Originally Posted by
pakeha-boy
Teto...try and get a hold of some Pilots from Northwest Airlines,,,they will give you plenty of reasons why they are leaving it,s absolutley shocking whats going on with some of the Major Airlines....sometimes the grass is greener on the other side..best of luck ...PB
AP
Legacy Airlines Hot Again
Wednesday October 25, 12:52 pm ET
By Stan Choe, AP Business Writer
Legacy Carriers Suddenly Hot Again on Wall Street
NEW YORK (AP) -- The nation's legacy airlines, previously cast aside by some investors, are suddenly hot again.
So far this earnings season, it's been the old-line hub carriers churning out strong profit reports and topping analysts' expectations. Low-cost competitors, meanwhile, have fallen short of Wall Street forecasts or announced scaled-back growth plans.
It's a stark turnaround from a year ago, when the list of network carriers in, entering or exiting Chapter 11 bankruptcy protection included Delta Air Lines, Northwest Airlines, United Airlines' parent and US Airways. The old-line carriers were seeking to cut costs and restructure to better compete with the upstart low-cost carriers.
The reason for the spotlight shift back to legacy carriers, analysts say, is due partly to heightened airport security this summer and partly to the preferences of business fliers.
After British police broke up a plot to bomb trans-Atlantic flights in August, a liquids ban and stepped-up airport security meant longer lines and bigger headaches for travelers.
That hurt all airlines, but it affected low-cost carrier Southwest Airlines Co. even more so, analysts say.
The Dallas-based carrier specializes in shorter routes than its legacy competitors. Calyon Securities analyst Ray Neidl wrote in a recent report that some of Southwest's potential passengers likely drove to their destinations rather than deal with airport delays and carry-on restrictions.
Cathay Financial analyst Susan Donofrio wrote in a research note that Southwest's average flight length is less than half that of any of the major airlines, meaning it may have a slower revenue recovery.
Southwest said last week the heightened security measures drained away more than $40 million in August and September revenue, or 1.7 percent of its total $2.34 billion in quarterly revenue.
American Airlines' parent, AMR Corp., meanwhile, said the terrorist scare hurt its August and September revenue by more $50 million. While AMR's overall number was bigger than Southwest's, it's proportionately smaller, amounting to less than 1 percent of AMR's total $5.85 billion in quarterly revenue.
Another reason American Airlines and other legacy carriers have better absorbed the security impact is because they're typically the carriers of choice for corporate travel, analysts say.
With merger and acquisition activity booming again, hordes of investment bankers and lawyers are taking to the sky to close deals. While low-cost carriers often offer lower fares and such amenities as leather seats and live television in coach cabins, corporate travelers tend to pump revenue into the legacy carriers, analysts say.
"Put differently, investment bankers typically eschew Live TV and chipper flight attendants in favor of larger, more expensive seats and, well, less chipper flight attendants," JP Morgan analyst Jamie Baker wrote in a recent research report.
Looking forward, analysts say the worst of the security woes are behind Southwest, as the government eases some of the heightened security restrictions.
But several analysts say they still have a bias for legacy carriers, which are able to drive more revenue from corporate travelers looking for first-class cabins and international connections.