Airtran and Frontier, running on fumes?

[airline#5]

"Caylon analyst Ray Neidl says U.S. airlines will lose over $1B in 2008 due to high fuel prices and fare cuts. Most, he says, can make it through the year, though he's worried about AirTran (AAI) and Frontier Airlines (FRNT). Delta Air Lines (DAL), Northwest Airlines (NWA) and Southwest Airlines (LUV) are in the best shape -- especially LUV because of its low leverage and fuel hedges."

"...AirTran's cash position will fall below 10% of revenue by year end"

So does this guy have a history of slinging nonsense, hard to dispute the low cash position issue. He mentions fare cuts though, what? And what is frontiers cash position?

 

[regionaltard]

high fuel prices and fare cuts

What else is there to say?

 

[Andy]

I've read Neidl for a while. If he mentions a problem with an airline, it's probably pretty bad. He has a tendency to be less than harsh.

I noticed Airtran's cash position being light a while ago. F9 had $170M of cash on hand at the end of Dec; AAI had $318M.
The problem lies in obtaining loans or leaseback deals for aircraft to be delivered - I've been surprised to not read of order cancellations yet. The credit markets are dead and I don't know if GECAS is still aggressively loaning money.

 

[Lear70]

Yes, the sky is falling. O woe is us...

Frontier? Yeah, they've been in trouble for a while now. Very little unrestricted cash on hand and very little to do to get more.

airTran has lots of delivery slots they can sell for a profit if things get bad. Unrestricted cash may not be "stellar" but, for an airline our size, it's comparable to what UAL and others are carrying (when adjusted for fleet size and operational costs).

Not fantastic times, but I'm confident AAI will survive. May not say airTran on the side of the hull after it's all said and done, but I'm certain everyone will still be gainfully employed.

Try not to panic.

 

[PCL_128]

Our cash position increased last year by something like $50 million. We've just sold two deliveries this year to foreign carriers, and they'll probably sell more. That will further increase our cash position. I'm not too worried. Worst case scenario is a merger, IMO.

 

[bleagle]

......

 

[Sedona16]

Yes, the sky is falling. O woe is us...

Frontier? Yeah, they've been in trouble for a while now. Very little unrestricted cash on hand and very little to do to get more.

airTran has lots of delivery slots they can sell for a profit if things get bad. Unrestricted cash may not be "stellar" but, for an airline our size, it's comparable to what UAL and others are carrying (when adjusted for fleet size and operational costs).

Not fantastic times, but I'm confident AAI will survive. May not say airTran on the side of the hull after it's all said and done, but I'm certain everyone will still be gainfully employed.

Try not to panic.

Lear 70, sorry if I missed it but are you back to Airtran now?

 

[airline#5]

A merger will be the best case scenario for the industry lowest paid FO's. Barring furloughs of course.

 

[PCL_128]

No, best case scenario is negotiating our own pay raises.

 

[71driver]

We may not have that much cash on hand, but hey our planes are full..........At least that is what Orlando thinks, it seems everytime the price of oil goes up we seem to run a fare sale.....honestly these guys in Orlando are clueless!!

 

[General Lee]

Our cash position increased last year by something like $50 million. We've just sold two deliveries this year to foreign carriers, and they'll probably sell more. That will further increase our cash position. I'm not too worried. Worst case scenario is a merger, IMO.

I talked to a SWA guy walking in the E Concourse last week and he said he was just at their schoolhouse and there was talk that SWA was now talking with Airtran. I mentioned it would be interesting to see a purple and orange 717, and he stated "I think they are interested in 61 737-700s and some gates." Honest story. Who knows? He said his friend at Airtran who is a senior 737FO just passed his upgrade opportunity on the 717 to stay on the 737.


Bye Bye--General Lee

 

[PCL_128]

Nice story, but those rumors have been going around forever. Like I said, I'm not worried.

 

[Capt.LongThrust]

I talked to a SWA guy walking in the E Concourse last week and he said he was just at their schoolhouse and there was talk that SWA was now talking with Airtran. I mentioned it would be interesting to see a purple and orange 717, and he stated "I think they are interested in 61 737-700s and some gates." Honest story. Who knows? He said his friend at Airtran who is a senior 737FO just passed his upgrade opportunity on the 717 to stay on the 737.


Bye Bye--General Lee

Yeah the schoolhouse is the source for up to minute info. I like to think of it as a live CNN newsroom. I have yet to see a rumor come out of there. If he was a senior f/o as stated he could have held the 737 anyway.

 

[atpcliff]

Hi!

The SWA/AirTran merger talk has been going on for at least 3 months.

The SWA CEO announced that SWA WILL merge with someone, once the DAL/NWA merger starts the consolidation ball rolling. The SWA CEO said that with consolidation, SWA is too small.

Since then, pilots have been speculating who SWA will merge with, and AirTran has come out on top.

cliff
YIP

 

[RIDETHELIGHTING]

what do you mean 3 months, try 3 years or more.