The Next Phase Of Industry Restructuring

[mistified]

If capacity doesn't make sense, it doesn't make sense whether in bankruptcy or not. Yes, DL will achieve signficant cost reductions and will be the cost leader in the legacy sector but if connecting capacity or to/from Florida doesn't make sense, it doesn't make sense whether in bankruptcy or not.

As UA has shown us, DL will shift capacity from domestic to int'l routes. DL still has significant opportunities to Latin America as well as to other points in Europe. Capacity can't really be significantly removed from the system but it certainly can be reallocated.

[post="293712"][/post]​

On 8/24/05
WorldTraveler said:

"The east coast has been very hard for airlines - Piedmont, Eastern, and likely Delta will all pass into history. I fully expect that DL will be acquired while in bankruptcy in a merger that is orchestrated by the creditors that have and will continue to prop up the industry. I'll try to write more on the subject in the next couple days. It is hard to contemplate but I think it is inevitable."

WT
I am having a hard time following your predictions.
DL will file for BK and vanish through a merger or combination package?
or
DL will file for BK becoming lean and mean and it's name will survive as a stand alone?

DL has worthless route structure?
or
DAL has a strong franchise?

 

[SoftLanding]

Couldn't it also be argued that creditors of these airlines in CH11 are looking for less capacity? Surely management of US Airways and so far UAL has cut capacity, especially US Airways.

With less capacity comes improved yield, hopefully followed by profits.

The fast money US Airways attracted is looking for fast, high returns. The pension funds, hedge funds and alike do not care what happens to employees and benefits. The less pay and benefits, the better the returns...

We are getting late in the economic cycle, what follows a boom is usually a bust (recession). With recessions comes lower traffic/lower yields and very likely lower oil prices.

With DAL on the CH11 door steps, more capacity still will be removed, so here is to yeild improvements, at least for awhile...

SoftLanding

 

[goodgirl37]

Airbus???? That's the best joke I have heard all week! Scarebus are a piece of ####!

[post="293053"][/post]​

LOL obviously you don't know the bus - yes they had complications at first as does any new aircraft but now they are no problem. Let me just make you knowledgeable on something as well - I had Delta and American employees on my 320 and they were in AWE - Delta employees said - if our shuttle employees fly on this they will never come back to us and the "AMERICAN" said wow our md80's our s**t compared to this - face the facts!!!

 

[WorldTraveler]

mistified,
8/24 was probably the low point in my decades long tracking of DL. I guess I'm entitled to a Prozac moment once every 20 years or so... even I don't have any Prozacs to take....

I do think it is likely that DL will file for chapter 11, but I now think they will be able to successfully restructure. Ironically, UA's success shows me that DL can do the same thing.

And for the umpteenth time, DL does not have a worthless route system. A company is not worthless if they generate $15 billion a year in revenue. I can assure you that lots of airlines would love to have that revenue. Delta simply has to cut costs to meet the revenue that route system generates while at the same time moving aircraft to routes with more revenue potential. I believe they are capable of doing both.

Given that oil prices will continue to rise, it is inevitable that NW and probably CO will end up in bankruptcy unless fares take off rather dramatically without affecting ridership - a pretty tall order.

 

[mistified]

mistified,
8/24 was probably the low point in my decades long tracking of DL. I guess I'm entitled to a Prozac moment once every 20 years or so... even I don't have any Prozacs to take....

I do think it is likely that DL will file for chapter 11, but I now think they will be able to successfully restructure. Ironically, UA's success shows me that DL can do the same thing.

And for the umpteenth time, DL does not have a worthless route system. A company is not worthless if they generate $15 billion a year in revenue. I can assure you that lots of airlines would love to have that revenue. Delta simply has to cut costs to meet the revenue that route system generates while at the same time moving aircraft to routes with more revenue potential. I believe they are capable of doing both.

Given that oil prices will continue to rise, it is inevitable that NW and probably CO will end up in bankruptcy unless fares take off rather dramatically without affecting ridership - a pretty tall order.

[post="294273"][/post]​

No problemo, just asking!

 

[Bluesky]

WT,

You're impressing me as an aviation expert who changes his opinion daily based on yesterday's news. Shall we say, 'blowing with the wind.'

 

[NewHampshire Black Bears]

WT,

You're impressing me as an aviation expert who changes his opinion daily based on yesterday's news. Shall we say, 'blowing with the wind.'

[post="294454"][/post]​

+++++++++++++++++++++++++++++++++++++++++++++++++++++

I agree with "Bluesky"

World Traveler, you are somewhat of a "Quirky Dude" !!!!!!!!!!!!

Judgeing via your "prognostications", are you saying AA is the ONLY legacy NOT to "enter the halls of BK-11/7" ??

 

[Fly]

This past year he has REPEATEDLY reminded us hard working people at United that most airlines never recover from bankruptcy. Now that Delta is about to join the ranks he has changed that tune too.