Timbo

I think RA really wanted to merge with Alaska, eliminate a competitor and lock in feed, not just code share. Now it looks like he will buy Hawaiian. Got plenty of money to do it now...but no money to restore pilot pay and retirements to decade old levels.

Carl Spackler

Our "union" has gotta ask for it first Timbo. What do you think the odds are of that happening?

Carl

TheManager

Winner. Their stock is on a tear. Check out the nice gap up

Reduces profit sharing too.



http://stockcharts.com/h-sc/ui?s=HA&...d=p81494084570

shiznit

Incorrect on the profit sharing calculation. It is based off of PTIX excluding one-time items, not net profit. "Profit-sharing" is a misnomer.

tonyp

No, no it's not. There is nothing cool about the double breasted jacket and I wear one to work...

TheManager

I'm familiar with this:


DEFINITION OF 'PRETAX OPERATING INCOME - PTOI'
An accounting term that refers to the difference between a company's operating revenues (from its primary businesses) and its direct expenses (except taxes) tied to those revenues. Pretax operating income excludes non-operating forms of revenue and non-recurring transactions such as capital gains on assets and profits from unrelated investments in other companies (unless its main business is investment in other companies).

Not so familiar with "PTIX"

Explain?

shiznit

PWA 2.A.207:

“Pre-tax income” (PTIX) means, for any calendar year, the Company’s consolidated pretax income calculated in accordance with Generally Accepted Accounting Principles in the United States and as reported in the Company’s public securities filings but excluding: a) all asset write downs related to long term assets, b) gains or losses with respect to employee equity securities, c) gains or losses with respect to extraordinary one-time or non-recurring events (including without limitation one-time transition or integration costs incurred in connection with the merger of the Company and Northwest Airlines Corporation during the two year period following the merger), and d) expense accrued with respect to the profit sharing plan.

PWA 3.I "Profit Sharing Plan"

describes the calculation, and uses this PTIX definition

gloopy

I thought that too until I looked at the big numbers. They are a good plug and play from a network perspective and they have a common enough fleet, although DL likes the 330-300 a LOT more than the -200. The -300 is a great money maker, but the -200 is largely a marketing/nework liability and one of the least profitable sub-fleet types for many market for much of the time.

While that could easily be dealt with, the fact remains that they have a LOT of debt. Run the numbers and adjust for size/market cap and you will see that for their size their debt is absolutely staggering. It would be the equivalent of DL having 70-80B in debt.

They are incredibly expensive from that point of view and for the price they don't bring anything to the table DL couldn't do itself for far, far less except that one or two NRT slots and that ain't worth the price by a long shot. I'd love to see their network added to ours, but I don't think its going to happen because the sheer economics of scale are way out of balance.

Hillbilly

Bingo! Absorbing them is completely counter to Delta's hyper focus on reducing debt. For what they make, their debt is really high and, if what I've heard is correct, I'm pretty sure we don't want anyone's A330-200s so we could lose more money on more routes. The -300s and 717s are a different story, but I don't think it is viewed as a viable option at this time.

full of luv

Gloopy,
Are you referring to their Haneda slots? I didn't think they even fly to NRT.
But the fact remains I agree with your assessment, other than picking up equip at fire sale prices if something were to go south in the industry, there is nothing in their network that couldn't be duplicated if it were worth the capital expenditure.
They are firmly rooted in Hawaii which is predominately an economy based on tourism and government/military. Both of which have a low rate of premium price ticket purchase. Very low margins for the long distances they have to cover.
They are good at what they do, offer a "hawaiian" way to begin and end your vacation to Hawaii, but as far as taking on that level of debt for the expected ROI, it does seem illogical without some other undisclosed factor.
LUV