Skip to comments.Major turbulence ahead for airlines (More major airlines about to go under? ThX Dems&econuts!)
Posted on 06/26/2008 12:42:12 PM PDT by NormsRevenge
New York - America's aviation system could be at risk of collapsing by the beginning of next year.
.. there is agreement among airline officials and analysts that Washington and the two presidential candidates need to recognize the severity of the crisis and take some action now to avert an economically crippling collapse in the near future.
"Unless something is done to move toward some kind of fix, we're going to see every one of our major airlines in bankruptcy," says Robert Crandall, former chairman of American Airlines. ...
As a result of the spike upward in oil prices, almost every major airline is now losing millions of dollars each quarter.
Unless the price of oil comes down, most are expected to run out of cash by the end of this year or the beginning of next. ...
Fuel costs used to be the airlines' second-largest operating expense behind personnel costs. Now it's their top expense, accounting for between 30 to 50 percent of airlines' operating budgets, according to the Air Transport Association, which represents the major carriers. The airlines are hindered by several things in hiking prices to offset fuel costs: First, they sell most of their tickets in advance, so most people flying this summer are using tickets that were bought before the recent jump in oil prices. So most of the time that planes take off this summer, the airlines will lose money even when the planes are packed. The major airlines are also constrained by stiff competition from low-cost carriers like Southwest, as well as by the fear that if prices go too high, people will simply stay home.
The solution, from the point of view of the major airlines, is to bring the cost of oil down.
(Excerpt) Read more at news.yahoo.com ...
What a concept... Only from the Left.
In less than 2 years, the list of actions, or should I say, inactions by liberals and Dems has laid body blow after body blow to this nation and its economy chasing clean air and blue skies, all the while, almost doubling both the price of food and fuel.
Thanks, Pelosi, Reid, Schwarznegger, Soros and al your puppets.. Thanks Sierra Club, NRDC, GanGReen.. a real bang-up job .
It makes ya wonder whose side they are on. It certainly isn't on the side of the poor and middle class as they all claim ad nauseum.
“almost every major airline is now losing millions of dollars each quarter.”
Almost? Who isn’t? Southwest? Jet Blue?
not sure on JetBlue.. JetBlue can afford it anyway, Soros owns a big chunk..
Southwest did load up on futures jet fuel-wise,, one of the few that did.. but even now, you can only stretch a balloon so far..
The airlines are once again extending their hands to the government begging for another taxpayer bailout, a ritual that seems to have become about as predictable as the arrival of the election season.
This has a whole lot less to do with the price of jet fuel as it does an outdated and flawed business model, excessive labor cost, and absolutley embarrassing level of customer dis-service.
Funny how I don't hear Southwest squealing for their turn at the gubmint teat.
I totally agree!!! The Democrat Congress has destroyed the hopes of an entire generation of young people. I wonder what the Founding Fathers would do if they could see this.
“Once you let that camel’s nose in the tent, it’s going to set up housekeeping,”
ain’t that the truth
Yeh, and I wonder who that young generation of young people will be casting their vote for in November.
“In less than 2 years, the list of actions, or should I say, inactions by liberals and Dems has laid body blow after body blow to this nation and its economy chasing clean air and blue skies, all the while, almost doubling both the price of food and fuel.
I totally agree!!! The Democrat Congress has destroyed the hopes of an entire generation of young people. I wonder what the Founding Fathers would do if they could see this.”
They would shoot first and ask questions later
Gee, sounds like a plan to me.
Someone should duct tape Algore to a heavy chair, tape his eyelids open and play this 7 minute loop for several weeks:
(Worth copying and pasting if it doesnt come thru as HTML)
There is a lot less air traffic this summer. The Fairbanks International Airport has been very busy in the past, but not now. It’s hard to overlook, being in the traffic pattern and not far from the airstrip. Many fewer jets, possibly more props, but not many small planes.
HE DOES? Damn, I like jetBlue!
I love the phrase "embarrassing level of customer dis-service." But, that's not the biggest problem right now. Its a bad business model. I've never understood airlines as a business. They are highly leveraged, and there's no end to their capital expenditures. If they didn't exist, it would have been necessary for Boeing to invent them.
With respect to fuel costs, however, there's a slightly different explanation, which comes from the insurance business (among others--farmers do it too in the commodities markets). In the insurance business, you time-match the duration of assets and liabilities. So, if you are selling tickets forward, you should be hedging fuel to the mean duration of the tickets you've hedged forward.
The problem with hedging is that there is a cost involved--no one wants to be the first with more expensive tickets. There's no obvious benefit to the traveler (except that your airline will be there when you need to travel), since he doesn't usually factor in the bankruptcy of his carrier.
As for the dis-service, I agree its annoying and unnecessary. Remember when you met a better class of people traveling by air than by rail or Greyhound?
close to 11% if I recall correctly, never flew them my self. wife did, she liked ‘em too..( but I kept her anyway.) ;-)
I miss flying and I don’t. I miss the older airlines.. eastern, braniff, pan-am. I am not a sardine. :]
I miss TWA - eventhou I knew the pilot on TWA 800. (That was a terrorist attack)