Originally Posted by
MSPeconomist
I think it would be unusual to take a charge in 2014 for stuff like early lease termination fees that ar costs expected to be incurred several years in the future, although I do realize that there are cases of companies taking early charges on their books for the costs of mergers or downsizing their workforce.
Agreed, it might not be lease termination fees. (There are some owned 744s, too, however.) It could be value of spare parts, the capitalized investment in cabin refurbs... I don't recall if there was enough detail on the earnings call to assess this.
In the absence of new widebody orders for near-term delivery, or receipt of used frames, this appears to signal that the era of growth of international versus domestic capacity may be over for Delta. (Recall the arrival of 10 77Ls, and 22 764s converted from domestic to international configs.) Retirement of 16 x 376 seat 744 = 6016 seats, offset by receipt of just 2930 seats on ten A330s (all by end 2017). Sure, they can squeeze the rest of the widebody international fleet for utilization but domestic growth looks to be a big part of total systemwide growth at around forecasted growth of GDP.