Delta to put 100 Rj's to the desert

[General Lee]

How many MD88/DC9's are equivalent to 100 crj's?

Richard Anderson stated recently that we will be keeping all of the larger DC9s (-40 and -50 series---41 of them will stay) until 2012, and I haven't seen anything about when the MD88s will be gone. 20 DC9-30s will be parked soon though, probably after the 1st of the year. Unfortunately 100 50 seat RJs sounds about right, and we all know they don't make money in a high fuel environment.

Bye Bye--General Lee

 

[Speedtape]

Look for a good number to come from ASA. My guess I 25. I've heard 91 50's from a couple sources. Remember, 80% of less is less. People think ASA can't be downsized in ATL are flat wrong.

Hugh reductions are coming! 100 planes is a lot. Spread over 5 or 6 carriers is a lot for each, even if evenly spread.

Your source? ASA may make a contribution--but it will not be a "good number!"

ATL is the fortress. There will not be much change there. CVG, SLC, and MEM is another story!

What's a "Hugh" reduction?
Your guess is "I 25"? Please translate.

Drinking and Keyboarding don't Mix!

 

[DoinTime]

yeah, whatever I'm betting we see a different story down the road.

Good luck though!

Medeco

Hows that crow taste?

 

[DoinTime]

Unfortunately 100 50 seat RJs sounds about right, and we all know they don't make money in a high fuel environment.

Bye Bye--General Lee

Judging by the $1,000,000,000 quarterly loss I would say nothing is making money in the high fuel environment. When you are losing nearly a half a million dollars an hour you have problems that parking some RJs wont fix.

 

[General Lee]

Judging by the $1,000,000,000 quarterly loss I would say nothing is making money in the high fuel environment. When you are losing nearly a half a million dollars an hour you have problems that parking some RJs wont fix.

You obviously didn't read the article about the loss. It was all a paper loss, looking at the value of the combined company with our decreased stock price due to high fuel. We actually had a $137 million operating profit, and our fuel hedging actually saved us over $313 million. Here is part of the article written by Reuters:


DELTA RESULTS
Delta, which has agreed to buy Northwest Airlines Corp, reported a quarterly net loss of $1 billion, or $2.64 per share. Excluding special charges, however, Delta said it earned $137 million, or 35 cents per share.

Delta, which said the special charges were mainly for the impairment of goodwill, emerged from bankruptcy at the end of April 2007, so many year-earlier figures were unavailable.

Revenue rose about 10 percent to $5.5 billion. Delta ended the quarter with $4.3 billion in unrestricted liquidity, including $1 billion available under its revolving credit facility.

The airline said it expects capacity for the second half of 2008 to be down 4 percent compared with 2007, with its domestic capacity down 13 percent and international capacity up 14 percent.

During the quarter, Delta hedged 49 percent of its fuel consumption and realized $313 million in gains.
Delta said its merger is likely to close in the fourth quarter and it has reached a pre-merger joint bargaining agreement between the Delta and Northwest pilots.
The company upped its forecast for merger-related synergies to $2 billion from $1 billion by 2012. Delta said the savings and revenue will come mainly from combining the two carriers' networks.


I hope that makes you feel better......(how's that crow taste)



Bye Bye--General Lee

 

[DoinTime]

Just what is "impairment of goodwill"?

 

[General Lee]

Just what is "impairment of goodwill"?

I don't really know, but I think it was stating the company could be worth X Amount after a merger, and watching the stock go down and now saying it will be worth less. I think that is right.


Bye Bye--General Lee

 

[jetracer5]

How many MD88/DC9's are equivalent to 100 crj's?

This is the part I find interesting. Delta never said it was parking 100 RJ's. They said the EQUIVALENT and every time they said parking planes they ALWAYS said the equivalent of 100 RJ's. I think something fishy is going on over at fort Delta. Or maybe I am just reading into it too much!

 

[Speedtape]

I don't really know, but I think it was stating the company could be worth X Amount after a merger, and watching the stock go down and now saying it will be worth less. I think that is right.


Bye Bye--General Lee

Goodwill is an intangible asset. It is the additional cost, or premium, above net asset value that a company is willing to pay in an acquisition of another company, under the concept of on-going concern, recognizing some "intrinsic or intangible value." It also can be the value recognized in combining the synergies of two companies. More simply, it is an accounting recognition of the premium paid above the net asset value.

The "impairment" means that there was a significant, negative change that took place during the accounting period that mandated an adjustment in the previous estimate of the value of Goodwill. Most likely, as the General stated, the adjustment was required due to the significant change in the stock prices for both Delta and NWA, and the significant and increased cost of fuel, which is the highest operational cost of running an airline.

However, it is interesting to note, in the recent report, the original cost savings potential in combining the two airlines has doubled from $1 Billion to $2 billion a year by 2012. This can only mean, over the next 3 years, that there will be aggressive moves and restructuring made, after merger approval, to attain those cost savings. The cost savings cannot be attained unless there is a drastic change in the status quo of the combined companies--can you say, Major OVERHAUL?

 

[Speedtape]

This is the part I find interesting. Delta never said it was parking 100 RJ's. They said the EQUIVALENT and every time they said parking planes they ALWAYS said the equivalent of 100 RJ's. I think something fishy is going on over at fort Delta. Or maybe I am just reading into it too much!

Hmmm.....You may be on to something! This is better than the Da Vincci Code with EQUIVALENT being the beginning of the riddle!

One thing we do know is the EQUIVALENT of 100 RJ's means about 5,000 seats! 5000/140 = about 35 to 36 mainline narrow bodies.

However, it seems that there were some ratios in the scope where 3 RJs could be added for every mainline plane added. One would think, in a reduction, the reverse would hold true to conform to the above logic. Therefore, should 33 mainline airplanes (any size) be parked, it would require 99+ or 100 rj's to be parked.

General, Please feel free to weigh-in!