tredding@swa
SWA F/O
- Joined
- Jul 1, 2002
- Posts
- 294
TURBULENT SKYS - AILING AIRLINES
MSNBC.com
http://www.msnbc.com/news/651118_asp.htm?vts=032720030540
March 25 — It's been a terrible two years for America's airlines. Since the terrorist attacks of Sept. 11, 2001, they have lost upwards of $18 billion and shed 100,000 workers. People are just more reluctant to fly at a time of war and terror alerts.
The slide in bookings has already contributed to bankruptcy filings by the second and seventh largest U.S. carriers. And the biggest carrier -- American Airlines -- may be on the brink of suffering the same fate.
If the war with Iraq is a prolonged one, and the downturn in travel persists, a slew of smaller airlines may also pack it in. It would not be a unique war-time experience: In the aftermath of the first Gulf War, Eastern Airlines, Pan Am, Midway and Markair all sputtered and failed.
This time around, the pressures on airlines are even more intense. A weak economy, a bear market, and rising jet fuel prices have all ganged up with post-Sept. 11 anxiety to tax the industry like never before. Airlines could lose $10 billion to $13 billion this year, industry experts predict. And they say the number of layoffs could match those already announced in the past year-and-a-half.
A government aid package may be some airlines only hope. But that is a political hot potato with many airline critics arguing that mismanagement dating back to well before Sept. 11 is at the heart of the industry's troubles.
Click an airline above for MSNBC's company-by-company analysis of the industry.
Gary A. Seidman
MSNBC
--------------------------------------------------------------------------------
UNITED AIRLINES
Airline status:
The world’s second largest airline filed for Chapter 11 bankruptcy protection on Dec. 9, 2002. It is pursuing a dual strategy of slashing labor costs and creating a new discount airline as a way to emerge from bankruptcy.
Financial results:
United’s parent, UAL, reported a $1.5 billion loss for the fourth quarter 2002, including a $326 million non-cash tax expense; pre-tax loss was $1.1 billion for the quarter.The company reported a $3.2 billion loss for all of 2002 on both a pre- and post-tax basis. It anticipated an operating loss of about $870 million for the first three months of 2003.
Employment:
On March 21, the airline’s unions were told United was laying off 1,100 mechanics and 2,300 flight attendants. United had 77,418 full time employees and 6,559 part time employees in January, 2002. In December 2002, it had 75,380 full time and 6,694 part time employees, according to the Air Transport Association.
Traffic:
United carries about 17 percent of the industry’s total traffic. In March, United said it will cut its flight schedule to 1,574 a day, not counting the 1,478 operated by its regional partners as United Express flights.
United Airlines
Price Change
0.88 +3.53%
Data:
CNBC on MSN Money and S&P Comstock 20 min. delay.
If the airline does not emerge from Chapter 11, the biggest beneficiary would likely be American, which has a competitive overlap at Chicago's O'Hare Airport and on transcontinental routes. Northwest, which competes on Pacific routes, would also benefit. JetBlue might begin service into O'Hare Airport from New York.
Fuel costs:
United has not hedged its fuel costs, which could cost the company tens of millions of dollars a month, analysts say.
Executive compensation:
Glenn Tilton, 54, was appointed CEO in 2002. Compensation data were not available.
Snapshot:
War-related financial issues have damaged the chances United will emerge from Chapter 11 quickly, or even at all. The airline, which carried an average of 210,000 passengers per day in 2001, is facing not only higher fuel costs and reduced passenger traffic due to war, but also greater reluctance by travelers to book given the uncertainty of the airline’s future.If the airline does not emerge from Chapter 11, its Pacific routes and routes to London's Heathrow International Airport are the most attractive assets and could be acquired by one of the stronger survivors such as Delta. Terminal space and gates at hubs in Chicago, Denver, and San Francisco are also valuable assets
--------------------------------------------------------------------------------
AMERICAN AIRLINES
Airline status:
American Airlines, AMR Corp's principal subsidiary, is the most financially troubled of the major, solvent carriers and may have difficulty avoiding Chapter 11.
Financial results:
American projected a daily cash burn of $5 million for the first quarter of 2003 (an amount that has likely grown since the prediction). American reported a fourth quarter 2002 net loss of $529 million, or $3.39 per share, compared with a fourth quarter net loss of $734 million before special items a year earlier.For all 2002, it reported a net loss of $2 billion before special items, and $3.5 billion after special items.For 2001, the company reported a net loss of $1.4 billion before special items, and $1.8 billion after special items.
Employment:
American had 90,518 full time employees and 14,972 part time employees in January, 2002. In December 2002 it had 88,256 full time and 13,857 part time employees, according to the Air Transport Association.
Traffic:
American said it boarded 6.4 million passengers in February, down 4.3 percent from a year earlier.
Fuel costs:
American has hedged 40 percent of its first-quarter 2003 needs at $23 per barrel (32 percent of total 2003 needs at $23 a barrel), according to Deutsche Bank analysts.
Executive compensation:
Donald Carty, 55, Chairman, CEO, earned $1.3 million in 2001.
American Airlines (AMR)
Price Change
2.30 +2.22%
Data:
CNBC on MSN Money and S&P Comstock 20 min. delay.
His stock options were valued at almost $6 million in 2001.
Snapshot:
CEO Carty warned in March that the Iraq war will make it more difficult to remain solvent. About 12 percent of American’s revenues are derived from trans-Atlantic routes. Standard and Poor’s says American is at greater risk than some other airlines during the war because its European routes are concentrated in the U.K., which is likely to see a greater drop in traffic than in Continental Europe. In addition, AMR's alliance partner, British Airways, also is expected to see a significant decline in bookings.
--------------------------------------------------------------------------------
CONTINENTAL AIRLINES
Airline status:
The fifth largest U.S. airline is financially wobbly. In March it said it needs to cut $500 million in annual operating expenses.
Financial results:
It recently estimated about $1.5 million daily cash burn. At the end of February, the company said it had approximately $1.2 billion in cash and short-term investments. Continental reported a fourth quarter 2002 net loss of $109 million, a 27 percent improvement over the fourth quarter 2001 loss of $149 million. Continental's net loss for the full year was $451.
Employment:
On March 19, Continental said it will reduce its workforce by approximately 1,200 employees by year-end. The cuts are in addition to the 4,300 employees currently on furlough or leaves of absence. Company said 25 percent of top management will be let go.Continental had 31,842 full time employees and 7,756 part time employees in January, 2002. In December 2002 it had 32,466 full time and 8,149 part time employees, according to the Air Transport Association.
Traffic:
In February 2003, Continental flew 4 billion mainline jet revenue passenger miles and 5.8 billion mainline jet available seat miles systemwide,
Continental Airlines
Price Change
5.83 -0.17%
Data:
CNBC on MSN Money and S&P Comstock 20 min. delay.
resulting in a traffic decrease of 6.6 percent and a capacity decrease of 2.3 percent as compared to February 2002.
Fuel costs:
Continental bought disaster insurance for its fuel needs, capping 95 percent of its first-quarter fuel at $33 a barrel, according Deutsche Bank analysts.
Executive compensation:
Gordon Bethune, 60, Chairman, CEO, earned in excess of $4.2 million in 2001.
Snapshot:
CEO Bethune said in March that if $500 million in annual expenses can be reduced, the airline will break even in 2004. He said, however, that a protracted war in Iraq would result in further cuts in domestic and international service.
--------------------------------------------------------------------------------
MSNBC.com
http://www.msnbc.com/news/651118_asp.htm?vts=032720030540
March 25 — It's been a terrible two years for America's airlines. Since the terrorist attacks of Sept. 11, 2001, they have lost upwards of $18 billion and shed 100,000 workers. People are just more reluctant to fly at a time of war and terror alerts.
The slide in bookings has already contributed to bankruptcy filings by the second and seventh largest U.S. carriers. And the biggest carrier -- American Airlines -- may be on the brink of suffering the same fate.
If the war with Iraq is a prolonged one, and the downturn in travel persists, a slew of smaller airlines may also pack it in. It would not be a unique war-time experience: In the aftermath of the first Gulf War, Eastern Airlines, Pan Am, Midway and Markair all sputtered and failed.
This time around, the pressures on airlines are even more intense. A weak economy, a bear market, and rising jet fuel prices have all ganged up with post-Sept. 11 anxiety to tax the industry like never before. Airlines could lose $10 billion to $13 billion this year, industry experts predict. And they say the number of layoffs could match those already announced in the past year-and-a-half.
A government aid package may be some airlines only hope. But that is a political hot potato with many airline critics arguing that mismanagement dating back to well before Sept. 11 is at the heart of the industry's troubles.
Click an airline above for MSNBC's company-by-company analysis of the industry.
Gary A. Seidman
MSNBC
--------------------------------------------------------------------------------
UNITED AIRLINES
Airline status:
The world’s second largest airline filed for Chapter 11 bankruptcy protection on Dec. 9, 2002. It is pursuing a dual strategy of slashing labor costs and creating a new discount airline as a way to emerge from bankruptcy.
Financial results:
United’s parent, UAL, reported a $1.5 billion loss for the fourth quarter 2002, including a $326 million non-cash tax expense; pre-tax loss was $1.1 billion for the quarter.The company reported a $3.2 billion loss for all of 2002 on both a pre- and post-tax basis. It anticipated an operating loss of about $870 million for the first three months of 2003.
Employment:
On March 21, the airline’s unions were told United was laying off 1,100 mechanics and 2,300 flight attendants. United had 77,418 full time employees and 6,559 part time employees in January, 2002. In December 2002, it had 75,380 full time and 6,694 part time employees, according to the Air Transport Association.
Traffic:
United carries about 17 percent of the industry’s total traffic. In March, United said it will cut its flight schedule to 1,574 a day, not counting the 1,478 operated by its regional partners as United Express flights.
United Airlines
Price Change
0.88 +3.53%
Data:
CNBC on MSN Money and S&P Comstock 20 min. delay.
If the airline does not emerge from Chapter 11, the biggest beneficiary would likely be American, which has a competitive overlap at Chicago's O'Hare Airport and on transcontinental routes. Northwest, which competes on Pacific routes, would also benefit. JetBlue might begin service into O'Hare Airport from New York.
Fuel costs:
United has not hedged its fuel costs, which could cost the company tens of millions of dollars a month, analysts say.
Executive compensation:
Glenn Tilton, 54, was appointed CEO in 2002. Compensation data were not available.
Snapshot:
War-related financial issues have damaged the chances United will emerge from Chapter 11 quickly, or even at all. The airline, which carried an average of 210,000 passengers per day in 2001, is facing not only higher fuel costs and reduced passenger traffic due to war, but also greater reluctance by travelers to book given the uncertainty of the airline’s future.If the airline does not emerge from Chapter 11, its Pacific routes and routes to London's Heathrow International Airport are the most attractive assets and could be acquired by one of the stronger survivors such as Delta. Terminal space and gates at hubs in Chicago, Denver, and San Francisco are also valuable assets
--------------------------------------------------------------------------------
AMERICAN AIRLINES
Airline status:
American Airlines, AMR Corp's principal subsidiary, is the most financially troubled of the major, solvent carriers and may have difficulty avoiding Chapter 11.
Financial results:
American projected a daily cash burn of $5 million for the first quarter of 2003 (an amount that has likely grown since the prediction). American reported a fourth quarter 2002 net loss of $529 million, or $3.39 per share, compared with a fourth quarter net loss of $734 million before special items a year earlier.For all 2002, it reported a net loss of $2 billion before special items, and $3.5 billion after special items.For 2001, the company reported a net loss of $1.4 billion before special items, and $1.8 billion after special items.
Employment:
American had 90,518 full time employees and 14,972 part time employees in January, 2002. In December 2002 it had 88,256 full time and 13,857 part time employees, according to the Air Transport Association.
Traffic:
American said it boarded 6.4 million passengers in February, down 4.3 percent from a year earlier.
Fuel costs:
American has hedged 40 percent of its first-quarter 2003 needs at $23 per barrel (32 percent of total 2003 needs at $23 a barrel), according to Deutsche Bank analysts.
Executive compensation:
Donald Carty, 55, Chairman, CEO, earned $1.3 million in 2001.
American Airlines (AMR)
Price Change
2.30 +2.22%
Data:
CNBC on MSN Money and S&P Comstock 20 min. delay.
His stock options were valued at almost $6 million in 2001.
Snapshot:
CEO Carty warned in March that the Iraq war will make it more difficult to remain solvent. About 12 percent of American’s revenues are derived from trans-Atlantic routes. Standard and Poor’s says American is at greater risk than some other airlines during the war because its European routes are concentrated in the U.K., which is likely to see a greater drop in traffic than in Continental Europe. In addition, AMR's alliance partner, British Airways, also is expected to see a significant decline in bookings.
--------------------------------------------------------------------------------
CONTINENTAL AIRLINES
Airline status:
The fifth largest U.S. airline is financially wobbly. In March it said it needs to cut $500 million in annual operating expenses.
Financial results:
It recently estimated about $1.5 million daily cash burn. At the end of February, the company said it had approximately $1.2 billion in cash and short-term investments. Continental reported a fourth quarter 2002 net loss of $109 million, a 27 percent improvement over the fourth quarter 2001 loss of $149 million. Continental's net loss for the full year was $451.
Employment:
On March 19, Continental said it will reduce its workforce by approximately 1,200 employees by year-end. The cuts are in addition to the 4,300 employees currently on furlough or leaves of absence. Company said 25 percent of top management will be let go.Continental had 31,842 full time employees and 7,756 part time employees in January, 2002. In December 2002 it had 32,466 full time and 8,149 part time employees, according to the Air Transport Association.
Traffic:
In February 2003, Continental flew 4 billion mainline jet revenue passenger miles and 5.8 billion mainline jet available seat miles systemwide,
Continental Airlines
Price Change
5.83 -0.17%
Data:
CNBC on MSN Money and S&P Comstock 20 min. delay.
resulting in a traffic decrease of 6.6 percent and a capacity decrease of 2.3 percent as compared to February 2002.
Fuel costs:
Continental bought disaster insurance for its fuel needs, capping 95 percent of its first-quarter fuel at $33 a barrel, according Deutsche Bank analysts.
Executive compensation:
Gordon Bethune, 60, Chairman, CEO, earned in excess of $4.2 million in 2001.
Snapshot:
CEO Bethune said in March that if $500 million in annual expenses can be reduced, the airline will break even in 2004. He said, however, that a protracted war in Iraq would result in further cuts in domestic and international service.
--------------------------------------------------------------------------------
