Delta CFO Says Merger Not Required03/03/08 - 02:43 PM EST
SEATTLE -- Merger talk is "a distraction" and $100 oil is a burden, but Delta Air Lines(DAL - Cramer's Take - Stockpickr) remains elated by its international prospects and is confident it will show a profit this year.
"Our plan is to make money this year, [with] fuel at $90 to $100, and we're still on plan," President and CFO Ed Bastian told reporters after the carrier took delivery Friday of a Boeing(BA - Cramer's Take - Stockpickr) 777-200LR, its first new airplane in six years. "We made over $600 million [pretax] in 2007, and while oil wasn't at $100, it wasn't far from that."
Bastian reiterated that Delta is not wedded to the concept of a deal with another carrier. A transaction with Northwest Airlines(NWA - Cramer's Take - Stockpickr) is widely considered to be the most likely possibility, but Delta hasn't confirmed that the two have held discussions.
A merger "has to be right for employees," he said. "That includes protecting seniority [and] protecting jobs. If we can do that, we'll consider a merger. If we can't, we won't."
Sources with knowledge of the situation say merger talks have stalled over the issue of Northwest pilots' efforts to protect their seniority. Bastian said only that "if we're going to do a deal, we'll do it with all the parties on board. Our standalone plan is in pretty good shape. Look at the momentum we have."
Meanwhile, the new airplane Delta received has the longest range of any commercial jet in the world. Next month, it will begin flying Delta's lengthiest route, 7,800 miles between New York and Mumbai. Because it will replace an aircraft that flies with cargo weight restrictions, it will add $10 million a year in revenue.
The airplane is emblematic of Delta's increasing international presence, which will rise from 20% of capacity in 2005 to 40% this summer. More growth is planned. Like other legacy carriers, Delta is benefitting from the move of capacity from domestic service to international. But Delta gains more than some of its rivals, because it has more domestic 757s and 767s to move.
Story
SEATTLE -- Merger talk is "a distraction" and $100 oil is a burden, but Delta Air Lines(DAL - Cramer's Take - Stockpickr) remains elated by its international prospects and is confident it will show a profit this year.
"Our plan is to make money this year, [with] fuel at $90 to $100, and we're still on plan," President and CFO Ed Bastian told reporters after the carrier took delivery Friday of a Boeing(BA - Cramer's Take - Stockpickr) 777-200LR, its first new airplane in six years. "We made over $600 million [pretax] in 2007, and while oil wasn't at $100, it wasn't far from that."
Bastian reiterated that Delta is not wedded to the concept of a deal with another carrier. A transaction with Northwest Airlines(NWA - Cramer's Take - Stockpickr) is widely considered to be the most likely possibility, but Delta hasn't confirmed that the two have held discussions.
A merger "has to be right for employees," he said. "That includes protecting seniority [and] protecting jobs. If we can do that, we'll consider a merger. If we can't, we won't."
Sources with knowledge of the situation say merger talks have stalled over the issue of Northwest pilots' efforts to protect their seniority. Bastian said only that "if we're going to do a deal, we'll do it with all the parties on board. Our standalone plan is in pretty good shape. Look at the momentum we have."
Meanwhile, the new airplane Delta received has the longest range of any commercial jet in the world. Next month, it will begin flying Delta's lengthiest route, 7,800 miles between New York and Mumbai. Because it will replace an aircraft that flies with cargo weight restrictions, it will add $10 million a year in revenue.
The airplane is emblematic of Delta's increasing international presence, which will rise from 20% of capacity in 2005 to 40% this summer. More growth is planned. Like other legacy carriers, Delta is benefitting from the move of capacity from domestic service to international. But Delta gains more than some of its rivals, because it has more domestic 757s and 767s to move.
Story
