Tag Archives: 737832

Delta to add three weekly routes to Central America in December

Delta Air Lines (Atlanta) is planning to add three weekly routes to Central America starting on December 21, 2013 per Airline Route. The new routes will be Los Angeles-Belize City, Minneapolis/St. Paul-San Jose and New York (JFK)-Guatemala City. All will operate on Saturdays.

In addition, Delta will cancel the New York (JFK)-Milwaukee route on September 1 per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-832 WL N3743H (msn 30836) climbs away from the runway at Los Angeles International Airport (please click on the photo for the full-size view).

Delta Air Lines:

Delta Air Lines to buy back shares up to $500 million as its financial condition improves

Delta Air Lines (Atlanta) today announced a balanced capital deployment program aimed at creating up to $5 billion of value for shareholders, including returning more than $1 billion to shareholders over the next three years.

As part of this program, Delta’s Board of Directors has initiated a quarterly dividend and declared a $0.06 per share dividend for shareholders of record as of Aug. 9, 2013. This dividend will be paid on Sept. 10, 2013. In addition, the Board has authorized a $500 million share repurchase program, to be completed no later than June 30, 2016. Together, these two programs are designed to return more than $1 billion of capital to shareholders over the next three years.

“Delta’s financial performance and balance sheet have strengthened considerably over the past five years and the Board believes the company is now in a position to begin returning cash to our shareholders,” said Daniel Carp, chairman of Delta’s Board of Directors. “The Board’s shareholder return program makes a long-term commitment to our shareholders with the implementation of an ongoing quarterly dividend, while also providing flexibility to return additional cash to shareholders through the share repurchase program.”

Comprehensive Financial Plan

Since 2009, Delta has made significant investments in its people, product and service, while improving its earnings and generating $4 billion of free cash flow. That free cash flow has been dedicated to strengthening the company’s balance sheet. As a result, Delta’s adjusted net debt has fallen from $17 billion at the end of 2009 to just under $12 billion at the end of 2012. The company expects to achieve its $10 billion adjusted net debt target by the end of 2013.

“Delta’s strategy has resulted in a solid financial foundation for our company, tremendous improvements in our fleet, facilities, products and technology, as well as top-notch operational reliability and service to our customers,” said Richard Anderson, Delta’s chief executive officer. “The capital deployment plan unveiled today furthers our commitment to becoming the airline of choice for our employees, customers and shareholders.”

In an investor presentation this morning, Delta outlined a comprehensive, five-year financial plan. The plan focuses on free cash flow generation through a combination of expected earnings improvements and a disciplined approach to capital investment. Over the next five years, the company plans to reinvest $2.0 – $2.5 billion annually, or approximately 50 percent of its operating cash flow, into improving the company’s fleet, facilities, products and technology. The resulting free cash flow will be used to return cash to shareholders, further reduce the company’s debt, and opportunistically address longer-term pension funding needs, driving up to $5 billion of value to Delta’s shareholders.

As part of this plan, Delta expects to achieve and maintain an adjusted net debt level of $7 billion, a $5 billion reduction over 2012. By meeting the $7 billion target, Delta will have reduced its adjusted net debt by $10 billion since 2009, significantly decreasing the company’s balance sheet risk and generating more than 50 percent savings in interest expense.

The company also plans to make up to $1 billion of incremental contributions to the company’s defined benefit pension plans over the next five years. These contributions would be in addition to the $650 – $700 million annual required minimum contribution.

Repurchases under Delta’s program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, or accelerated share repurchase transactions in compliance with applicable regulatory guidelines, including Securities and Exchange Commission Rule 10b-18. Purchases will be made subject to market and economic conditions, applicable legal requirements, and other relevant factors. Delta had approximately 855 million shares of common stock outstanding as of March 31, 2013.

Delta Air Lines:

Delta Air Lines to offer nonstop Los Angeles-Nashville service in April

Delta Air Lines (Atlanta) will add new daily nonstop service between Los Angeles and Nashville starting on April 8. The new route will be operated with Boeing 737-800s according to Airline Route. The company is also starting Raleigh/Durham-Tampa Bombardier CRJ200 Delta Connection flights also on April 8.

Delta Air Lines:

Delta Air Lines is in talks to purchase Singapore Airlines’ 49% share of Virgin Atlantic Airways

Delta Air Lines (Atlanta) is reportedly in discussions with Singapore Airlines (Singapore) to acquire their 49 percent share in Virgin Atlantic Airways (London). If successful, Delta’s European partners, namely Air France-KLM, could then buy some of Sir Richard Branson’s shares to take control of the UK company according to this report by the Financial Times.

Read the full report: CLICK HERE

Top Copyright Photo: Michael B. Ing. If completed, it would be a bold move by SkyTeam to further increase its presence at slot-controlled Heathrow Airport in London against the Oneworld alliance. Boeing 737-832 N3755D (msn 29627) climbs away from Los Angeles International Airport.

Delta Air Lines:

Virgin Atlantic Airways:

Bottom Copyright Photo: Brian McDonough. Is the Virgin Atlantic brand in danger of becoming history? Boeing 747-41R G-VROC (msn 32746) arrives at New York (JFK) in the updated 2010 motif.

Delta to start nonstop New York-Vancouver service

Delta Air Lines (Atlanta) will start daily, nonstop service between its New York (JFK) hub and Vancouver, British Columbia starting on June 6, 2013. The new route will be operated with Boeing 737-800s according to Airline Route.

Delta:

Delta posts a $586 million net profit in the second quarter

Delta Air Lines (Atlanta) today reported financial results for the June 2012 quarter. Key points include:

Delta’s net income, excluding special items¹, for the June 2012 quarter was $586 million, or $0.69 per diluted share.
Delta’s June 2012 quarter GAAP net loss was $168 million, or $0.20 per diluted share, including mark-to-market adjustments on open fuel hedges and other special items.
Delta’s unit revenues were up 8.5% for the quarter and the company has produced a unit revenue premium to the industry for fifteen consecutive months.
Delta ended the June 2012 quarter with $5.3 billion in unrestricted liquidity and adjusted net debt of $12.1 billion.

Delta’s operating revenue grew $579 million, or 6%, on 1.3% lower capacity in the June 2012 quarter compared to the June 2011 quarter. Despite lower capacity, traffic increased 0.3% as load factor increased 1.4 points to 85.1%.

Passenger revenue increased 7%, or $560 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 8.5%, driven by a 6.8% improvement in yield.
Cargo revenue decreased 1%, or $2 million, with lower cargo yields partially offset by higher volumes.
Other revenue increased 2%, or $21 million, from higher ancillary business revenue.

Comparisons of revenue-related statistics are as follows:

			Increase (Decrease)
			2Q12 versus 2Q11
			Change	Unit
Passenger Revenue		2Q12 ($M)	YOY	Revenue	Yield	Capacity
	Domestic	$ 3,727	7%	8%	6%	(1)%
	Atlantic	1,584	1%	9%	7%	(7)%
	Pacific	860	20%	9%	8%	10%
	Latin America	473	8%	8%	5%	– %
	Total mainline	6,644	7%	8%	6%	(1)%
	Regional	1,807	7%	11%	9%	(3)%
	Consolidated	$ 8,451	7%	8%	7%	(1)%

Fuel

Excluding mark-to-market adjustments, Delta’s average fuel price² was $3.37 per gallon for the June quarter, which includes 16 cents per gallon in settled losses from its fuel hedging program. On a GAAP basis, which includes mark-to-market adjustment on out of period hedges, the company’s average fuel price was $3.95 per gallon. At June 30, Delta had $350 million of hedge margin posted with counterparties.

Delta expects to participate meaningfully in the fuel price decline for the second half of 2012. As of the July 23^rd forward curve, the company expects to realize average fuel prices of $3.09 and $3.05 for the September and December 2012 quarters, respectively, excluding any impact from the Trainer refinery.

During the June quarter, Delta’s subsidiary, Monroe Energy, closed its acquisition of the Trainer refinery. Work is currently underway to complete the turnaround and modify the plant to maximize its jet fuel production. The company expects the plant to be operating at full capacity in the fourth quarter. With Trainer at full capacity, Delta expects to save more than $300 million annually on its fuel expense.

Non-Fuel Cost Performance

In the June 2012 quarter, Delta’s operating expense, excluding fuel, increased $308 million year over year. Primary drivers for the increase included higher profit sharing expense, increases in wages and benefits, and the impact of special items.

Consolidated unit cost (CASM³), excluding fuel expense, profit sharing and special items, was 3.6% higher in the June 2012 quarter on a year-over-year basis, driven by the impact of capacity reductions and investments in employees, products, services and facilities. GAAP consolidated CASM increased 12% primarily due to mark-to-market adjustments on open fuel hedges in future periods.

Cash Flow and Liquidity

As of June 30, 2012, Delta had $5.3 billion in unrestricted liquidity, including $3.5 billion in cash and short-term investments and $1.8 billion in undrawn revolving credit facilities.

Operating cash flow during the June 2012 quarter was $683 million, driven by the company’s profitability and advance ticket sales, which was partially offset by pension funding and fuel hedge margin postings. During the quarter, Delta made $354 million in contributions to its defined benefit pension plan, completing its funding requirements for the year.

Capital expenditures during the quarter were $652 million, including $300 million for aircraft (including parts and modifications), $180 million for the Trainer acquisition, and $65 million for Delta’s investment in Aeromexico.

During the June quarter, Delta paid $374 million in debt maturities and capital lease obligations. Subsequent to the end of the quarter, Delta completed its $480 million 2012-1 enhanced equipment trust certificates (EETC) offering. The certificates are secured by 31 aircraft that are being refinanced from other debt financings.

At June 30, Delta’s adjusted net debt was $12.1 billion.

Delta recorded special items totaling $754 million in the June 2012 quarter, including:

a $561 million charge on mark-to-market adjustments on fuel hedges settling in future periods;
$171 million in severance and related costs associated with voluntary early out programs; and
a $22 million charge for fleet, facilities and other items.

Delta recorded special items totaling $168 million in the June 2011 quarter, including:

$80 million in severance and related costs;
a $64 million charge for fleet, facilities and other items;
a $13 million charge for debt extinguishment; and
$11 million in mark-to-market adjustments for fuel hedges.

(1) Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.

(2) Average fuel price per gallon: Delta’s June 2012 quarter average fuel price of $3.37 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, and includes the impact of fuel hedge contracts with original maturity dates in the June 2012 quarter. Settled hedge losses for the quarter were $155 million, or 16 cents per gallon. On a GAAP basis, fuel price includes $561 million in mark-to-market losses recorded on fuel hedge contracts settling in future periods.

(3) CASM – Ex: Delta excludes from consolidated unit cost ancillary businesses which are not related to the generation of a seat mile, including aircraft maintenance and staffing services which Delta provides to third parties and Delta’s vacation wholesale operations (MLT). The amounts excluded were $244 million and $230 million for the June 2012 quarter and June 2011 quarter, respectively.

Delta Air Lines: