As always, its important to check the facts versus listening to mere opinions stated above. People like to say things that sound like facts, but which are really only what they wish were facts, what their dad told them, or what they guess are facts.
US is not on borrowed time, it was the only major to post a (modest) profit for the last quarter. Not simply an operating profit - a full, bona fide profit. Someone said thats 'only because they cut pay,' as if cutting costs is like cheating or immoral. They said they may have a loss for the rest of the year, but the only prudent thing to say is that times are tough and that they need more help. Sailing along in bankruptcy protection is an easier business enivornment with more lax rules.
Its interesting, when UA
and US first declared bankruptcy, one theory was that the first to declare bankruptcy would end up being the healthiest airline, as some thought all the majors would have to declare bankruptcy sooner or later. UA
employees were telling us that AA
, etc... would be next. US has taken bankruptcy protection and done some good and is now at worst a break-even airline, with more progress coming. United, however, has perhaps insurmountable problems. UA
's load factor was 86% last quarter! How do you not make a profit with all those filled seats? By having an 87% break even load factor!
Northwest lost 182 million, United lost 247 million and Delta lost 1.65 BILLION (of which 312 million was cash). CO
are very near to breaking even, recording operating profits, but posted small overall losses.
does not have the most cash, at 2.9 billion, American does at 3.9 billion. The amount of cash on hand is the key to these quarterly figures. The one thing airlines learned after Pan Am, Eastern, Braniff, etc... disappeared is that you've got to have a LOT of cash to weather airline industry storms. In fact, you can perhaps predict which airlines are likely to surivive or die based only on how much cash they have in the bank - a figure made known to the public every quarter.
All the US majors have an adequate amount, although United is in the worst shape with only 838 million in unrestricted cash, compare this to a considerably smaller airline - Continental - with its 1.8 billion in unrestricted cash. It is generally thought by airline analysts that the big three airlines need at least a billion in cash at all times to safely operate. UA
is dangerously flirting with its liquidity, and its management seems unable to make sweeping changes or do anything thoughtful to turn it around. (What is it about the second time UA
tries to build an airline within an airline - Ted - that makes management think it will work?) For this reason, and the fact that their service is horrible, I argue UA
is the most likely to disappear. But, I don't think they will this time unless they get one more major blow, like even higher fuel prices, a strike, etc...
The bad news is that the profitable and close to proftable (US/CO/AA) will get cocky and start buying new aircraft again, repeating the cycle of building up too much capacity while good aircraft sit in storage. Its a crazy business.
all figures taken from quarterly financial releases found on airline websites