|Quoting sxf24 (Reply 46):|
Analysts who provide reports on airlines and ask questions on the earnings call are hired by the owners of the Delta to provide an opinion on the company's outlook and potential. While it is easy to disparage these individuals, they are quite smart and basically spend their career digesting information about the industry - think A.net on steroids.
Airline executives who ignore the analysts do so at their peril. One executive who did a superb job of keeping them happy was Northwest president Don Nyrop. Two of the slides he showed at presentations compared Northwest to arch rival Pan Am. The first slide showed the number of vice presidents each airline had; Northwest had very few, Pan Am had dozens. The next slide showed the balance sheets of each airline; Northwest had almost no debt and lots of stockholder's equity, Pan Am had no equity and lots of debt. These slides reminded the analysts that if their clients invested in Northwest, NW would use their money for things that increased the stock price, instead of wasting it on lots of overpaid vice presidents.