Delta reports record profit for Q4

[WorldTraveler]

This topic of mergers is interesting but why not talk about something that is more realistic. Merger with DL is not in my opinion in the mix. More a purchase of assets. None of the jewels that AA has are for sale or could be wrestled away from AA or their creditors. That is where the value is. So ..here is my question.What would DL want that AA is willing to dispose ? And if they where to buy some part of AA would DL be required to take any employees when outside of a merger?

I have long said that the most likely outcome is that AA will emerge as an independent company and that it will probably be in their best interest to do so....
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But AMR is reorganizing at a time when no other airline is in the same position, DL continues to strengthen its financial position, and AA does have assets which the industry could find to be of value.
I also do not think that there are any more significant antitrust issues in a combination with ALL of AA than there would with AA and any other carrier that would be willing to buy them.....
The only real antitrust issue regards NYC, but the same issue would involve US at DCA....
absent NYC, there are no ATI issues regarding a DL-AA combination.... the combined entity minus AA's NYC would have a market share of about 33% which has not been considered too high of a size in other industries.
AA's ORD, DFW, MIA, and LHR operations all have value to DL and don't create antitrust issues. Don't underestimate at all at how much DL views AA as perhaps the last opportunity to grow to what it needs to be globally and pick up some of the industry's best assets in the process.
FYI AA carries about 37% of the revenue to/from Latin America/Caribbean carried by US airlines; UA/CO has about 20%, and DL has about 15%. AA carries about 2/3 of its revenue or about 25% of the industry total through MIA which makes it one of the most concentrated hubs to/from any region of the world for US carriers and obviously a good part of that is demographics in S. Florida but it also says how critical it is to be able to compete in the MIA-Latin America market in order to be a significant force in that market overall.
As such AA's Latin America operation will be valuable. Considering it is packaged with the largest US carrier presence to LHR, the 2nd largest hub in the US which is undoubtedly quite profitable, a strong business market presence at ORD, and LAX and it isn't hard to see why any carrier will find AA's assets interesting.
Keep in mind also that the highest value to the creditors will be the determining factor in how AA will emerge from BK... it may or may not necessitate that AA emerge intact.
And it is almost a given that any less-than-total asset acquisitions would involve people... but considering that DL hired more employees from Pan Am than any other carrier even though DL "only" got the continental Europe and Shuttle assets, it says that DL is willing to hire people to make the deal work.
Just as in every other industry BK, there is a significant element of uncertainty involved in the restructuring process... the fact that AA has such good assets while other carriers are in relatively strong health makes it all the more risky for them and all the more possible that what has happened in previous BKs with successful independent emergences may or may not be repeated for AA.
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3 months after AA filed, there continue to be speculation about mergers and AA's outcome.... and apparently Richard Anderson made yet another comment that was quoted in the French press that DL is interested in some of AA's assets including their Latin America operations. As long as there continue to be indications that other carriers including DL are thinking about acquisitions of AA in total or part, then there won't be any letup in speculation... even though I agree it is speculative at this point.

 

[topDawg]

Before DL bought NW and AA was "number 1" ALL I ever heard from this DL board was "Bigger doesn't mean better" !!!!!!!!!!!!!!!!!!!!

Though it remains to be seen (post BK), AA can have just as many flights as DL from LGA or JFK, BOS, or any other place it has retreated from recently.
How do I know ? I LIVED it with AA in the very early 80's ! HEL*, I can remember when BOS whent down to " 11 " flights a day.
Then came Bob Crandall, and the rest was HISTORY ( $$$$) as DL sat helplessly by.

All I'm saying is that making gigantic statements....while your chief competitor is cashing in thier "Get out of Jail FREE card" $$$ is perhaps jumping the gun a bit brother.

AA has for years dealt with WN in Texas.
WAIT till WN/Air Tran get cranking out of HOT-Lanta !

As for DL "buying" AA, well you might want to consider the current administration, who is definitely enroute to 4 More Years, AND happens to have a special fondness for the O R D area !!

( I GUARANTEE You Overlooked THAT lil' Issue ) !!!!!!!! :unsure:

Whoa. You need to chill dude.
1) congrats for being around in 80s, good for you. Most of us were too.
2) AA can't have "just as many flights as Delta" out of LGA or JFK. Period. Delta has more slots in NYC then AA/B6 or any other carrier AA could merge with other than UA. period.

Oh and cool story on the Obama/ORD thing. It doesn't mean jack s**t as long as AA/ORD is burning money and getting murdered on pretty much every route out of the city. BK isn't some magic source that makes a network profitable and fills on the holes in said network. (at least, I have yet to see that little tidbit in the BK code)

 

[topDawg]

Well W T, here is a FACT that you Absolutely overlooked !

Since the new laws regarding acquired carriers (Think TWA and MO. Sen. Mc Caskill), AA's union employees would go with them to a (hypothetical) DL.
Seeing DL escaped a unionized below-the-wing ramp force(NW) by a mere 500 votes, What on earth would another election pairing ex NW and AA union employees produce ???
Hmmm ???

You KNOW the answer, and DEL-DUH will NOT roll the dice on that baby !

So AA will Not be seeing HOT-LANTA any day soon.
Sorry !

I'm not so sure JFK is slot controlled, plus try to remember all those TWA JFK authorities that AA has tucked away for a rainy day.

Yikes again.
Ok, 1) All NYC, (LGA/EWR/JFK) are slot controlled. As is SNA,LGB,DCA and sounds like soon to be SFO.
2) AA has nothing left from TWA that is meaningful. (at least that they aren't using now)
3) Delta, if it bids for AA, wont care about the union thing. The guys in Atlanta are as stupid as you make them out to be, they will pull the same stuff as with the NW merger, if it fails then at the end of the day they can always go back into BK to par down labor. This is the new industry. IMHO airlines in BK will become the "new" thing. :angry:

 

[topDawg]

Some thing else to consider in our hypo AA/DL marriage WT, that being of the large number of about to be furloughed "union members" (I've put union members in quotation marks because these folks I'm about to mention, only know about unions from Websters Dictionary), are being furloughed from TULSA Oklahoma and the greater DFW area. These folks NEVER saw a YES vote(for the company) that they didn't like.
SO, you'd be left with the NY/BOS/ORD/LAX crowd not so willing to kowtow.
Now couple that with the Good people (former RED TAILS) then DL has a shiite storm on thier hands.
Sure DL is handing out raises, and a lil' profit sharing, but do not for a second think that the AA/NW guys don't see/realize the crap DL is pulling with DGS/Ready reserve etc.

one would hope so. Wanna make me think that our outsourcing, pension, heath care cost, pay and time off will get better too? B)

 

[topDawg]

This topic of mergers is interesting but why not talk about something that is more realistic. Merger with DL is not in my opinion in the mix. More a purchase of assets. None of the jewels that AA has are for sale or could be wrestled away from AA or their creditors. That is where the value is. So ..here is my question.What would DL want that AA is willing to dispose ? And if they where to buy some part of AA would DL be required to take any employees when outside of a merger?

Delta won't do an asset purchase just for the reason you said. The creditors, namely the employees, will want to protect jobs, and the last thing Delta is wanting to do is piss off a bunch of people at AA. (I mean, they want a chance when it comes time to vote.)

The DOT has yet to look at the total airline, they always look at city to city and the effect it would have. AA and DL have very little overlap. (even in NYC, a good bit of the AA/DL network and thus hub to spoke routes would still have less seats and flights than UA at EWR. )

My guess is Delta would have to give up a good bit of NYC slots, and would have to dump the JVs with QF/Virgin to OZ and IMO the JVs with AF/KL/AZ/BA/IB.

CVG/MEM would die quickly. (I do think LAX and MIA would grow a good bit.)

 

[Kev3188]

one would hope so. Wanna make me think that our outsourcing, pension, heath care cost, pay and time off will get better too? B)

I dunno... I'm pretty excited about paying ~ $50 more per month in May for the same coverage I have now...

 

[WorldTraveler]

Kev,
you might want to review this document which provides data on health care cost benefits both to the employee and to the employer.
Note that health care costs have doubled over the past decade and are up 8-9% just over the past year.
You will note that the average health care benefits cost over $15K and the employee part is about $4100 for family coverage.
http://ehbs.kff.org/pdf/8226.pdf
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Your increase in costs this year might be higher than average since the PMNW contracts have not reflected the increase in costs and you are transitioning to DL's standards for cost sharing. DL's expectation of employee cost sharing is closer to the average for US companies than what NW provided and actually quite close to the average for other companiest.
Note, however, that DL's profit sharing and salary levels are at or above average for the airline industry.

 

[Kev3188]

You just can't help yourself, can you?

One MORE time: The current rates are not the contractual ones. They already way up from what I was paying before. You already know this, but thanks for once again conveniently overlooking that in your perpetual quest to edify the Widget. Thanks also for assuming I have no clue how insurance rates and the split cost burden between employer/employee work.

You would do well to be a whole lot less condescending, and that's the "whole truth."

 

[tom barry]

W T,

" O U C H " !!!!!!!!!!!!!!!!!!!

 

[WorldTraveler]

the only OUCH that exists comes from Kevin who once again wanted to try to tell us how poorly compensated he is at DL.

Problem is that data from both the US Dept of Labor and private enterprise shows that Kevin's health care costs are AVERAGE. Yes, AVERAGE. Nothing glorifying Delta... no basis for complaint either... just average.
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Of course being confronted with the truth that he receives AVERAGE health care benefits doesn't fit into Kevin's mantra but he will have to figure out how to overcome that obstacle on his own...

 

[Kev3188]

Nobody said anything about being poorly compensated; you took an offhand comment to another poster, and changed it to fit your own agenda. That profit sharing you were so quick to throw in the mix? Almost offsets the loss of an inclusive lunch. The alleged July increase? Might-might- cover the bump in premiums.

 

[2BlacknBlue]

Nobody said anything about being poorly compensated; you took an offhand comment to another poster, and changed it to fit your own agenda. That profit sharing you were so quick to throw in the mix? Almost offsets the loss of an inclusive lunch. The alleged July increase? Might-might- cover the bump in premiums.

...not to mention hiring people off the streets, with little or no experience, into merit positions @ the same pay rate as senior employees with 10, 15, 20, 25, and even 30 years of experience. Throws that "pay for performance" out the window!!!!

 

[topDawg]

I dunno... I'm pretty excited about paying ~ $50 more per month in May for the same coverage I have now...

HA! Delta should make that part of the new TV stuff.

"Delta Air Lines, Our employees heath care cost Keep Climbing"

anyways, Welcome Change brother, Delta Air Lines You'll love the way we bend our employees over..... :angry:

 

[topDawg]

Kev,
you might want to review this document which provides data on health care cost benefits both to the employee and to the employer.
Note that health care costs have doubled over the past decade and are up 8-9% just over the past year.
You will note that the average health care benefits cost over $15K and the employee part is about $4100 for family coverage.
http://ehbs.kff.org/pdf/8226.pdf
.
Your increase in costs this year might be higher than average since the PMNW contracts have not reflected the increase in costs and you are transitioning to DL's standards for cost sharing. DL's expectation of employee cost sharing is closer to the average for US companies than what NW provided and actually quite close to the average for other companiest.
Note, however, that DL's profit sharing and salary levels are at or above average for the airline industry.

Are we really going to do this again? I thought we figured this out like 6 pages ago?

Ok, I want to give a few little facts.
1) United still makes ~150 bucks more a month, after union dues.
2) United Profit sharing is the same, 15% and theirs is contracted. Delta can change at anytime. (could be good or bad)
3) United pays ~3% less health care cost.
4) United has 35 days of vacation (Delta is 20 or 25 if you got it before the line in the sand)
5) also if I read this right Untied get more Sick/PPT time than Delta. (though the holidays looks a little bit better)
6) United has a hard cap on Outsourcing 20%, Delta can cut all of TechOps lose tomorrow.

now. For 75 bucks, i would get lower health care, more time off, more pay and ~ the same 401K match/holiday and profit sharing. Why is that union thing bad again?

As always, your kinda talking out of your butt. Kev. is right, we are at the bottom of the list when it comes to almost everything.

PS and they will get to try to do better in X years, We just get to *hope* Delta is giving more, and have no way of getting more if they want to stay on the bottom of the s**t list. <_<

 

[topDawg]

the only OUCH that exists comes from Kevin who once again wanted to try to tell us how poorly compensated he is at DL.

Problem is that data from both the US Dept of Labor and private enterprise shows that Kevin's health care costs are AVERAGE. Yes, AVERAGE. Nothing glorifying Delta... no basis for complaint either... just average.
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Of course being confronted with the truth that he receives AVERAGE health care benefits doesn't fit into Kevin's mantra but he will have to figure out how to overcome that obstacle on his own...

Delta says the cost are more than most US airlines 1-3%.

It is such a shame that Delta puts the inof out for employees and most are still to stupid to see they are getting it in the pants. :angry: