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alberchico
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How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 5:41 am

Were all the majors making profits and hiring pilots right up until 9/11 or did they start to slump before. If there were no terrorist attacks, would the majors like AA or UA continued making profits? How was the management at the majors BEFORE 9/11 ?
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srbmod
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 5:59 am

Quoting Alberchico (Thread starter):
Were all the majors making profits and hiring pilots right up until 9/11 or did they start to slump before.

The economy started to slump in the last few months of 2000 as a result of the tech bubble bursting. Airlines started to see a slump in travel and profits were beginning to slide and some airlines started layoff and had hiring freezes. It really was the beginning of the downward trend of the cycle for the industry. 9/11 just made a bad situation worse. Had 9/11 not happened, the recovery would have started several years earlier than it did (and not everybody has recovered yet). Without 9/11, the industry would have probably been back to normal by now. You probably still would have had the US and UA bankruptcies and probably the Hawaiian and Aloha ones as well (As in a down economy, people won't go on as expensive vacations, so folks would have stayed on the mainland instead.). There still would have been some airlines go out of business, like National still would have gone out of business as they were in CH. 11 close to a year before 9/11. Midway and Vanguard may have been able to ride out the storm, but probably not without some sort of merger deal or new ownership (And probably would have become Hooters Air). Ozark/Great Plains still would have failed, and some of the charter airlines that depend on the US military contracts may have been affected, as the Iraq War probably would have never taken place, nor would the Afghan involvement. I think AirTran would not have grown as big as it had either, as they took advantage of opportunities that arose as a result of the post-9/11 cutbacks and the cutbacks associated with the financial problems of some airlines.
 
dutchjet
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 6:06 am

Short answer: the airline industry was already headed for trouble. The US and world economies were losing strength, and after some very good years of record passengers, fast expansion, lots of aircraft orders and high-flying profits, things were slowing down and the airlines were facing an over capacity problem. The airline industry has always been cyclical, and a downturns were nothing new. Of course, the events of 9/11 made everything far worse and sent the entire industry into a nose-dive.
 
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mariner
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 6:34 am

The first half of this link gives you an idea of how bad things were becoming at United in 2000 and 2001 prior to 9/11:

http://www.united.com/page/middlepage/0,6823,50103,00.html

However, note the date on this:

http://news.bbc.co.uk/2/hi/business/1625092.stm

CEO Goodwin had sent the critical letter ("United will perish") to the staff on October 15, 2001 - only four weeks after 9/11.

http://www.chicagotribune.com/news/s...5578.story?coll=chi-unitednav-misc

9/11 may have made United's situation worse, but it was already in the toilet.

cheers

mariner
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FlyingTexan
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 6:38 am

United and American were complete disasters and in terrible financial health. United was falling with their antics (or shall I say the unions) during the Summer of 2000.

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ETStar
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 7:09 am

Yup, and that event simply precipitated their spirals, and was well used and taken advantage of to justify layoffs and cost cuttings... the troubles did start way before that day though.
 
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mariner
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 7:34 am

Quoting FlyingTexan (Reply 4):
United was falling with their antics (or shall I say the unions) during the Summer of 2000.

As noted in United's own history of itself, the problems existed before the Summer of Hell - the summer of 2000.

http://www.united.com/page/middlepage/0,6823,50103,00.html

I wouldn't just dump on the unions. The proposed merger with US Airways was a costly problem - as was Avolar. The airline had been grossly mismanaged for some time.

cheers

mariner
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StevenUhl777
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 2:30 pm

Quoting Mariner (Reply 6):
The proposed merger with US Airways was a costly problem

To the tune of $500 million, therabouts...

I bet Glenn and Jake wish they had that $$ in the checking account these days...
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alberchico
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 3:01 pm

Quoting Mariner (Reply 6):
As noted in United's own history of itself, the problems existed before the Summer of Hell - the summer of 2000.

Are you talking about the delays that airline suffered that summer?
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mariner
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 3:08 pm

Quoting Alberchico (Reply 8):
Are you talking about the delays that airline suffered that summer?

The summer of Hell was an industrial action by the pilots, a slow down. It caused chaos throughout the system, which is why it was caused "the summer of Hell":

http://www.chicagotribune.com/chi-un....story?coll=chi-unitednavover-misc

Anti-union people tend to date United;s probelms from that summer, but - as shown in the links above - the problems had begun long before that.

The summer of Hell compunded some of the problems and led to - I believe - a disastrously expensive contract with the pilots.

Within a year, United was on its knees. The came 9/11. And then four weeks later CEO Goodwin admitted United was on its knees.

cheers

mariner

[Edited 2005-07-17 08:09:27]
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FriendlySkies
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RE: How Was The Airline Industry Before 9/11?

Sun Jul 17, 2005 3:17 pm

And then a few weeks after that Goodwin was out of a job.  Wink