Any "Latest & Greatest" about Delta?
On Reserve
Joined APC: Jan 2008
Posts: 20
Thanks-- I appreciate the quick response!
Bank of America sees $50 oil as Opec dies - Telegraph
So... $50bb means what for us?
Does Lagos drop in value? RJs get a second life? Economy booms? We profit like mad? We expand the 88 fleet? Ticket price wars? New entrants to the airline industry?
So... $50bb means what for us?
Does Lagos drop in value? RJs get a second life? Economy booms? We profit like mad? We expand the 88 fleet? Ticket price wars? New entrants to the airline industry?
New entries to the market are going to be limited by pilots willing to fly with them. 50 seat RJs are not going to work because there will be no pilots to fly them in just a few years. More 88's? Possibly. A340's even make sense. 747's make sense. Everything changes.
Gets Weekends Off
Joined APC: Jun 2009
Posts: 5,113
Bank of America sees $50 oil as Opec dies - Telegraph
So... $50bb means what for us?
Does Lagos drop in value? RJs get a second life? Economy booms? We profit like mad? We expand the 88 fleet? Ticket price wars? New entrants to the airline industry?
So... $50bb means what for us?
Does Lagos drop in value? RJs get a second life? Economy booms? We profit like mad? We expand the 88 fleet? Ticket price wars? New entrants to the airline industry?
As soon as that gets resolved, and enough of the little guys go bankrupt or get bought out by the big guys, as soon as enough fragile countries get into deep unrest, as soon as Russia can't take it anymore and finds a new way to put geopolitical risk on the table, it goes up.
Then we realize that capacity is still greater than demand, peak-oil is nonsense, and it comes back down.
Which suits the big traders fine, because volatility is how they squeeze money out of you and me.
So I guess for airlines, it means the benefits are meaningful, but not guaranteed over any significant length of time.
I hope it stays just expensive enough that people keep making energy-conscious decisions, and demand growth doesn't pick up.
Gets Weekends Off
Joined APC: Jun 2009
Posts: 5,113
Interesting times for sure. DAL is projecting more profit in 2015 than 2014. 2014 is 4B+. Our business model is based on $100/barrel oil going forward. $50/barrel changes things. More profit for DAL and as long as profit sharing remains the same, we get a big taste.
New entries to the market are going to be limited by pilots willing to fly with them. 50 seat RJs are not going to work because there will be no pilots to fly them in just a few years. More 88's? Possibly. A340's even make sense. 747's make sense. Everything changes.
New entries to the market are going to be limited by pilots willing to fly with them. 50 seat RJs are not going to work because there will be no pilots to fly them in just a few years. More 88's? Possibly. A340's even make sense. 747's make sense. Everything changes.
Who thinks it's a good idea to "monetize" profit sharing?
Thanks, George. I hope whatever got you on an IV has gone away.
As for the "Global" Production Balance, I had an entirely different concept in mind. I thought we were offering a conciliatory arrangement for the VS JV, in exchange for a minimum % of all Delta ASK's worldwide.
The way I read this TA, we're essentially floating the VS JV a couple % this way or that way, based on how much international we're doing. It doesn't sunset the VS agreement if we're getting slaughtered, it doesn't even have penalties if we're getting slaughtered by non-compliance with Virgin Australia and/or AF-KLM/AZ/
I'm failing to see the point of this agreement, so far.
As for the "Global" Production Balance, I had an entirely different concept in mind. I thought we were offering a conciliatory arrangement for the VS JV, in exchange for a minimum % of all Delta ASK's worldwide.
The way I read this TA, we're essentially floating the VS JV a couple % this way or that way, based on how much international we're doing. It doesn't sunset the VS agreement if we're getting slaughtered, it doesn't even have penalties if we're getting slaughtered by non-compliance with Virgin Australia and/or AF-KLM/AZ/
I'm failing to see the point of this agreement, so far.
There is no point in signing this agreement. It is useless.
In fact it may do more harm than good.
The "cure" provision is jaw dropping. It is absolutely astounding that anyone would negotiate a contract that specifically allows the other party to be in violation every other year and says right in the agreement that there will never be a penalty. Who would sign something like that?
I wonder if the bank would let me skip every other mortgage payment?
That language is ridiculous. Our negotiators should be embarrassed.
The worst part is the horrible precedent it sets for the upcoming AF/KLM non-compliance problem. I think ALPA just signaled what they plan to do about that issue. Nothing.
88's are like the Crown Vic of the airline world. Buy them for nothing from an old man, add a spot light on the drivers side window, drive them for a decade, scrap them out when your done with it, and the chicks are all over anyone driving a Crown Vic.
The pressure on the Company to get a deal would be immense. Monetizing profit sharing into a huge% raise might be enough to lower profit sharing. But with these developments, probably not.
Gets Weekends Off
Joined APC: Jun 2009
Posts: 5,113
Excellent post.
There is no point in signing this agreement. It is useless.
In fact it may do more harm than good.
The "cure" provision is jaw dropping. It is absolutely astounding that anyone would negotiate a contract that specifically allows the other party to be in violation every other year and says right in the agreement that there will never be a penalty. Who would sign something like that?
I wonder if the bank would let me skip every other mortgage payment?
That language is ridiculous. Our negotiators should be embarrassed.
The worst part is the horrible precedent it sets for the upcoming AF/KLM non-compliance problem. I think ALPA just signaled what they plan to do about that issue. Nothing.
There is no point in signing this agreement. It is useless.
In fact it may do more harm than good.
The "cure" provision is jaw dropping. It is absolutely astounding that anyone would negotiate a contract that specifically allows the other party to be in violation every other year and says right in the agreement that there will never be a penalty. Who would sign something like that?
I wonder if the bank would let me skip every other mortgage payment?
That language is ridiculous. Our negotiators should be embarrassed.
The worst part is the horrible precedent it sets for the upcoming AF/KLM non-compliance problem. I think ALPA just signaled what they plan to do about that issue. Nothing.
Your post brings up a good question: what about the AF/KLM/AZ JV? How does this work with that? I had expected that this agreement would be comprehensive, not a one-off, and set up the parameters for the existing and future JV's. That's what I initially thought they meant by "Global Production Balance".
There is another version of "Global Production Balance" I've heard about, which is that Delta can't buy 49% of VA, and grow VA beyond England, and pocket benefits, without us flying more. That is actually smart, although limited to this airline.
I think this second version is all we're getting: if VA expands, then we do about 2/3 of the extra joint flying. But first, we give them about 10 % of the growth, free. Is that about right?
Last edited by Sink r8; 12-10-2014 at 07:18 AM.
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