Stable wide-body fleet
04-12-2016, 07:53 PM
#41
Gets Weekends Off
Joined APC: Apr 2014
Posts: 367
From the horse's mouth: (Bastian)
Delta will maintain a moderate ($5 Billion) debt load to thwart any Carl Icahn wannabe's from making that move. However, Delta remains invested in other areas to ensure easy access to a debt free balance sheet if the economy goes south.
American and United with their $25 Billion in debt, not so much. Like I said, I'll take a paycheck from a financially secure company vs. one who will drown in their debt in a matter of seconds, WHEN the economy turns south again.
Delta will maintain a moderate ($5 Billion) debt load to thwart any Carl Icahn wannabe's from making that move. However, Delta remains invested in other areas to ensure easy access to a debt free balance sheet if the economy goes south.
American and United with their $25 Billion in debt, not so much. Like I said, I'll take a paycheck from a financially secure company vs. one who will drown in their debt in a matter of seconds, WHEN the economy turns south again.
I agree DAL is postured the best for a financial tsunami and the least to take advantage of the upswing on the backside. It's probably wiser in this day and age to bet on the bad times being worst than the last.
04-12-2016, 07:59 PM
#42
:-)
Joined APC: Feb 2007
Posts: 7,339
Debt for an airline isn't a bad thing necessarily. Right now a hedge fund could buy Delta, shut it down, sell off all its assets, and pocket about $12 billion in profit from the deal. To prevent something like this happening at Southwest, Herb put in a poison pill to prevebt such an LBO attempt, Delta has no such pill, is buying back stock, and the price is going no where.
04-13-2016, 03:57 AM
#43
Banned
Joined APC: Nov 2013
Posts: 430
Debt for an airline isn't a bad thing necessarily. Right now a hedge fund could buy Delta, shut it down, sell off all its assets, and pocket about $12 billion in profit from the deal. To prevent something like this happening at Southwest, Herb put in a poison pill to prevebt such an LBO attempt, Delta has no such pill, is buying back stock, and the price is going no where.
04-13-2016, 06:21 AM
#44
Gets Weekends Off
Thread Starter
Joined APC: Mar 2015
Position: stake holder ir.delta.com
Posts: 10,534
You might take a look at Delta's real financial picture. 12 billion dollars in pension debt alone and aircraft leases off the books. I can't conceive of Delta being valued at more then 60 billion dollars after being shut down. The assets would not even cover the pension debt.
Delta contributes $350 million in stock to pension plans | Delta News Hub
These are the capped pensions from all the employees who survived bankruptcy with a pension benefit. Its impossible to have this conversation without stating the south pilots get 0 and the north pilots are capped and get some based on the time of service at the time it was frozen. This is not a bait but a reality that must be understood. There are 80,000 employees and 72,000 or so have frozen pensions. There is a large funding requirement from a finance perspective.
I won't get into pension replacement or PBGC backing but this is where the money goes. Flame on, but remember the thread topic is fleet stagnation and JV flying.
Last edited by notEnuf; 04-13-2016 at 06:35 AM.
04-13-2016, 09:20 AM
#45
Gets Weekends Off
Joined APC: May 2015
Position: A350 Both
Posts: 7,292
Debt for an airline isn't a bad thing necessarily. Right now a hedge fund could buy Delta, shut it down, sell off all its assets, and pocket about $12 billion in profit from the deal. To prevent something like this happening at Southwest, Herb put in a poison pill to prevebt such an LBO attempt, Delta has no such pill, is buying back stock, and the price is going no where.
04-13-2016, 09:40 AM
#46
Runs with scissors
Joined APC: Dec 2009
Position: Going to hell in a bucket, but enjoying the ride .
Posts: 7,751
Delta likes to report debt minus pension obligations. The obligations are no longer accruing and the funding timeline has been lengthened so they feel the pension debt is under control. The $1 billion a year meets the funding requirement and puts them ahead of schedule. The addition of $350 million in DAL stock should appreciate quickly helping the funding level. The plan is to hold Aeromexico stock in the pension fund as well. When the JV is announced, both should get a nice pop.
Delta contributes $350 million in stock to pension plans | Delta News Hub
These are the capped pensions from all the employees who survived bankruptcy with a pension benefit. Its impossible to have this conversation without stating the south pilots get 0 and the north pilots are capped and get some based on the time of service at the time it was frozen. This is not a bait but a reality that must be understood. There are 80,000 employees and 72,000 or so have frozen pensions. There is a large funding requirement from a finance perspective.
I won't get into pension replacement or PBGC backing but this is where the money goes. Flame on, but remember the thread topic is fleet stagnation and JV flying.
Delta contributes $350 million in stock to pension plans | Delta News Hub
These are the capped pensions from all the employees who survived bankruptcy with a pension benefit. Its impossible to have this conversation without stating the south pilots get 0 and the north pilots are capped and get some based on the time of service at the time it was frozen. This is not a bait but a reality that must be understood. There are 80,000 employees and 72,000 or so have frozen pensions. There is a large funding requirement from a finance perspective.
I won't get into pension replacement or PBGC backing but this is where the money goes. Flame on, but remember the thread topic is fleet stagnation and JV flying.
04-17-2016, 03:13 PM
#49
Gets Weekends Off
Joined APC: Aug 2008
Posts: 799
Based on the chart in Section 1, VA can essentially add another city pair with weekly service before we have to add 1 more flight. To say that another way, they have to add 7 more weekly flights before we have to add 1.
How a group of Delta pilots got in a room and thought that was a good idea is beyond me. It's what we're stuck with, fortunately its a small JV. As the ALPA boys would brag, we can't under any circumstance go below 5 weekly flights.
The above is the way I understand it. Someone might have a different take on it.
04-17-2016, 03:32 PM
#50
Gets Weekends Off
Joined APC: Jun 2015
Posts: 360
Im not 100%, but I'm fairly confident it was because at the time the JV started Virgin Australia (VA) had daily departures from 2 cities in Australia to N. America. 14 flights. Delta had daily LA to SYD for 7 flights.
Based on the chart in Section 1, VA can essentially add another city pair with weekly service before we have to add 1 more flight. To say that another way, they have to add 7 more weekly flights before we have to add 1.
How a group of Delta pilots got in a room and thought that was a good idea is beyond me. It's what we're stuck with, fortunately its a small JV. As the ALPA boys would brag, we can't under any circumstance go below 5 weekly flights.
The above is the way I understand it. Someone might have a different take on it.
Based on the chart in Section 1, VA can essentially add another city pair with weekly service before we have to add 1 more flight. To say that another way, they have to add 7 more weekly flights before we have to add 1.
How a group of Delta pilots got in a room and thought that was a good idea is beyond me. It's what we're stuck with, fortunately its a small JV. As the ALPA boys would brag, we can't under any circumstance go below 5 weekly flights.
The above is the way I understand it. Someone might have a different take on it.
I agree it's a small JV with VAustralia, but it's the classic case of give an inch and the company will take a mile. The fact that the LOA was so lopsided against us and was signed by a certain group of old guard DALPA individuals needs to be kept in the light of day so we don't repeat history.
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