Frontier goes Chap 11...

[Tanker Clown]

Yeah what a bunch of bastards for having a solid business plan.

I wish the folks at F9 the best.

Hey CB...you might want to get off your high horse. Who's to say that SWA won't be filing Ch 11 within a year.

 

[say again]

This industry S$CKS!!!!!!!!!!!!!!!!

 

[dude100]

Isn't it kinda of interesting that all these carriers are going tits up around the same Bush and one CEO (Tilton) are talking, "time to ease foriegn ownership rules" the US Airline industry is going the way of the shipping and cruise line. Not one ship is registered in the US or operated buy American crews.

"I SAY WHAT WHAT, IN THE BUTT, I SAY WHAT WHAT IN THE BUTT!!!"

 

[Oakum_Boy]

Italian crews driving Liberian registered aircraft. Lord help us.

 

[vikesfanIV]

Hey CB...you might want to get off your high horse. Who's to say that SWA won't be filing Ch 11 within a year.

Tanker Clown, barring something catastrophic specific to SWA, there is no way they are going BK within a year. Especially given their strong balance sheet relative to all the competition. SWA knows it's hedges are winding down and has a plan to make up that lost revenue (to the tune of about $1.5 billion a year according to Gary Kelly). But that is a few years down the road. They are the best positioned airline to withstand this current environement. 70% hedged this year at $51/barrel, 55% hedged for 2009 at $63/barrel, and 30% at $63/barrel for 2010. That's with their current growth plans. If they decide to cut their growth then all those numbers go up respectively. Their balance sheet has $2.7 billion in cash vs. $2.0 billion in long term debt. They spent $1.8 billion dollars the last 2 years buying back stock (money they obviously wouldn't be spending on a stock repurchase plan if they were having cash flow problems). Like I said, SWA needs to fix some things by 2010, but they are in great position for the rest of this year and into 2009.

 

[PCL_128]

"key" airlines being the defining term.

I don't think Frontier qualifies.

I wasn't really referring to F9. Andy was basically talking about complete industry armageddon, so I was talking about loans from BA and GE in a general sense to the industry. They'll end up loaning to the companies that they feel will be their best customers over the next decade.

Tanker, companies such as G.E. Cap don't really have a choice but to bail out their customers. If they don't bail them out, the airlines default on Billions of debt and you lose any future money you will make as well.

Exactly. The fact that GE is missing earnings won't really factor in to the equation. The engine business is a significant part of their conglomeration, and they won't let the entire domestic market collapse, especially while they're sitting on $15 billion in cash.

 

[Yuppyguppy]

Unfortunately there will be no savior for F9. Credit markets are dead, and M&A is out of the question as other carriers want to keep their cash reserves high in case of a protracted recession.

Analcysts are saying FL and UAL are next up. FL certainly made a mistake by not leveraging more, but as more capacity comes off-line they will benefit by higher fares. I think they will survive.

UAL is the wild card. They feel that CAL will dance with them, but I have a feeling Kellner will let AMR file chapt 11 and then look to talk to them. Regulators will have a more open mind about an AMR merger if that happens.

imp:​

AMR and CAL? Aren't they in the same state? Two hubs in NY? Yeah your right. But who knows about UAL...our mgmt is soooooo stupid.

 

[737 Pylt]

Hey CB...you might want to get off your high horse. Who's to say that SWA won't be filing Ch 11 within a year.

Must be a slow day on myspace, hey jmoney?

Didn't you just write this?

But I bet you'd love to be working at SWA right now. They are starting to look like the only guys who will be around in a few years.

Maybe you better get back to rubbing the colonel's feet and making those all important copies.
After you've got a lot of taxpayer money to keep wasting!

737

 

[Tanker Clown]

Tanker, companies such as G.E. Cap don't really have a choice but to bail out their customers. If they don't bail them out, the airlines default on Billions of debt and you lose any future money you will make as well.

It's a lose-lose position, they just have to pick the lesser of two evils.

Isn't this constant bailing out of airlines kind of like throwing good money after bad. At some point, they probably have to look at cutting off a few of the smaller players.

 

[realmanofgenius]

the worst case is china investment corp (ref 60 min special 4/6/08) comes in and starts buying failed banks, airlines, and pretty much starts setting u.s. monetary policy as a result. we are close to the brink. the fed can't fix everyhting.