Posts: 55
Joined: Sun May 27, 2007 5:19 am

US Legacy Airlines

Thu Jul 26, 2007 1:07 am

I've been hearing and reading in the news alot of Legacy carries such as NW, AA, and UA cancelling routes and having difficutly filling up other ones.
In the future, what airlines do you think are going to be the lasting carries in the United States?

I think DL and CO are deffinately in the running.
I'm surprised to hear that AA is having some difficulty, such as the situation in BOS to name one.

Any insight of the outcomes of any of these airlines would be nice.

[Edited 2007-07-25 18:09:55]
Flying is like having eyes on the top of the world.
Posts: 769
Joined: Thu Dec 15, 2005 3:26 am

RE: US Legacy Airlines

Thu Jul 26, 2007 1:29 am

JB, FL, WN to name a few... oh and don't worry about the others, they'll be fine too.
The demand in the USA is huge, and with a few strategy changes, all the legacy carriers will stay in business. It's not AZ for god's sake...  tombstone 
"Get your facts first. Then you may distort them as much as you please" -- Mark Twain
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Joined: Sat Dec 06, 2003 1:30 am

RE: US Legacy Airlines

Thu Jul 26, 2007 6:56 am

As long as our buerocratic nanny state is in effect, the majors won't go completely out of business. Their investors (i.e. stockholders) may get shafted every time they declare bankruptcy, however.
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
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Joined: Tue Aug 05, 2003 6:18 am

RE: US Legacy Airlines

Thu Jul 26, 2007 9:19 am

Don't draw the conclusion that because network(legacy) carriers are cutting routes means they are not capable of surviving. They are pulling routes down because they don't make enough money. I'll remind you that WN, FL, and B6 have all recently announced route pullbacks. Part of responsible airline management is cutting your losses when something changes in a market or when it becomes obvious that the market didn't materialize as expected. Remember that airplanes are mobile factories and can be moved very easily from one place to another.

As for the staying power of airlines, I'll also remind you that several of the network carriers - DL and UA have posted operating profit margins on par or better than B6 or WN. And the network carriers don't have hundreds of aircraft on order which will strain the balance sheet. The LFCs might move fast enough in a downturn to stay out of trouble but from a financial standpoint, the network carriers as a group are turning in very good performance and have reasonably healthy balance sheets as a result of their trips through bankruptcy. You are as likely to see bankrupties among some of the LFCs in the next downturn as you are from network carriers.
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Joined: Wed Mar 07, 2007 8:51 am

RE: US Legacy Airlines

Thu Jul 26, 2007 3:02 pm

it is probably because these are less profitable routes due to too much competition, if 6 legacy carriers all have to pull the price down by $100 and lets say there are 600 people wanting those flights, if those 600 people split up evenly to the 6 different legacy carriers they will all make much less compared to if those 600 people all split up evenly onto 2 or 3 legacy carriers, this is why i think mergers are necesary, there is simply too much competition, but these mergers would need to be done with much care to ensure a smooth transaction to hurt the least amount of people. I could see CO DL and AA coming together and UA US and NW coming together to make 2 legacy carriers. US has already shown that they want to merge so that wouldn't be too hard, i see them merging with NW (mostly because of identical fleets). CO and DL seem to have the same ideas followed closely by AA (plus they all have the same fleet). Or another direction could be a CO+DL AA+UA and NW+US and just try and help every one in the different unions get along and consolidate so all the airlines could begin making money again. Just think, 600 people split into 2 or 3 airlines will make each airline more than if those 600 people were split into 6 and the prices would still remain competitive but the routes would be more profitable per airline (plus we would see the return of widebodies to domestic flights  Smile )
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Joined: Sun Mar 26, 2006 8:15 am

RE: US Legacy Airlines

Thu Jul 26, 2007 4:11 pm

I wouldn't hazard a guess. I never though PanAm and TWA would go under.  Wink Moderator Team

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