Most of you will be familiar with what i do as a job, and also familiar with my habit of watching threads and responding when i feel i can add a valuable input - wish more members would do the same but there you go.
I can tell you catagorically that if a major 9/11 style attack, on a similar scale were to re-occur, then there would be major casualties within weeks. I feel that the European air network is more robust and probably better equipped to absorb a large attack as each major player has its own distict "back yard" - whereas in the US all the majors fight over the same traffic. I'm broadly oversimplifying much of this, so that it is easily understood by all our members in her, as sometimes, even as an analyst in the industry, i find some of the information on here inpenetrable, and confusing.
Figure 9/11 style losses for all the airlines concerned - US, United, probably SA
)">AA would go. Their survival is debatable at the moment, with SA
)">UA and SA
)">AA being in the better postion. Continental, Delta, and Northwest would have to furlough staff left right and centre. The LoCos would be hit very hard too, as their business model is based on low-costs, and the first thing that will happen is the fuel suppliers will raise their prices as the price of oil rises, as it will in reaction to the attacks, in anticipation of reaction from those nations involved. In any case, as soon as the attack happens, all the airlines in any kind of danger will be placed on cash terms only with the jet fuel companies, and this will mean any airlines with poor liquidity will not able to pay for their fuel or any other d2d running costs that are not done on credit (as they are currently in most cases) - and this is how airlines stop running, and collapse. My job is to assess the credit worthiness of an airline and decide on a suitable credit line, any special terms, and make a review of that company's operations and financial situation - its a cool job - basically i get paid to talk about airlines like you guys do. Anyway back to the point-
To prevent a collapse, airlines will be compelled to ditch fixed asset strength (aircraft mostly) and the preferred way to do this is to sell them to banks and financial institutions and aircraft lessors who will then lease them back to the airline which provides a cashflow boost in the short-term but raises current liabilities on the balance sheet and all things being equal, it is better to own the aircraft. Any routes that are not profit making or show even the slightest signs of sluggish loads will be dropped and this means more business for Goodyear and Marana.
Once one of the majors falls, the industry will brace itself and any remaining credit lines will be dropped, and shareprices will plummet. There will be no confidence in the marketplace in the airlines considered "in danger" and this will spread into the media. Bookings will fall as people realise that the airline is in trouble, and this will kill the airline stone dead.
)">UA and SA
)">AA both fell, there would be no immediate under-capacity in the marketplace as traffic is laid low after the attacks and the uncertainty remains. How long it takes for bookings to begin to rise again, is open to question, though you can bet SA
)">CO, and the LoCos will have removed any spare capacity from the desert, and increased fares to take up the slack. SA
)">UA and SA
)">AA will return albeit in a much reduced and more streamlined profile - their crown jewels, the 100+ 777s and various slots around the world such as LHR
, will probably be gone. What happens to them will be open to question, though certainly the financial institutions owed money by SA
)">UA/AA will have taken these assets away, and they will probably not be leased back to the new companies for routes it cannot run, so they will find their way onto the second hand market - who they will go to will be a source of great debate in here i imagine.
In the aftermath you will find that costs stay high. The problem may be that airlines cannot make an operating profit even with 90%+ load factors with the costs they have to carry in terms of fuel price, security etc, and ongoing losses year by year erode shareholder equity and will eventually be very damaging. You cant retain a 90% load factor without better than competitive fares, and if the company raises these fares the load factor will obviously go down - simple economics. Once the loads decline and operating costs stay high - the airline will become very loss-making very quickly, and may fail.
If no new 9/11 style attack happens i can see a lot of changes for the US industry, and a number of major players will have problems if oil prices remain high, or even get higher. If i had to guess, and its probably not very professional of me to name names, but as a rough guide (and by no means definitive) if a new attack were to happen id say the following would be staring collapse in the face - NOT certain to die, but in serious trouble - who would collapse would come down to timing, and outside influences that i dont have time to go into now, but suffice to say its a lottery. Figure any two or three from the list as worst case scenario.
Id be a bit worried about:
I would say these guys are safe
Middle East Airlines (Lebanon)">ME
What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???