Boyd says LCC's have their problems approaching

[T45Flyer]

In my opinion, SWA will be in or near bankruptcy by 2008-2009.

YourPilotFriend,
Just curious on what situation or issues that you see to bring you to this conclusion. Thanx.

 

[ivauir]

. The LCC cards are for the most part worthless.
.

Lots of folks seem to like the Swa card ....

 

[canyonblue]

If a passenger is only flying 2-3 times a year..he is going to have a hard time earning a ticket on Southwest too.

Yea I know, I was going to put 8-9 for the simplicity of the free ticket, but it just ends up in a p!ssing match anyway. Bottom line is if you fly enough to cover 100,000 miles or more, I would thing you could afford to just buy a ticket to Europe and not have the hassle of the blackouts.

 

[Dane Bramage]

"In my opinion, SWA will be in or near bankruptcy by 2008-2009."

In my 5+ years of reading FlightInfo, THAT is the most ridiculous statement I've ever seen here. Dude, you are NOT smart...

 

[DTW320]

They will point to Airtran, with their "point-to-point" service and their low-paid employees. They don't realize that Airtran pays it's 717 Captains more than Delta or United or Northwest pays their widebody Captains. They also don't realize that Airtran is a Hub carrier just like Delta, Northwest and United.

Sorry Abe, minor BS flag on the play.....

At least for now,even with the huge concessions, DAL and NWA pay more for every widebody CA than Airtran pays the most senior 717 CA. Same for UAL(747-400 & 777) with the exception of 767 CA which is $4/hr less than AT 12yr 717CA.

Not that any of this matters, just trivia............

 

[MLBWINGBORN]

How did the employees choke the life out of it? SWA has the highest paid employee's in the industry. Don't worry GuppyWN you can join the rest of us here in the paycut world soon. In my opinion, SWA will be in or near bankruptcy by 2008-2009.

Well..
I guess we fooled them again boys..

As long as folks think we are harmless and about to die a very public death they will continue to blame something/sombody else for their woes.

About every quarter some wise ass makes a statment like we are just a tic toc away from some disaster.

But never provides supporting data nor qualified information as to how this is supposed to be happening.

What some of you folks dont get is that we are ALWAYS close to the edge.

We plan to be CLOSE TO THE EDGE.We LIKE being close to the edge.

And we will do everything required to stay as close to the edge as possible.

Some posters on this board are like Mike Boyd.

They read the posts here,look thru then WSJ or NYT and then spout some earth shattering news that at best is fiction very loosely based on a very narrow collection of biased reports or opions.

People like Mike Boyd are nothing but hired mouth pieces that on slow days when hes not writing for a client like American or United,spout off the obvious and charge you for it while laughing all the way to the bank.

In other words..He is nothing but a hired tool.

Give him no more credit than that and you wont be surprised nor disappointed.

Give him more..You very well may find yourself at the very least embarassed and at the very worst BROKE.

 

[FlyBoeingJets]

Originally Posted by YourPilotFriend
How did the employees choke the life out of it? SWA has the highest paid employee's in the industry. Don't worry GuppyWN you can join the rest of us here in the paycut world soon. In my opinion, SWA will be in or near bankruptcy by 2008-2009.

Originally posted by Abe44
My prediction (you heard it here first!) is that LCC pilots/flight attendants/mechanics/gate agents/etc will be crying about their company coming to them for givebacks in the near future because they can't compete with the so-called "legacy" carrier costs.

C'mon guys. Delta started losing money in '01 and just declared BK in '05, almost 5 years of losses. Do you really think BK in 3 years will happen at a SWA? A carrier that now pays cash for a majority of their new aircraft (8% growth) and still posts a profit. With those pesky fuel hedges strong until the end of 2007 and some until 2009. IMHO, if you want to predict BK in 3 years pick a carrier posting losses with a less robust balance sheet.



Abe44,

Your assertion makes more sense, but I disagree. See the above paragraph. Mostly, I think the near future is too soon. The human nature factor will loom large and IF pay cuts are on the table, you are right, the whining will be louder than a T-37 during the second engine start.

Also, look at www.airlinepilotcentral.com Airtran, or any other pax carrier, does not pay narrowbody captains more than legacy widebody captains. Maybe ABX does.

 

[AA717driver]

All I know is that a huge debt load killed TWA. It wasn't an instant death but it killed them just the same.

Those carriers coming out of bankruptcy are or will be carrying a huge debt load. So does AA. Anyone is crazy to talk of real (not just paper magic) profits at these carriers until that debt load is substantially (90%) reduced along with the debt service payments. AA has to siphon $1 BILLION straight off the top of their annual revenue to service the debt. Scares me.

Personally, I have been treated better on the LCC's (SWA, Frontier and AT) than on the Legacies. That is what determines where my money goes.TC

 

[llowwelll]

They also will tell you that all LCC's are profitable. Not so, just look at Jet Blue's recently reported loss......or Airtran's latest quarter and 2006 estimate....or SWA's 2005 performance (minus their fuel hedges).

AirTran's 2006 fiscal year average profit estimate ranges anywhere from a low of $0.70 per share (AirTran's own website: http://phx.corporate-ir.net/phoenix.zhtml?c=64267&p=irol-estimates) to a high of $0.88 per share (http://moneycentral.msn.com/investor/invsub/analyst/earnest.asp?Symbol=AAI). The spread from individual analysts varies from $0.24 per share (http://finance.yahoo.com/q/ae?s=AAI) to $1.44 per share. Of course, AirTran may surprise all of the analysts and post a loss for the next fiscal year, but even with the lowest estimate for 2006, profits should approximately double FY 04 results. None of the analysts that I saw are forecasting a loss in FY 06 at AirTran.

 

[TZtoSWA]

Spoken like a management love child! If the legacies go away, how do our troops get to and from the theater? LUV, Jetblue, AirFrance, Lufthansa?

ATA, World, Omni, etc.

 

[abe44]

Sorry Abe, minor BS flag on the play.....

At least for now,even with the huge concessions, DAL and NWA pay more for every widebody CA than Airtran pays the most senior 717 CA. Same for UAL(747-400 & 777) with the exception of 767 CA which is $4/hr less than AT 12yr 717CA.

Not that any of this matters, just trivia............

I stand corrected (for now)! The bleeding may not be over yet for NWA and DAL, but you're right about the current rates.

Abe44

 

[abe44]

Originally Posted by YourPilotFriend
How did the employees choke the life out of it? SWA has the highest paid employee's in the industry. Don't worry GuppyWN you can join the rest of us here in the paycut world soon. In my opinion, SWA will be in or near bankruptcy by 2008-2009.

Originally posted by Abe44
My prediction (you heard it here first!) is that LCC pilots/flight attendants/mechanics/gate agents/etc will be crying about their company coming to them for givebacks in the near future because they can't compete with the so-called "legacy" carrier costs.

C'mon guys. Delta started losing money in '01 and just declared BK in '05, almost 5 years of losses. Do you really think BK in 3 years will happen at a SWA? A carrier that now pays cash for a majority of their new aircraft (8% growth) and still posts a profit. With those pesky fuel hedges strong until the end of 2007 and some until 2009. IMHO, if you want to predict BK in 3 years pick a carrier posting losses with a less robust balance sheet.



Abe44,

Your assertion makes more sense, but I disagree. See the above paragraph. Mostly, I think the near future is too soon. The human nature factor will loom large and IF pay cuts are on the table, you are right, the whining will be louder than a T-37 during the second engine start.

Also, look at www.airlinepilotcentral.com Airtran, or any other pax carrier, does not pay narrowbody captains more than legacy widebody captains. Maybe ABX does.

For the record, I don't predict any LCC bankruptcies anytime soon (or ever), I just feel that many of the LCC cost advantages are disappearing (pension funding, pay rates, scheduling efficiences, to name just a few). At some point in the near future, many of the legacies will be able to produce the product for as little (or almost as little) as the LCC's can, while still enjoying a revenue advantage. At that point, some LCC managers will be looking for givebacks.

Abe44

 

[SWA/FO]

LCC might have a problem, but LCCs' in general NO.

 

[abe44]

AirTran's 2006 fiscal year average profit estimate ranges anywhere from a low of $0.70 per share (AirTran's own website: http://phx.corporate-ir.net/phoenix.zhtml?c=64267&p=irol-estimates) to a high of $0.88 per share (http://moneycentral.msn.com/investor/invsub/analyst/earnest.asp?Symbol=AAI). The spread from individual analysts varies from $0.24 per share (http://finance.yahoo.com/q/ae?s=AAI) to $1.44 per share. Of course, AirTran may surprise all of the analysts and post a loss for the next fiscal year, but even with the lowest estimate for 2006, profits should approximately double FY 04 results. None of the analysts that I saw are forecasting a loss in FY 06 at AirTran.

You are correct, sir! I don't know what I was looking at when I posted. I see now that '05 was basically a break-even year (with a slight 4th quarter loss), while predictions for '06 are exactly as you say.

Abe44
....gotta stop posting here after Super Bowl parties

 

[Uppercrust]

Of course, AirTran may surprise all of the analysts and post a loss for the next fiscal year,

Which anal-cysts are these???. ... Ty Girl Webb and Fletch152??

 

[Chronic Jetlag]

Boyd puts out his two cents worth after the fact; rarely does he have anything insightful to say. He looks at numbers then he makes a few predictions. Fun to read at best but nothing worth paying for.

 

[800Dog]

ATA, World, Omni, etc.

Not enough airframes but, nice try.

 

[Marko Ramius]

One big glass of haterade for all!!!!!!!!!

Boyd is an analyst, who like all analysts from Ray Neidl to Terry Bradshaw are right sometimes and wrong others. And just like a bunch of football fans getting mad getting mad because Bradshaw or someone else picked against their team, pilots, FA's, etc get all hot and bothered when Boyd says something that gores their ox. Unfortunately these are our careers, not games, so ignoring what people are saying and railing against the messenger carries a greater penalty. Funny how no one cares when Boyd or some other analyst talks against a carrier like United, but say something about a regional or an LCC and it's Red Storm Rising. Boyd was out there railing about issues with the first gen RJ's long before it became obvious to us really smart pilots. Is he obnoxious about things, no doubt, but people only care when he's shining the light on their a$$. Personally I think he makes some extremely valid points about the issues facing the LCC sector going forward. I think what he outlines primarily are issues, and not so much conclusions just yet. That seems appropriate because this is the first time in our industry that LCC's have played such a prominent role in the overall airline landscape, these issues are new to them, and it remains to be seen how their management teams will respond/handle them. It didn't look to me like he was forecasting mass BK's or the end of the world.

Gordon Bethune pointed out where this was headed back around late 2002 early 2003, when he started to question what would happen when the LCC's recieved so many aircraft that they had to fly them on less than optimum routes revenue wise, increasingly bumping into each other, all converging with restructured legacy carriers. I remember reading about in one of those industry forecast issues in Aviation Week. No one really cared because pilots and most analysts are alike in this manner: we don't care or believe unless it's right in front of eyes-anything else is bs. Air Transport World has been running various articles the last year or so questioning certain aspects of the LCC model. Beyond the aforementioned fleet issues, they also pointed to LCC's in parts of Asia failing, oversaturation and failures in some European markets, and the potential for Indian and Middle Eastern carriers being too exuberant. Their opinion seemed to be the primary reason it hadn't happened in the US yet was that the overall market was larger so it could support a higher percentage of LCC carriers before the issues showed, and the incompetence of US Network major carriers management vs. their counterparts across the world. They predicted the same convergence of the issues that Bethune, AvWeek and others did. For a good portion of 2004 both the CEO's at Southwest and AmWest pointed out that they felt the US had a few too many LCC's. Their moves since that time pretty much jibe with their leaders opinions. Airtran tried to get in on some of those moves, so it wouldn't surprise me if their management feels that way as well. Boyd isn't alone on this one, so why is everyone so mad. We're all just employees anyway, so we should just take in all the info and make the decisions or adjustments to our respective careers.

 

[FlyBoeingJets]

Very good post, Marko!!

I thought last quarter was going to be great for all LCCs. It's failure to deliver is very telling. We had great load factors everywhere yet JetBlue, Alaska, and even Airtran did not do well. (Yes I know they broke even, but how do you not make money while Delta is in such a retrenchment mode?) SWA didn't make as much as they should have. The legacies were constrained and couldn't cut fares further. '06 looks like a great year for LCCs but it may be the last before the coming storm. It may not even be as great as predicted.

We are definitely about to bump into each other and blood will be spilled. I predict the number of LCCs, including the really small players, to be cut in half in 3-4 years. Hopefully thru mergers but there will likely be some liquidations.

 

[Ty Webb]

Which anal-cysts are these???. ... Ty Girl Webb and Fletch152??

Yawn . . . . . you know, Crustypants, you started off OK, but lately, your stuff has just been so lame. . . . maybe you should just give it a rest for a while.