Okay, about a half hour left of trading and was thinking about plopping 10k in DALRQ. I know stupid right? Its at .68 right now
UPDATE 2-Delta Air sees profit swing, lower debt
12:21p ET March 27, 2007 (Reuters)
NEW YORK, March 27 (Reuters) - Delta Air Lines Inc. , which plans to emerge from bankruptcy in late April, said on Tuesday it expects to swing to a profit this year on cost reductions and higher revenue.
It also plans to slash debt and generate billions in cash flow.
"We have a lot of prospects for growth going forward," said Ed Bastian, Delta's chief financial officer and one of the front-runners as the successor to Chief Executive Gerald Grinstein, who plans to retire once Delta exits bankruptcy.
"We've got the revenue momentum at our back," Bastian said, speaking at a Delta investor conference.
He also said he was a bit more bullish on industry mergers than Grinstein, who fought off a hostile takeover attempt from rival US Airways Group .
"I think consolidation is eventually going to occur," said Bastian.
Delta, which expects to exit bankruptcy on April 30, has cut about $2 billion from annual costs and shifted planes to more lucrative international routes since filing for Chapter 11 in September 2005. The company was pushed into bankruptcy after racking up nearly $19 billion in debt and accumulating about $7.5 billion in losses between 2001 and 2005.
PROFIT SWING
The No. 3 U.S. carrier said it expects to earn $816 million in pretax income, excluding special items, in 2007, on higher revenue and cost reductions. That compares with a 2006 pretax loss of $452 million.
It also expects to reduce net debt to $7.6 billion in 2007, compared with $16.9 billion as of June 30, 2005, and plans to generate $5 billion in cash flow between 2007 and 2009.
Delta plans to issue new shares in the first week in May. The company, whose current shares will be canceled, has said it expects to have a market value of about $10 billion.
Delta's turnaround has been fueled by aggressive cost cutting and a resurgence in demand for air travel, which has filled planes and given carriers leeway to raise fares. Last week, Delta raised fares $5 each way in the continental United States -- the second broad fare increase this year.
Delta, like other major U.S. carriers, is shifting planes to international routes as it seeks to escape competition from low-cost carriers like Southwest Airlines domestically.
In the first quarter, for instance, Delta said it plans to expand its international capacity 24 percent to 26 percent, while reducing domestic capacity 4 percent to 6 percent. The carrier also has 30 Boeing planes on order that are capable of flying international routes, Bastian said.
But analysts expect fares between the United States and Europe to come under pressure in the coming years as competition heats up after a recent agreement to loosen trans-Atlantic flying restrictions takes effect next March.
Delta is also setting the stage for a bitter battle for the New York market.
"We've got to win in New York," said Bastian. "New York has to be our second base of profitability."
Continental Airlines is the largest carrier in the area, with its profitable hub in nearby Newark, New Jersey. It has vowed to defend its position in the area from increasing competition from Delta, AMR Corp's American Airlines, and JetBlue Airways Corp. .
Delta's leadership remains an open question. CEO Grinstein plans to retire and prefers an internal candidate.
"My strong preference -- very strong preference -- is that it be internal," Grinstein said. "My persuasive powers will be brought to bear."
Analysts see Bastian and Chief Operating Officer Jim Whitehurst as the front-runners. The company plans to name a new board, which will select the future CEO, in late March or early April. (Additional reporting by Kyle Peterson)
UPDATE 2-Delta Air sees profit swing, lower debt
12:21p ET March 27, 2007 (Reuters)
NEW YORK, March 27 (Reuters) - Delta Air Lines Inc. , which plans to emerge from bankruptcy in late April, said on Tuesday it expects to swing to a profit this year on cost reductions and higher revenue.
It also plans to slash debt and generate billions in cash flow.
"We have a lot of prospects for growth going forward," said Ed Bastian, Delta's chief financial officer and one of the front-runners as the successor to Chief Executive Gerald Grinstein, who plans to retire once Delta exits bankruptcy.
"We've got the revenue momentum at our back," Bastian said, speaking at a Delta investor conference.
He also said he was a bit more bullish on industry mergers than Grinstein, who fought off a hostile takeover attempt from rival US Airways Group .
"I think consolidation is eventually going to occur," said Bastian.
Delta, which expects to exit bankruptcy on April 30, has cut about $2 billion from annual costs and shifted planes to more lucrative international routes since filing for Chapter 11 in September 2005. The company was pushed into bankruptcy after racking up nearly $19 billion in debt and accumulating about $7.5 billion in losses between 2001 and 2005.
PROFIT SWING
The No. 3 U.S. carrier said it expects to earn $816 million in pretax income, excluding special items, in 2007, on higher revenue and cost reductions. That compares with a 2006 pretax loss of $452 million.
It also expects to reduce net debt to $7.6 billion in 2007, compared with $16.9 billion as of June 30, 2005, and plans to generate $5 billion in cash flow between 2007 and 2009.
Delta plans to issue new shares in the first week in May. The company, whose current shares will be canceled, has said it expects to have a market value of about $10 billion.
Delta's turnaround has been fueled by aggressive cost cutting and a resurgence in demand for air travel, which has filled planes and given carriers leeway to raise fares. Last week, Delta raised fares $5 each way in the continental United States -- the second broad fare increase this year.
Delta, like other major U.S. carriers, is shifting planes to international routes as it seeks to escape competition from low-cost carriers like Southwest Airlines domestically.
In the first quarter, for instance, Delta said it plans to expand its international capacity 24 percent to 26 percent, while reducing domestic capacity 4 percent to 6 percent. The carrier also has 30 Boeing planes on order that are capable of flying international routes, Bastian said.
But analysts expect fares between the United States and Europe to come under pressure in the coming years as competition heats up after a recent agreement to loosen trans-Atlantic flying restrictions takes effect next March.
Delta is also setting the stage for a bitter battle for the New York market.
"We've got to win in New York," said Bastian. "New York has to be our second base of profitability."
Continental Airlines is the largest carrier in the area, with its profitable hub in nearby Newark, New Jersey. It has vowed to defend its position in the area from increasing competition from Delta, AMR Corp's American Airlines, and JetBlue Airways Corp. .
Delta's leadership remains an open question. CEO Grinstein plans to retire and prefers an internal candidate.
"My strong preference -- very strong preference -- is that it be internal," Grinstein said. "My persuasive powers will be brought to bear."
Analysts see Bastian and Chief Operating Officer Jim Whitehurst as the front-runners. The company plans to name a new board, which will select the future CEO, in late March or early April. (Additional reporting by Kyle Peterson)
