Newsstand - More airlines on path to bankruptcy?

http://www.msnbc.com/news/792863.asp

More airlines, Spiff? The headline is general, but the teaser only mentions one specific airline....

[edited for clarity]

[This message has been edited by LexPassenger (edited 08-12-2002).]

I posts them as I finds them.

Just the facts, man, just the facts.

When UA files for bankruptcy as well, I wonder how many will jump on me when I point out that the TSA helped UA into the poorhouse too? (Disclaimer: the TSA will not be the only responsible party; one Jim Goodwin did plenty of damage to UA. Still The TSA's random security crap certainly isn't making any airline more profitable)

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"Give me Liberty or give me Death." - Patrick Henry

Spiff... beg ta differ with you on this one... I wouldnt put the blame on the TSA, they havn't been around long enough...but more squarely on the infinate rules and wisdom enacted by the Secretary of Transportation, FAA and other organizations under the department. Just my 2c worth...

Well, first of all, I don't think that UAL is going to be filing for bankruptcy any time soon, with the cash they have on hand, and the bleed rate. Riddle me this: how long does it take to blow through $3.5 billion if you're losing $1 million a day? Someone said they have $900 million coming due at the end of the year. Fine. Assuming the burn rate stays constant, that will mean they're down to $2.5 billion. I think that's a pretty decent cash position to be in.

Second of all, if they do declare for bankruptcy, it isn't going to be the TSA that made it happen. Sure, the searches are annoying, but I guarantee you that they have reduced UAL's revenue by far less than the slowing economy has. Business travel was slowing long before the terrorist attacks and the TSA. That's the real problem, as annoying as the random searches are.

Mdtony, UAL had a cash balance of approximately $2.6 billion as of June 30. The $900 million in debt servicing, assuming that it is not refinanced, will take that number down to approx. $1.7 billion.

However, UAL's current daily cash burn of ~$1 million/day will NOT remain constant; as the company moves into the historically weak fourth and first quarters, the burn rate will likely go up into the neighborhood of $1.5-2 million/day, at the very least. Using $1.5 million/day as a more realistic burn rate for the foreseeable future, UAL will be down to approx. $1.3 billion by the end of Q1 2003, which is proportinally about the same amount of COH that U had going into its Chapter 11, and within the BK trigger range already preset by the UAL BOD.

I think there is a good chance UA will go through a reorganization. I would not be surprised if it is alredy coreographed with the US Air reorganization, with the end game being airlines that are in an alliance, repositioned with a far lower cost structure.

I also think that if Spiff could blame air pollution and the 2000 Presidential election on the TSA, he would do so.

I rather doubt the the TSA has much if anything to do with the precarious state many airlines are in. In many cases their trouble can be traced to the poor customer service and weird ticket 'rules' they have. A good deal of their 'trouble' is richly deserved.

It sure would be nice if I could do those things because at least with the air pollution issue we'd see the TSA disappear that much faster. Instead, we will have to endure more idiotic, intrusive searches and more airline bankruptcies until Congress wises up and disbands this cancer that has infested our airports.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Brian:
I also think that if Spiff could blame air pollution and the 2000 Presidential election on the TSA, he would do so. </font>

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"Give me Liberty or give me Death." - Patrick Henry

[This message has been edited by Spiff (edited 08-13-2002).]