DAL has best earnings upside revisions in industry

[WorldTraveler]

thank you, thank you, thank you.

"I have already told you most of the work Delta sends out costs about the same as it would if it was done in-house."

do you suppose that UA and US have different pricing for MRO work than DL does? of course not.

there is a DIRECT correlation between the value of work and the jobs that could be had if that work was done in house.

DL spends less on outsourced maintenance that AA/US and UA that means more money for DL employees and it means that AA/US and UA are taking money they could be paying their own employees and giving it to MROs.

as for engine overhauls, it is precisely because the OEMs are trying to increase their margins by doing the engine work in their shops or JVs that DL has the buying power to influence those kinds of decisions by ordering its entire widebody replacement from one manufacturer.

given that there really are no facts, you are mighty pessimistic. Perhaps it took such a massive order for DL to get the size of discounts it wanted but it is also very likely that DL considered overhaul costs for the life of the engine and said Rolls would only win the deal if DL could do the work in its own shops and with a JV.


as for TAESL, I have never argued that the employees aren't AA's... the point about it being a JV is that you can't count everything that happens at TAESL as AA revenue because RR gets a chunk of it.

let's also be clear that TAESL is a profit center for AA and it is not the least bit lost on the 4th floor types that DL is not the least bit interested in sending money down I-20 to support a competitor.

It is VERY LIKELY that DL said that they will not buy RR engines if the requirement is that they be done at TAESL. I happen to agree that a JV is more likely but it is also possible that, if RR has exclusivity requirements with AA that RR might have had no choice but to give DL a carveout to do its own maintenance or lose the deal.

it is also worth noting that your observation about sending GE work out might be related to a deteriorating relationship with GE - or least that other OEMs like Airbus over Boeing - are more receptive to DL now.

it is also not out of the realm of possibility that AF and DL have jointly put the pressure on Rolls

let's wait for some definite news... we are clearly cut out of different types of fabric. I am an optimist that will believe the best until it is proven that is not justified. There is no justification to not be optimistic.

 

[topDawg]

do you suppose that UA and US have different pricing for MRO work than DL does? of course not.

I disagree. United plays vendor swap more than Delta does. Delta gave that game up(to a point) because they know the mechanics don't have a back bone to go after the work. United has to prove to its unions that the work can be done cheaper. (as part of the CBA at United, United must be up front about the cost because if it can be done cheaper at United then it has to be insourced.
 

there is a DIRECT correlation between the value of work and the jobs that could be had if that work was done in house.

Man you are such a bean counter. lol.
 

DL spends less on outsourced maintenance that AA/US and UA that means more money for DL employees and it means that AA/US and UA are taking money they could be paying their own employees and giving it to MROs.

What kind of stupid ass logic is that? "oh well at least you get it back in profit sharing" Man having you ass in an office all those years must have been nice.

 

as for engine overhauls, it is precisely because the OEMs are trying to increase their margins by doing the engine work in their shops or JVs that DL has the buying power to influence those kinds of decisions by ordering its entire widebody replacement from one manufacturer.

Doesn't look like it.
 

given that there really are no facts, you are mighty pessimistic. Perhaps it took such a massive order for DL to get the size of discounts it wanted but it is also very likely that DL considered overhaul costs for the life of the engine and said Rolls would only win the deal if DL could do the work in its own shops and with a JV.

Uh oh WT talking out of his ass again.
"Rolls-Royce said on Friday that the order for engines also included the provision of long-term post-delivery services as part of a "TotalCare" support package."
 
not sure what kind of other proof you need. 
 

as for TAESL, I have never argued that the employees aren't AA's... the point about it being a JV is that you can't count everything that happens at TAESL as AA revenue because RR gets a chunk of it.

But you logic is amazingly stupid. We are talking about staffing. I don't care about these stupid numbers you keep posting. they mean nothing. Zero. zip. nada..... NOTHING to me. 
 
Because again, Airline X does a job in house that requires 10 people but outsources airline Ys work
Airline Y requires 2 employees for its in-house job but outsources airlines X job. 
 
you have to be a complete and total idiot to believe that airline X is the better pick. I don't care about the cost side of it. 
 
 
Again, because you have never done this you don't have the smallest of clues how important it is to have as many people working under you as possible. Not only does it mean furlough protection but it also means being about to bid better days off, better shifts, better bays, better leads, better forman, etc. etc. And if you are an ASM or MUE it means a better chance for advancement. 
and in a world without a pension where people like me will work till they die it makes it even more important to a junior person. 
 
but when you sit in a office for your career and work 9 to 5 with weekends and holidays off you aren't going to understand that. I assume that is why you constantly harp on pay. 

 

[topDawg]

let's also be clear that TAESL is a profit center for AA and it is not the least bit lost on the 4th floor types that DL is not the least bit interested in sending money down I-20 to support a competitor.

oh God not this crap again. 
 
The stupid pissing contests end at the curb. Delta is going to send work to whatever vendor is the best for them. Delta doesn't send the Trents they have now to AA just cause........ Also part of a TotalCare agreement is that Rolls is the one who generally selects who does what.
 
 

It is VERY LIKELY that DL said that they will not buy RR engines if the requirement is that they be done at TAESL. I happen to agree that a JV is more likely but it is also possible that, if RR has exclusivity requirements with AA that RR might have had no choice but to give DL a carveout to do its own maintenance or lose the deal.

Again so likely that they already have TAESL do work for Delta? 
 
the maintenance world works nothing, I mean nothing, like you think it does. If TAESL opens a TrentXWB line I will bet whatever you want to bet that is where RR and Delta sends them. It would be completely foolish to send them to HAESL (and pay for that) when you can truck them to TAESL. Its the same reason Delta doesn't send the T800s to HAESL now. (and FWIW HAESL is a JV between RR and HEACO.....who is owned by the CX holding company) 
 
Also Delta doesn't have complete control like that when they sign a TotalCare agreement. Rollers will generally be the one to pick which vendor the work goes to. That is why you see all the Trent800 and RB211 work in America going to TAESL and not somewhere in Asia. 
 

it is also worth noting that your observation about sending GE work out might be related to a deteriorating relationship with GE - or least that other OEMs like Airbus over Boeing - are more receptive to DL now.

Yes a terrible relationship Delta must have with GE. Seeing that every airplane they order that has a GE option they go with GE. 260 or so GE engines on order or part of the 739 deal. 
100 Trents. 
 
You do the math. 
 

it is also not out of the realm of possibility that AF and DL have jointly put the pressure on Rolls

Yes, yes it is. I don't know why you would think that
1) Delta is putting pressure on Rolls. They have already ordered the engines, signed a TotalCare agreement etc. AF has, AFAIK not even ordered the TrentXWBs yet, much less signed a TotalCare agreement. 
2) Delta and AF/KL mx work together? Is it because of the JV? 
Again, stuff like that has nothing, nada, zip, zero to do with that. 
 
 

let's wait for some definite news... we are clearly cut out of different types of fabric. I am an optimist that will believe the best until it is proven that is not justified. There is no justification to not be optimistic.

We aren't cut from a "different fabric" you just don't know what you are talking about. Its not about me being a optimist or pessimist, it is simply taking knowledge and facts and using them to form an opinion. 
Fact: Delta has already signed a deal with Rolls to do the TrentXWB out of house. 
Fact: Delta can't run the engines in any of its tests cells. 
Fact: Delta has of yet to even try to do a large engine. Every time they have sent the work out. (PW4168s, CF6-80E1, GE90, RR Trent 800) 
 
 
And something else to keep in mind. AA has TrentXWBs on order too. It is very possible that TAESL ends up adding the TrentXWB to its line up. If that happens the chances of a JV with Delta get even smaller than they are now, because Rollers isn't going to see a point in offering that much US production when only so few engines will be used in the US (DL/AA/UA have them on order, but not nearly the scope like we see in Europe or Asia) 
 
In my honest opinion I give the chances of the XWB being an in-house engine about a 5%. Trent 7000 I'll go 7% and Trent 1000(assuming Delta doesn't cancel the order) a 3%. 
 
Before the TotalCare agreement I was at about 75% for all three. 

 

[WorldTraveler]

and, again, you really have no idea what DL is going to do on aircraft that won't need heavy maintenance for years from now. And you also don't know that the total care service that DL is buying won't be done by DL as part of the same type of joint venture that exists with AA.

All you have done is extrapolate your pessimism that DL will outsource work even though they have maintained their level of outsourcing.

 

[eolesen]

Dawg, it wouldn't surprise me if there's a territory exclusivity clause between RR and AA i.e. anything that can go by surface transport within North America goes to TAESL. They've both invested a lot in the test cells there, and I don't see what incentive there would be for Rolls to want to open up a second facility within a day's drive of the existing one.

CO and DL had no problem sending engines there before, so no idea why DL would be opposed to it now.

 

[WorldTraveler]

as I noted, there may well be an exclusivity clause. wouldn't be surprised if there is.

Engine overhauls are highly profitable. DL knows that.

The question is whether DL is willing to cut off a major profit source for AA.

I can't help but think that DL hasn't seriously given it consideration.

despite dawg's views that math is for stupid people, DL is run by people who excel at math.