FlyDreamliner From United States of America, joined Jan 2006, 2759 posts, RR: 15
Reply 2, posted (5 years 10 months 2 weeks 13 hours ago) and read 1629 times:
Nope, nothing that dramatic.
WN is just running into the same reality all of the other airlines are already facing. It was bound to happen sooner or later. Good management can stave off things like this, but market realities are what they are.
Nothing new here.
As for those debt rating agencies... those were the people who gave those subprime paper and derivatives AAA ratings... they have to be taken with some salt.
"Let the world change you, and you can change the world"
WorldTraveler From , joined Dec 1969, posts, RR:
Reply 3, posted (5 years 10 months 2 weeks 13 hours ago) and read 1544 times:
it's easy to dismiss them but they do have profound effects on the costs of running a business and how a company is perceived.
Given the tight credit markets, it isn't too unusual to think that WN would draw down its credit lines but in doing so it is raising debt in a time when high debt is exactly what is crippling this economy.
The distincition between the LFCs and the network carriers is quickly deteriorating and it will be harder and harder for WN to continue to prosper to the degree it has in the past.
The irony is that the network carriers are probably layering on fuel hedges like crazy now so that the hedging advantage that WN has had will quickly be matched by other carriers when the economy does come back.