Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Fuel Prices May Be Final Straw For Legacy Carriers  
User currently offlineCanadaEH From Canada, joined Jul 2003, 1341 posts, RR: 4
Posted (10 years 1 month 2 weeks 2 days 8 hours ago) and read 3301 times:

Which airline is next?
Fuel crisis could be the beginning of end of one or more of the nation's major carriers: experts.


NEW YORK (CNN/Money) - With new threats of bankruptcies, and appeals for labor concessions and government assistance, the nation's major airlines are facing a crisis that may well spell the end for one or more carrier in the next few years, according to industry executives and experts.

Airlines have traditionally taken a long time to die -- Trans World Airlines lost money for decades before its final bankruptcy filing and acquisition. But experts say the carriers operating a big network of hubs and international flights -- the so-called legacy or major carriers -- face new challenges that could speed up their demise.


More at:
http://money.cnn.com/2004/05/25/news/fortune500/airlines_outlook/index.htm?cnn=yes


EH.
14 replies: All unread, jump to last
 
User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3006 posts, RR: 2
Reply 1, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3230 times:

I don't think this is the nail in anyone's coffin (except possibly US). Airlines can raise prices or add surcharges as needed to cover rising costs. Everyone knows what's going on. Every company I can think of has added some kind of surcharge or way to recover costs. I think it would take another catastrophe that would keep large numbers of pax on the ground to do another carrier in....


Finally made it to an airline mecca!
User currently offlineWdleiser From United States of America, joined Apr 2004, 961 posts, RR: 4
Reply 2, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3211 times:

I have been wondering how America West has been doing. I have not heard about them in ages and I have always wondered how they made money.

User currently offlineAA737-823 From United States of America, joined Mar 2000, 5720 posts, RR: 11
Reply 3, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3163 times:

Yeah, I think that when you consider ALL the strikes against carriers, at least one big name won't survive. United or US will go first. Labor, fuel, and all the other costs will surely push someone under, and the rest will survive only because of that one carrier's loss.

That's my prediction.
R


User currently offlineNosedive From , joined Dec 1969, posts, RR:
Reply 4, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3119 times:

Yesterday's Denver Post seemed to believe that rising fuel prices could cost UA some loans.
http://www.denverpost.com/Stories/0,1413,36~33~2169523,00.html


User currently offlineFreshlove1 From , joined Dec 1969, posts, RR:
Reply 5, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3077 times:

Nice to see that we have had the token "US is dead" post concerning this topic. When are people going to learn that no airline is safe. US is doing better then DL and UA right now, but I see that most have not bothered to see this. Oh this just in the price of peeled carrots has just gone up, I guess this means that US is finished...Come on people get real!!!!!

User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3006 posts, RR: 2
Reply 6, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3067 times:

Please understand, that I'm rooting for US's continued survival. It's the main carrier at GSP, and I'd hate to see that void. Plus, I have more US FF miles than any others. Even if other carriers added flights, I bet we still wouldn't have flights to as many cities nonstop.


Finally made it to an airline mecca!
User currently offlineFreshlove1 From , joined Dec 1969, posts, RR:
Reply 7, posted (10 years 1 month 2 weeks 2 days 7 hours ago) and read 3048 times:

Maybe when US starts their point to point thing GSP might have a few more cities added instead of always having to go through PHL, PIT or CLT to get where you need to go unless of course that is where you need to go.

User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3006 posts, RR: 2
Reply 8, posted (10 years 1 month 2 weeks 2 days 6 hours ago) and read 2999 times:

We do have several daily US flts to LGA and DCA at least. My partner flies US all the time, and says the planes are always full in/out of GSP, and sometimes he can't even get on flights he wants because they're sold out. I really wish US would add some mainline flights back. I mean, if PNS can support them, come on!!


Finally made it to an airline mecca!
User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 1 month 2 weeks 2 days 6 hours ago) and read 2929 times:

>>>Which airline is next?
>>>Fuel crisis could be the beginning of end of one or more of the nation's major carriers: experts.

The above deals with a major issue on the "cost" side of the equation, but another issue is on the "revenue" side.

With today's stories out re: the possibility/probability of a major terrorist attack this summer/fall, should something like that occur (irrespective of whether it directly involves aviation as a mechanism or not), overall travel demand will likely go in the toilet, taking revenue streams along with it.

A possible "double-whammy" here is that any attack would also probably increase oil prices even higher than current levels, exacerbating the problems for financially weaker airlines who haven't been a financial position to hedge fuel.

Between the potentials for even higher costs and suddenly lower revenues, this could be one UGLY summer...for people...for the industry...

Pray (to the Deity of your choice) for world peace...!






User currently offlineChiGB1973 From United States of America, joined Mar 2004, 1613 posts, RR: 1
Reply 10, posted (10 years 1 month 2 weeks 2 days 6 hours ago) and read 2901 times:

I don't know why it is just the legacy carriers. Without the fuel hedge Southwest has in place, they would have posted a loss for the first quarter of this year.

http://www.usatoday.com/travel/news/2004-05-07-swa-oil_x.htm?POE=TRVISVA

It is hurting everyone.

M


User currently offlineUltrapig From United States of America, joined Dec 2003, 581 posts, RR: 0
Reply 11, posted (10 years 1 month 2 weeks 2 days 6 hours ago) and read 2877 times:

OPNL-Thank you for your generic request for prayer-Let me add-to those atheists on the Board let's hope the the forces of chance play into the hands of the legacy carriers.

User currently offlineFreshlove1 From , joined Dec 1969, posts, RR:
Reply 12, posted (10 years 1 month 2 weeks 2 days ago) and read 2742 times:

So what is WN going to do after 2 years when the $24 dollar a barrel oil runs out??

User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 13, posted (10 years 1 month 2 weeks 1 day 23 hours ago) and read 2697 times:

>>>So what is WN going to do after 2 years when the $24 dollar a barrel oil runs out??

I don't know this for a fact but I would presume at least some hedging has been accomplished for future years, but what percentage and at what cost I couldn't tell you.



User currently offlineCkfred From United States of America, joined Apr 2001, 5153 posts, RR: 1
Reply 14, posted (10 years 1 month 2 weeks 1 day 22 hours ago) and read 2649 times:

The dire predictions for the airlines is based on the price of oil staying above $40 a barrel. If Saudi Arabia does increase its production to the levels that it is promising, that should cause oil prices to start declining, although not until Q3 or Q4.

If other OPEC countries increase production, or if China's economy starts to overheat, leading towards inflation and a economic slowdown, that should also cause prices to fall.

But, if gas is still over $2 a gallon come Christmas, then it's a whole other story.

But I have two questions. First, why don't the LCCs raise fair? I understand that some have hedged, but they still have to be affected to some degree by oil prices. If the legacy carriers want to add $5 to $10 per segement, I would be inclined to add $2.50 to $5 per segment. After all, that's only the cost of 2 gallons of 87 octane.

Second, how are the European carriers coping? I assume that jet fuel in Europe is more expensive than in the U.S., because of European taxes. But have European carriers seen the price of jet fuel run up to the degree they have here, and are the former state carriers having the same pricing problems that U.S. legacy carriers have?


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Fuel Tax May Be Introduced Soon. posted Mon May 20 2002 12:24:11 by LMML 14/32
The Answer For LCC Vs Legacy Carriers? posted Sun Feb 5 2006 16:13:33 by Mirrodie
Fuel Prices For Airlines From Oil-Producing States posted Wed Jan 11 2006 16:33:23 by IAD777
EL AL May Be Sued For Breaking Shabbat posted Thu May 19 2005 21:41:18 by Planenutz
CO Now Charges Fees For High Fuel Prices posted Thu May 20 2004 02:23:05 by Startknob
LatAm To Be Hot In 2003 For US Carriers (article) posted Mon Feb 2 2004 09:14:43 by MAH4546
AA's Loss May Be A Gain For WN posted Tue Apr 8 2003 22:11:29 by LoneStarMike
C O A For Concorde May Be Restored Next Week! posted Mon Aug 20 2001 17:44:31 by Hkgspotter1
TAP Air Portugal May Be Up For Sale! posted Wed Jul 19 2000 21:20:37 by Reno_air
Mehadrin Airline May Be Launched To Counter El Al posted Tue Dec 12 2006 06:42:43 by Jimyvr