Any "Latest & Greatest" about Delta?
03-22-2011, 05:31 PM
Happy to be here
Joined APC: Jun 2006
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Posts: 18,563
Heathrow ‘Land Grab’ Looms
Richard Branson may create a “once-in-a-generation” chance for Delta Air Lines Inc. (DAL) and Air France-KLM Group to grow at London Heathrow, Europe’s busiest airport.
The U.K. billionaire is considering options for his Virgin Atlantic Airways Ltd., whose 288 takeoff and landing slots at Heathrow are 3 percent of the total. A buyer would be able to use the slots to add lucrative flights to U.S. and Asian business markets, said Ray Neidl, senior aerospace specialist at Maxim Group in New York.
“This is huge, and we’re probably never going to have this happen again in our lifetime,” Neidl said in an interview. Heathrow slots are “hard to come by even in ones and twos. It’s a once-in-a-generation opportunity.”
Delta, Air France and their SkyTeam alliance are the smallest airline group at Heathrow, with 5 percent of slots, trailing 47 percent for British Airways’ Oneworld and Star Alliance’s 25 percent. Slots are so valuable that Continental Airlines paid $209 million for four pairs three years ago.
Branson is studying the sale of his 51 percent stake after hiring Deutsche Bank AG to review options, and Etihad Airways has signaled interest, said a person familiar with the matter, who declined to be identified because talks are private. Goldman Sachs Group Inc. (GS) is assisting a possible Delta-Air France bid, London’s Sunday Times reported Feb. 20, without citing anyone.
‘Be a Target’
Virgin Atlantic’s allure reflects “a bit of a land grab for scarce slots,” said Laurie Price, director of aviation strategy at consultant Mott MacDonald Group Ltd. in Croydon, England. “Anybody who owns those slots has got to be a target.”
Spokesmen for Delta, Air France-KLM and Etihad declined to discuss Crawley, England-based Virgin Atlantic.
“Virgin Atlantic is a strong, independent business with a good growth position at both London Heathrow and Gatwick so we are not surprised that there is interest in us,” said Janine Doy, a spokeswoman for the airline. “We cannot comment any further at this stage.”
European Union rules require the zone’s airlines to be under European control, so a Virgin Atlantic ownership change would have to involve an EU partner such as SkyTeam’s Air France-KLM (AF) or Star’s Deutsche Lufthansa AG (LHA), according to Price.
Singapore Airlines
A sale of Singapore Airlines’ 49 percent stake, which the carrier acquired in 1994, would be open to all bidders. Having that holding on the market also would create an opening for a U.S. buyer such as Atlanta-based Delta to participate alongside Air France-KLM.
Control of Virgin Atlantic’s slots at Heathrow is “the whole rationale for Delta and Air France being interested,” said Jim Higgins, an analyst at Soleil Securities in New York who recommends buying Delta. A sale of Singapore Airlines’ holdings may tempt Lufthansa, he said.
“No decision has been made about an immediate divestment of our stake,” a Singapore Airlines spokesman, Nick Ionides, said in an e-mail. He said the carrier regularly reviews options and was open to “any interesting opportunities.” A Lufthansa spokeswoman, Claudia Lange, declined to comment.
Heathrow is about 15 miles (24 kilometers) from London, compared with 30 miles for Gatwick airport, making it a magnet for the business travelers prized by airlines. It’s also at 99 percent capacity and has no expansion planned.
Heathrow Squeeze
Virgin Atlantic faces mounting Heathrow competition after British Airways and AMR Corp. (AMR)’s American Airlines, a Oneworld partner, gained antitrust immunity in July, allowing them to coordinate prices and schedules on trans-Atlantic flights.
That added to pressure from Lufthansa, which in 2009 exercised an option to buy a controlling stake in British Midland, known as BMI, the No. 2 slot owner at Heathrow. With that move, Lufthansa kept BMI’s slots, now totaling 780, off the open market while expanding Star’s size advantage over the independent Virgin Atlantic.
While Delta CEO Richard Anderson declined on a December conference call to discuss the status of any talks with Virgin, the company has indicated its interest in Heathrow, where it has 10 daily flights.
“We think there is room to grow there,” Delta Executive Vice President Glen Hauenstein told investors on the same call.
Delta, the world’s second-largest carrier after Star member United Continental Holdings Inc. (UAL), dwarfs Virgin Atlantic’s fleet of 39 jets and revenue of 1.98 billion pounds ($2.76 billion) for the year ended February 2010. Delta had 815 planes at the end of 2010 and revenue of $31.8 billion.
Open Skies Treaty
What it lacks is a big footprint at Heathrow, where it didn’t win clearance to fly until the approval of the 2007 U.S.- EU Open Skies treaty.
“SkyTeam has a relative weakness there,” said Jonathan Wober, a London-based analyst at Societe Generale. While Air France-KLM has a hub in Paris, its home city, “the London market is huge, particularly in the premium market,” he said.
Branson, 60, must consider the future of the Virgin brand in deciding how much control to cede, said John Strickland, an airline analyst at JLS Consulting Ltd. in London. The 26-year- old Virgin Atlantic is the flagship of Branson’s wider portfolio, ranging from space travel and luxury vacations to gyms and mobile phones, Strickland said.
Should Branson give up command, Virgin Atlantic’s new owner would get Heathrow assets that would rise in value along with travel demand, said George Hamlin, president of Hamlin Transportation Consulting in Washington.
“The economy is better and traffic is up,” Hamlin said. “And they’re not making any more slots.”
To contact the reporters on this story: Mary Jane Credeur in Atlanta at [email protected]; Steven Rothwell in London at [email protected]
To contact the editors responsible for this story: Chad Thomas at [email protected]; Ed Dufner at [email protected]
The U.K. billionaire is considering options for his Virgin Atlantic Airways Ltd., whose 288 takeoff and landing slots at Heathrow are 3 percent of the total. A buyer would be able to use the slots to add lucrative flights to U.S. and Asian business markets, said Ray Neidl, senior aerospace specialist at Maxim Group in New York.
“This is huge, and we’re probably never going to have this happen again in our lifetime,” Neidl said in an interview. Heathrow slots are “hard to come by even in ones and twos. It’s a once-in-a-generation opportunity.”
Delta, Air France and their SkyTeam alliance are the smallest airline group at Heathrow, with 5 percent of slots, trailing 47 percent for British Airways’ Oneworld and Star Alliance’s 25 percent. Slots are so valuable that Continental Airlines paid $209 million for four pairs three years ago.
Branson is studying the sale of his 51 percent stake after hiring Deutsche Bank AG to review options, and Etihad Airways has signaled interest, said a person familiar with the matter, who declined to be identified because talks are private. Goldman Sachs Group Inc. (GS) is assisting a possible Delta-Air France bid, London’s Sunday Times reported Feb. 20, without citing anyone.
‘Be a Target’
Virgin Atlantic’s allure reflects “a bit of a land grab for scarce slots,” said Laurie Price, director of aviation strategy at consultant Mott MacDonald Group Ltd. in Croydon, England. “Anybody who owns those slots has got to be a target.”
Spokesmen for Delta, Air France-KLM and Etihad declined to discuss Crawley, England-based Virgin Atlantic.
“Virgin Atlantic is a strong, independent business with a good growth position at both London Heathrow and Gatwick so we are not surprised that there is interest in us,” said Janine Doy, a spokeswoman for the airline. “We cannot comment any further at this stage.”
European Union rules require the zone’s airlines to be under European control, so a Virgin Atlantic ownership change would have to involve an EU partner such as SkyTeam’s Air France-KLM (AF) or Star’s Deutsche Lufthansa AG (LHA), according to Price.
Singapore Airlines
A sale of Singapore Airlines’ 49 percent stake, which the carrier acquired in 1994, would be open to all bidders. Having that holding on the market also would create an opening for a U.S. buyer such as Atlanta-based Delta to participate alongside Air France-KLM.
Control of Virgin Atlantic’s slots at Heathrow is “the whole rationale for Delta and Air France being interested,” said Jim Higgins, an analyst at Soleil Securities in New York who recommends buying Delta. A sale of Singapore Airlines’ holdings may tempt Lufthansa, he said.
“No decision has been made about an immediate divestment of our stake,” a Singapore Airlines spokesman, Nick Ionides, said in an e-mail. He said the carrier regularly reviews options and was open to “any interesting opportunities.” A Lufthansa spokeswoman, Claudia Lange, declined to comment.
Heathrow is about 15 miles (24 kilometers) from London, compared with 30 miles for Gatwick airport, making it a magnet for the business travelers prized by airlines. It’s also at 99 percent capacity and has no expansion planned.
Heathrow Squeeze
Virgin Atlantic faces mounting Heathrow competition after British Airways and AMR Corp. (AMR)’s American Airlines, a Oneworld partner, gained antitrust immunity in July, allowing them to coordinate prices and schedules on trans-Atlantic flights.
That added to pressure from Lufthansa, which in 2009 exercised an option to buy a controlling stake in British Midland, known as BMI, the No. 2 slot owner at Heathrow. With that move, Lufthansa kept BMI’s slots, now totaling 780, off the open market while expanding Star’s size advantage over the independent Virgin Atlantic.
While Delta CEO Richard Anderson declined on a December conference call to discuss the status of any talks with Virgin, the company has indicated its interest in Heathrow, where it has 10 daily flights.
“We think there is room to grow there,” Delta Executive Vice President Glen Hauenstein told investors on the same call.
Delta, the world’s second-largest carrier after Star member United Continental Holdings Inc. (UAL), dwarfs Virgin Atlantic’s fleet of 39 jets and revenue of 1.98 billion pounds ($2.76 billion) for the year ended February 2010. Delta had 815 planes at the end of 2010 and revenue of $31.8 billion.
Open Skies Treaty
What it lacks is a big footprint at Heathrow, where it didn’t win clearance to fly until the approval of the 2007 U.S.- EU Open Skies treaty.
“SkyTeam has a relative weakness there,” said Jonathan Wober, a London-based analyst at Societe Generale. While Air France-KLM has a hub in Paris, its home city, “the London market is huge, particularly in the premium market,” he said.
Branson, 60, must consider the future of the Virgin brand in deciding how much control to cede, said John Strickland, an airline analyst at JLS Consulting Ltd. in London. The 26-year- old Virgin Atlantic is the flagship of Branson’s wider portfolio, ranging from space travel and luxury vacations to gyms and mobile phones, Strickland said.
Should Branson give up command, Virgin Atlantic’s new owner would get Heathrow assets that would rise in value along with travel demand, said George Hamlin, president of Hamlin Transportation Consulting in Washington.
“The economy is better and traffic is up,” Hamlin said. “And they’re not making any more slots.”
To contact the reporters on this story: Mary Jane Credeur in Atlanta at [email protected]; Steven Rothwell in London at [email protected]
To contact the editors responsible for this story: Chad Thomas at [email protected]; Ed Dufner at [email protected]
03-22-2011, 05:32 PM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Ya know what 1D is? Permitted Aircraft types of A and C operators.
03-22-2011, 05:33 PM
Gets Weekends Off
Joined APC: Feb 2006
Posts: 1,242
From the LCP meeting in ATL from RA and SD:
1. Capacity up 1-2 % for the year but a 4% drawdown from the ATL after the summer schedule. Extra pilots would be absorbed by longer block times. Delta "is not a furlough airline"
2. Should still make a small profit for the year
3. DC-9 gone by SEP 2012
4. 14 more MD90's this year. 60 more over the next 2 years.
5. 100 Saab/CRJ's gone this year
6. Decision on 110/190 seaters by 3Q of this year
7. Likes the C-series for the 110 seaters, but needs more info on the engines (geared turbofans) 737-900 or 321 for the 190 seater.
8. Still have firm orders for the 787 but doesn't think the -800 will work.
9. Marketing will try to send the same type A/C to the same stations to help with Maintenance issues. i.e. all MD-88 ATL-LGA.
10. NO BIG BASE MOVES in the near future. Too expensive.
11. Fuel hedge as of today +500 mil
12. Just hired a "Fuel Czar" from the oil industry to run our fuel purchase program. Even mention we might need to look at buying a refinery. All options on the table.
13. Delta wants to "WIN" in NY and LA. Slot swat should happen soon. Had comments about USAIR but probably should not quote.
"Not in a hiring mode" but looking forward the next 4-6 years could need 800 pilots a year but can only train 600 at the max.
1. Capacity up 1-2 % for the year but a 4% drawdown from the ATL after the summer schedule. Extra pilots would be absorbed by longer block times. Delta "is not a furlough airline"
2. Should still make a small profit for the year
3. DC-9 gone by SEP 2012
4. 14 more MD90's this year. 60 more over the next 2 years.
5. 100 Saab/CRJ's gone this year
6. Decision on 110/190 seaters by 3Q of this year
7. Likes the C-series for the 110 seaters, but needs more info on the engines (geared turbofans) 737-900 or 321 for the 190 seater.
8. Still have firm orders for the 787 but doesn't think the -800 will work.
9. Marketing will try to send the same type A/C to the same stations to help with Maintenance issues. i.e. all MD-88 ATL-LGA.
10. NO BIG BASE MOVES in the near future. Too expensive.
11. Fuel hedge as of today +500 mil
12. Just hired a "Fuel Czar" from the oil industry to run our fuel purchase program. Even mention we might need to look at buying a refinery. All options on the table.
13. Delta wants to "WIN" in NY and LA. Slot swat should happen soon. Had comments about USAIR but probably should not quote.
"Not in a hiring mode" but looking forward the next 4-6 years could need 800 pilots a year but can only train 600 at the max.
03-22-2011, 06:28 PM
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
03-22-2011, 06:33 PM
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
03-22-2011, 06:37 PM
Doesn't Get Weekends Off
Joined APC: Jun 2007
Posts: 2,598
David Neeleman had a plan like this in the works for JetBlue before he was booted. He was going to buy enough refineries to produce all the fuel for JetBlue and he was going to use "idle" capacity time to produce diesel and sell it to BNSF and Union Pacific. Only problem was there were no refineries for sale and the government wouldn't let him build any new ones. He said he thought you could almost make fuel a fixed cost over a 3-5 year period if you could refine your own Jet A instead of hedging. Would be nice to see Delta pull this off, but refineries aren't for sale and you can't just go build one.
03-22-2011, 06:47 PM
Gets Weekends Off
Joined APC: Jul 2006
Position: Boeing Hearing and Ergonomics Lab Rat, Night Shift
Posts: 1,724
...Only problem was there were no refineries for sale and the government wouldn't let him build any new ones. He said he thought you could almost make fuel a fixed cost over a 3-5 year period if you could refine your own Jet A instead of hedging. Would be nice to see Delta pull this off, but refineries aren't for sale and you can't just go build one.
Owner of Big West refinery confirms Alon as sole bidder - Bakersfield.com
BTW the previous owner bought the refinery from Shell (who were going to close it) and made big upgrades to the refinery.
The oil fields around that refinery account for 10% of the domestic us produc tion.
Don't believe the "poor oil industry line"
Cheers
George
03-22-2011, 07:19 PM
Doesn't Get Weekends Off
Joined APC: Jun 2007
Posts: 2,598
Not only for sale, for sale at pennies on the dollar:
Owner of Big West refinery confirms Alon as sole bidder - Bakersfield.com
BTW the previous owner bought the refinery from Shell (who were going to close it) and made big upgrades to the refinery.
The oil fields around that refinery account for 10% of the domestic us produc tion.
Don't believe the "poor oil industry line"
Cheers
George
Owner of Big West refinery confirms Alon as sole bidder - Bakersfield.com
BTW the previous owner bought the refinery from Shell (who were going to close it) and made big upgrades to the refinery.
The oil fields around that refinery account for 10% of the domestic us produc tion.
Don't believe the "poor oil industry line"
Cheers
George
03-22-2011, 07:27 PM
veut gagner à la loterie
Joined APC: Apr 2008
Position: Light Chop
Posts: 23,286
But more importantly was that discount on fuel because it was tremendous. They're overpriced but still, I think if the fuel price was in the high $6 dollar range I was paying in the high mid 3s or low 4s. Worse case maybe $5. But hey, buy a 1000-2200 gallons and save a $1/gal was well worth it.
Still, we owned our own fuel farm which again shows the value in owning your supply chain because instead of $5-$6+ a gallon I was paying in the mid to high $2s. So as long as you know what you are doing. Anybody ever ran a fuel farm? It's about as fun as dealing with this %@#$@# thing:
When I had recurrent the other day I went down to the training center a little early and played in the CAPT trainer. I may have been the only person in the building, albeit a sunday, but it was dead except for the actual sims, they were a little busy but I saw a lot of them with the bridges connected and doors opened and nobody around.
Maybe shorten training up a bit? Just a thought. Don't kill the messenger. And if people were the issue well, you've got pilots willing to be SLIs. I think I heard for 3 MD88 SLI positions there was 300-400 applicants last year? On ATL M88 B if you do a day trip and get a raw score of 10-11 at the beginning of the month you might not fly again until the end of the month.
BTW, how did you dirty dogs up there in MSP do your SLI's? Wasn't it a requirement 1 month on the line and 1 month in the sim? Not perpetual sim with say 3 months on the line as DAL does? Or obviously heavily DGS?
03-22-2011, 08:09 PM
Gets Weekends Off
Joined APC: Apr 2009
Posts: 917
DC-8 Marble Mountain Vietnam
Something to break up the monotony:
YouTube - Seaboard World DC-8 lands at Marble Mountain Vietnam.m4v
YouTube - Seaboard World DC-8 lands at Marble Mountain Vietnam.m4v
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