DL beats estimates, improves profit

[WorldTraveler]

As much as you want to believe that RA has "grown up" he in fact has a very different airline to manage.

He doesn't have the confrontational environment that has marked labor relations in the legacy sector of the industry for years.

And the reason why AA and UA don't pay profit sharing anywhere close the levels that DL pays - at 16.5% for 2014 and well above that for this year, and even WN's 10%, is because of the confrontational environment which exists.

You call it mgmt. trying to prove they are in change but it is a confrontational environment nonetheless.


FWAAA,

nice to see you reduced to name calling when you can't acknowledge that DL has indeed offset and will offset its hedge losses.

DL recorded hedging losses in 2014. go back and look at it.

 

[Kev3188]

RA has, IMO, grown up more than anything.

Maybe, but a leopard doesn't change his spots...

And it still doesn't change my opinion that it's actually Mitacek, Hauenstein, etc. that are doing the real work in the C-Suite (again, to say nothing of the rank & file workforce)...

 

[topDawg]

As much as you want to believe that RA has "grown up" he in fact has a very different airline to manage.

He doesn't have the confrontational environment that has marked labor relations in the legacy sector of the industry for years.

But he still has unions to deal with. As i have asked you before, how in Gods name does he do it

oh i know, step one, not treating labor like crap.

And the reason why AA and UA don't pay profit sharing anywhere close the levels that DL pays - at 16.5% for 2014 and well above that for this year, and even WN's 10%, is because of the confrontational environment which exists.

Delta proves every day that this excuse is just more and more horse crap.
but a very common one for the bean counter types like yourself. Its always labors fault, never you guys your perfect. Always those damn dirty unions. (unless the unions and the company work together....those don't count)

You call it mgmt. trying to prove they are in change but it is a confrontational environment nonetheless.

yes because generally management is trying to be daddy.
 
 

Maybe, but a leopard doesn't change his spots...

eh, Ed is (maybe was) just as bad as Richard when it came to labor. He said some very nasty things about us during BK.
over time they can straighten out. IMO the board at Delta isn't going to put up with another s**t show like they had during the 90s.

 

[FWAAA]

nice to see you reduced to name calling when you can't acknowledge that DL has indeed offset and will offset its hedge losses.

DL recorded hedging losses in 2014. go back and look at it.

Any hedging losses recognized in 2014 (or 2008-2009, for that matter) are irrelevant to the current year. The anticipated fuel hedging losses which will be recognized during 2015 are for hedge contracts covering 2015 fuel consumption.

You falsely claimed above that those losses (of which DL executives said there would be about $2.05 billion) were "just a couple percent" of annual revenue, which is clearly false (as I have shown). Five percent is not "a couple percent," no matter how much you backpedal now. Even when the news is good, you needlessly exaggerate.

It's as if Brian Willams and Bill O'Reilly were writing your posts.

 

[WorldTraveler]

you can nitpick even on facts about what percent of DL's revenues that DL's fuel hedge losses amount to but you cannot deny that DL has managed to overcome them thru increased revenue.

If DL wasn't overcoming those hedge losses, they would be seeing reduced profits - or a loss.

but that hasn't happened.

and you also would be more focused at looking at AA's numbers and guidance to accept that AA's decreased revenue and its own stated currency losses absolutely amount to as much as what DL will incur in hedge losses - but AA so far is not offsetting the revenue.

and unless they figure out how to add a bunch of domestic capacity, they likely cannot offset their losses.

AA's profit is being driven by lower fuel costs even without fuel hedge losses and the fuel savings are overcoming the revenue declines. DL's profit is being driven by increased revenues, currency hedge gains, and a profitable refinery which are offsetting the fuel hedge losses.

and dawg,
once again, you play the role of poor labor that is getting beat up by mgmt.

give it up.

I'm not beating you up and I am not acting like mgmt.

DL succeeds with its unionized workforce because DL knows that the secret of its employee success is finding shared successes for all.

But organized labor ALSO has decided they want mgmt. to succeed - the same thing that happens at WN - or has historically.

That is nowhere near the mindset that exists at AA, UA, or other unionized legacies of the past.

The failure even of CO and WN which had positive labor relations is that you can only keep handing out pay raises until you are no longer cost competitive.

that isn't bean counter mentality. That is reality.

The exact reason why WN labor groups are stalled right now is because WN cannot keep giving out huge pay raises without gaining the efficiency gains that allowed them.

CO had no choice but to sell out to UA because its labor costs quickly ballooned to legacy levels and CO's labor cost advantage no longer helped; plus DL was invading their most profitable franchise in NYC.

You can prove me wrong if you want but DL is keeping organized and non-union labor happy because DL gets what it wants and can keep the pay better than DL's most direct competitors - AA and UA - who do not have the efficiency advantages that DL has.

 

[topDawg]

you can nitpick even on facts about what percent of DL's revenues that DL's fuel hedge losses amount to but you cannot deny that DL has managed to overcome them thru increased revenue.

If DL wasn't overcoming those hedge losses, they would be seeing reduced profits - or a loss.

but that hasn't happened.

and you also would be more focused at looking at AA's numbers and guidance to accept that AA's decreased revenue and its own stated currency losses absolutely amount to as much as what DL will incur in hedge losses - but AA so far is not offsetting the revenue.

and unless they figure out how to add a bunch of domestic capacity, they likely cannot offset their losses.

AA's profit is being driven by lower fuel costs even without fuel hedge losses and the fuel savings are overcoming the revenue declines. DL's profit is being driven by increased revenues, currency hedge gains, and a profitable refinery which are offsetting the fuel hedge losses,

 
wait, who said anything about AA when talking about the hedges? I'm confused. 

 

[FWAAA]

Spin, deflect, deflect, spin.

Good thing that Anderson, Bastian and Jacobson don't make up the numbers like you do. To their credit, they stick to facts, not fantasy.

One criticism I have of today's earnings release is the disclosure that PRASM fell by 1.7% in the first quarter even though the guidance released just two weeks ago disclosed that PRASM was down by 1.5%. Again, over-promise and under-deliver. Not typical of this management team, but they did it twice this quarter. The earlier guidance was for "flat" PRASM yet that was not updated until April 2 in the Investor Update, where it was changed to "down 1.5%." And even then, they over-promised.

 

[FWAAA]

wait, who said anything about AA when talking about the hedges? I'm confused.

It's my fault. I mentioned AA one time above when I noted that the DL hedging losses for 2015 of $2.05 billion were about three times the AA Venezuela currency losses (which WT mentions in practically every post he makes these days). In the legal sense, I "opened the door" to that line of discussion and thus brought it upon myself (and, unfortunately, upon everyone else). Sorry about that.

 

[WorldTraveler]

There are a number of AA fankids who were quick to jump all over DL's fuel hedge losses as soon as it became apparent that they would be there and they would be large.

I have repeatedly said that if you factored in DL's increased revenue generation capability plus the refinery and DL's own currency advantages since DL does have currency hedges - and then subtract out AA's own revenue shortfalls and its currency losses, the difference won't be that great if one exists at all.

quite simply, AA has been able to absorb the revenue hits because of low prices - and its lower revenues match its lower costs.

DL knew when the fuel hedge losses became obvious that they would have to grow revenues to overcome them - and DL has been very good in growing revenues.

UA appears to be pulling capacity out in the right places in order to offset its own currency issues and also is benefitting from a lot more of the drop in fuel prices.

DL had the biggest hill to climb to overcome the fuel hedge losses but it did it and I suspect by the middle of the year when fuel hedge losses are over, DL's overall financial performance will be as good as if not better than AA or UA's.

DL took a revenue generation strategy to overcome its fuel hedge losses.

that's what I said 6 months ago and I still believe that will be the case.

 

[FWAAA]

More spin and deflect. More "but I've been right about everything I've ever posted" nonsense.

Spin and deflect all you want. You were wrong about such an easy item - lord only knows why you'd exaggerate the facts, especially when DL's earnings report was so good.

Stick to the facts, and if you do, then maybe someday others will praise you for your forward-thinking posts instead of you always telling us how correct you've always been. And when I say "others," I don't mean your alter-egos like Spectator and Chucky.

 

[topDawg]

It's my fault. I mentioned AA one time above when I noted that the DL hedging losses for 2015 of $2.05 billion were about three times the AA Venezuela currency losses (which WT mentions in practically every post he makes these days). In the legal sense, I "opened the door" to that line of discussion and thus brought it upon myself (and, unfortunately, upon everyone else). Sorry about that.

except its not your fault. You make a good point. WT went into spin, deflect then talking about AA mode again. 
 
Delta management has done good things, but they suck at this hedging thing. I know where i would be if i cost the company billions of losses like they have with the hedges. 
 

I'm not beating you up and I am not acting like mgmt.

That is nowhere near the mindset that exists at AA, UA, or other unionized legacies of the past.

that isn't bean counter mentality. That is reality.
 

I didn't say you were beating me up. No offense but you have no control over me.
having said that, your views are more inline with the management teams at UA and AA. All we have to do is look at all your posts about punishing the FAs to prove that.
 
When you are constantly screwed by management and in some cases your union like the employees at those airlines you can't expect labor to take the first step. Parker had a chance to get labor on his side and instead told the front line employees that they weren't important and had nothing to do with day to day operations. (but he somehow does...)
The unions at AA haven't been perfect and their are plenty examples of union employees that don't have a grasp on reality when it comes to things they "should" be getting but at the end of the day the majority of employees would work harder and better if they were treated better. 
 
and it is very much bean counter mentality. I have already given you examples of how you are wrong... 

 

[topDawg]

More spin and deflect. More "but I've been right about everything I've ever posted" nonsense.

Spin and deflect all you want. You were wrong about such an easy item - lord only knows why you'd exaggerate the facts, especially when DL's earnings report was so good.

Stick to the facts, and if you do, then maybe someday others will praise you for your forward-thinking posts instead of you always telling us how correct you've always been. And when I say "others," I don't mean your alter-egos like Spectator and Chucky.

can't admit that, even in the great numbers, Delta is failing hard with its hedges. 

 

[WorldTraveler]

I've never tried to argue that the hedge losses aren't real.

what I have consistently said is that DL would overcome them and that AA's losses from currency and revenue would be just as great as what DL has lost in fuel hedge losses.

given that DL's pre-tax margin at market fuel prices would have been higher than what AA has estimated its pre-tax margin to be, my point has been completely validated that DL has and will overcome the hedge losses and that AA has not gained the benefit that a lot of AA fans here have tried to argue.

FWAAA on this issue just like so many others wants to nitpick on details - even if he is right - while refusing to acknowledge that the big picture I painted six months or more ago long before the numbers are available is indeed still correct.

 

[robbedagain]

Despite that just wanted to say congrats to all the hard working frontline dl folks

 

[commavia]

Japan will be beach market reductions in capacity. With the 744 going away Hawaii-Japan will likely be going all 330 or 767 Also wouldn't shock me to see the 333 go to MSP-NRT so that 777 can cover DTW-NRT. Leaving the 744 for DTW-ICN/PVG and Europe. 
Brazil, expect the 764 to go away and 763s to take over ATL-GRU #1 and JFK-GRU. ATL-BSB will probably end up going 75S from the current 763. 
India/Africa/Middle east, its such a small region for Delta at this point, AMS-BOM cut probably did it.

 
Sounds about like what I was expecting.  Personally, I've long expected a reduction in the Japan beach market capacity - as hauling tour groups back and forth to SPN didn't sound like it would be the most efficient or rewarding use of assets long-term - and I suspect the currency headwind just exacerbated the economics.  In Brazil, I will be interested to see if ATL-GRU stays at 14x weekly or if the second flight drops below daily, and similarly if BSB stays daily.