Delta Now Projects Cash Flow loss in 1st Quarter

 
Old Mar 10, 03, 5:52 pm
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Delta Now Projects Cash Flow loss in 1st Quarter

The press release is here.

Previously they had projected a positive cash-flow in the first quarter.

The accompanying SEC filing mentions many negative influences but not frequent flyer dissatisfaction as uncertainties for the future.

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Old Mar 10, 03, 10:32 pm
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Interesting that DL blames it's first quarter woes on the uncertainties in the middle east. Is there any way to objectively measure the impact of the changes to the skymiles program? Canarsie conducted a poll on the DL Board re: the financial impact. Given what I have been reading on this board since the changes were announced, I see large defections of big-revenue fliers. Clearly, the bottom line has been affected...yet, not acknowledged by Delta.
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Old Mar 10, 03, 10:51 pm
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DL is unlikely now, if ever, to actually admit their present and future woes are.....GASP!!!....due to any bonehead decisions by management. This is a target rich environment to lay off blame. Fuel costs, war, 9/11, the economy, the weather, low cost start-ups, blah, blah, blah will get the blame. IMO, "We made a terminal and ultimately fatal error in revising our SM's program" will never make the list of excuses for their financial difficulties.
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Old Mar 11, 03, 12:02 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cholula:
DL is unlikely now, if ever, to actually admit their present and future woes are.....GASP!!!....due to any bonehead decisions by management. This is a target rich environment to lay off blame. Fuel costs, war, 9/11, the economy, the weather, low cost start-ups, blah, blah, blah will get the blame. IMO, "We made a terminal and ultimately fatal error in revising our SM's program" will never make the list of excuses for their financial difficulties.</font>
You hit the nail on the head- Whenever there is someone else to blame- do it. I suppose someone must be teaching this philosophy at MBA programs across the country. Very sad, indeed.
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Old Mar 11, 03, 4:46 am
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Old Mar 11, 03, 7:42 am
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None of the traditional six network carriers are expecting to be cash flow positive for the 1st quarter.

If the frequent flyer changes were driving so many passengers to other carriers, why are all the other carriers doing so poorly? Given DL's size and the number of high revenue FF'ers they are driving away, the other carriers should be seeing some real improvements. Yet, every carrier continues to miss revenue targets. I guess they must all be flying JBLU,WN and AAI.
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Old Mar 11, 03, 8:26 am
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Or not flying at all. Frequent flyer programs serve at least two purposes: (1) engendering loyalty to a particular airline and (2) encouraging additional discretionary flying on that airline. The first purpose translates into flying your "favorite" airline when you have to fly anyway. The second is related to flying "extra" to reach certain elite thresholds. The evisceration of SkyMiles has affected both aspects in a negative way, but only the first aspect necessarily results in other airlines picking up the business. And many frequent flyers ARE, in fact, choosing the smaller. lesser known airlines like JetBlue.

Bruce
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Old Mar 11, 03, 9:31 am
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Delta Air Lines now expects overall capacity to fall 1.5% year-over-year for the quarter, after in January projecting a 0.5% to 1% rise. Analysts expect Delta to lose $3.04 per share this quarter, and $6.36 per share this year.

As a result of this news, Delta Air Lines stock, as of 10:41 this morning Eastern Standard Time, was down $1.81 at $6.85 per share, losing greater than 20% of its value this morning alone.

Delta cites war fears are convincing some travelers not to fly. Yeah, right.

As a businessman, I would do whatever I can to keep my current customers, and keep them happy. Treat your customers right through the lean period, and they will reward you during the more lucrative times.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by obscure2k:
Canarsie conducted a poll on the DL Board re: the financial impact.</font>
Thank you for the reference, obscure2k, but I am not sure that this thread helped all that much, as the final total tallied for lost revenue for 2004 was $2,729,474.66 minimum - hardly enough of an impact to even force Delta to give their policy changes a second thought.

[This message has been edited by Canarsie (edited 03-11-2003).]
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Old Mar 11, 03, 10:13 am
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Bruce It think your right about additional flying on your favorite airline. I used to use Delta to go to ATL now I drive or take AirTran. I used to fly Delta to go the Fort Lauderdale now I use Southwest or drive. I would pay more to stay on Delta to get the segs rather than using the others but now I go with what is the least expensive because there is no reason to stay with Delta. It's just SIMPLY GOOD BUSINESS.
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Old Mar 11, 03, 10:18 am
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Well said. I don't take any discretionary trips on DL anymore and have burned through my DBC vouchers. Next it will be the miles while I still have the status to burn through them. After that, my #2 airline becomes NW or UA/US.

And business travel? AA got most of it long before these new hateful changes were announced. Now they or NW gets all of it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cholula:
DL is unlikely now, if ever, to actually admit their present and future woes are.....GASP!!!....due to any bonehead decisions by management. This is a target rich environment to lay off blame. Fuel costs, war, 9/11, the economy, the weather, low cost start-ups, blah, blah, blah will get the blame. IMO, "We made a terminal and ultimately fatal error in revising our SM's program" will never make the list of excuses for their financial difficulties.</font>

[This message has been edited by Spiff (edited 03-11-2003).]
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Old Mar 11, 03, 10:44 am
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It sickens me but I think alot of FF's on this board seem to be proud of the fact they are bringing a great airline down.
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Old Mar 11, 03, 11:03 am
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Proud?
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Old Mar 11, 03, 11:04 am
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Oh, please.

The "great airline"'s management decided to bring itself down.

All we want is for Delta to improve instead of destroy its FF program, not "bring a great airline down".

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by firstmob:
It sickens me but I think alot of FF's on this board seem to be proud of the fact they are bringing a great airline down.</font>


[This message has been edited by Spiff (edited 03-11-2003).]
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Old Mar 11, 03, 11:04 am
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I think with the changes that Delta is making when they need their loyal passengers most, they are bringing themselves down. Delta will have no one to blame but themselves if they are forced into bankrupcy.
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Old Mar 11, 03, 11:17 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by firstmob:
It sickens me but I think alot of FF's on this board seem to be proud of the fact they are bringing a great airline down.</font>

I think the point has been made many times the the "great airline" is bringing itself down. We're just making a business decision based on which carrier offers the best value.
Most here believe that Delta used to offer the best value and service.
Now, most believe its competitors offer a better product.
This is the beauty of a free market economy.

I wish my clients had a forum such as Flyer Talk to express their concerns. This board should be an incredible tool for DL to used in gaging FF satisfaction with its product...
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