USAir (3 threads combined)

[SoCalCruiseguy]

I think everyone has a pretty good grip in regards to what in general is wrong with th US airline industry. As has been the case for a very long time, the US airline industry has had THE worst business model and as a group been THE worst run industry in America for decades. What is happening now is just the business cycle finishing up its belated loop. For years the airlines previously known as "the big guys" would collectively (but not collussionarily of course) get together and crush any smaller or start up airline that attempted to spoil the party. Can anyone say Peoples Express. That all changed though with the entry of SWA onto the scene. An airline with a good plan, a good concept, great marketing, great management and financial backing to boot. I have absolutely no sympathy for any of these airlines who are in trouble, they did it to themselves! And as has been mentioned several times on this thread before, 9-11 despite what some of the airlines would have you think, had little if ANYTHING to do with their former and current financial condition. The airlines just used it to cover themselves while they did stupid things like wack "fringe" services, reduce baggage allowances, reduce, eliminate and then bring back for a charge meal service, eviscerate their freq. flier programs, add additional b.s. fees etc AND slum up to the Federal Government trough for some free tax payer money. The funny thing there though is that although the industry did get a few billion, they got a whole lot less then they thought was coming and that was another milestone of them beginning their big slide. Still, the feds would have been better off using that money to provide some seed money for other technology like a bullet train. Like others here, I have never flown so much for so little than I have over the past year. I just finished a trip on AA coast to coast RT including taxes for $130, gotta love it! In my mind the only question now is who is going to go 1st? Unfortunately it does look like USAIR.

[parody]

had operated

 

Ah, the tense here is the key. As passenger traffic (among other factors) declined after 9/11 and slots became available at some of the formerly capacity-constrained airports, space was then made available for the new start-ups that have been mentioned.

[hdawson]

Question for those that might know. Did any of the three profitable airlines, SW, JetBlue or AirTran take government backed loans after 9-11. I'm pretty sure that AirTran didn't.

[SoCalCruiseguy]

I don't know the for sure answer on that although I think it was a clean sweep for the big guys. If I remember correctly SWA didn't want it, several other little guys did but few if any got any money

[bUU]

Keep in mind that the profitable airlines didn't have committed, anti-competitive labor obligations. They're each quick to not criticize the majors, because they know they weren't so much smart as lucky.

[Lois R]

Hi, I haven't read all the posts but have a question. (If it has been answered I apologize)

 

I am sailing on Sept 10th Philly to Bermuda. I found a very good price on USAIR from Jax to Philly, NON-STOP:)~for anyone, think I will be ok booking them?

Not sure what the majority of opinions are~use them or find something else?

[hdawson]

You're pretty safe booking USAir till mid-June. After that it's a crap shoot.

My guess liquidation. I would find another airline, JetBlue, AirTran, etc.

[Lois R]

hdawson, I booked with Delta. I feel pretty safe about that;) thanks for your reply to my question:)

[hdawson]

Lois. That is wise. Delta is safe till Oct. Then a good chance of a Chap 11 filing. Their debt load is larger than the whole state of Calif. 25 Billion and their revenue is way too low. For investers, their return on investment is

a big Minus $45 on a 4 dollar and change stock. Delta is a much better bet than USAir or United in the long run.

[Lois R]

hdawson, you sure know alot about the airline industry! Delta is only safe until October? And US Air till May?

I figured Delta would be flying for a long time:eek: I hope September is ok!

[Ibcruzing]

Hello again Hdawson:

 

My friend has tickets for usairway, for our cruise in September, should I tell her to purchase from another airline. How sure are you that usairways is going belly up?

[hdawson]

Ibcruzing. How sure? Just speculation. I sure am not buying their stock at under a buck a share. Delta is safe way beyond Oct. Oct is when they may have to file Chap 11. That does not mean they will liquidate. United has been under Chap 11 protection for almost three years. As for those that think USAir and United will keep flying because that's what airlines in bankruptcy do; Think Panam. Eastern. People Express. Braniff. TWA and sooooo many others. Most businesses, like the rest of us, have life spans.

[Ibcruzing]

Thanks, Hdawson

 

My friend was booked on an overbooked usairways flight. She received 2 roundtrip vouchers (to be used within 12 months as compensation). She won't lose any money if they do go belly up; she was just hoping to save some.

 

Thanks again for all your help

[Globaliser]

I'm not entirely sure of all the ramifications of this, and I remain pessimistic about the airlines' chances of long-term survival, but this should keep US going for a bit longer. From Bloomberg:-

America West, US Air to Merge, Have $1.5 Bln Funding (Update4)

 

May 19 (Bloomberg) -- America West Holdings Corp., the eighth-largest U.S. airline, and US Airways Group Inc. agreed to merge to create a national low-fare carrier, with $1.5 billion in funding from new investors, vendors and others.

 

The merger is getting financial support from Airbus SAS, Air Canada parent ACE Aviation Holdings Inc., hedge funds Par Capital Management Inc. and Peninsula Investment Partners LP and a group led by Air Wisconsin Airlines Corp., the airlines said in a statement today. The combination may occur as early as September, after US Airways exits bankruptcy, they said.

 

The carriers, which plan to operate under the US Airways name, said they expect to save about $600 million a year. The outside capital was needed to complete the merger and bring US Airways, the No. 7 U.S. airline, out of bankruptcy. America West didn't have enough cash to acquire US Airways on its own.

 

(Remainder of story via link above.)