Costs Lift Off At Low-Cost Airlines
David S. Kurtz, managing director of Lazard Freres & Co., in Chicago, an adviser to the federal Air Transportation Stabilization Board, said the capital markets loved bankrupt US Airways' merger with low-cost America West Airlines, because it embraced both operating models (low cost and legacy).
Most investors are betting on the inevitable consolidation, Snyder said. United, expected to emerge from Chapter 11 next year, is figuring it will drive the industry consolidation. But others disagree, saying United's reorganization plan is flawed. They say United is erroneously assuming crude oil will drop to $52 per barrel. Plus, the airline is betting it can recapture premium fare-paying business travelers, a segment that started deserting United six years ago because of bad service.
Investors should watch for mergers. "How this will happen, when it will happen, and who will match up with whom is something that is on everybody's mind," said Lazard's Kurtz. "It's what is driving investment in this industry."
Complete Story
Regards,
USA320Pilot
David S. Kurtz, managing director of Lazard Freres & Co., in Chicago, an adviser to the federal Air Transportation Stabilization Board, said the capital markets loved bankrupt US Airways' merger with low-cost America West Airlines, because it embraced both operating models (low cost and legacy).
Most investors are betting on the inevitable consolidation, Snyder said. United, expected to emerge from Chapter 11 next year, is figuring it will drive the industry consolidation. But others disagree, saying United's reorganization plan is flawed. They say United is erroneously assuming crude oil will drop to $52 per barrel. Plus, the airline is betting it can recapture premium fare-paying business travelers, a segment that started deserting United six years ago because of bad service.
Investors should watch for mergers. "How this will happen, when it will happen, and who will match up with whom is something that is on everybody's mind," said Lazard's Kurtz. "It's what is driving investment in this industry."
Complete Story
Regards,
USA320Pilot
