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CO Loses $16 Million In Third Quarter  
User currently offlineCory6188 From United States of America, joined Feb 2004, 2692 posts, RR: 6
Posted (10 years 1 month 4 days 23 hours ago) and read 4045 times:

CO just put out their third quarter earnings. $16 million loss after a $22 million special charge for their MD-80s is not bad at all in my opinion. It's a far cry from DL's $675 million, at least.

You can read the full release here:

http://phx.corporate-ir.net/phoenix.zhtml?c=85779&p=irol-newsArticle&ID=632331&highlight=

18 replies: All unread, jump to last
 
User currently offlineN670UW From United States of America, joined Jul 2003, 1606 posts, RR: 8
Reply 1, posted (10 years 1 month 4 days 20 hours ago) and read 3894 times:

They would have made a profit if it weren't for special MD-80 retirement charges. Not bad.

Still, though, high fuel prices are killing everybody.



670


User currently offlineKL911 From Czech Republic, joined Jul 2003, 5259 posts, RR: 15
Reply 2, posted (10 years 1 month 4 days 20 hours ago) and read 3849 times:

How about all those new international flights startup costs? In which Q will we see that impact, and how much of an impact will it be?

KL911


User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6335 posts, RR: 34
Reply 3, posted (10 years 1 month 4 days 19 hours ago) and read 3731 times:

Still, though, high fuel prices are killing everybody.

Not SWA... yet!  Big grin

I think that the high fuel prices "rationale" for poor profits is a "smoke screen" for an extremely competitive environment where no one wants to blink first, increase air fares and MAINTAIN them! Look at all the failed attempts...
yet look at the record high load factors... it is not that people are not flying and need such low fares to continue to fly.

So, even if fuel prices drop, the carriers would just lower their fares in the lockstep suicidal competition that we have been witnessing for a while now!

With the way things are going, this industry is not going to recover for a long while!!



Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlineErikwilliam From Brazil, joined Mar 2004, 2152 posts, RR: 11
Reply 4, posted (10 years 1 month 4 days 18 hours ago) and read 3652 times:

Comparing to other US carriers, how´s CO situation??
I know Delta, United, UsAir are real bad, but how about the others. Jetblue, Frontier and Southwest are doing fine, strugling to have some profits, but the have it. How´s Song and TED doing, are hey really helping Delta an United?

And here´s another question, a bit off topic, don´t U guys think that given these huge offer of seats and companies etc etc, and as the aviation market is very competitive, any crisis situation like 9/11( let´s hope never again) or oil prices, wars, thunderstorms or snowstorms, anything can influence this specific market in a really bad way, like we see now. There are too many players, and to survive they have to put their profit margin down, and given the amount of money in play, any slight detail can cost milions and milions. Wouldn´t it be better to have less players, make the "healthy" ones get "healthyer" and slowly eliminating the "sick" ones???



Dida, Cafu, Lucio, Roque Junior, Roberto Carlo, Emerson, Ze Roberto, Ronaldinho, Kaka, Adriano, Robinho, Ronaldo
User currently online727LOVER From United States of America, joined Oct 2001, 6550 posts, RR: 20
Reply 5, posted (10 years 1 month 4 days 18 hours ago) and read 3591 times:

Btw, is there an official retirement date for the MD-80s?

How many are still operating?



Listen Betty, don't start up with your 'White Zone' s*** again.
User currently offlineLuv2fly From United States of America, joined May 2003, 12144 posts, RR: 49
Reply 6, posted (10 years 1 month 4 days 18 hours ago) and read 3544 times:
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I am not sure when they will be gone officially, I do know there is only a handful left right now.


You can cut the irony with a knife
User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 7, posted (10 years 1 month 4 days 17 hours ago) and read 3422 times:

While CO is certainly doing better than most US carriers, and actually made a modest profit before the special charge relating to MD80 retirements (note another special charge is coming in the 4th quarter), one must consider that the 3rd quarter is the time when airlines should make LOTS of money....travel and demand is generally at its highest during this period which increases revenue. Losses should be expected in the coming 2 quarters, especially as the impact of sky-high fuel prices really begins to affect bottom line results. Thus, while CO should be congraduated for doing better than most, its not really time to celebrate yet. CO's expansion to Europe cannot come at a better time, the percentage of revenue that CO derives from international operations is rising, and by opening services to new destinations with existing 757 equipment could prove to be real revenue maker for CO. ALso note that CO's cash on hand, at over $1.5 billion, is rather good and should allow CO to get through the next couple of quarters without any real problems.

When the US and world economies fully recover, and fuel prices moderate to some reasonable level, CO will certainly be in a position to make some real money....a good route structure, modern and economical aircraft, and a reputation for good (if not great) service should make CO a winner among US carriers.


User currently offlineIahcsr From United States of America, joined Jun 1999, 3461 posts, RR: 42
Reply 8, posted (10 years 1 month 4 days 14 hours ago) and read 3232 times:
Support Airliners.net - become a First Class Member!

Last count I saw was six MD80s. Last flight(s) should be between late Dec. and early Jan.


Working very hard to Fly Right....
User currently offlineN1120a From United States of America, joined Dec 2003, 26698 posts, RR: 75
Reply 9, posted (10 years 1 month 4 days 14 hours ago) and read 3210 times:

WN is making lots of money and has fuel hedged for the next 5 years. B6 has warned profits will be down due to hurricane related issues but should still be ok. F9 has not been majorly profiting lately, but should come out of the slump soon. CO has actually been having these kind of small profit numbers for a while now (before the charge). It is like they are teasing us before they become the first legacy to break out a real profit


Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineSpacecadet From United States of America, joined Sep 2001, 3646 posts, RR: 12
Reply 10, posted (10 years 1 month 4 days 12 hours ago) and read 3093 times:

I think that the high fuel prices "rationale" for poor profits is a "smoke screen" for an extremely competitive environment where no one wants to blink first, increase air fares and MAINTAIN them! Look at all the failed attempts...

I agree. While in absolute terms fuel prices are very high, when adjusted for inflation they're still lower than they have been in the past.

The problem is companies build various costs into their accounting forecasts and they obviously weren't counting on today's prices. But it's not the absolute costs that are killing them, it's just the unexpected rise. The costs themselves they should be able to bear - if they can't, they shouldn't be in the airline business. They understand that fuel prices rise and fall.

Fuel prices are scapegoated around here a lot. It's really a red herring. Low fares are the main problem, brought on by cut-throat competition. I mean, at the end of the day, the point of any business is to raise revenue through selling a product or a service, and airlines can't charge a self-sustaining price on their product right now. On the cost side, labor costs are a bigger issue for most airlines than fuel costs.



I'm tired of being a wanna-be league bowler. I wanna be a league bowler!
User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 34
Reply 11, posted (10 years 1 month 4 days 12 hours ago) and read 3067 times:

High fuel prices don't HAVE to kill anyone. If all the airlines would intelligently hedge their fuel oil, they wouldn't been in this mess. One reason WN is doing so well is judicious fuel hedging. Delta on the other hand has not hedged any fuel at all and is a complete victim of fluctuations in fuel price. Fuel is one of the two greatest expenses for the airlines, and airlines that don't hedge it, that is, fix the cost of it for a period of time, are crazy. Continental has been hedging fuel since 1995, I think, which explains why their losses are narrow and present only because of one-time charges.

-WGW2707


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 997 posts, RR: 51
Reply 12, posted (10 years 1 month 4 days 12 hours ago) and read 3050 times:

High fuel prices don't HAVE to kill anyone. If all the airlines would intelligently hedge their fuel oil, they wouldn't been in this mess. One reason WN is doing so well is judicious fuel hedging.

Honest to god it isn't easy to hedge fuel by any means. An airline must have rock-solid credit and significant cash reserves for them to hedge effectivly. Delta does not have this. What kind of a business would take the risk of hedging to DL?

And second, all DL has to do is raise their fairs. Even with FL in ATL, they have a a near monopoly on the area.

And third, as you mention, fuel is one of the two big cost. The other is payroll, and we all can see how willing the DL staff are to take pay cuts.... they'd be screwed either way. DL is a goner and I'm not really going to miss it.


User currently offlineSESGDL From United States of America, joined Jan 2001, 3489 posts, RR: 10
Reply 13, posted (10 years 1 month 4 days 12 hours ago) and read 2997 times:

"And third, as you mention, fuel is one of the two big cost. The other is payroll, and we all can see how willing the DL staff are to take pay cuts.... they'd be screwed either way. DL is a goner and I'm not really going to miss it."

One of the most ignorant posts I've ever seen. DL is a goner, blah blah blah. DL hasn't even filed for bankruptcy yet and you're already saying they're done. Maybe you need to check your facts. Also, DL has a near monopoly on ATL?!? WRONG! ATL is one of the most competitive hubs of ANY major US carrier, we can't say that about AA's monopolized DFW hub now can we?

Jeremy


User currently offlineUal777contrail From , joined Dec 1969, posts, RR:
Reply 14, posted (10 years 1 month 4 days 11 hours ago) and read 2941 times:

Dont compare the size of CO to DL, BIG, BIG, differance.
That is very good.

UAL 777 CONTRAIL


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 997 posts, RR: 51
Reply 15, posted (10 years 1 month 4 days 11 hours ago) and read 2896 times:

DL is a goner, blah blah blah. DL hasn't even filed for bankruptcy yet and you're already saying they're done. Maybe you need to check your facts.

Well both Charles Schwab and Merryil Lynch estimate the probablity of Ch.11 at 85% or higher. They have lost more than 600 million dollars for consecutive quarters, or roughly 30 million dollars a day. Even if they are no where near bankruptcy, this is absolutely unacceptable and shows the fallability of their leadership. Waiting to bankruptcy to wake-up is a terrible idea, and yet, what major reogranizations have they made? Zero.

When an airline enters Ch.11, they are a TWA800 from losing the confidence and support of their customers and creditors. A high-profile disaster is a major pain to a healthy airline, and a death-blow to weak ones. By slipping into piss-poor financial health, DL is really just rolling dice and praying all goes well. When the fate of your business hangs on variables that are out of your control, you are asking to be screwed.

And Ch.11 is by no-means a safe haven. If you cannot secure creditors and bankruptcy courts deem it isn't in the interest of consumers for you to survive... you're planes end-up flying for another airline. Name one financially prudent discion that DL has made in the past 5 years? I ask for just one.

DL has nothing to show creditors they have a sound plan for working through bankruptcy, creditors are all looking at the song-and-dance UA is putting on, and I will not be suprised in the least when creditors say "not a chance in hell," and move on. Investing in bankruptcy reconstruction is a huge risk for an investor... when you could just put that money in FL stock and let them be place in the sun. I don't think DL will liquidate, but a heavy reconstruction and layoff is inevitable.

[Edited 2004-10-20 01:24:27]

User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6335 posts, RR: 34
Reply 16, posted (10 years 1 month 4 days 11 hours ago) and read 2856 times:

As a comparison, according to the Detroit Free Press, Northwest is expected to post a third-quarter loss of $70 million.

http://www.freep.com/money/business/northwest19e_20041019.htm

FI reports that CO sees the probability for continuing losses in 2005 and is already close to asking for concessions from employees

It was also mentioned that CO will start 757 service to Stockholm.

[Edited 2004-10-20 01:49:45]


Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlineRamerinianair From United States of America, joined Nov 2003, 1486 posts, RR: 0
Reply 17, posted (10 years 1 month 4 days 10 hours ago) and read 2762 times:

WOW WAY TO GO GORDO!!!!
They just amaze me. They might not be the biggest but thye are the only full service carrier in America to post anything that close to a profit.
Great for them!!!
SR



W N = my Worst Nightmare!!!!!
User currently offlineBigB From United States of America, joined Nov 2003, 612 posts, RR: 2
Reply 18, posted (10 years 1 month 4 days 10 hours ago) and read 2730 times:

Dont compare the size of CO to DL

I agree



ETSN Baber, USN
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