the narrowbody/widebody distinction matter? DL executives are on public record discussing considering advantageous prices in the market on used widebodies several years ago and noting that they expected prices to get even better (which they did). Just because they finally pulled the trigger this time (after doing so numerous times on narrowbodies) after not doing so for a long time does not provide any evidence at all that they didn't intend to operate the frames.

Frankly, your assertion is rather absurd: that an airline well-known for buying used airplanes and flying them for a long time planned to buy fairly new used airplanes and not fly them. The points you've made on your side are utterly unconvincing as to why, with a signed purchase order, their intentions for the frames would be any different. Here was the basic fleet plan pre-COVID: expand A350 fleet, keep flying 777s. COVID changes things. A tremendous wall of post-hoc rationalization to fit your desired reality (that DL could not possibly have had to change plans from their original and common-sense intention) simply doesn't comport with the order of events. They ordered some planes; found they didn't need them and they were better off cancelling, even though it involved a penalty; cancelled in a smart commercial decision.

Why you're twisting and turning to make it seem like they ordered planes they never wanted to operate, apparently had no firm resale contract for, and then paid money to cancel them - in which case they've just exposed themselves to a shareholder derivative suit - is a mystery to me. That set of facts makes Delta management look much less competent than they clearly are.

MSPNWA wrote:


The old "burden of proof" diversion. First, I've already supported my argument to call the status quo into question and sent the ball into the other court. Second, the burden of proof here should be with those under a false premise that because DL agreed to purchase the airplanes, it means that they intended to operate them. Obviously that is not the only reason to acquire airplanes, particularly when engaging in an equity stake in a new partner under duress. So what we have here is a belief that has been turned into a pseudo-fact without the external supporting evidence to do so. So let's see your evidence supporting the belief that DL intended to operate them, and let's measure the two sides up.


You don't seem to be able to see the many holes in your own arguments. For example, if DL never intended to take these airplanes, why did they agree to take them and then not re-market them? They had how long to try to re-sell this fleet, if that's what they intended, and instead they're paying to get out of the contract. Indeed, why agree to take them in the first place if they never wanted them? It's clear that LATAM didn't want them - that's why they sold them - but why would DL specifically agree to take on four airframes it didn't want rather than dealing in cash as part of the larger transaction? Couldn't it just be the rational argument that LATAM offered them at a valuation that made them economic for DL to operate based on pre-COVID projections and then...things changed?
Last edited by IADCA on Wed May 27, 2020 1:42 pm, edited 1 time in total.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 1:41 pm

IADCA wrote:
Why does the narrowbody/widebody distinction matter? DL executives are on public record discussing considering advantageous prices in the market on used widebodies several years ago and noting that they expected prices to get even better (which they did). Just because they finally pulled the trigger this time (after doing so numerous times on narrowbodies) after not doing so for a long time does not provide any evidence at all that they didn't intend to operate the frames.


I don't see how there's any distinction. :shakehead:
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Wed May 27, 2020 2:02 pm

Westerwaelder wrote:
The other big shareholders are coming up with $900million and Delta owning nearly 20% stumps up $62?


Delta really doesn't have a choice here. The conditions attached to government funding they took to sustain operations preclude them from making outside investments.

Aeropostale wrote:
I keep reading in this thread that LATAM is now in bankruptcy, all contracts becoming void and equity worthless, and that somehow a new LATAM will emerge within a couple of years...

Correct me if I’m wrong but Chapter 11 is not bankruptcy as in liquidation (that would be Chapter 7) but just protection from creditors while the company is being given the chance to reorganize, including renegotiating debts and contracts based on a recovery plan that has to be approved by a court.

So how exactly is the “old LATAM” supposed to be replaced by a new one without the former’s liabilities? As far as I understand, Delta’s contracts with LATAM will continue to be valid during and after Chapter 11 if LATAM successfully re-emerges (which seems very likely), and in any case the A350s either belong or are leased by LATAM Brasil, which is not part of the Chapter 11 filing.


Contracts do not automatically become void and equity does not automatically become worthless in a Chapter 11 bankruptcy. A company restructuring in Chapter 11, however, does have the right to reject contracts or continue to stay bound by contracts. (Certain contracts, like labor contracts, are more complicated.) The bankruptcy judge must approve these rejections and the rejections presumably must be necessary for a successful reorganization of the debtor. The counterparties in the rejected contracts end up with a financial claim against the bankruptcy estate and are likely to end up with either an equity stake in the reorganized company or a significant haircut taken on the monies owed by the bankrupt company. In the case of leased assets like aircraft or real estate, the lessor ends up with the asset.

The "new LATAM" will likely end up with creditors of the "old LATAM" holding equity stakes. Maybe the prior equity holders will continue to have a diluted stake, maybe their equity will end up being worthless. The JV contract with Delta will continue because LATAM management apparently continues to think being in the JV is better than not being in the JV.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 2:07 pm

Aeropostale wrote:
I keep reading in this thread that LATAM is now in bankruptcy, all contracts becoming void and equity worthless, and that somehow a new LATAM will emerge within a couple of years...

Correct me if I’m wrong but Chapter 11 is not bankruptcy as in liquidation (that would be Chapter 7) but just protection from creditors while the company is being given the chance to reorganize, including renegotiating debts and contracts based on a recovery plan that has to be approved by a court.

So how exactly is the “old LATAM” supposed to be replaced by a new one without the former’s liabilities? As far as I understand, Delta’s contracts with LATAM will continue to be valid during and after Chapter 11 if LATAM successfully re-emerges (which seems very likely), and in any case the A350s either belong or are leased by LATAM Brasil, which is not part of the Chapter 11 filing.


No, all contracts are not void. The contracts must be voided by the court. So this wasn't an out of DL, but rather LATAM if they wanted (responding to a post above). However, a lot of the liabilities of "old LATAM" will be voided - that's one of the big benefits of Chapter 11. So yes, this is often considered a "new" entity when it emerges.
 
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Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 2:15 pm

B757Forever wrote:
Delta's original plan was to refresh the interiors (carpet, wall covering, seat covers etc.) on these four "non-standard" A350 aircraft and operate them as a subfleet on South American routes. Obviously that has now changed.


[quote="MSPNWA"]
Where was this plan published? Internally?


Yes. Internal only. This was not distributed publicly.
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Re: Delta Pays $62m to Cancel A350 Purchase from LATAM

Wed May 27, 2020 2:44 pm

ScottB wrote:
Westerwaelder wrote:
The other big shareholders are coming up with $900million and Delta owning nearly 20% stumps up $62?


Delta really doesn't have a choice here. The conditions attached to government funding they took to sustain operations preclude them from making outside investments.

I know they can"t do anything. I was responding to the theory that cancelling the four frames and paying $62 million was somehow a way to support LA and safeguard the JV. That sum seems paltry compared to what other shareholders are putting up so if anything dilutes Delta's influence rather than safeguarding anything.
 
Antarius
Posts: 2392
Joined: Thu Apr 13, 2017 1:27 pm

Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 4:00 pm

MSPNWA wrote:
Antarius wrote:
Actually no. The burden of proof lies with you, not someone asserting that someone who bought planes intends to use them.

Save for a lessor, that's true basically 100% of the time. So the absence of evidence does not need justification. Your theory does.


The old "burden of proof" diversion. First, I've already supported my argument to call the status quo into question and sent the ball into the other court. Second, the burden of proof here should be with those under a false premise that because DL agreed to purchase the airplanes, it means that they intended to operate them. Obviously that is not the only reason to acquire airplanes, particularly when engaging in an equity stake in a new partner under duress. So what we have here is a belief that has been turned into a pseudo-fact without the external supporting evidence to do so. So let's see your evidence supporting the belief that DL intended to operate them, and let's measure the two sides up.


Yes, the burden of proof argument. What stops us from just saying anything. For example, if I claimed you were Ted Bundy, wouldn't I need to prove it?

Please cite examples of non lessors who bought airplanes and did not operate them and never intended to. I can bury you in lists of people who did operate their purchases.

Your move, Ted.
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Polot
Posts: 10629
Joined: Thu Jul 28, 2011 3:01 pm

Re: Delta Pays $62m to Cancel purchase of 4 used A350s from LATAM

Wed May 27, 2020 4:40 pm

Antarius wrote:
MSPNWA wrote:
Antarius wrote:
Actually no. The burden of proof lies with you, not someone asserting that someone who bought planes intends to use them.

Save for a lessor, that's true basically 100% of the time. So the absence of evidence does not need justification. Your theory does.


The old "burden of proof" diversion. First, I've already supported my argument to call the status quo into question and sent the ball into the other court. Second, the burden of proof here should be with those under a false premise that because DL agreed to purchase the airplanes, it means that they intended to operate them. Obviously that is not the only reason to acquire airplanes, particularly when engaging in an equity stake in a new partner under duress. So what we have here is a belief that has been turned into a pseudo-fact without the external supporting evidence to do so. So let's see your evidence supporting the belief that DL intended to operate them, and let's measure the two sides up.


Yes, the burden of proof argument. What stops us from just saying anything. For example, if I claimed you were Ted Bundy, wouldn't I need to prove it?

Please cite examples of non lessors who bought airplanes and did not operate them and never intended to. I can bury you in lists of people who did operate their purchases.

Your move, Ted.

While I do agree with you that DL intended to operate the used A350s, Delta has actually “bought” brand new 737-800s and used E190s that they never actually operated (in both cases planes were immediately sold to someone else after contractual delivery and never painted in DL livery). Delta also bought Gol’s 767s with no intention of ever operating them, along with various MD-90s (and MD-80s/717s? Can’t remember).

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