Donder10 From Canada, joined Oct 2001, 6660 posts, RR: 20 Posted (14 years 3 weeks 3 days 13 hours ago) and read 5976 times:
Which of the US majors is most likely to go bankrupt in the next year or so.
CO have made profits for a while but I'm not sure they have too many assets,USAirways has a high cost structure,is losing money likes there's no tomorrow and are suffering from the decrease in passenger numbers accross the Atlantic.
United can't fill their 744's regularly and are planning on parking upto 12 I believe.
Jeff G From United States of America, joined Jan 2002, 449 posts, RR: 1
Reply 3, posted (14 years 3 weeks 3 days 12 hours ago) and read 5810 times:
A tie: America West and US Airways. I don't think either one will be around in 2004. I hope I'm wrong. United may file bankruptcy this year, but will survive in the long run. AA can take care of itself, in spite of the hard times it's had lately. DL, NW, CO, SW, and AL will all be OK.
AA_Cam From , joined Dec 1969, posts, RR:
Reply 4, posted (14 years 3 weeks 3 days 11 hours ago) and read 5766 times:
American had plans to totally retire its 727 fleet due to age before Sept 11, that is a non-factor in this argument (they're actually better-off without them). And as for the 717's they were also a temporarily held aircraft (aquired along with TWA), with intentions of complete liquidation were decided before sept 11. Now as for the 777's being parked, I cannot come up with a valid explaination for that, except fiscal requirements.
Hoffa From , joined Dec 1969, posts, RR:
Reply 6, posted (14 years 3 weeks 3 days 10 hours ago) and read 5711 times:
I think United is losing the most money at the moment...they are, like every other airline literally haemorraging cash although loads are improving (yields are still horrendous though) but again this is the same story at every other airline.
United seems more exposed due to their huge Asian, European, and Latin American presence (business traffic has tumbled precipitously).
But so far all the airlines except America West have been reluctant to sign up for US Government backed loans because it means signing away control/shares of your airline to the government, in effect nationalizing it.
PROSA From United States of America, joined Oct 2001, 5644 posts, RR: 4
Reply 10, posted (14 years 3 weeks 3 days 7 hours ago) and read 5590 times:
I'll be a ray of sunshine and predict that none of the majors will fail in the foreseeable future. They'll all get through this rough period, battered but still standing.
I'll base this on two factors:
1) Memories of September 11 will fade, and fear of flying will start to recede.
2) The economy seems to be on the mend, which will translate into increased business travel and better yields.
"Let me think about it" = the coward's way of saying "no"
AWA22 From , joined Dec 1969, posts, RR:
Reply 11, posted (14 years 3 weeks 3 days 6 hours ago) and read 5560 times:
This is why I do not think America West will go bankrupt anytime in the near future. We have secured over 400 million in loans and 600 million from various concessions from venders and other bussiness partners. This funding will help keep HP around well into the future.
Flashmeister From United States of America, joined Apr 2000, 2919 posts, RR: 6
Reply 12, posted (14 years 3 weeks 3 days 5 hours ago) and read 5546 times:
Even the most generous of loans have to be repaid at one point or another... and if there's no money to pay the loan, you have a problem. America West has no profits to use to pay the loans, and nothing left to put up as collateral to borrow more money.
Combine that with labor trouble, governmental meddling as a result of ceding 33% of the airline (and some operational control), low yields, poor public perception, etc... and you have a real mess.
ILUV767 From United States of America, joined May 2000, 3142 posts, RR: 7
Reply 13, posted (14 years 3 weeks 3 days 4 hours ago) and read 5531 times:
Regarding United Airlines. I doubt that they will go bankrupt. When Jim Goodwin announced that UA would go bankrupt, people forgot that he said "if we keep loosing money at this rate." Right now, United is loosing close to 1 million a day...not 13 million a day when Goodwin made that statement. It has been going down since Novemeber.
Currently, there are four 747s in storage. The other 40 747s are flying the line. Most of them are sent to Asia, or the south pacific once a day. Most of the flights to Asia are going out full/oversold in all cabins.
I saw the pictures of the 777s at PAE, and the deal with those are that there are not enough 777 engines for 777s. They are being put on an "out of service" status, not "stored" status. United has not yet stored a single 777, like it has with the 747. Just to set the record straight.
United's average load factor is around 77% compared to 68% at most other carriers. They also cut more flights post september 11th, but kept the ones at the peak periods. They have cut east-west redeyes as they get in after midnight/1am. They kept west-east red-eyes as they arrive early in the morning.
United is also taking delivery of new Airbusses. Sadly, these planes are going to Ansett for two years. On the plus side, United is making a lot of money by doing this. At the moment, they do not need the extra busses, so leasing them out is a good move for UA.
So, whats wrong with United? Well, United is loosing around 1 million a day. Our average load factor is not high enough, and the premium cabin yeilds are not as high as they once were. United also has to pay its labor force more than any other carrier. Expect pay cuts to come before summer from all employee groups, especially ALPA.
As a cost saving measure, United is starting to contract out many more flights to its Express carriers. SkyWest is opening up a RJ hubs in SFO, LAX and DEN. AirWisconsin RJs are being spotted several times aday in LAX to assist SkyWest. New routes are going to Express that were once shuttle. Where 737s would go out empty to places like SBA and BOI, RJs are now/soon going to these markets. Many of the ex Shuttle routes are going to Express. While the thoughts of an hour in an RJ is not the most pleasent, it saves the company tons of money.
To fix the problems, United fired Jim Goodwin as its CEO and hired Jack Creighton who is accepting no pay for his job, just stock options.
To reduce costs, routes are going to RJs, service items are being cut/reduced, and non-ecential flights are being cut.
A positive effort is being made so that United will fly you where you need to go when you need to go. West to east transcons depart around 11am, for an evening arrival. East coast to west coast transcons leave in the evening for nightime arrivals. Connecting flights to Latin America, Europe, Asia and the South Pacific meet these flights.
United still has one of the best route maps, and has some of the strongest alliance partners. They still offer a award winning product, even with the service cuts. As more and more people begin to fly, sources tell me that by April, United will have a positive cash flow.
BNE From Australia, joined Mar 2000, 3208 posts, RR: 11
Reply 15, posted (14 years 3 weeks 3 days 2 hours ago) and read 5480 times:
I guess would be US Airways, maybe not go broke completely but a major downsizing may be necessary.
Does any no how big Eastern were when they stop flying. Who picked up all there passengers. Seems inconvincable a large carrier can go broke, but Ansett did it so it can happen to anyone.
Elchanan From Norway, joined Sep 2001, 60 posts, RR: 0
Reply 16, posted (14 years 3 weeks 3 days ago) and read 5445 times:
What's with the government loans deal anyway? Isn't this the first time the US Government becomes partial owner of any of the airlines? Is this even valid according to American law? I understand that the situation caused by Sept.11 is extremely special, but I should think that any government involvement would be temporary and only in the form of loans - without actually buying shares of a company. Or is the government really getting into the business of aviation? Please help me out getting the facts straight here...
A $15 Million cash burn rate is significantly higher than than what AA, CO, DL, or US are losing. ILUV767 mentioned their high exposure to international flying which is precisely the problem to start with.
I have heard rumors that UA will be filing for bankruptcy later this week! Can anybody confirm?
XFSUgimpLB41X From United States of America, joined Aug 2000, 4297 posts, RR: 35
Reply 22, posted (14 years 3 weeks 2 days 13 hours ago) and read 5297 times:
ILUV767.... that stuff that iheard about united is recent.. they were doing a bit better i think for a short while.. but they really need to make some big changes to keep their head above the water. Its really sad.