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.

 

[jehtplane]

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

Well if it comes from your pie hole than it must be true

 

[PHXFLYR]

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!!

Not as clueless as some airline managers I've met in PHX or some pilots in PHL for that matter.

PHXFLYR

 

[Ty Webb]

AirTrans actually has a pretty comfortable bankroll compared to what we are used to . . . . It wasn't that long ago that we had $130 million. Sure, oil was a lot cheaper, but our highest losses (real losses!) in the worst quarters seem to be in the $10 million range, and we're making money on an annual basis. Not very worried here.

As for the SWA rumors . . . . I would expect the first announcement to be SWA's purchase of ATA's pax ops . . . . . possibly followed by a deal of some sort with AirTran in the event of a "feeding frenzy" in the industry. If SWA/AirTrans doesn't happen, look for us picking up pieces of a dismembered Midex (sorry, guys) and possibly something on the Sun Country scene (sorry again, guys, just a prediction).

We'll see. . . . I think the smartest combo would have been the Midex/AirTran/Alaska deal our management was drumming up, but they didn't count on "Baghdad Carol" and "Uncle Timmy"'s bunker mentality . . . . not to mention AK's bristling at the suggestion of merging with an airline they had never heard of (I'm talking about management here).

Cinch up your harnesses, folks, the ride may get a little bumpy ahead . . .

TW

 

[General Lee]

Well if it comes from your pie hole than it must be true

Let me guess, you fly a 717? Hey, it is a true story. Whether or not Southwest will do anything with or to Airtran, I don't know or care. I just stated what the guy told me.

Bye Bye--General Lee

 

[AV80R]

I must say I'm surprised SWA didn't buy Aloha now that they're canceling their pax flying. Since SWA wanted to start flying internationally I figured Hawaii trips on their own instead of on ATA would've been a good start wouldn't you say?

Btw – I wish the very best to all Aloha employees - have flown on you guys many times and always enjoyed your top notch service.

 

[jehtplane]

Let me guess, you fly a 717?

Bye Bye--General Lee

Negative

 

[fletch717]

Let me guess, you fly a 717? Hey, it is a true story. Whether or not Southwest will do anything with or to Airtran, I don't know or care. I just stated what the guy told me.

Bye Bye--General Lee

Whoever told you that is a spaz. It is highly unlikely that southwest will buy anyone in the near future. Southwest has some internal issues to work through, and that will take some time. Another point if we were to merge with anyone, I can't see parking 87 airplanes overnight. I'm sure stranger things have happend. That does'nt make business sense. If and when a deal goes down, and if planes are parked and furloughs are triggered. It will be in seniority order, just like the big D. If your friend is a check airman on the 73 and he is junior to me, which he is. I'll bid 73 and he is gone in seniority order.

 

[gt1900]

The AAI website predicts a loss of about $26million for 2008 for AAI. The earnings estimate was updated on 3/25. I don't think a loss is good, but Im pretty sure AAI could handle a $26 million loss for 1 or 2 years. Lets just hope it doesn't get worse then that.

 

[DrunkIrishman]

Is it possible that people are confusing ATA with AirTran like has happened before (as it relates to a SWA merger/buyout)?

 

[On Your Six]

Well if it comes from your pie hole than it must be true

Quit being an a$$. GL was just reporting what he had heard. This is a rumor/information board by the way.

Being acquired by SWA wouldn't be such a bad thing IMHO (depending upon how the integration would be worked out if it actually happened ).

 

[redflyer65]

Unfortunately, I see Frontier being first out the door before Airtran. Not that Airtran is doing that great, but they do have the cash to sustain them for a longer period of time.

We'll see....

 

[meanstreak]

The AAI website predicts a loss of about $26million for 2008 for AAI. The earnings estimate was updated on 3/25. I don't think a loss is good, but Im pretty sure AAI could handle a $26 million loss for 1 or 2 years. Lets just hope it doesn't get worse then that.

Does that $26 million include the aircraft slots we sold for a profit? Also I was told if we dip down to $250 million we have to start paying cash for everything (no credit).

Four different people now have also told me Dave Van.... in the training house has been telling people that Airtran is looking to sell the 10 717 we own. When I start to hear the same news from different people how can I not worry. It's just un-fu***** believable we haven't raised our fares but we can still have an April Fools sale.

 

[Aubie]

Fletch, what exactly are these "internal issues" at SWA you mentioned?

Good luck to all the Aloha people.

 

[FIREMAN]

Do we own 10 717s? I think most all are leased.
There is a break down of what we own (bank owned) and what is leased in the yearly report on the web.
I can not remember the 717 side but we only lease 23 737. And we already have the financing for the next 9 737s.

 

[fletch717]

Fletch, what exactly are these "internal issues" at SWA you mentioned?

Good luck to all the Aloha people.

The recent grounding of aircraft due to the lack of inspections has created a knee jerk reaction by the FAA. I promise you the feds are in Dallas looking at every scrap of paper, careers are over for some people on both sides. With all that said the last headline anyone at Southwest wants in the papers is
"Today Southwest Airline who recently gounded several aircraft over cracks in the fuselage bought AirTran Airways formerly valujet which crashed in the florida everglades killing all 106 people."
Its BS but that is what would happen. Southwest is a good Airline but right now they have a PR problem. The general public will continue to fly SW, But right now I believe SW mgmt does'nt want any more bad press.