If you are an employee of these airlines, please share with us what you know.
Delta just bought over a billion dollar of CRJ900 airplanes from Bombadier, a Canadian airplane manufacturer. The money they paid for these airplanes will be taken out from the loan Delta just received from its creditors in the amount of $9 billion. Last year, Delta Airlines lost over $5 billion. They have a huge debt as high as $30 billion. Its balance sheet does not balance because its net worth is minus over $10 billions. In other words, its assets are worthless. So if Delta borrowed $9 billion and bought newer airplanes costing over a billion dollars, its debt will continually increased. Delta has been under bankruptcy since 2005. With high fuel prices, Delta will have to survive paying off its debt along with its yearly loss. With a new $9 billion loan and a 2006 loss of over $5 billion, Delta is expected to lose up to $7 billion in 2007.Stock price should fall to $0.30 per share just like last year.
Northwest Airlines still operates 164 DC9 aircraft. DC9 was built by McDonnell Douglas. Douglas no longer exists. It merged with Boeing a few years ago. Northwest received the first DC9 in 1974. DC9, like the Boeing 727, is an inefficient airplane. Both aircraft consume fuel like First World War army tanks. Its stock price is extremely overpriced. It should be where it used to be last year, at $0.35 per share.
With oil price climbing to $78 per barrel before the end of 2007, both Delta and Northwest will find themselves in red ink in a very long time.
2007-02-08
18:51:43
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2 answers
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asked by
Mr. USA
1