Originally Posted by
tjisnumbaone
It's better than $1.4 billion from the first quarter. With the merger (not holding on to all of the extra and unnecessary gates, etc.) saved them a lot. Hope they will make a profit in 2009.
Unless the economy makes an incredible turn around in roughly the next five minutes the chances of Delta making a profit in 2009 are slim and none.
Originally Posted by
mooper
You have to remember that long-run profits matter, not short-run. Most companies lose money when new, and many mature businesses waver in and out of profitability, especially when the nature of their business is cyclical. Airlines haven't been extremely profitable in the long-run compared to other industries, but their financial performance in recent times isn't indicative of an inability for them to profit.
My understanding is that on the whole US airlines have lost more than they've made no matter what period of time you examine. To claim they "haven't been extremely profitable in the long-run compared to other industries" is a gross exaggeration of their profitability. They've lost money, period. All but a few have completely wiped out their shareholders in bankruptcy at least once.
Originally Posted by
mooper
Hedges are a form of insurance, and like all insurance, are losing proposition for the buyers on balance. Those who are *lucky* or or willing to lose the premium to protect against the possibility of greater losses may be acting rationally, but it is not logical to view hedging as anything more than a bet with the odds out of your favor in terms of expected return. WN happened to get the lucky end of the stick during a very bad period, but that doesn't mean they will continue to do so. In recent months, their bets have put them behind the pack instead of ahead.
If you're selling a product today that you won't deliver for several months, it only makes sense to lock in what it will cost you to deliver the product in the future based on what you sold it for today, even if you may end up paying a bit more for the security of locking in that cost. I really don't cosnider that a "bet", but rather a reasonable business decision.