DL expects solid 2011 and 2012 financials

[WorldTraveler]

Despite economic problems in the US and Europe, a 30% increase in fuel costsw, and a major disaster in Japan (where DL gets 10% of its revenue) DL will be profitable in 2011 and expects to be in 2012.... the network airline business model can have the flexibility necessary to adapt to difficult economic situations.
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Corporate revenue is growing again… DL obtains more than its share of corporate revenue relative to its capacity and continues to grow in key markets, including NYC.
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Europe has not been profitable for DL in 2011… as I have noted, DL is shifting from a strategy of making money during the summer with lots of seasonal capacity in the summer to reducing capacity to a sustainable year round level with minimal seasonal capacity.
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Latin America has the greatest growth prospects and will be where DL will focus its strategic attention built around exclusive partnerships and/or equity stakes in AM in Mexico, G3 in Brazil, and AR in Argentina. Latin America is DL’s weakest revenue position relative to its peers where DL is also the smallest of the US carriers.
Domestic and Asia are DL’s highest revenue markets relative to its peers, showing that network strength translates into revenue premiums.
DL’s focus in Asia will be with integrating its system with its Chinese partners but requires improved slot times.
DL intends to reduce non-fuel costs to 2010 levels as new 739ERs replace higher maintenance aircraft…gain staffing efficiencies through a consolidated workforce….continue to reduce the number of higher CASM small RJs.
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Delta is reducing debt at the rate of about $2B per year and is on target to have the least amount of debt among peers AA and UA even after AMR’s BK.
DL’s $1.8B line of credit is the largest in the industry and saves $100M per year interest charges vs. having the money “in the bank”.
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Amex and DL have renegotiated their agreement to provide cash during the peak winter season.
New IT platforms in 2012 will help DL target product offerings to customers and increase revenue including through related-product (merchandise) and up-sales.
The LGA slot deal will allow 100 new flights to 29 new destinations to DL. DL’s JFK operation will be restructured to maximize use of slots that can best be used at JFK.
DL’s operational performance over the past year has improved from bottom tier to mid to upper tier in all customer service related metrics – OT, bags, complaints, fleet reliability.
DL’s dynamic fuel hedging strategy is saving 10 cents/gallon compared to with other airlines’ hedging strategies.
2012 will be focused more on consolidating and improving existing opportunities more than implementing any dramatic new initiatives.

The webcast and supporting PDF documents are available http://www.delta.com/about_delta/investor_relations/webcasts/

 

[WorldTraveler]

Word is that DL will be increasing pay to US domestic employees in mid 2012 as well.

 

[mistified]

The LGA slot deal will allow 100 new flights to 29 new destinations to DL. DL’s JFK operation will be restructured to maximize use of slots that can best be used at JFK.

Off which 82 out of the 100 are RJ's ????
Not DAL mainline.

 

[WorldTraveler]

Off which 82 out of the 100 are RJ's ????
Not DAL mainline.

Mistified,
Do you realize that even after the slot swap (based on the schedules that were released Friday), the average size of DL/Delta Connection aircraft at LGA will still be equal to the average aircraft size for all carriers at LGA now?
Do you also realize that if you look at UA/CO's operation at EWR within the same distance from EWR as the perimeter rule allows at LGA, DL's average aircraft size at LGA is actually larger by about 5 passengers? Remember, CO has no large RJs in its fleet and DL's average domestic aircraft size for its mainline fleet is higher than CO's.
DL is adding about 10K seats/day using the same slots than the way they were used by US and DL is still using slots on average as well as the airport as a whole uses them.
The reality is that many short haul markets including the smaller markets that do not want to be cut out of service to/from NYC do not justify mainline aircraft at the frequencies necessary to be competitive.
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DL is adding several mainline longerhaul routes from JFK (transcon, Caribbean) that are freed up as DL reduces frequencies on short-haul RJ routes currently served from JFK.

 

[mistified]

Mistified,
Do you realize that even after the slot swap (based on the schedules that were released Friday), the average size of DL/Delta Connection aircraft at LGA will still be equal to the average aircraft size for all carriers at LGA now?
Do you also realize that if you look at UA/CO's operation at EWR within the same distance from EWR as the perimeter rule allows at LGA, DL's average aircraft size at LGA is actually larger by about 5 passengers? Remember, CO has no large RJs in its fleet and DL's average domestic aircraft size for its mainline fleet is higher than CO's.
DL is adding about 10K seats/day using the same slots than the way they were used by US and DL is still using slots on average as well as the airport as a whole uses them.
The reality is that many short haul markets including the smaller markets that do not want to be cut out of service to/from NYC do not justify mainline aircraft at the frequencies necessary to be competitive.
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DL is adding several mainline longerhaul routes from JFK (transcon, Caribbean) that are freed up as DL reduces frequencies on short-haul RJ routes currently served from JFK.

DL does not fly large RJ's.
The commuter affiliate they use does.
Lets not confuse DL (mailine) with the commuter. Two different operations. Different pilots, flt attendants etc....

 

[WorldTraveler]

so what is your point? that DL should only start routes if it can be flown by mainline?
You somehow manage to miss the fact that DL mainline is increasing its presence in other markets in the same proportion as it is to mainline... and you also have missed that DL is the ONLY network carrier that is reducing the size of its regional operations.
So, if you don't like the idea that DL is adding service with regional carriers, you might want to raise your concerns to other airlines before you get to DL.
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If your concern is why DL is using regional jets instead of mainline specifically in NYC, you might want to consider that DL is adding 10K seats per day to the LGA market compared to how those same slots have been used for the past several years.
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Either way, the money still goes into DL's bank accounts. The regional carriers are paid to fly the routes; if the routes turn out to generate the kind of profits that DL expects they will, then it is the mainline employees who will benefit.
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Your concern leaves me a bit mistified as to what your actual concerns are and even more so why you are unable to see the value in the transaction for DL and its employees.

 

[mistified]

so what is your point? that DL should only start routes if it can be flown by mainline?
You somehow manage to miss the fact that DL mainline is increasing its presence in other markets in the same proportion as it is to mainline... and you also have missed that DL is the ONLY network carrier that is reducing the size of its regional operations.
So, if you don't like the idea that DL is adding service with regional carriers, you might want to raise your concerns to other airlines before you get to DL.
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If your concern is why DL is using regional jets instead of mainline specifically in NYC, you might want to consider that DL is adding 10K seats per day to the LGA market compared to how those same slots have been used for the past several years.
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Either way, the money still goes into DL's bank accounts. The regional carriers are paid to fly the routes; if the routes turn out to generate the kind of profits that DL expects they will, then it is the mainline employees who will benefit.
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Your concern leaves me a bit mistified as to what your actual concerns are and even more so why you are unable to see the value in the transaction for DL and its employees.

Hello WT
My only point is and I will quote again:

DL does not fly large RJ's.
The commuter affiliate they use does.
Lets not confuse DL (mailine) with the commuter. Two different operations. Different pilots, flt attendants etc....

Don't make more out of this than it is.

 

[WorldTraveler]

Hello WT
My only point is and I will quote again:

DL does not fly large RJ's.
The commuter affiliate they use does.
Lets not confuse DL (mailine) with the commuter. Two different operations. Different pilots, flt attendants etc....

Don't make more out of this than it is.

if your point is employees, yes.
If the point is revenue, no, it is DL's money at risk.
Again, if the point is employee related - pilots and FAs - then DL is doing more to bring regional carrier flying back to mainline than any other US network carrier.
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At face value of your statement, I think most people here understand the difference between mainline and regional operations.

 

[mistified]

if your point is employees, yes.
If the point is revenue, no, it is DL's money at risk.
Again, if the point is employee related - pilots and FAs - then DL is doing more to bring regional carrier flying back to mainline outsource than any other US network carrier.
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At face value of your statement, I think most people here understand the difference between mainline and regional operations.

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As he was talking I found myself agreeing with him and told him so.
He spent the next ten minutes telling me I was wrong.