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This topic comprises 3 pages: 1 2 3
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Topic: Aloha/ATA/Skywest! Who's next?
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Paul Mayer
Oh get out of it Melvin, before it pulls you under!
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Posts: 3836
From: Albuquerque, NM
Registered: Feb 2000
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posted 04-05-2008 10:31 PM
Fuel price is indeed a factor, but it's not the only thing going in the wrong direction for the airlines these days. Regarding fuel, only two airlines are forecast to make money this year, JetBlue and my former employer Allegiant Air. Fuel prices could double their current levels and Allegiant will still make a profit. Overseas, SAS makes the same claim.
Aloha with its debt load and costs couldn't compete with Mesa's unrealistic low inter-island fares. What's sad is that even though Mesa had these low fares, their load factor was never more than about 25% on the puddle jumpers they fly. Aloha was flying with 85% load factors with their 737s and couldn't break even while being forced to match Mesa's fares. Mesa has never made a profit in the islands but they did manage to run one of the big guys into the ground.
As for ATA, FedEx pulled the rug out from under them in that FedEx terminated their team agreement with ATA to help carry US troops under FedEx's federal CRAF (Civil Reserve Air Fleet) contract. Without that subsidy and cash coming in, ATA couldn't cut it. ATA operated two round trips a day between Hawaii and here and left hundreds of pax stranded here last week after their sudden shutdown.
Haven't heard anything specific about Skywest yet, but all the major carriers including Delta and United (Skywest's major partners) are looking hard at pulling the plug on the cost-pass-through agreements they presently have with their respective regional affiliates. Which means the regionals will now have to start running without any financial assistance (which covered things like fuel price increases) from their former major partners.
Skybus lasted all of 10 months. I kinda wondered about the viability of their business model with Columbus as a hub, especially given their debt load with all those new Airbuseseseseses. As is typical of most new businesses, it looks like they simply weren't capitalized enough to carry them through the initial lossy phase that every new business goes through.
The fallout from the Southwest/United/American/Delta maintenance paperwork debacle continues. Four more airlines are under investigation at this point. Allegiant will have the FAA on their property Monday morning to begin their maintenance audit. I wish Allegiant all the best, but I wouldn't be surprised to see some of their planes grounded for a while after this audit.
As for me, not sure I want to try to stay in the airline industry right now, though I have apps in with FedEx, Southwest, and Virgin America. Also have a shot at doing some civilian contractor work for the USAF at the Al Udeid airbase near Doha, Qatar. All aircraft maintenance or engineering related stuff. Was planning to get my pilot credentials off ice later this year, but in this market pilots are suddenly once again a dime a dozen. No need to waste money reviving a useless ATP certificate at this time.
[Edit] Lots of people are guessing Frontier will be the next mainland carrier to go this year. [ 04-24-2008, 03:42 PM: Message edited by: Paul Mayer ]
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Leo Enticknap
Film God
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Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 04-06-2008 07:08 AM
Who's next? Alitalia is on the brink: AF/KLM walked away from takeover negotiations when the Italian government (which owns a 51% stake) made it clear that they wouldn't support any takeover which involves job losses. Under European Union competition laws Italian taxpayers can't continue to pump money into Alitalia and run it at a loss, with the result that it's expected that the airline will enter the Italian equivalent of Chapter 11 and be radically downsized.
As for who's next after that: Shitish Airways if there's any justice in this world! If even an airline deserved to fail, it's that shower. As you'll probably have heard, the opening of the new Terminal Five at Heathrow went completely tango uniform: over a week later, they've still got around 20,000 bags yet to be reunited with their owner (the lastest rumour is that they're going to fly them all to Milan for sorting!), and are cancelling around a third of each day's flights. They've had incompetence down to a fine art for about ten years now. Every summer or Christmas there is either a strike, some monumental cock-up or both, and we see the now traditional spectacle on the telly of passengers in a makeshift refugee camp at Heathrow declaring that it'll be a chilly day in Hell before they ever fly BA again.
Northwest are apparently going to start charging $25 to check a second bag on US domestic flights, increasing their fuel surcharge and are scaling back their timetable. Their transatlantic service from Amsterdam is still very good though: I've probably used it 15-20 times in the last five years or so, and there was only ever a serious delay once (in the dying days of the DC-10s, where a maintenance issue caused a three-hour delay leaving Memphis). They were very efficient rebooking the connections and gave us a meal during the wait.
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