DL sues Republic for excessive cancellations

[topDawg]

Not sure what DL is hoping to achieve here other than get out of its contract before RJET drops it in court.

When they do file (I think the situation is well past "if"), RJET might decide it's better to drop some of the contracts with the three majors. All but two are long term agreements and may or may not be economically sustainable under the new contract with the IBT.


Some percentage of the aircraft RJET is currently operating for the widget have place options, which dumps the liability for the aircraft onto DL. That's why antagonizing Bedford just doesn't make sense to me. The UA agreements also have put/pull triggers. Not sure about AA.

It's probably a toss up to see how quickly RJET, AirWis and Great Lakes all wind up filing. Oddly, Mesa seems to be in better shape than those three combined.

Take it to court and get the judge to stop this from happening is my guess
 

Wholly owned regional didn't quite work out for Delta.   Comair was wholly owned by Delta, and look what happened.

Delta mismanaged Comair and ASA. 
 
and then took pennies on the dollar (for ASA) or nothing (for Comair) compared to the billions they paid for them. 
I think they moved that guy over to the hedging department after that.     

 

[WorldTraveler]

In making the assessment of how much a failure ASA and Comair were, you might want to also consider that they connected tens of millions of passengers to DL's network over many years. it is easy to say that they were failures because they had no value on the resale market but they achieved what they intended to do. Even mainline airplanes are written down. Obviously it would have been nice to be able to carry tens of millions of passengers and then walk away from the regional carriers when it no longer made sense to have them but regional carriers were absolutely necessary in the pre-consolidation era. Consolidation is reducing dependence on regional carriers and DL is the furthest along in reducing its regional carrier needs because DL has finished its network restructuring post-merger.

Perhaps you could argue that UA came out better because they had less ownership in regional carriers but they also trailed the industry in revenue production for a significant number of years.

 

[topDawg]

In making the assessment of how much a failure ASA and Comair were, you might want to also consider that they connected tens of millions of passengers to DL's network over many years. it is easy to say that they were failures because they had no value on the resale market but they achieved what they intended to do. Even mainline airplanes are written down. Obviously it would have been nice to be able to carry tens of millions of passengers and then walk away from the regional carriers when it no longer made sense to have them but regional carriers were absolutely necessary in the pre-consolidation era. Consolidation is reducing dependence on regional carriers and DL is the furthest along in reducing its regional carrier needs because DL has finished its network restructuring post-merger.

Perhaps you could argue that UA came out better because they had less ownership in regional carriers but they also trailed the industry in revenue production for a significant number of years.

 
 
Yeah WT, even when Delta literally sets billions of dollars on fire you find ways to make them seem better. What a joke......
 
 
Was that one of your projects at Delta? Wouldn't shock me.  

 

[WorldTraveler]

I'm justifying nothing.

Did UGa teach you the concept of writing down an asset? It would have had to occur if it were mainline aircraft.

not all investments have long-term value. It is fully expected that some will serve short-term purposes.

Whether DL saw that at the time they invested in regional carriers but it would take you to not realize that the reason why DL's investment in OH and EV is worth less is because DL has led the industry in moving capacity away from regional carriers.

 

[topDawg]

I'm justifying nothing.

Did UGa teach you the concept of writing down an asset? It would have had to occur if it were mainline aircraft.

not all investments have long-term value. It is fully expected that some will serve short-term purposes.

Whether DL saw that at the time they invested in regional carriers but it would take you to not realize that the reason why DL's investment in OH and EV is worth less is because DL has led the industry in moving capacity away from regional carriers.

So, 4-5 billion (more than the cash Delta has on hand now) is a short-term investment? 
 
Lol you will go to any extremes to defend Delta, no matter how dumb they sound. 
 
and FYI, I was taught that burning 5 billion dollars is stupid. 

 

[WorldTraveler]

tell me how much DL amortized on its own fleet in the time it owned OH and EV.

I am not justifying anything and I am not defending anything.

I AM saying that if you consider that DL obtained years of RJ flying from OH and EV, then you have to consider that such an investment did accomplish something for DL's network.

A number of DL AND OTHER CARRIER hubs simply would not have existed were it not for the small RJ. It is only because of consolidation among legacy carriers that regional carriers are not needed any more.

I don't suppose you can think of other investments that DL or other carriers made that worked for a period but have much less value now. hmmm. flight kitchens....hmmm...ticket offices.

 

[topDawg]

tell me how much DL amortized on its own fleet in the time it owned OH and EV.

Fleets are 30 year investments
OH/EV was 5-10 years tops.
not even in the same ball park.

 

I don't suppose you can think of other investments that DL or other carriers made that worked for a period but have much less value now. hmmm. flight kitchens....hmmm...ticket offices.

you do realize that both of those things are still around right? (plenty of international CTOs and I think you know airlines still need catering)


oh and just another fact of life, two of the three major airlines own in-house catering. One doesn't. Guess which?

 

[WorldTraveler]

you need to read DL's financial statements before you make statements like you have.

There are VERY FEW CTOs left and few of them are even DL exclusive where they do exist.

DL invested a lot of money AND PEOPLE in CTOs and they aren't needed any more.

and catering within the US is largely beverages plus some first class and food for sale. Airlines spend far, far less on catering but invested in facilities to support serving FOOD on many flights.

Yet another trend that passed and resulted in a writedown of assets.

 

[topDawg]

you need to read DL's financial statements before you make statements like you have.

There are VERY FEW CTOs left and few of them are even DL exclusive where they do exist.

DL invested a lot of money AND PEOPLE in CTOs and they aren't needed any more.

and catering within the US is largely beverages plus some first class and food for sale. Airlines spend far, far less on catering but invested in facilities to support serving FOOD on many flights.

Yet another trend that passed and resulted in a writedown of assets.

once again, Airlines still have CTOs and flight kitchens. 
 
and no airline has spent 5 Billion bucks on a CTO or flight kitchen. (oh and both of said investments, again 30+ years, OH/EV was 5-10 years) 

 

[WorldTraveler]

No CTO or flight kitchen can fly 10s of millions of passengers.

Are you willing to correct your statement about the financial life of aircraft, including RJs?

 

[topDawg]

No CTO or flight kitchen can fly 10s of millions of passengers.

Are you willing to correct your statement about the financial life of aircraft, including RJs?

didn't say they did. You said airlines invested in things that aren't used anymore
that was false. Not only was it not correct but as I have said CTOs/FKs cost a hell of a lot less than OH/EV did and were investments the airlines made, basically at the start of their time. 
OH/EV was not even remotely close to those years of investments. 
 
 
I didn't make a incorrect statement about aircraft. 
They are 30 year investments (at least at Delta) 
 
 
oh and to add, at least with aircraft when they are done you get something from the investment. 

 

[WorldTraveler]

but we are talking about regional aircraft and even at the time DL wrote down its investments in OH and EV, regional aircraft -let alone mainline - were not 30 year investments.

 

[topDawg]

but we are talking about regional aircraft and even at the time DL wrote down its investments in OH and EV, regional aircraft -let alone mainline - were not 30 year investments.

Again not true. 
A lot of the RJs have been 15-20 year investments and most that have been parked were either sold or traded in for big RJs. 
 
so they got return on investment. 

 

[WorldTraveler]

just tell us what the financial life of RJs were at the time the EV and OH investments were written down.

The regional carriers carried tens of millions of passengers... but that apparently isn't a investment to you.

btw, you do realize that DL filed for BK and wrote down the value of its own stock in the process, don't you?

 

[eolesen]

oh and just another fact of life, two of the three major airlines own in-house catering. One doesn't. Guess which?

Sorry for the sidebar, but I don't think you're correct there... UA still has ownership over Chelsea, but who else owns a catering subsidiary or division?
AA certainly doesn't, and I don't think WN keeping their provisioning department as being quite the same as a catering company.

Even Chelsea is only located at the pm-CO hubs + DEN, and that was probably a holdover from the days of the CO DEN hub...