Here's a look for the year:
2004 keeps getting worse for US carriers
Dateline: Friday March 19, 2004
"Extreme jet fuel prices" and "weakening domestic revenue" will push the US airline industry into another huge loss this year, Samuel Buttrick predicts.
In a report released yesterday, the UBS analyst significantly widened his 2004 loss estimate for US airlines to $2.3 billion from $500 million previously.
"Hopes for a meaningful US airline financial recovery in 2004 are fading fast. With oil/jet fuel prices at near-record highs, the fossil fuel dependency of today's aircraft is unfortunate. Furthermore (and regrettably) most US carriers bet last year that oil prices would fall and therefore failed to extend hedges," he wrote.
But higher costs are responsible for only about a third of the problem, according to Buttrick. The lion's share is related to the weak revenue environment. Although this is partly attributable to excess capacity in transcon markets, he noted that these routes account for less than 10% of domestic revenue and even "extreme" weakness there "cannot fully account for the poor expected domestic revenue showing in February."--PF
With this outlook going forward, are we poised to lose a domestic US airline this year? Your thoughts please....................