This doesn't paint a very good picture for the industry as a whole.
http://www.chicagobusiness.com/cgi-bin/art...articleId=32164
http://www.chicagobusiness.com/cgi-bin/art...articleId=32164
Tilton's Troubles
- Thread starter Borescope
- Start date
luvthe9
Veteran
- Aug 30, 2002
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United Airlines will be part of industry consolidation one way or another
July 13, 12:35 PM, Chicago Examiner
United Airlines continues to be a troubled company. The Chicago-based airline stock is trading at levels indicating bankruptcy is once again likely. With air travel down due to the economic recession United Airlines finds itself in danger of running out of cash. Cash is exactly what United needs right now with more than $1.5 billion in debt due early next year. Some experts are publicly stating that United Airlines can survive until the middle of next year unless the economy drastically improves.
So United Airlines is on a trek to failure unless dramatic changes are made. If the economy takes off and business travel rises to previous levels and fuel prices do not rise substantially United will be okay. If this does not happen as described they won’t be okay. So with the economic situation of today, United needs a strategy to solve their core issues assuming there will be no economic recovery. The drastic changes that are required for United Airlines to move beyond their current woes is to bring in new leadership that is capable of orchestrating a merger and relieving the company from its excessive debt burden.
United Airlines needs to face the reality that Tilton is not the right CEO for the company. In fact, he may have been the right leader to be at the helm during 2007 when oil prices surged and jet fuel reached historic levels, but when his level of expertise was most crucially needed he failed the company. Being a former oil man, Tilton should have better handled the commodity issues of 2007. He should have had a strategy to hedge oil futures to protect the company from the dynamic shifts in the market. This was Tilton’s initial strategic failure and it is still hindering the company today.
According to Mo Garfinkile, CEO of Virginia-based GCW Consulting LLC, who has advised Mr.Tilton and United "the game plan now is to survive." Now the company is headed once again into bankruptcy and if it lands there again it will be a prime candidate for being liquidated and most likely will not survive. With the drop in air traffic and strong competitors like Southwest Airlines expanding into the traditional business route and offering lower-priced options, the airline industry will squeeze the weaker players out. The industry is in need of consolidation and if business leaders don’t do it through mergers the market will do it through bankruptcy and liquidation. United Airlines will be part of the industry consolidation but they may not survive it.
July 13, 12:35 PM, Chicago Examiner
United Airlines continues to be a troubled company. The Chicago-based airline stock is trading at levels indicating bankruptcy is once again likely. With air travel down due to the economic recession United Airlines finds itself in danger of running out of cash. Cash is exactly what United needs right now with more than $1.5 billion in debt due early next year. Some experts are publicly stating that United Airlines can survive until the middle of next year unless the economy drastically improves.
So United Airlines is on a trek to failure unless dramatic changes are made. If the economy takes off and business travel rises to previous levels and fuel prices do not rise substantially United will be okay. If this does not happen as described they won’t be okay. So with the economic situation of today, United needs a strategy to solve their core issues assuming there will be no economic recovery. The drastic changes that are required for United Airlines to move beyond their current woes is to bring in new leadership that is capable of orchestrating a merger and relieving the company from its excessive debt burden.
United Airlines needs to face the reality that Tilton is not the right CEO for the company. In fact, he may have been the right leader to be at the helm during 2007 when oil prices surged and jet fuel reached historic levels, but when his level of expertise was most crucially needed he failed the company. Being a former oil man, Tilton should have better handled the commodity issues of 2007. He should have had a strategy to hedge oil futures to protect the company from the dynamic shifts in the market. This was Tilton’s initial strategic failure and it is still hindering the company today.
According to Mo Garfinkile, CEO of Virginia-based GCW Consulting LLC, who has advised Mr.Tilton and United "the game plan now is to survive." Now the company is headed once again into bankruptcy and if it lands there again it will be a prime candidate for being liquidated and most likely will not survive. With the drop in air traffic and strong competitors like Southwest Airlines expanding into the traditional business route and offering lower-priced options, the airline industry will squeeze the weaker players out. The industry is in need of consolidation and if business leaders don’t do it through mergers the market will do it through bankruptcy and liquidation. United Airlines will be part of the industry consolidation but they may not survive it.
