Delta Pilots get 29% pay raise will this affect the APA

[TWU informer]

In black and white. The goal of AMFA/AMP to raise the wage at the expense of overhaul will be achieved with the assistance of BK. You guys finally got what you wanted but couldn't get with all those pesky overhaul members voting in a democratic union. You are willing to start the charge and watch the troops die in the quest for hire wages but you never told them it was just for the AMFA/AMP organizers, not the ones who signed cards and funded your dreams. Just like your idol Delle with his "one-time only" $500,000 annuity after leading all those NWA, UA, and AS guys towards a cliff. I thought one of the words in the AMFA slogan was integrity? Looks like "IGM" the definition of integrity in AMFA/AMP based on the facts and your words.

Keep up the fight of lining your pockets at the expense of the thousands that will lose their jobs.

While I don't aften agree with Bob, going through BK and blaming labor for the company's ills and everything will be fixed once you get through 1113 is BS. Most of the BK's result in mgmt continuing to operate as before and relying on labor and outsourcing to resolve the cost and revenue problem. Looks like DL may be facing another trip to BK court if they don't get their act together. They outsourced damn near everything, what now? Pay cuts and slash the remaining benefits?

Make up your mind!

at 9:00am this morning it was all AMFA, AMP, and Delle-Femine's fault.
at 2:00pm it is all managements fault.

Who's fault is this? AMFA, AMP, or Management?

You are terribly confused and know nothing other than too blame.
While you sit at some computer not producing a damn thing for the Airline you work for.

GET THIS CORRECT...... IT IS ALL YOUR FAULT!!!!!

 

[Overspeed]

Make up your mind!

at 9:00am this morning it was all AMFA, AMP, and Delle-Femine's fault.
at 2:00pm it is all managements fault.

Who's fault is this? AMFA, AMP, or Management?

You are terribly confused and know nothing other than too blame.
While you sit at some computer not producing a damn thing for the Airline you work for.

GET THIS CORRECT...... IT IS ALL YOUR FAULT!!!!!

Again. Apples and oranges. You're funny though.

The assumption that a craft union was the panacea to your ills and trying to compare an airline that outsources over 50% and provides the top hourly rate to one that outsources less than 10% and provides a wage higher than most other airlines under the July 2010 TA is not the argument being made here. AMFA promised top wages to 25,000 members at NWA, UA, and AS and instead provided that to only 3,000 members while outsourcing the rest.

The issue being discussed here by WT was that we should get over it and let the 1113c process work its magic and solve all the company's problems. That is not true because in the grander scheme of things if you don't fix the way a company does business nobody wins.

I understand that you will connect anything you can to try to distort the facts and promote the building on your AMFA club house. Keep trying to connect dissimilar discussions to make yourself feel better. The facts are AMFA did not deliver to 90% of the people they signed up. So the TWU is failure by keeping over 10,000 AMTs employed and earning pensionable service for almost ten years beyond all the other airlines. Do you measure success by how many times AMFA gets its ass handed to them? Then you are batting 1.000 in fact that ball hasn't even landed yet.

 

[WorldTraveler]

While I don't aften agree with Bob, going through BK and blaming labor for the company's ills and everything will be fixed once you get through 1113 is BS. Most of the BK's result in mgmt continuing to operate as before and relying on labor and outsourcing to resolve the cost and revenue problem. Looks like DL may be facing another trip to BK court if they don't get their act together. They outsourced damn near everything, what now? Pay cuts and slash the remaining benefits?

http://seekingalpha....e-stock-crashes

"Delta's abnormal accounting assumptions may provide a short-term boost to earnings, but they will likely lead to a long-term drag or possible bankruptcy."

"In my opinion, it is only a matter of time before Delta's management will have to guide earnings expectations lower, perhaps much lower. At which point, the stock will trade more on the underlying economics of the business than oil, just as it did today after announcing the plans for capacity reduction. Oil is down and so is DAL."

"From where I sit, the company is in an intractable situation. It is not making any money and its liabilities are formidable: pensions at $14.1 billion plus total debt of $11.9 billion equals $26 billion."

I fully expected that you - or someone - would jump on that article.

Seeking alpha and other sites like it are famous for running airline stocks through the same models they use in other industries and then proclaim that airlines can't make it because their business model including their debt levels is so far out of whack with the rest of what is accepted in general business.

Those reasons are precisly why airline stocks are not considered decent for holding as an investment and also why airline credit is generally far lower than other companies - ie it's considered junk.

Once you get passed the idea that nearly all airlines are poor investments and their credit sucks, then it is possible to evaluate stocks WITHIN the sector.

On that basis, DAL doesn't look as bad - since DL is paying down debt at the rate of about $1.5B per year.
Sure, DL has pension expenses, but since it is in the only solvent network airline that has not terminated its pension plans (other than the small amount UA holds via the CO merger), then it is not a surprise that DL's pension expenses are quite large.
If AA proceeds to keep its pension plans via a freeze instead of a termination, they will be fighting the same issue over time. And since AA's pension plans won't be funded while in BK, the level of underfunding will grow significantly until they emerge.
With respect to debt, DL's choice of buying used low value but reasonably modern aircraft such as the M90 and 717 are precisely part of its plan to not continue to take on debt.
Retaining the pension plans does put a drag on DL's finances relative to UA and US - and the same will be true if AA retains theirs.
Thus, the question becomes how well AA will do - and DL is now doing - relative to UA and US who will not have those pension plans - which is a big part of the reason why seeking alpha thinks DL is a bad investment.
But the reality is that DL is generating nearly $3B in free cash flow per year which enables them to strengthen their balance sheet.
AA's debt will be higher as a result of its increased used of newer aircraft - but AA's costs might be alot lower. Thus, AA might be better positioned to handle its higher debt levels because of lower costs.

Finally, it is worth noting that AA and DL pilots are both higher paid than UA pilots right now... and UA
will have to cough up a lot of cash to bring their pilots - as well as the CO pilots up to levels comparable with what DL pilots will get. UA's costs are already higher than DL's and they are higher than what AA expects their costs to be.

Thus, it is very possible that UA will be the hardest hit in the escalation of costs since UA employees have little reason to not expect to be brought up to higher salaries in exchange for making the merger work.

AA will be in a much better position to rebuild and could very well obtain significant benefits from UA's difficulties in integrating, since UA and AA have a pretty long history of one benefitting at the expense of the other.

It's also worth noting that DL's market capitalization was just about $10 billion today - but closed just under. I'm not sure when or if a US airline has ever had a market capitalization above $10B.
In contrast, UA's market cap is about $2B less than DL's and WN's as the 3rd largest airline based on market cap comes in about $3B less than DAL.

 

[southwind]

While I don't aften agree with Bob, going through BK and blaming labor for the company's ills and everything will be fixed once you get through 1113 is BS. Most of the BK's result in mgmt continuing to operate as before and relying on labor and outsourcing to resolve the cost and revenue problem. Looks like DL may be facing another trip to BK court if they don't get their act together. They outsourced damn near everything, what now? Pay cuts and slash the remaining benefits?

Wow Dude ! You work for DL or just know everything about everything ! DL outsourced HMV's, resource and money pits............a far cry from damn near everything, as you stated, and right now our hangers are "PACKED" with in-sourced, "Money-making" aircraft, along with our world recognized engine in-sourcing and turn times !
Now go try to blow out someone else's candles !

 

[FWAAA]

It's also worth noting that DL's market capitalization was just about $10 billion today - but closed just under. I'm not sure when or if a US airline has ever had a market capitalization above $10B.
In contrast, UA's market cap is about $2B less than DL's and WN's as the 3rd largest airline based on market cap comes in about $3B less than DAL.

LUV's market cap in early 2002 exceeded $17 billion, IIRC. In early 2002, LUV peaked at $22/sh when more than 800 million shares were outstanding.

 

[MCI transplant]

Wow Dude ! You work for DL or just know everything about everything ! DL outsourced HMV's, resource and money pits............a far cry from damn near everything, as you stated, and right now our hangers are "PACKED" with in-sourced, "Money-making" aircraft, along with our world recognized engine in-sourcing and turn times !
Now go try to blow out someone else's candles !

Damn overspeed! Looks like you've been put in your place for a change!!!

 

[TWU informer]

Wow Dude ! You work for DL or just know everything about everything ! DL outsourced HMV's, resource and money pits............a far cry from damn near everything, as you stated, and right now our hangers are "PACKED" with in-sourced, "Money-making" aircraft, along with our world recognized engine in-sourcing and turn times !
Now go try to blow out someone else's candles !

You cannot talk with overspeed about facts. He is too busy connecting dots on his dot board.

 

[MCI transplant]

You cannot talk with overspeed about facts. He is too busy connecting dots on his dot board.

Sometimes I wonder who's back pocket he's really in? The TWU's, or the Company's? ----- Oh yea, I forgot, they're one in the same, now arn't they!

 

[FWAAA]

It's also worth noting that DL's market capitalization was just about $10 billion today - but closed just under. I'm not sure when or if a US airline has ever had a market capitalization above $10B.

Not only did LUV have a market cap in excess of $10 billion, but so did AMR. In the second quarter of 1999, AMR peaked at 74.3125/sh with more than 182 million outstanding shares for a market cap in excess of $13.5 billion.

There may be other examples, but the historical market caps of WN and AMR dwarf DL's current market cap.

 

[WorldTraveler]

Thanks for the info...
but you'll also remember that ALL of the US network carriers were doing extraordinarily well in the late 90s, just prior to the dot-com bust. IN fact, UA and DL both were more profitable than AMR. All 3 were generating in excess of $3B in free cash flow per year.
Therefore, would you be so kind as to cite the market caps for AA, DL, and UA - and any other of the publicly traded US network carriers for the same period?
.In 2002, LUV's market cap exceeded the entire US airline industry for a number of years - I don't remember WN's $17B number but considering that the entire network carrier segment was practically worthless, it wasn't hard to do.

In contrast today, LUV is worth 1/3 of what it was at that time (if the $17B number is correct) and DL and UA combined today are both worth more than LUV.
Given that AMR will emerge from BK with enormous amounts of debt and its business plan is based on taking on higher levels of debt than any US airline has ever had, it is hard to believe that AMR's market cap will be anywhere near its peers, let alone what AA once had. The only way it can generate the cash necessary to service those levels of debt is by cutting other costs so low and generating revenue far in excess of what its peers are doing. Given that DL and UA's business plans are both based on having far less debt than AMR's and no analyst has yet validated that AMR's plan's ability to generate the levels of revenue increases that AA says will come in its plan are realistic, it might be a very long time, if ever, before AMR's market cap is on par or above its peers.

And for now, AMR's network peers have a $10B and $8B headstart...
Of course, it is also worth noting that US is worth less than 20% of what DL is worth and 1/4 of what UAL is worth.

There is no guarantee that any statistic for a business will mean anything years from now. The key is whether the business plan is capable of adapting to the realities of whatever realities confront that business. Market cap is sustained when businesses are capable of adapting and winning.