Philip Baggaley
Philip Baggaley
aircraft assets borrow carriers cushion face fail financial forced gradually legacy quickly recent
During the recent downturn, the legacy carriers have gradually used up their financial cushion of aircraft and other assets they can borrow against. If they are forced to face a new crisis, they may fail more quickly than they have in the past.
airlines amount carries divert fair fix helps percent problem revenue shutting united
United shutting down doesn't necessarily fix the problem for other airlines, but it helps a lot. It does divert a fair amount of revenue to other airlines -- United carries about 17 percent of the nation's traffic.
airlines domestic fuel helping high improved load offset pricing
American Airlines is benefiting from much improved pricing and load factors, particularly in the U.S. domestic market, which are helping to offset very high fuel prices.
airlines seem shake
As we've seen, these airlines never seem to shake out.
airline anxious bankrupt below business company cutting fear levels lose passenger service suspicions wary
A bankrupt airline is anxious not to lose customers, especially business travelers, and may be wary of cutting service below competitors' levels for fear of confirming passenger suspicions that the company is not long for this world.
air consumer depressing economic effect energy growth higher indirect longer prices resulting slow storm
In the longer term, if the storm and resulting higher energy prices slow economic growth and consumer spending, it will have an indirect depressing effect on air travel.
airline attention cooperation management mergers require short struggling supply
Airline mergers are very difficult. They require a lot of cooperation from labor, management attention and financing. All those things are in short supply when you're just struggling to survive.
airline assured cash difficult dollar dragging last purely till trouble wait
An airline doesn't wait till it's down to its last dollar to file. It'll be difficult to keep dragging it out. Without new financing, from a purely cash perspective, they are already in trouble to be assured they can reorganize in bankruptcy.
airline assured cash difficult dollar dragging last purely till trouble wait
An airline doesn't wait till it's down to its last dollar to file, ... It'll be difficult to keep dragging it out. Without new financing, from a purely cash perspective, they are already in trouble to be assured they can reorganize in bankruptcy.
chapter file indicate likely northwest
These disclosures indicate that Northwest will very likely file for Chapter 11 shortly, probably on Sept. 14.
bankruptcy company early example felt financial heading position pursue relatively stronger survive toward
They are another example of a company that started out in a relatively stronger financial position than their peers, and they felt they were in better position to survive a shakeout. They didn't pursue cost-cutting as aggressively as they would have if they were heading toward bankruptcy early in the (industry's) downturn.
fuel losses prices year
Probably not. Particularly with fuel prices where they are. But they have been narrowing their losses every year in bankruptcy.
cash decline flow free industrial less pay peak percent ratio
Usually, one would see a ratio of less than 50 percent for industrial and transportation companies; however, that's the peak and from there, it should decline as they use free cash flow to pay down debt.
bankruptcy both carriers continue effects expect major
I wouldn't expect to see any major effects of these bankruptcy filings on passengers. I think both carriers will restructure successfully and continue flying.