AirTran717 From United States of America, joined Aug 2006, 746 posts, RR: 4 Reply 3, posted (5 years 8 months 5 days 1 hour ago) and read 22807 times:
AirTran has been around in one form or another for a long time. They were able to thrive when many couldn't, i.e; post-9/11 days. To say that they are shaky... well that's realistic since most every airline is right now. But to say they will go under... very foolish and typical media spin. I worked for AirTran from ValuJet days on up. I've seen the darkest days as well as the highest highs. It will take a lot more than high fuel prices and idiotic media speculation to push them out.
UAL-Fan From United States of America, joined exactly 14 years ago today! , 369 posts, RR: 0 Reply 4, posted (5 years 8 months 5 days 1 hour ago) and read 22775 times:
The thing that seems to be so much different this time around is who or what will provide the credit to bail these Companies out? With the credit market dried up and the US Govt. being basically BK......what's next? I guess the UAE or China could come to the rescue.
BAW716 From United States of America, joined Nov 2003, 2018 posts, RR: 29 Reply 5, posted (5 years 8 months 5 days 1 hour ago) and read 22695 times:
I've been hugely critical of UA management since the days of their bankruptcy filing. They are not the same carrier I worked for 10 years ago...not even close.
As for their long term viability, I agree with Ikramerica...the only way UA will be saved is by a merger with another carrier or another carrier buying them out. I could list the reasons, but they are already well known on this forum...I don't need to repeat them. I'd have to look a little deeper to predict, as the magazine article predicts, that they will be out of business by year end 2008 if oil is at $105/barrel. It isn't cash position that is going to break UA, it is how they will be able to retain high yield passengers if they can't bring their product up to industry standard...and to do that they have to invest and to invest, they have to use capital, which really needs to be preserved to keep the airline running (see the vicious circle?).
I think by summer we'll have a better sense of where things are headed for UA, and the rest of the industry.
One thing is certain: ATA was not the last airline that will fall in 2008.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
Knope2001 From United States of America, joined May 2005, 2644 posts, RR: 30 Reply 7, posted (5 years 8 months 5 days ago) and read 22443 times:
I think this guy is looking at it strictly from the cash perspective and the ability to obtain additional financing. He doesn't include any factor for the success (or lack of success) which airlines will have in paring back and stopping the bleeding. Cutting costs further and increasing revenue more are crucial for all carriers now.
Ikramerica From United States of America, joined May 2005, 21312 posts, RR: 60 Reply 8, posted (5 years 8 months 5 days ago) and read 22366 times:
Quoting BAW716 (Reply 5): I think by summer we'll have a better sense of where things are headed for UA, and the rest of the industry.
CO wants DEN back, and my guess is they would also love a greater presence at LAX back as a Pacific gateway and ORD as a midwest hub (sorry CLE) and NRT rights. IAH-LAX-EWR-ORD creates a "four region" system, with DEN as a regional hub/O&D market to connect the west and the midwest/south. But I don't think CO want all the baggage of UA, nor IAD or SFO, nor the Airbus aircraft.
I know AA is in a weak position, but they may be interested in IAD and SFO gate space and a fleet of A320s to replace 1/2 their MD80s wholesale (which would piss of the AA pilot union).
ORDagent From United States of America, joined Dec 2003, 823 posts, RR: 1 Reply 9, posted (5 years 8 months 5 days ago) and read 22364 times:
I think the UA brand may be done within a year. I just hope they don't suddenly fall apart. That would make my life extremely misserable as I'm a Chicago based travel agent. I think the two biggest assets UA has are the ORD hub and East Asian route system.
Coronado990 From United States of America, joined Oct 2003, 1591 posts, RR: 2 Reply 12, posted (5 years 8 months 5 days ago) and read 22128 times:
Quoting Ikramerica (Reply 8): But I don't think CO want all the baggage of UA, nor IAD or SFO, nor the Airbus aircraft.
Wow, that sure would give AA or DL/NW a great advantage if they took over the SFO hub (or dare I say US). I would keep the SFO hub in tact just to make sure that didn't happen. Way too important as an Asia jumping off point and connecting northbound-southbound west coast traffic.
EXAAUADL From , joined Dec 1969, posts, RR: Reply 13, posted (5 years 8 months 5 days ago) and read 22081 times:
Air Tran has the most fuel efficient fleet in the industry. Their load facts are good, and their yields are decent. I dont see how he says Air Tran is in danger of going out of business. I also dont think airlines will have as much trouble raising cash if they need to as say someone looking to buy a home. I dont htink the "credit crunch" would effect them nearly as much
Ikramerica From United States of America, joined May 2005, 21312 posts, RR: 60 Reply 14, posted (5 years 8 months 5 days ago) and read 21965 times:
Quoting ORDagent (Reply 9): I think the two biggest assets UA has are the ORD hub and East Asian route system.
I agree, with LAX Terminal 7 and DEN terminals being the next valuable, and IAD and SFO being next down the list.
Their fleet is the least valuable asset. The have a lot of older A320 series, 737 classics, older 757s, older 763s, some of the oldest 777s and 744s, etc.
It will be interesting to see someone like AA or CO flying 747s again, but I would imagine that would be short lived until one or the other could acquire 77Ws. Not sure the value of the 772s with their PW engines and non-IGW abilities, but I suppose someone like AA can dedicate them to Atlantic ops and save their RR 77Es for "rest of the world" flights.
The PW 77Es would go into the used market, I would imagine. Considering the 787 delays, they may be valuable to other carriers as short term lease interim lift aircraft.
744s would start being converted into freighters right away.
The 757s would be coveted around the world as F and second-tier aircraft.
763s have varying value depending on age, interior fittings, etc.
737 classics? Well, 735s aren't that old, so there would be value there, but they aren't that efficient in this high oil price environment. 733s would go to third world airlines.
If nobody was jazzed about the A320s, it would add to the looming glut of used A320s on the market (which is a far cry from the current sellers market). At least that's my prediction. But again, you might see someone like AA take them wholesale as a replacement for much older aircraft, if the unions can work out the details (not holding my breath).
Of all the things to worry about... the Wookie has no pants.
ATCtower From United States of America, joined exactly 6 years ago today! , 510 posts, RR: 3 Reply 15, posted (5 years 8 months 5 days ago) and read 21910 times:
Quoting Ikramerica (Reply 2): UA will "go" by nature of a buyout to save them, which includes splitting up some of their assets. Just my opinion, but it's been looming for a long while...
I would not be terribly surprised if this were the outcome given a healthy UA, but at this point??? I imagine if an airline the size of F9, or FL were to go under right now, it would be in a very similar fashion to ATA. "We're closed, get over it."
Quoting BAW716 (Reply 5): I've been hugely critical of UA management since the days of their bankruptcy filing. They are not the same carrier I worked for 10 years ago...not even close.
I can agree with the statement. UA has had some serious mis-management issues in the last decade, and I dont think they would even attempt to purchase anyone right now.
Quoting FlyCMH (Reply 6): Remember, these are the same people that called Skybus a "success story."
I believe the exact quote was a "Remarkable airline who will have success in a time of hardship for the industry" Either way, we need Mariner to chime in on this one. He is one hell of a supporter of F9 and is generally on target... What I can say, and will continue to say is that every airline out there paying 100+/bbl is going to have a hard time until the flying public ponies up the dough and quits bitching when they cant find an airfare from LAX-JFK for less than $100... The airlines are in a losing battle with a recession, and generally CHEAP clientele right now. This can be attributed to the airlines themselves lowering service quality, but IMO it has far more to do with the flying public wanting their cake and to eat it in first class too...
By reading the above post you waive all rights to be offended. If you do not like what you read, forget it.
Ken777 From United States of America, joined Mar 2004, 7847 posts, RR: 8 Reply 19, posted (5 years 8 months 4 days 23 hours ago) and read 21527 times:
Since I heard on the radio coming to the office that oil almost hit $112 during the day I think it fair to expect more than one more airline to face some critical times. There may be Ch 11 filings, or simple closing down, or major restructuring of the company itself outside of BK protection.
The problem is that the majors have had to respond to LCCs while protecting their high dollar market. The fare cuts have allowed more people to fly than ever before - some for the first time - and these additional bums in the seats were OK for a while. Now we are in, or heading to, a recession at a time when fuel prices are going through the roof.
Makes it tough for the average Joe to take his family on a vacation via a flight. For those of us in the US who prefer to fly overseas for a vacation the deep fall of the Dollar makes it an even greater challenge.
I think that 2008 will be a year of major change for the airlines. December 08 certainly be the same as January 08 in terms of the industry, which is a pity.
Jawake From United States of America, joined Sep 2007, 257 posts, RR: 0 Reply 21, posted (5 years 8 months 4 days 23 hours ago) and read 21969 times:
Quoting Mariner (Reply 20): Every day for the past week, when I come to a.net, I have to spend my time correcting the assumptions - often presented without facts - of the nay-sayers.
Quoting United1 (Reply 23): Ahhh the infamous UA breakup thread....Almost as prevalent at the what is NW going to replace the DC-9s with? threads.
I debated about posting this at all, I read it earlier, and if you note, the FOX article is dated last Friday.
I agree, the endless speculation is depressing, and I for one would like to see Airlines have a good year. They deserve it. For many in the industry the last decade has been anything but fun.
The reason I decide to post, is because of the simple fact that oil is crazy high, and there seems to be no end in sight. I have parked my diesel truck, because at $4 a gallon, I can't afford it. So honestly, how long can airlines keep going when oil is out of control?
Ikramerica From United States of America, joined May 2005, 21312 posts, RR: 60 Reply 23, posted (5 years 8 months 4 days 22 hours ago) and read 21409 times:
Headlines are annoying. A.net is no stranger to that...
But the article does actually talk about that. It discusses what happens IF, repeat IF, oil stays high through the end of the year. It projects that UA can't survive on $105 or above, but others like DL and NW can handle $120.
Since NONE of those airlines planned for oil that high in their reorgs, one can assume the analysts are, in fact, taking into account that the airlines would do everything they can to mitigate the problem of high prices, but there is a breaking point. The analysts, right or wrong, have given the estimates for those breaking points.
You don't have to agree (I don't know if I do or not), but the information is there and it isn't being hidden or disguised.
Of all the things to worry about... the Wookie has no pants.
ORDagent From United States of America, joined Dec 2003, 823 posts, RR: 1 Reply 24, posted (5 years 8 months 4 days 22 hours ago) and read 21253 times:
Quoting Ikramerica (Reply 14): Their fleet is the least valuable asset. The have a lot of older A320 series, 737 classics, older 757s, older 763s, some of the oldest 777s and 744s, etc.
IMHO the aircraft must stick around for a bit and be gradually rationalized across the combined fleet. If UA is merged or bought out I doubt the combined company is going to have access to enough credit and cash to make large orders with Boeing or Airbus.
Quoting United787 (Reply 16): If any major carrier is going down, I would put my bets on AA!
I doubt that. AA has been extremely good at keeping its financial house in order. Of course the fleet is aging and those MD-80s are going to have to go. As fuel gets more and more expensive those birds are looking more and more like guzzlers.