9 Billion Loss in 2008

[Old School]

As crude oil tops $110 per barrel, a worried hum heard in the U.S. airline industry in recent months is now building into a shrill alarm. The latest alert came Mar. 12 when JPMorgan Chase (JPM) downgraded seven large U.S. airlines and suggested the "best-case" scenario for the industry is a $4 billion loss for the year. "And if demand trends mirror prior recessions, a $9 billion loss can't be ruled out," JPMorgan analyst Jamie Baker wrote.

 

[jke406]

Raise ticket prices NOW!

anybody have the McJobs website address?

 

[On Your Six]

Netjets is hiring!

 

[tzskipper]

Raise ticket prices NOW!

It would seem that in this marketplace, the only way an increase in ticket prices (demand) can occur is if there is a decrease in "supply" (i.e.; seats). Once consolidation begins, so will the downsizing.

Who will be first to be thrown under the bus?

Skipper

 

[jetflyer]

It would seem that in this marketplace, the only way an increase in ticket prices (demand) can occur is if there is a decrease in "supply" (i.e.; seats). Once consolidation begins, so will the downsizing.

Who will be first to be thrown under the bus?

Skipper

Will it take someone going out of business to decrease the supply of seats so ticket prices will rise?

In my opinion the government made it worse for every airline by allowing US Airways to stay alive. That made it worse for Delta and then Northwest who then were also allowed to continue.

Somebody is going to have to go out of business in my opinion and the planes can not be just snapped up by the current airlines but allowed to sit in the desert.

 

[Tanker Clown]

jetflyer, good points.

The question is, who's going to go? Who's gonna be the first to fall?

Looks like ATA has a foot in the grave.

 

[PCL_128]

In my opinion the government made it worse for every airline by allowing US Airways to stay alive. That made it worse for Delta and then Northwest who then were also allowed to continue.

It goes back much further than that. This whole industry mess is a result of deregulation. It was the worst thing to ever happen to the companies, the employees, and the consumers. If the airlines really do go back into a cycle of massive losses this soon after barely starting a recovery, then we might finally see a return of the CAB and regulation. We're well past due for it.

 

[swingtrader]

How has deregulation been bad for the consumer? I haven't done any research on the subject but I would guess that ticket prices have been pretty flat relative to inflation over the past 15-20 years.

 

[regionaltard]

How has deregulation been bad for the consumer? I haven't done any research on the subject but I would guess that ticket prices have been pretty flat relative to inflation over the past 15-20 years.

I'd guess that a transcon ticket probably costs less than half of what it did 30 years ago in real dollars. "Flat" would represent a colossal improvement.

 

[PCL_128]

Ticket prices haven't really gone down much at all when accounting for inflation, but the product has suffered immeasurably. Lots of smaller cities have completely lost airline service, where they once had a 727. Those that have retained service have seen it downgraded to turboprops or cramped RJs except for the largest cities. When I was a kid, a USAir 737 took me from tiny little Charlie-West to CLT. Now? Not a mainline airplane in sight. The consumer has suffered, just not anywhere near the degree that we have.

 

[regionalcap]

How has deregulation been bad for the consumer? I haven't done any research on the subject but I would guess that ticket prices have been pretty flat relative to inflation over the past 15-20 years.

http://www.airlines.org/economics/finance/AirTravelVersusAverageBasket.htm

The chart didn't post correctly but here is the link. Ticket prices per mile grew by 1.5 times since 1978 while everything else has more than doubled.

Price of Air Travel versus Other Goods and Services



ITEM -- U.S. Good or Service Unit 1978* 1990 2006 GROWTH College Tuition: Public1 Year $688 $1,908 $5,836 8.5 x College Tuition: Private1 Year $2,958 $9,340 $22,218 7.5 x Prescription Drugs2 Index 61.6 181.7 363.9 5.9 x New Single-Family Home3 Home $55,700 $122,900 $246,500 4.4 x New Vehicle6 Vehicle $6,470 $15,900 $28,450 4.4 x Unleaded Gasoline7 Gallon $0.67 $1.16 $2.59 3.9 x CPI (Urban-All Items)2 CPI-U 65.2 130.6 201.6 3.1 x Movie Ticket8 Ticket $2.34 $4.22 $6.55 2.8 x First-Class Postage5 Stamp $0.15 $0.25 $0.39 2.6 x Whole Milk2 Index 81.0 124.4 181.6 2.2 x Grade-A Large Eggs2 Dozen $0.82 $1.01 $1.31 1.6 x Air Travel: International4 Mile 7.49¢ 10.83¢ 11.85¢ 1.6 x Air Travel: Domestic4 Mile 8.49¢ 13.43¢ 13.00¢ 1.5 x

 

[Aubie]

PCL-

Deregulation the problem? Have you studied much on the subject of economics, or on the history of the airline industry? Price-fixing, inefficiency, but comparatively higher pilot salaries doesn't equate to economic health and profitability. The biggest difference between that that era and this one is the price of oil.

 

[Yuppyguppy]

in my humble opinion i think mergers are guarateed.

 

[instructordude]

As pilots we have zero control over the cost of oil, the dollar and recessions. We do have control over the second highest cost for our companies, wages. Now I'm not saying to run to the company and say please cut our wages but it might be the time to really think hard about a second round of paycuts. Lets discuss it amongst our Union Leadership and figure out the best strategy. Maybe it is regulation? maybe a national line of seniority? Lets get our collective voices heard to our great union. I don't want a paycut or sudden change but sometimes we have no choice.

 

[PCL_128]

You've gotta love instructordude. Always entertaining.

 

[Tanker Clown]

You've gotta love instructordude. Always entertaining.

He must work for ALPA.

 

[jke406]

He must work for ALPA.

He's far too clever for that.

 

[Goren]

There is no plan at any major airline (from a management perspective) that can deal with $110 per barrel oil...more than one airline will be under the bus before it is over.

 

[regionalcap]

instructordude,
Are you freakin serious?

 

[Max Powers]

Ticket prices haven't really gone down much at all when accounting for inflation, but the product has suffered immeasurably. Lots of smaller cities have completely lost airline service, where they once had a 727. Those that have retained service have seen it downgraded to turboprops or cramped RJs except for the largest cities. When I was a kid, a USAir 737 took me from tiny little Charlie-West to CLT. Now? Not a mainline airplane in sight. The consumer has suffered, just not anywhere near the degree that we have.

Is your head completely up your rear or just partially?

 

[instructordude]

instructordude,
Are you freakin serious?

I am very serious about my job security, security that is dependent upon my companies financial success.

 

[olympus593]

Congrat on being the biggest tool on FI!!!

 

[crxpilot]

As pilots we have zero control over the cost of oil, the dollar and recessions. We do have control over the second highest cost for our companies, wages. Now I'm not saying to run to the company and say please cut our wages but it might be the time to really think hard about a second round of paycuts. Lets discuss it amongst our Union Leadership and figure out the best strategy. Maybe it is regulation? maybe a national line of seniority? Lets get our collective voices heard to our great union. I don't want a paycut or sudden change but sometimes we have no choice.

You........are an absolute disgrace and embarassment for our profession.

 

[crxpilot]

It goes back much further than that. This whole industry mess is a result of deregulation. It was the worst thing to ever happen to the companies, the employees, and the consumers. If the airlines really do go back into a cycle of massive losses this soon after barely starting a recovery, then we might finally see a return of the CAB and regulation. We're well past due for it.

I think most recently it started with United's bankruptcy. They should have been forced to pony up for the pensions and what not or die. Everybody else had to follow suit from that point on.

 

[regionalcap]

Instructordude,

So you (as a supposed Delta pilot) want the pilot group to take another cut on top of the previous 46% cut. You are out of your mind. The pilot group is working to actually get some money back. I am ashamed if you are actually a fellow delta pilot.

 

[Tanker Clown]

Instructordude,

So you (as a supposed Delta pilot) want the pilot group to take another cut on top of the previous 46% cut. You are out of your mind. The pilot group is working to actually get some money back. I am ashamed if you are actually a fellow delta pilot.

Delta guys don't want the money back that bad. Just look at that reject General Lee. He spends all his time bragging about how great Delta is. There is no way that he's going to ruffle any feathers to get money back.

I bet if the company went to the pilots asking for more, the Delta guys would give it without much of a fight. It's in their DNA.

 

[jke406]

I'm inclined to agree with this guy. Their MEC is giving away the store.

What happened to "TAKE IT BACK!!"

It turned into "may we please have a tiny bit back, if it's not too much to ask. and then you can give the rest to NWA pilots."

 

[Tanker Clown]

I'm inclined to agree with this guy. Their MEC is giving away the store.

What happened to "TAKE IT BACK!!"

It turned into "may we please have a tiny bit back, if it's not too much to ask. and then you can give the rest to NWA pilots."

It was replaced long ago with "GIVE IT BACK." The pilots at Delta felt this was a much easier and less contintious slogan. So far it's worked as advertised.

 

[instructordude]

Instructordude,

So you (as a supposed Delta pilot) want the pilot group to take another cut on top of the previous 46% cut. You are out of your mind. The pilot group is working to actually get some money back. I am ashamed if you are actually a fellow delta pilot.

I'm not saying a paycut is necessary but we have to be responsible in these times. If a paycut is necessary then so be it. Maybe it is time we learned how to live within our means and survive on 75K per year. That is a lot of cash.

 

[Tanker Clown]

I'm not saying a paycut is necessary but we have to be responsible in these times. If a paycut is necessary then so be it. Maybe it is time we learned how to live within our means and survive on 75K per year. That is a lot of cash.

I didn't think Delta FO's made that much. Wow, maybe they are due for another cut.