MCTSET
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Airlines on the edge

Thu May 23, 2019 11:44 pm

I know this thread may be quite a disheartening thread to some but I this is the reality of the airline business. I am curious to hear your thoughts on which airlines are likely next to go out of business, I think the toughest market right now is Europe, while this summer might give some respite to the teetering airlines, the winter after that could be brutal with all of that extra capacity and oil price trends.
 
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Veigar
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Re: Airlines on the edge

Thu May 23, 2019 11:46 pm

I guess an obligatory Norwegian would be a good guess
 
MCTSET
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Re: Airlines on the edge

Thu May 23, 2019 11:56 pm

Veigar wrote:
I guess an obligatory Norwegian would be a good guess


I think Norwegian short haul is more likely to call quits than the long haul division. Europe is over cry with Norwegian competing for low cost passengers against lower costing airlines, they are just enable to complete on a cost basis against Ryan, wizz etc. At least when it comes to long haul they are the lowest cost carrier in their market.
 
WWads
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Re: Airlines on the edge

Thu May 23, 2019 11:59 pm

I know it sounds absurd, but what happens to American Airlines if the economy goes south and people stop putting big spending on their AA credit cards? After all the financial reports are pretty clear that AA is being propped up by AAdvantage.

No competitive advantage, a strong reliance on business travel in key hubs, and over one hundred brand new jets on credit. Where have I heard that before?
 
AlexBrewster03
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Re: Airlines on the edge

Fri May 24, 2019 12:09 am

If the Brazilian economy doesn’t improve, could we see any of the Brazilian airlines fall?
Besides that, Etihad. Cant imagine they will be around in 10 years or so.
 
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MKE22
Posts: 185
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Re: Airlines on the edge

Fri May 24, 2019 12:12 am

https://www.al.com/news/2019/05/via-air ... ately.html

Via Airlines, although it's seemingly been happening for a while
 
filipinoavgeek
Posts: 215
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Re: Airlines on the edge

Fri May 24, 2019 12:23 am

Jet Airways: for now they're gone but officially they still exist, so I guess you could count that as on the brink.
PR is also probably vulnerable if their losses continue and they don't pace themselves on expansion.
 
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aemoreira1981
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Re: Airlines on the edge

Fri May 24, 2019 12:40 am

I would say American Airlines just because of its immense debt load. In the USA, I would say that B6 is perhaps in the best shape on this as almost all of their Airbus fleet is owned, with a significant portion paid off. That said, Delta probably has a lot of exposure outside of the USA, especially in Brazil, Mexico and the UK, more so than any other US carrier.

As for Brazil, discounting Avianca Brasil which is all but dead, I can't see any other carrier collapsing. In Mexico though, one needs to watch out for Interjet, which is trying to be a hybrid between Aeromexico and Volaris. The decision to buy the Sukhoi Superjet was disastrous for them.
 
YLWbased
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Re: Airlines on the edge

Fri May 24, 2019 4:05 am

Hong Kong Airlines is a complete mess at the moment.

YLWbased
Hong Kong is not China. Not better or worse, just different.
 
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Super80Fan
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Re: Airlines on the edge

Fri May 24, 2019 4:13 am

JetBlue, at least with their current corporate culture. I don't expect them to go under but I definitely see them merging or being bought out in the next 5-10 years.

American Airlines might struggle compared to United or Delta during the next recession, but they are not going to go out of business as some might (oddly) suggest.

That being said, I hate talking about airlines going under because of all the employees who instantly lose jobs, unless it's a company with big red flags and lots of warning signs it sometimes comes out of the blue.
RIP McDonnell Douglas
 
Max Q
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Re: Airlines on the edge

Fri May 24, 2019 4:43 am

aemoreira1981 wrote:
I would say American Airlines just because of its immense debt load. In the USA, I would say that B6 is perhaps in the best shape on this as almost all of their Airbus fleet is owned, with a significant portion paid off. That said, Delta probably has a lot of exposure outside of the USA, especially in Brazil, Mexico and the UK, more so than any other US carrier.

As for Brazil, discounting Avianca Brasil which is all but dead, I can't see any other carrier collapsing. In Mexico though, one needs to watch out for Interjet, which is trying to be a hybrid between Aeromexico and Volaris. The decision to buy the Sukhoi Superjet was disastrous for them.



While AA does have massive debt they’re
not going anywhere, along with UA and DL
they enjoy an almost monopolistic control
of the American market with total domination of several hubs


And if their debt does become a problem
again they’ll just file CH11 again, discharge
most of it and start again
The best contribution to safety is a competent Pilot.


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paullam
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Re: Airlines on the edge

Fri May 24, 2019 6:48 am

The moment the Italian government decides to stop funding Alitalia they’ll be gone.
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upperdeckfan
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Re: Airlines on the edge

Fri May 24, 2019 6:50 am

What about AZ? is the gov't goign to subsidize them forever?
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32andBelow
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Re: Airlines on the edge

Fri May 24, 2019 7:27 am

Ravn is having a very hard time getting pilots
 
filipinoavgeek
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Re: Airlines on the edge

Fri May 24, 2019 7:31 am

While Alitalia is struggling hard, Air Italy is not doing so well either, considering their recent history of short-lived routes, and their in-flux fleet plans. I'd be surprised if they'll still be around in their current form within the next three years; in fact, it's not implausible that Alitalita will actually outlive Air Italy.
 
TheEuphorian
Posts: 333
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Re: Airlines on the edge

Fri May 24, 2019 10:10 am

Like Alitalia, Thai Airways and Malaysian Airlines are both in a similar situation, as soon as these airlines lose taxpayer-funded government money, they'd be gone in a year.
 
gerald05
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Re: Airlines on the edge

Fri May 24, 2019 10:40 am

What about Adria?
 
smallmj
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Re: Airlines on the edge

Fri May 24, 2019 11:25 am

If you believe some posters here then Flair Air (Canada) can't possibly survive. We will see what we will see.
 
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FlyRow
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Re: Airlines on the edge

Fri May 24, 2019 12:55 pm

Depends what you mean by on the edge.

I think Brussels Airlines is on the edge of disapearing in the eurowings behemoth.

I wonder what will happen if the chinese economy breaks down one day, it's a huge market albeith a terrible controlled one, what happens if the peeps stop flying.
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DALMD80
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Re: Airlines on the edge

Fri May 24, 2019 1:27 pm

WWads wrote:
I know it sounds absurd, but what happens to American Airlines if the economy goes south and people stop putting big spending on their AA credit cards? After all the financial reports are pretty clear that AA is being propped up by AAdvantage.

No competitive advantage, a strong reliance on business travel in key hubs, and over one hundred brand new jets on credit. Where have I heard that before?

I think we would see them slipping before anything happened. They're a legacy carrier after all.
You can take the boy away from aviation, but you can't take aviation out of the boy.
 
DALMD80
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Re: Airlines on the edge

Fri May 24, 2019 1:29 pm

Flair is certainly on the way out I think.
You can take the boy away from aviation, but you can't take aviation out of the boy.
 
zakuivcustom
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Re: Airlines on the edge

Fri May 24, 2019 2:02 pm

FlyRow wrote:
I wonder what will happen if the chinese economy breaks down one day, it's a huge market albeith a terrible controlled one, what happens if the peeps stop flying.


The CN3 (along with all of its subsidiaries, so throw in the like of 3U (Sichuan) or MF (XiamenAir) in here as well) will be fine. The gov't will never let them go under. At worst they cut a bunch of secondary point-to-point long-hauls.

HU and company (HNA Group) has not been looking great even before the current trade dispute anyway. I can see them go under (HX in particular is on VERY shaky ground).

Other smaller private carriers, i.e. Juneyao or Loong Air, will just get investments by one of the CN3 if things really go that far south.

P.S. Seriously, AA going under? Not going to happen as somebody will definitely jumped in to buy them if things go that far south.
 
MCTSET
Topic Author
Posts: 67
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Re: Airlines on the edge

Fri May 24, 2019 3:25 pm

paullam wrote:
The moment the Italian government decides to stop funding Alitalia they’ll be gone.


So they won’t be gone.
 
MCTSET
Topic Author
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Re: Airlines on the edge

Fri May 24, 2019 3:29 pm

filipinoavgeek wrote:
While Alitalia is struggling hard, Air Italy is not doing so well either, considering their recent history of short-lived routes, and their in-flux fleet plans. I'd be surprised if they'll still be around in their current form within the next three years; in fact, it's not implausible that Alitalita will actually outlive Air Italy.


I was going to say air Italy as well, but I think they can make something of themselves if the properly establish fleet plans and and European shorthual network. They may struggle with the last task due to slot problems in major markets, but maybe big brother might be able to help with that.
 
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PatrickZ80
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Re: Airlines on the edge

Fri May 24, 2019 4:37 pm

What about Enter Air? Holiday and charter flights out of Poland can't exactly be a very profitable business, certainly not with Ryanair Sun competing them into the ground.
 
bluefrog
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Re: Airlines on the edge

Fri May 24, 2019 5:55 pm

thomas cook could be the next big charter company to go under with over a billion in debts ,i read in the mailonline last week gointg to close traval agence's in britain so ruin family holidays for the british and the airline part maybe sold off to virgin or LH ?
 
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PatrickZ80
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Re: Airlines on the edge

Fri May 24, 2019 7:35 pm

bluefrog wrote:
thomas cook could be the next big charter company to go under with over a billion in debts ,i read in the mailonline last week gointg to close traval agence's in britain so ruin family holidays for the british and the airline part maybe sold off to virgin or LH ?


You're making it sound way more dramatic than it is.

Thomas cook is a travel organization that owns it's own airline so they don't have to book their passengers on external airlines for their most booked destinations. However the airline division is loss-making, so they're looking to sell it off. Instead they'll be booking their passengers on external airlines like they do on destinations their own airline doesn't serve.

Thomas Cook has a lot of sales offices where people can go to book a holiday, but keeping all those offices open costs a lot of money. So they're closing a number of them. This has no influence on the passengers that have booked a holiday through such offices as the holiday itself is booked with the main organization. The offices are just selling it, not actually managing it. But since more and more people are booking their holiday online the need for sales offices becomes less.

Rest assured the family holidays booked through Thomas Cook are not in danger. As said, they're managed from the main office which will not be closed. And even if the airline division is being sold off, they're still able to book their passengers on it through contracts that no doubt come with the sale.

In Germany Thomas Cook is known under the name Condor, but it's the same organization and the same story.
 
EvanWSFO
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Re: Airlines on the edge

Fri May 24, 2019 8:04 pm

AA is too large to let fail. They would go the bankruptcy route. If they were too big back in the 90's when Bill Clinton ordered striking pilots back to work, they are certainly much bigger and important to the economy, regardless of what a bad airline they are at the moment.
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CWL757
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Re: Airlines on the edge

Sat May 25, 2019 9:18 pm

PatrickZ80 wrote:
What about Enter Air? Holiday and charter flights out of Poland can't exactly be a very profitable business, certainly not with Ryanair Sun competing them into the ground.

Enter Air also operates many charters outside of Poland (Especially in the UK during Winter) I think they're safe for now. Interesting ones to watch are Orange2Fly, Olympus etc. Tiny fleets and purely relying on Ad-Hoc flights.
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WWads
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Re: Airlines on the edge

Sat May 25, 2019 11:25 pm

I'm not arguing that AA will collapse and disappear. I'm saying that it will flirt with failure once again, before being saved by the taxpayer, through Chapter 11 or outright bailout.

The Big 3 are too big to fail at this point after all.
 
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FCOTSTW
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Re: Airlines on the edge

Thu May 30, 2019 7:52 pm

AlexBrewster03 wrote:
If the Brazilian economy doesn’t improve, could we see any of the Brazilian airlines fall?


I do not think you too far off in guessing the location.

https://www.bbc.com/news/business-48457389
 
Aurantiaco
Posts: 61
Joined: Thu May 30, 2019 6:21 pm

Re: Airlines on the edge

Fri May 31, 2019 7:27 pm

I’ll pick Southwest due to the MAX groundings. I don’t think it will go bankrupt, but the expanding Hawaiian routes with about 5% of its fleet gone, they might lose some profit even when the MAX makes up a small portion of the fleet. Plus, since the public generally has a negative impression on the MAX, I’ll put out a possibility of a loss of popularity of the MAX routes.
 
leghorn
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Re: Airlines on the edge

Sun Jun 02, 2019 9:30 pm

ch-aviation says "Adria denies asking for state aid". Make of that what you will.

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