Delta deferring 4 A350s, MD88s gone in 5 years.

[topDawg]

Delta announced today they will defer 4 A350s that were coming in 2018 and that the MD88 fleet will be parked completely in 5 years. 
 
Delta is taking 6 A350s in 2017 along with two A330-300s which will allow the complete draw down of the 747 fleet. Delta will still take 3 A350s in 2018 and the 4 deferred frames will come in 2019 and 2020. (Along with 10 more A350s) 
 
The A330-900s start showing up in 2019 and the 787-8 start showing up in 2020. 
 
The company also announced (finally) some changes to the way they are cleaning up the balance sheet. The net debt of 4 Billion target will be moved back a few years (2019-2020 vs 2017) and the company will increase its pension payments by ~$200M yoy. Extending the debt target out by 2-3 years allows for higher pension plan increases and also is going to be used to address some of the tax headwinds the company will start to see in 2017. Also, Capex is going to jump a little bit (~300-500M) for some projects Delta has coming up. Some of them announced (LAX terminal, New Rolls Royce engine shop) and i suspect some rumors that are running around (True TOC1 replacement in Atlanta, some more engine stuff, SEA terminal expansion and International aircraft mods). Capex will not get above 50% of operating cash flow however.
 
Delta expects the increase in pension funding should get the company to 80% by 2020. 
 
Finally Delta is increasing its dividend to $0.81 from $0.54. Also going to complete the latest round of stock buy backs early. 
 
 
 
My opinion, the A350 deferment sucks but as long as DALPA keeps letting Delta outsource more than they should to AF/KL (and just take 30 million every two years for it) then Delta is going to keep playing them for fools. Hopefully the pilots buck up a little more. 
 
but I am glad they are reducing the debt funding and moving that money into the pension plan. That has been Delta's biggest issues since they have gotten into the 7B or so ball park of net debt and something I have been wanting to see them address more. Delta has about 15B in pension liability, I believe, which is ~5B more than AA and nearly 10B more than UA. 
 
 
I can't seem to get the 8K to link but its on Delta.com via Investor relations. 

 

[NewHampshire Black Bears]

Funny how AA or UA pilots DON'T let AA or UA ' play them like FOOLS '.
TESTICLES anyone ?

 

[topDawg]

Funny how AA or UA pilots DON'T let AA or UA ' play them like FOOLS '.
TESTICLES anyone ?

 
UA or AA pilots also have a pretty crappy track record when it comes to JVs. 

 

[robbedagain]

dawg  do you know where the first C series will be doing the proving runs? and has DL come out with cities that will first see the C series

 

[Kev3188]

As far as I know, they have not...

 

[topDawg]

dawg  do you know where the first C series will be doing the proving runs? and has DL come out with cities that will first see the C series

Sounds like they are going west and the 717s that are out west are coming back east.

My money is on SEA being the first base with a LAX and SLC base also. The long legs make the aircraft perfect to start some of the bigger missing holes in DL's western network (i.e. LAX/SEA-ORD, SEA-Texas, some smaller SLC flying like ELP or MKE)

The plan with the E90s was the same, they would be based in SEA first. I fully expect the same with the C100.



but this is Delta so an ATL base is always in the cards.

 

[robbedagain]

thanks guys.   I would think the A350s and may be the 330s would be based in SEA as well for the Trans Pacific runs     

 

[topDawg]

thanks guys.   I would think the A350s and may be the 330s would be based in SEA as well for the Trans Pacific runs

First 350 base will be DTW. My bet is ATL or LAX is second. SEA probably won't see many 350 flights as the A330 can do everything but HKG easily. (I do think SEA-HKG will go to the A350 quickly.)

SEA is already a 330 base, a long with ATL, DTW and NYC. You probably won't see many more and if you do it'll be MSP re-opening or maybe LAX.