the "L" word?

[Ty Webb]

Ten percent of revenue would be $250 million in cash remaining . . . doesn't sound very earth-shattering to me, considering it's twice what we had on hand 5 years ago.

Unless there is some sort of DOT requirement to have 10% of revenue in "restricted" cash, it would hardly appear newsworthy . . . .

 

[whymeworry?]

WTF do these analysts know? They're parrots. They just repeat what their told.

1) IF, thus far a BIG IF, fare price hikes stick there will be no losses. Furthermore, it's just the beginning of the year. There is plenty of time left for more fare increases. You can't say "XYZ carrier will lose a billion" while fare increases are holding, which they presently are, that more than offset any fuel price hike.

2) If I had $100 for every analyst that predicted UAL, USAir and AWA would liquidate I'd be wealthy right now. What do they know? This is a dynamic, fluid situation. Things look gloomy now, by summer the outlook could change. It's way too early to predict the demise of any major carrier.


Aloha was an exception to the rule due to

A) mismanagement of cashflow (they should have filed months ago and simply cut back interisland 30-50% to give up market share rather than shut down).

B) Being a victim of too much dependability in their price-war ridden markets (meaning Mesa drove them out).

US mainland carriers business model is quite different from the interisland mkt.

 

[Benhuntn]

I hope we all make it but here are some serious facts about the future

JBLU-profit margin is .05%, debt 2.94 for every dollar in the the bank.

FRNT-profit margin is -5%, debt 3.03 for every dollar in the bank.

It would not take much to tip the scales unfavorably in either case.

 

[Andy]

I always knew I would find out about JB's demise from an anonymous post from a pilot at an anonymous airline.

JBLU's not in immediate danger. They've got sufficient cash on hand.
One of the things that I've watched with JBLU over the years is that they've kept a large amount of their debt short term. That's to capture lower interest rates, not an uncommon corporate practice. This strategy doesn't work well in rising interest rate environments (not the current case) or if credit availability tightens (that IS a problem).
From looking at JBLU's last 10K, it looks like they're slowly shifting to longer term debt. I'd say that your CFO has been earning his pay.
JBLU looks like they could have a few cash issues, but not as bad as some other airlines.

 

[Andy]

Whymeworry, the big difference this time around is being able to find cash. Whether it be a loan, refinancing debt, sale/leaseback agreements, or even DIP financing, the capital markets have pretty much shut down.
In this environment, a 'relatively healthy' company can go from smooth operations one day to chap 7 the next.

 

[AA717driver]

WTF do these analysts know?

Yeah, 5 years ago, the Legacies were deader than Jimmy Hoffa and LCC's were going to rule the world.

So WE'RE overpaid and financial analysts are looked upon as gods. This country IS f#@ed up! TC

 

[ferlo]

Folks were saying that about US Airways from 2001 through 2005...

Oh well, one can dream...

 

[johnboy99]

I hope we all make it but here are some serious facts about the future

JBLU-profit margin is .05%, debt 2.94 for every dollar in the the bank.

FRNT-profit margin is -5%, debt 3.03 for every dollar in the bank.

It would not take much to tip the scales unfavorably in either case.

Thats life dude. How much debt do you have for every dollar in the bank. My guess it wouldn't be much better.

 

[Andy]

Thats life dude. How much debt do you have for every dollar in the bank. My guess it wouldn't be much better.

LUV has $2.78B in cash; $2.09B in debt. They've always had a very conservative balance sheet; best in the business.

 

[RocketRob]

I always knew I would find out about JB's demise from an anonymous post from a pilot at an anonymous airline.

fair enough. This was from a CAL V.P.