Who's next to fold?

bagchucker

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Mar 19, 2007
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With TZ, AQ, and SX all folding in the span of a week, and incidentally at the end of Q1, it causes great alarm to wonder if other carriers are that close to the brink either. Aside from the economy and fuel prices, there wasn't any indicators that were so obvious as to predict the total shutdown of the 3 aforementioned carriers. TZ and AQ filed for bankruptcy protection only days before total shutdown.

Any speculation on remaing carriers who are direly on the brink? It seems that Q1 will see huge losses for all the carriers, but will any of these loses be enough to cause more shutdowns? I know that most of the majors can weather the storm with larger amounts of cash reserves, but it can't go on forever. Aside from merger frenzy being stepped up, what else can we expect in this industry?
 
I think YV has got to be in the running... even as entrenched as they are with US/UA, the $80M judgement HA won against them, and the (likely) loss of DL flying has got to be putting the pressure on.

I wouldn't be suprised to see ExpressJet (just the branded ops part) go either.
 
I think YV has got to be in the running... even as entrenched as they are with US/UA, the $80M judgement HA won against them, and the (likely) loss of DL flying has got to be putting the pressure on.

I wouldn't be suprised to see ExpressJet (just the branded ops part) go either.
I thought JetBlue may go away some time this year, but as FWAAA pointed out on the JetBlue thread here it may well be Frontier or Spirit next.
 
The folks running this country always seem to say that they don't believe we are in recession. This cannot be a good sign for things to come. I know the goverment should not prop up failing airlines, I am not suggesting that, but things are bad.

I have had A LOT of clients either affected by TZ or AQ (I think I might have booked one person on SX) and these people are now scrambling to buy another ticket to Hawaii or they are canceling their trips. This is going to have a huge trickledown effect. I really doubt someone is going fill the entire void to Hawaii, just a guess would be that 50% of it gets filled given the problems with the economy. Hawaii will see less tourism this summer from the US and the people at the hotels, resorts, and tour companys will see less revenue.

I think these quick closures have trained the public to be more wary of booking on a carrier that is in bankruptcy. After years of seeing NW,DL,US,UA and way back when CO in BK protection they probably booked away but gradually became more comfortable with the word Bankruptcy. Next time someone goes into it to reorganize I'd expect that they'll loose a larger number of people thru booking away than before.
 
My guess is in this order....
Frontier, too much presure from WN in DIA.
Midwest Airlines, private investors owned both Aloha and Skybus so you know they have to be getting spooked.
AirTran, if and only if Delta and Northwest come together. With Northwest's pronounced attitude towards low cost competition, they would get squashed.
Jet Blue, only if Lufthansa pulls the plug. Otherwise they have some staying power as Lufthansa can pump as much money into them as they want, they just can't own the airline.
 
I think these quick closures have trained the public to be more wary of booking on a carrier that is in bankruptcy. After years of seeing NW,DL,US,UA and way back when CO in BK protection they probably booked away but gradually became more comfortable with the word Bankruptcy. Next time someone goes into it to reorganize I'd expect that they'll loose a larger number of people thru booking away than before.
I don't think these closures will effect booking for a airline in Chpt 11. Aloha and ATA where in Chpt 11 for only a couple of days before they closed. I'll bet most didn't even know the were filed. What this may lead to is casual travelers booking away from smaller airlines they may have never heard of, like Spirit or Frontier.
 
I think the reason people keep bringing up Frontier is because from other things I've read, they have a slimmer cash balance than others. Also, while those revenue figures are good, are the increases in revenue enough to offset the cost of fuel increases. If not, and their cash balance dips some, it could start to put them into a spin. Keep in mind they recently sold aircraft for cash. Not even a sale leaseback which suggests the routes they eliminated were cash negative.
 
I'm hoping that Virgin America runs out of cash and shuts down this week; any time Richard Branson the A-Hole experiences failure is a fun day for me. He'd probably write a check to keep that from happening, however.

When I mentioned in that other thread that Frontier might be next, I was thinking declining cash balance, despite their relatively good March. Don't predict it would result in immediate shutdown - rather, a trip thru Ch 11.
 
I wouldn't be too surprised at seeing Virgin America bite the dust but with Branson who knows. I also wouldn't be surprised to see him toss cash at that money-losing pig just to save himself the embarassment of admitting failure in the US domestic market.
 
There are certain limits as to how much Branson can pump into VX; I'm not sure on the specifics, but there has to a certain amount of $ contributed by US investors if he pumps money into VX. Maybe someone can explain in clearer terms.




I agree with Kev about the ExpressJet's own brand...I doubt that will be around much longer given today's fuel situation and the fact that many routes have had horrendous load factors thus far, though they seem to be improving a bit.
 
There are certain limits as to how much Branson can pump into VX; I'm not sure on the specifics, but there has to a certain amount of $ contributed by US investors if he pumps money into VX. Maybe someone can explain in clearer terms.

Foreigners are limited as to the amount of equity they may own and control they may exercise in a US airline, but I didn't think that would prevent Branson from simply giving VX more money if it runs short on cash and declining to take any more stock or voting power. Like a gift from a parent to a child. Perhaps US law prohibits such activity - if so, then good. Without any financial assistance from Branson, VX will fold much sooner.