What Airline based in America is the most financially stable?

This one should be obvious...........................Southwest.

WN because of

Assets
Cash available
Debt Rating
Longevity

If we look into the non-low-cost airlines, i think the most stable is CO.
DL, UA, US airways are in problems. Don´t know about AA, look stable too, but CO looks the most stable of them all. NW has some problems as well.
Regards,
Adam Bechny

I'd say Southwest is no. 1, followed by Northwest. Continental has a slightly healthier balance sheet and is slightly more profitable (or less loss making) than Northwest, but Northwest is substantially larger and more assets. Also Northwest is better positioned in less competitive markets. So my ranking would be:

1. Southwest
2. Northwest
3. Continental

It should also be mentioned that now that NWA has obtained the needed conessions from their pilots, their financial health is further positioned ahead of Continental which sadly will soon have to start negotiating for concessions.

-WGW2707

If we are talking about the legacy carriers the ones doing the "least worst" would be CO and NWA, CO announced a 3rd Quarter loss of $16 Million which is alot better than what DL and AMR reported.

If your talking in general terms than Southwest without a doubt is the most financialy solvent airline in the US.

Leaders and Laggards in Market Cap:

Southwest Airlines Inc [LUV] $11.3 B
Deutsche Lufthansa AG [DLAKY.PK] $4.5 B
AIR France-KLM [AKH] $4.4 B
British Airways PLC [BAB] $4.1 B
Ryanair Holdings PLC [RYAAY] $4.1 B
JetBlue Airways Corp [JBLU] $2.2 B
AMR Corp [AMR] $1.1 B

America West Holdings Corp [AWA] $152.8 M
UAL Corp [UALAQ.OB] $110.4 M
FLYi Inc [FLYI] $73.0 M
US Airways Group Inc [UAIRQ.OB] $61.1 M
Midwest Air Group Inc [MEH] $50.4 M
ATA Holdings Corporation [ATAH] $20.2 M

2004 Fiscal Year Profits as of now
Airline___Profit Margin%___Operating Margin%
JetBlue_______7.44________12.56
Skywest______7.33________13.56
Pinnacle______6.81________12.27
Airtran_______6.27_________8.92
Southwest____4.33_________7.56
Mesa_________3.13_________7.51
America West_2.00_________4.34
Northwest_____0.19________-0.26
Alaska_______-0.76________-0.47
Continental___-1.05_________1.03
American_____-2.62________-0.09
US Airways___-4.44________-2.38
ATA_________-6.64________-2.61
Hawaiin______-8.47________-8.11
United______-10.18________-0.43
Delta________-20.3________-7.67

The most profitable and therefore most financially viable airlines are the LCCs and the regional partners as well. The big majors are not doing well at all, but some are good in better shape then others. I would say a contracted regional carrier would be the best way to go as a financial investment (presuming the parent company is not about to dissolve or their big customer is having problems).

A surprise might be Skywest. I know they are just a regional carrier, but they have expanded with CO, UA and DL in recent years and is one of the only carriers that still depends on a highly efficient prop (EMB 120) for much of their operations. With a revenue $521million and a net income of $39.4million (up 40%) they are doing really well.

[Edited 2004-10-23 23:28:27]

[Edited 2004-10-23 23:31:47]

[Edited 2004-10-23 23:33:21]

The airlines arent doing as bad as I thought. But what about worldwide, who is the most financially stable?


Thanks in AAdvance!!

Well, it could be Amtrak... Airlines are not doing great those times !

AAplatnumflier, look at the Market Cap list in a prior post.... that is a great starting point!

Amtrak isnt doing so well either. If i am not mistaken there was a time when Amtrak was going to file for BK but I could be wrong.

Amtrak isnt doing so well either. If i am not mistaken there was a time when Amtrak was going to file for BK but I could be wrong.

If I'm not mistaken, Amtrak is run by the US government (at least it was). If this is the case, can Amtrak even file for bankruptcy? Wouldn't the government either bail it out or shut it down?

NceBoy,

Amtrak has never reported a profit in its history as a company. They're FAR from being in a strong financial state.

Jeremy

Anyways getting back to the Financial part of this thread, I find it interesting how there are almost as many on the plus side as there are on the minus side. I thought that there would be many more in the negative numbers.

Southwest!!?? Wow, I must really be out of the loop. I thought it was USair!  

Amtrak is a government owned-corporation, like the Postal Service as well. It gets kind of complicated when it comes down to what they can and can't do.

There's no surpise to see WN at the top of the list, even if the legacy carriers where doing good I would expect Southwest to be up there for the same reasons listed in the second post. I'm not suprised to see SkyWest up there either, they seemed to have positioned themselves fairly good for the time being.

Do you think that Jet Blue aquiring these new smaller planes will have any affect on them? Will people be afriad of those small planes due to the resent crashes?


Thanks in AAdvance!!

WN would definently be the most profatable but what about international? Co has opened many new routs but some other airlines may be doing better. correct me if im wrong.

--COAMiG29--

First, Amtrak is not owned by the government. It is a private company that is subsidized by the government in the interest of keeping up passenger transportation on the rails. They have not reported a profit since taking over passenger ops from the major US railroads, though they came close after 9/11.

Second, the most financially stable US airlines are all LCCs. Southwest is the most stable in the world, while smaller carriers like B6, HP, AS and FL are also doing well. F9 has not had the best year, but they are also in far better shape than many other carriers. Of the legacies, CO is definately doing the best, followed by NW and AA.

Finally, as far as B6 flying "smaller" planes goes, the E190 is not a small plane as one would think. They look like 3/4 scale 737s with their low slung engines and tall winglets and most people will see them that way. Also, 100 seat aircraft don't bring to mind small planes for most people, as DC-9s still make people think they are on a full-sized jet. They should do fine

Do you think that Jet Blue aquiring these new smaller planes will have any affect on them? Will people be afriad of those small planes due to the resent crashes?

Huh? The only recent flight crash that possibly could have any relevence to this is the CRJ ferry flight, and no, why on earth would people be afraid of them? The Embraers arent even considered regional jets by their manufacturer or anyone else. They are fairly spacious, comfortable airplanes.

It is very obvious that airlines can make a profit with the LCC platform or the regional partner platform. However Flyi was profitable as Atlantic Coast Airlines, I am eager to see their 3rd quarter results because they posted a profit 2nd quarter while flying for UA. Another interesting feature is how the hybrid full service and LCC plan followed by AS and HP puts them right about neutral right now, so they are on the verge of turning a year end profit, while none of the network carriers are likely to turn a full year profit for a few years.

As for international carriers. I can't pull numbers of those (many do not post profit and operating margins). However profits for the last fiscal year should be a fair representation:

Some of the most profitable airlines in the world
Emirates___$419Million
Singapore__$360Million
Ryanair____$302Million
Qantas____$282Million
(Figures in US dollars)


Oh and about market cap, I wouldn't use those figures to represent long term viability because even though Lufthansa is at the high end of the list they still had a $1.2 billion loss last year, which hardly makes them one of the most financially stable airlines in the world. It wasn't that long ago when Delta's market cap would have appeared on that list, but now look at where they are.

Do you think that Jet Blue aquiring these new smaller planes will have any affect on them?

What 'smaller' aircraft.....?? The Embraer 190 by no means is a 'small' aircraft.

View Large View Medium

Photo © Herson Mendes

Well you must admit the Embraer is "smaller" then the A-320 which they operated now, so he is absolutely correct.
Reminds me of once when I was spotting and we were hoping to see the new Air France 777-300. When in the end one of their 777-200s approached instead, they said "sigh, it's a SMALL 777."

Smaller yes, but not by much.....

Embraer 190:

W/S...94'-3"
L...118'-11"
H...34'-7"

A320:

W/S...111'-10" (+17'-7")
L...123'-3" (+4'-1")
H...38'-7" (+4'-0)

Yes, I know the fuselage diameter on the A320 is bigger and thus it holds more people. I'm talking ramp 'footprint'.

[Edited 2004-10-24 20:44:50]

Do you think that Jet Blue aquiring these new smaller planes will have any affect on them?

Yes. By allowing JetBlue to tap smaller markets that have until now been protected from LCC competition, I expect it will have a positive effect.  

Gotta be WN. With the hedges in place, low debt to equity translating into a stellar balance sheet, and a nice pile of cash in the bank.

I can't believe you people. The top 2 most stable airlines in the US, if not the world, are UPS & FedEx. Either one is worth more than any 10 US airlines market caps, COMBINED! Pick any 10.

"I cant believe you people"


Come on now, no need to try to insult everyone's intlegence. I think it was understood that we were talking about passenger airlines.

Hey can I add to Roseflyer, there are many regional carriers that are very profitable you need to focus on the regional airlines, Mesa will be a very strong carrier in the future to come! Its growth has passed any other airline!

I would hardly say that American is stable financially, after posting over a 250 million dollar loss in the 3rd Q this year. However, they have an extremely vast supply of cash reserves (over a billion or two i think). So, although they are not stable (as in they are still losing a shit ton of money) they are prepared for the storm and can hold out for longer than most other legacy airlines. the list as i see it:

Southwest
JetBlue
AirTran
Northwest/Continental (tie)
America West

last but not least
American
United

I'd say it is Southwest also.
They are an enormous airline yet their growth has been steady and consistent. As has their profit-making. I'd go as far to say that the stability of their finances is nothing short of staggering in this industry!

As for others, I think you have to at least give honorable mentions to AirTran and JetBlue. Making any money during these times of high fuel prices and increased competition is very respectable, and both of these US airlines have had healthy margins the past few years.

Unless the downward spiral is reversed soon for some of the US legacy majors, it might be too late. It seems that all except Southwest, Continental and Northwest are either in bankruptcy or on the brink of it.

One last note, the Embraer 190s going to JetBlue are not small. Smaller, yes. (I hope the comparison someone tried to make between a 777-300 and 777-200 was a joke!). According to JetBlue, the Embraers will be 100 passengers with seats the same size or larger than what they currently have on their A320 fleet. The last time I checked, no RJ has 100 passengers and I don't think 25 rows of 4-abreast seating is small. The two biggest questions facing JetBlue are: (a) the reliability/dependability of the new aircraft - they will be the first airline to fly the E190 and (b) which market to send the Embraers to first!

Planespotting - how on earth are American in a worse position than US Airways (just entered Ch.11) and Delta who are just about to if all the rumours are true!?