Self Loading Freight
15th Nov 2001, 02:23
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."
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."