View Full Version : US carrier shakedown by New Year


Self Loading Freight
15th Nov 2001, 03:23
Sorry to do a Guv, but this is an interesting, if hardly uplifting, analysis of the US industry after the latest incident, courtesy of the NY Post. Mergers, closures and a massive restructuring of the revenue model are on the cards, it says: one thing's for sure, 2002 will see a very different environment for everyone.

R (whose own industry is also in meltdown. Fun.)

From http://www.nypost.com/business/34309.htm

$7B LOSSES PUT CARRIERS' FUTURE UP IN THE AIR

By PAUL THARP

November 14, 2001 -- At least two airlines may go bust by New Year's as a result of the public's travel slowdown - while other carriers may merge to stay aloft.
Aviation experts said the industry is undergoing its biggest upheaval in nearly two decades, and will resurface as a completely different animal in the coming year.

Terrorist fears and Monday's air crash in Queens have spooked the flying public to new highs of anxiety, pushing airlines to the brink of ruin with losses expected in excess of $7 billion this year.

"Two days ago, I would have said the 10 major airlines would wind up consolidating into six, but now I think it's going to be fewer," said Tom Burke, director of Avmark Inc., an international consulting firm.

Airline stocks recovered yesterday after a beating on Monday from the Queens air crash.

Burke predicted that US Airways and America West may throw in the towel anyway due to staggering losses.

Other big carriers such as Continental and Delta may merge, or Northwest and Delta may combine.

"There's all sort of combinations that are going to develop. No one's sure what Northwest and Continental are going to do. There's also Southwest and Air Tran talking about a merger," said Burke.

"Of the four big carriers that had talked in the past about merging, those merger possibilities are now open again," he said. "Almost any combination is possible now."

Big airlines might also start poaching prime markets and routes from weak smaller carriers. "The large carriers acquire the cream and let the weaker small carriers fall by the wayside and disappear," said Steve Lott, business editor of Aviation Daily. He said one likely victim is Vanguard Airlines, which posted poor earnings yesterday.

Airlines will probably get a lot more rope from regulators than they've ever had before.

Burke thinks government regulators, who frowned on consolidations in the past, will probably step aside to let the consolidation parade begin.

"Antitrust issues have become secondary to the survival of airlines," Burke said. "Mergers are very viable options."

Regulators might also give clear sailing to the merger they shout down just earlier this year, such as the United and US Airways merger.

"If United and US Airways wanted to get [their merger] through today, they would get a much different response firm the government," said Aviation Daily's Lott.

"I doubt that United and US Airways are going to propose that right away because they're still in a race to see who's got the biggest losses in the industry," said Lott.

Airlines will also put new policies into effect, such as pricing all tickets the same.

"We're in a tremendous revision scenario now," said Burke. "Airlines have to start selling tickets the way trains and buses do - selling a ticket at cost plus a little margin of profit."



TowerDog
15th Nov 2001, 05:44
Southwest and AirTran merging?

Hello, anybody home....?

A quality major carrier and a scab-outfit like ValueJet. (AirTran)
Not a marriage made in heaven.

Comments from folks employed by the 2 players? :eek:

Semaphore Sam
15th Nov 2001, 06:38
>A quality major carrier and a scab-outfit >like ValueJet. (AirTran)
>Not a marriage made in heaven.

Why use such emotion-filled crap to describe an operation that has, over 5 years, survived and recovered from the edge? Such gratuitously insulting talk is really stupid.

laxman
15th Nov 2001, 07:00
WhileI arrived here after the buyout of Morris Air, I think I can say quite unequivocally, that there ain't NFW that SWA will acquire Air Tran. Somebody better get off that crack pipe.

DownIn3Green
15th Nov 2001, 07:07
Lax and TwrDg,

So I suppose you guys are in management and know it all?

If you haven't realized it by now, mgmt (such as it is) will do as they will to further their own gains...

As for the comment re: Air Tran being a "scab" outfit...don't know, don't care, but be honest, if it was the only J/S going, would you turn it down?

quid
15th Nov 2001, 07:36
>>if it was the only J/S going, would you turn it down? <<

Yup. And that's only fair, 'cause there's no way he'd be on mine.

Quid (ex EAL) (Guess you had to be there)

411A
15th Nov 2001, 07:42
Think the ALPA boys had better stand aside and let airlines at least have a chance to survive....otherwise many pilots will go hungry visiting the unemployment line.

TR4A
15th Nov 2001, 08:46
I fly for SWA. SWA would not buy or merge with Air Tran. Air Tran flys MD-80's NOT B737's.

Semaphore Sam
15th Nov 2001, 09:37
Well-said, 411A. Anybody flying these days had better look over his/her shoulder, & manifest superior attitudes only when justified by superior performance. Any of us could be walking the streets, these days!

TowerDog
15th Nov 2001, 17:15
Down:

Yup, would turn down the jumpseat even if it was the only one i town.

SOPS
15th Nov 2001, 22:18
And there are still S***S in Australia that say, "Why are the 89ers like they are?", "Why wont they forget?"...
Keep the faith all, that is the strength!!!

Gantenbein
16th Nov 2001, 01:24
Bicker all you like, there’s more at stake here. With Air France and Delta recently acquiring an open skies agreement, with British Airways and American about to do the same, with KLM and Northwest having shown the way for a few years, with the Lufthansa – United alliance, any reshuffle in the US is going to have a major impact in Europe as well. Not to mention the Asian side of the equation, the feeders on several continents, the travel agents. I believe you’re not doing the original post justice...

flite idol
16th Nov 2001, 01:34
Nah cant see that one,! but Air Tran do have a couple of old 737-200`s the rest of the fleet are old DC-9`s and new B717`s.

TR4A
16th Nov 2001, 02:39
Nah cant see that one,! but Air Tran do have a couple of old 737-200`s the rest of the fleet are old DC-9`s and new B717`s.

From AirTran's web site:

What type of fleet does AirTran Airways use?
AirTran Airways utilizes Boeing 717 and McDonnell Douglas DC-9 jets


Again: SWA would NOT buy them, they do not fly B737.

Raas767
16th Nov 2001, 02:58
One thing I do know for sure is that so called airline analysts don't know anything. These are the same group of rocket scientists that predicted that TWA would not survive the winter in 1989, and in 90, and in 91 and so on and so on. You can all bet your paycheck on the fact that if an airline analyst predicted it, it aint gonna happen.
What a racket!

flite idol
16th Nov 2001, 04:37
Again: I agree SWA would not buy Airtran but they did until very recently operate four inherited B737-200 adv`s. I saw one at DFW fairly recently no MD80`s in sight. However this totally irrelevent to the point that SWA would have no interest in buyout or merger.

Mishandled
16th Nov 2001, 13:04
I would tend to agree with raas767, the analysts are just firing off theories, and at the moment it is the "safe bet" to predict doom and gloom. At the moment I dont think anyone can accurately predict whats going to happen, not even the "experts". From my point of view, the demand for flying will pick up, and even exceed levels before 9/11 and the recession. Its just a matter of when (thats my expert theory). Good luck to everyone until then. :)
;) ;)

[ 16 November 2001: Message edited by: Mishandled ]