DL & NWA will probably file before Oct 17

DIAMONDDD

Well-known member
Joined
Nov 28, 2001
Posts
463
Total Time
some
Hey K-Mart, that Avatar of yours is spooky. I swear it tried to talk me into sending in $150.00 as I was looking at it.
 

skykid

On Point
Joined
Jan 24, 2002
Posts
759
Total Time
6000
Good article. Problem is, Northwest and Delta would both be extremely complicated cases in Ch11 and would be hurt tremendously by the new procedures. Here's hoping it doesn't work out that way.
 

~~~^~~~

Well-known member
Joined
Dec 21, 2001
Posts
6,137
Total Time
7,500+
Yep and with oil topping $60 a barrel....

The problem with oil is not only tight supply, it is made worse by the fact the dollar is being devalued by Bush's monetary policies. Bush intended this as a way to pump US exports and domestic manufacturing. But, the US is no longer a manufacturing economy. Our exports have not increased much at all, while our tastes for foreign automobiles and luxury goods are continuing to be fed by cheap credit.

Much of the increase in the cost of oil is a result of the dollar’s decrease in value. The Dollar has lost 38% to the Euro since 2002. If oil prices were 38% lower, our airlines would be in much better shape.

As is, I think employees and creditors are tapped out. There is not enough money to float Delta a lot longer. Sources like the spin off of ASA ( and its fleet of high cost 50 seat RJ’s ) just is not possible if Delta does not have a network to feed.
 

WillowRunVortex

Former Sleepless Knight
Joined
Dec 30, 2004
Posts
352
Total Time
D
NWA, will file if they dont get concessions from PFAA and Mechanics, If they do they wont
 
Last edited:

WillowRunVortex

Former Sleepless Knight
Joined
Dec 30, 2004
Posts
352
Total Time
D
~~~^~~~ said:
Yep and with oil topping $60 a barrel....

The problem with oil is not only tight supply, it is made worse by the fact the dollar is being devalued by Bush's monetary policies. Bush intended this as a way to pump US exports and domestic manufacturing. But, the US is no longer a manufacturing economy. Our exports have not increased much at all, while our tastes for foreign automobiles and luxury goods are continuing to be fed by cheap credit.

Much of the increase in the cost of oil is a result of the dollar’s decrease in value. The Dollar has lost 38% to the Euro since 2002. If oil prices were 38% lower, our airlines would be in much better shape.

As is, I think employees and creditors are tapped out. There is not enough money to float Delta a lot longer. Sources like the spin off of ASA ( and its fleet of high cost 50 seat RJ’s ) just is not possible if Delta does not have a network to feed.
http://politics.yahoo.com/s/usatoday/gaspricestoohighnotbyhistoricalstandards
 

On Your Six

Well-known member
Joined
Mar 8, 2004
Posts
4,509
Total Time
9,500
lowecur said:
I believe both of these companies will file Chapt 11, and with the new BK law just signed by Dubya, there will be a late summer rush to get in by the deadline of Oct 17th.

http://yahoo.businessweek.com/magazine/content/05_27/b3941102_mz020.htm

Shouldn't you be talking to your GEICO customers right now? I love your unequivocal "I believe" - yeah you and other wannabe analysts like Mike Boyd. He predicted UAL's quick demise four years ago.

When oil reaches $90 per barrel you can expect JetBlue, AirTran and SWA joining the Chap. 11 queue as well....
 

~~~^~~~

Well-known member
Joined
Dec 21, 2001
Posts
6,137
Total Time
7,500+
WillowRunVortex:

When writing about oil at $60 a barrell on this board, we are more interested in its effect on the price of jet fuel. We are a long way from the days during the 70's gas crisis when jet fuel was a nickel a gallon.

On your Six is correct. Unless fuel prices abate, or ticket prices nearly double, Jet Blue, AirTran and Southwest will join the party at the steps of the Courthouse. No one can make money in this environment.

So it is a matter of seeing who survives long enough to see sufficient capacity drop away for ticket prices to increase.

By the way, I agree with your article, but not your choice of engines. I have a couple of SVT products in the garage and eagerly await what those guys will do with the 5.4L. Early prototypes of the Lightning were putting out over 550HP. So far, Ford has nixed the idea of a 170MPH 5,300 pound truck. But if that was in the Mustang - Y I P P E E.

~~~^~~~
 

AAflyer

Well-known member
Joined
Nov 26, 2001
Posts
1,493
Total Time
9000+
On Your Six said:
Shouldn't you be talking to your GEICO customers right now? I love your unequivocal "I believe" - yeah you and other wannabe analysts like Mike Boyd. He predicted UAL's quick demise four years ago.

When oil reaches $90 per barrel you can expect JetBlue, AirTran and SWA joining the Chap. 11 queue as well....

I don't think you would need oilas high as $90 for JB and AirTran to go Chpt. 11.

I thought I had read some where that at $60 both these companies would start feeling the heat, SWA would also be feeling it right now if not hedged at mid to high $20s.

On a positive note, it looks like oil has dropped over a $1.00 down to $59.45... OPEC has said they will increase, and our reserves in the US will be at 100% by August. I guess only time will tell. Wish I had a crystal ball like
Lowecur.

AA :cool:
 
Last edited:

lowecur

Well-known member
Joined
Sep 14, 2003
Posts
2,317
Total Time
na
Common people, do you actually believe fares would not rise to adjust for higher oil. Use a little common sense.
 

PCL_128

Well-known member
Joined
Nov 21, 2002
Posts
15,296
Total Time
5000+
lowecur said:
Common people, do you actually believe fares would not rise to adjust for higher oil. Use a little common sense.

Common sense is not a pre-requisite for becoming airline management. Haven't you been paying attention?
 

michael707767

Well-known member
Joined
Sep 20, 2002
Posts
1,640
Total Time
13,500
lowecur said:
Common people, do you actually believe fares would not rise to adjust for higher oil. Use a little common sense.


the problem with the airline industry, as Gordon Bethune once said, is we are only as smart as our dumbest management team. All it takes is once box of rocks at one airline (DAL) to charge too little, and the rest pretty much have to match.

PS the fact that lowecur thinks DAL and NWA will file convinces me it will never happen.
 

iaflyer

Haulin the folks...
Joined
Nov 27, 2001
Posts
436
Total Time
7,400
lowecur said:
Common people, do you actually believe fares would not rise to adjust for higher oil. Use a little common sense.
Well, most business WOULD raise fares to adjust - it would make sense. Unfortunetly for the legacy carriers, SWA hedged fuel at some pretty low prices. So at the moment SWA doesn't need to raise prices. I think the legacy carriers think that if they raise prices the passengers will scoot over to SWA and leave their airplanes empty, making them lose even more money.

iaflyer
 

Vikedog64

Member
Joined
Mar 20, 2004
Posts
19
Total Time
39hrs
skykid said:
Good article. Problem is, Northwest and Delta would both be extremely complicated cases in Ch11 and would be hurt tremendously by the new procedures. Here's hoping it doesn't work out that way.
Who wouldn't be a complicated case? I am not convinced that DAL will enter Chap 11..
 

MJG

Well-known member
Joined
Jun 2, 2003
Posts
580
Total Time
7000+
iaflyer said:
I think the legacy carriers think that if they raise prices the passengers will scoot over to SWA and leave their airplanes empty, making them lose even more money.

iaflyer

Agreed, but I don't get this mentality. With the millions of people flying around this hemisphere each month the LCC's can't fly them all. You don't see people trading in their Hummers for a Civic (yet). So I think to a point that passengers are willing to pay higher fares.

Problem is, like someone said earlier, that right now it's a giant starring contest amongst all the airlines to see who will blink first. Unfortunately a couple of carriers that would have already blinked are being propped up by our govt. and so this suicidal contest will continue for some time.
 
Last edited:

canyonblue

Everyone loves Southwest
Joined
Nov 26, 2001
Posts
2,314
Total Time
15000+
iaflyer said:
I think the legacy carriers think that if they raise prices the passengers will scoot over to SWA and leave their airplanes empty, making them lose even more money. iaflyer


I don't believe they really think this at all. We only fly to 60 cities, and could never carry all the people who would look for the lowest fare, even if it was us. I really think it is more of a game that the Legacy carriers are playing with each other, and those high ego CEO's do not want to give up any share to another Legacy. If they need more money they just go back to the well, ie: the employees.
 

General Lee

Well-known member
Joined
Aug 24, 2002
Posts
20,442
Total Time
A lot
canyonblue said:
I don't believe they really think this at all. We only fly to 60 cities, and could never carry all the people who would look for the lowest fare, even if it was us. I really think it is more of a game that the Legacy carriers are playing with each other, and those high ego CEO's do not want to give up any share to another Legacy. If they need more money they just go back to the well, ie: the employees.

That is correct, especially for Delta. Unlike NW with all of the union unrest, DL only has one major union, and we pilots have already allowed to give $1 billion a year for 5 years. Could we give more? I hope not, but it may come to that. The rest of the employees would have no recourse, since they are not represented and have no contract. I think we are on the way to recovery, except for the fuel. We are on our way to saving $5 billion a year by next year-----but the key is to get to next year. Also, the fuel prices don't matter much IF you can raise fares to keep up with the increase. We have had 7 fare increases stick so far, and more are on the way. With pension reform on the doorstep, DL will be helped tremendously---since we have huge pension payments due over the next 4 years. If we could get them extended over more years, that would help, and fuel surcharges sticking could help too. But, as I was stating, we have flexibility here at DL, whereas other Majors may not with extra unions....


Bye Bye--General Lee
 

ExAF

Well-known member
Joined
Nov 29, 2001
Posts
647
Total Time
6000
Doubt It

iaflyer said:
Well, most business WOULD raise fares to adjust - it would make sense. Unfortunetly for the legacy carriers, SWA hedged fuel at some pretty low prices. So at the moment SWA doesn't need to raise prices. I think the legacy carriers think that if they raise prices the passengers will scoot over to SWA and leave their airplanes empty, making them lose even more money.

iaflyer
I doubt there are enough empty seats and available locations to absorb "all those passengers." Sure, the legacy carriers would lose some pax in that case, but their planes would hardly be empty. Everyone is running at 80% or better on loads. The really popular routes are running much higher. Cheers...ExAF
 
Top