Posts: 96
Joined: Tue May 25, 1999 7:15 am

Healthy Airlines

Thu Oct 04, 2001 5:21 am

There is a lot of talk about bankrupt or close to chapter 11 airlines after the sad events of 11/9.
What I wonder is: Are there any "healthy" ones around who could profit of the situation to consolidate their position (and buy the troubled ones for little money) waiting for better times to come?
Posts: 1388
Joined: Fri Aug 27, 1999 7:39 am

RE: Healthy Airlines

Thu Oct 04, 2001 5:48 am

Dallas-based Southwest Airlines Co is healthy. They might find opportunities opening up when/if other carriers fold, collapse, or crubmle, but they are not apt to purchase another company.....particularly a real large one. Too much hassle to digest.

They have about 1.4 Billion in cash. Their highest loss estimates (when everything was shut down) was $13 Million/day. I think they can be safely expected to earn a profit of roughly 15 cents a share for the 3rd Quarter...the only U.S. airline to do so.

They restored their system to 100% operational status while other carriers were trying to get 80% of their flights back in operation. They have not laid anyone off nor arew they planning to. They are in fact running a couple of pilot training classes in October and at least one for FAs.

Load factor fell but has recovered to the 50s for the week ending 29 Sep and, based on comments made by their CFO....should be up to 60% or a little better now.

Yields are down but so is fuel...they can probably break even at around 63 or 64% The current load factor probably has them in a positive cash flow situation.

I am not gleeful or smug that other airlines are having a bad time. Nobody likes it when the industry is in trouble. Still, it is sort of nice to see a company that other airlines liked to sneer at...when everyone was making a profit.....continue to do their thing and do it well.
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Joined: Fri Dec 31, 1999 5:50 am

RE: Healthy Airlines

Thu Oct 04, 2001 6:13 am

Ryanair is trying very hard to benefit from BA's relinquishing of slots at Gatwick, Cork, and Shannon. In fact, they have guaranteed the Irish government that they can exceed BA's load factors to Cork and Shannon and bring even more money into the local economies.

Ryanair is in a very "healthy" situation. They have more than e700 million in cash on hand, and will proceed with the purchase of up to 60 secondhand 737s, cash outright (btw, the prices for used 737s are dropping by the day). They have also hedged fuel prices through the next 12 months.

Ryanair even says that if Europe is plunged into a recession, the airline will still grow because people will become more price conscious.

I'm not sure of other European budget carriers, but it looks like Ryanair intends to come out of the current crisis unscathed.

Not all who wander are lost....
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Joined: Mon Nov 13, 2000 4:06 am

RE: Healthy Airlines

Thu Oct 04, 2001 6:32 am

The Lo-Cost Airlines in the UK

Singapore Airlines

Queensland And Terratorial Air Service

SouthWest Airlines

China Southern Airlines

(Educated guesses, except for the first four, which are nearly definates)
Anyone can fly, only the best Soar.
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Joined: Sun Jun 17, 2001 1:04 am

RE: Healthy Airlines

Thu Oct 04, 2001 9:53 am

Alaska Airlines
Easy Jet

Posts: 723
Joined: Mon Aug 06, 2001 8:06 pm

RE: Healthy Airlines

Thu Oct 04, 2001 1:58 pm

What about QF and DJ? They seem to be doing well and running at near full capacity due to the demise of Ansett Australia.

RE: Healthy Airlines

Thu Oct 04, 2001 4:30 pm

"Queensland And Terratorial Air Service"

Dont you mean

Queensland Ans Northern Territory Aerial Service(s)?

Guess what! they changed their name the new one is

Qantas Airways
Posts: 280
Joined: Wed Feb 07, 2001 2:49 am

RE: Healthy Airlines

Thu Oct 04, 2001 4:36 pm

I think charter airlines in the UK should be relatively stable as they have already got most of their seats filled via tour operators for the next 6-12 months at least. The ones not tied directly in with tour operators may have problems though.

They may suffer though where they were due to lease aircraft to US/Canadian carriers during the Winter.

I'm glad to be flying for a charter company and not a scheduled one during these difficult times.

Midwest Express

Thu Oct 04, 2001 9:45 pm

This may be the first year since its inception in 1984 that YX (Midwest Express) loses money. The only two U.S. airlines to have consistently turned a profit from day one are Southwest and Midwest Express. And they are complete opposites. The severe downturn in business travel has definitely affected Midwest Express which caters mostly to high-yield business travelers. However, the carrier is in a sound financial situation, with hardly any debt at all, and owns most of their aircraft. While YX may lose money this year, I think they will still fair better than most carriers.
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Joined: Thu Feb 01, 2001 12:31 am

RE: Healthy Airlines

Thu Oct 04, 2001 9:51 pm

As surprising as it can be for some people, AF is doing quite well.
And they could benefit from the problems encountered by SR. (Reduce competion on the French domestic network, and more pax attracted to their CDG hub)
Ecoute les orgues, Elles jouent pour toi...C'est le requiem pour un con
Posts: 57
Joined: Sun Sep 09, 2001 12:54 am

UAL Is Healthier Than You Think!

Thu Oct 04, 2001 10:19 pm

they have eliminated 20,000 jobs and loads are close to full with the flight reductions...union employees have yet to see a raise and UAL has the extra time and money to go into the Biz Jet "time share" buisness.....not to mention the 800 million they have already recieved from the govt. and 1.2 billion from insurance due to the events of 9/11.......can't wait to see Goodwin in cuffs!

RE: Healthy Airlines

Fri Oct 05, 2001 2:40 am

So you're saying that the layoff of around 70,000 pilots and cutting of 10-20% of flights in major carriers actually did good for the industry? I don't mean that in a bad way.  Big grin

So if that was in fact beneficial then perhaps will the furloughed pilots have a chance at a job again in the near future, as the profits rise again and airlines cautiously begin to expand?

Hopefully.  Big grin

Aloha 737-200!!  Wink/being sarcastic
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Joined: Sat Jun 24, 2000 7:43 am

RE: Healthy Airlines

Fri Oct 05, 2001 3:27 am

Southwest will do fine because they didn't falter the last time we had an economic downturn a decade ago. Thanks to Southwest's extremely low seat-mile costs, they may actually thrive as the airline takes over business reliquished by the cutbacks to AA, CO, DL, NW, and UA.

JetBlue is another airline that will do fine. Like Southwest, JetBlue sports low seat-mile costs and has locked up some important markets like JFK-FLL.

In Europe, both EasyJet and Ryanair could become major players in the European market, especially between the British Isles and the European continent. Like Southwest and JetBlue, both these low-cost carriers have low seat-mile costs and will definitely benefit as AF, BA, IB, LH, etc. cut back their services to and from the British Isles. Indeed, with a glut of 737-300/400/500 planes suddenly becoming available, Ryanair's intent on getting more CFM56-powered 737's could end up being less expensive that Ryanair originally envisaged because of the depressed prices for these planes.

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