FlyI in nosedive?
May 2, 2005, 8:38 am
#1
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FlyI in nosedive?
Link
Sad info on the day of Happy Bags...
Despite these steps, J.P. Morgan Chase & Co. analyst Jamie Baker said in a research note Friday, April 29, that Independence is at risk of running out of cash by year's end. And with the company having expended most of its financing options during its restructuring, this time FLYi could be forced to liquidate.
"Potential external sources of liquidity and/or [debtor-in-possession] financing are difficult to identify, and a return to its regional roots appears unlikely," Baker wrote, calling a shutdown of Independence "more likely" than the failure of in-state rival US Airways Group Inc., which is operating out of bankruptcy protection for the second time since 2002.
"Potential external sources of liquidity and/or [debtor-in-possession] financing are difficult to identify, and a return to its regional roots appears unlikely," Baker wrote, calling a shutdown of Independence "more likely" than the failure of in-state rival US Airways Group Inc., which is operating out of bankruptcy protection for the second time since 2002.
May 2, 2005, 9:31 am
#2
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Also from the above mentioned article....
"Although most industry observers share Baker's concerns about FLYi's prospects, many are more optimistic that the airline will survive. Struggling airlines have repeatedly found temporary saviors in time to avoid shutdowns. FLYi leaseholders, for example, own an estimated 20% of the company's stock and could bend further to protect their investment.
"Investors and analysts routinely underestimate liquidity rabbits that failing airlines pull from their hats," Baker conceded. Falling oil prices or a dramatic uptick in FLYi's revenue also could buy the company more time."
Not to downplay the seriousness of FLYI's situation, but there is some breathing room even beyond what has already been bought (especially if revenue increases... which it should from the second quarter on).
"Although most industry observers share Baker's concerns about FLYi's prospects, many are more optimistic that the airline will survive. Struggling airlines have repeatedly found temporary saviors in time to avoid shutdowns. FLYi leaseholders, for example, own an estimated 20% of the company's stock and could bend further to protect their investment.
"Investors and analysts routinely underestimate liquidity rabbits that failing airlines pull from their hats," Baker conceded. Falling oil prices or a dramatic uptick in FLYi's revenue also could buy the company more time."
Not to downplay the seriousness of FLYI's situation, but there is some breathing room even beyond what has already been bought (especially if revenue increases... which it should from the second quarter on).
May 2, 2005, 10:51 am
#3
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Total revenue increases, revenue increases per available seat mile, or revenue increases per passenger?
From previous financial reports, the last figure, revenue per passenger, is what is really hurting FlyI more than anything at this point, since they got their load factor to a respectable level.
From previous financial reports, the last figure, revenue per passenger, is what is really hurting FlyI more than anything at this point, since they got their load factor to a respectable level.
May 2, 2005, 11:18 am
#4
Join Date: Feb 2005
Posts: 196
I don't get it...
Originally Posted by whlinder
May 2, 2005, 11:29 am
#5
Join Date: Feb 2005
Posts: 196
Najor hole in analysts theory
From WSJ:
"ARLINGTON, Va. -- US Airways Group Inc.'s (UAIRQ) first-quarter loss widened as the company struggled with a combination of high fuel costs and low fare prices.
In a press release Friday, the carrier, which is operating under bankruptcy protection, posted a first-quarter loss of $191 million
The company reported $513 million in unrestricted cash as of March 31, compared to $978 million on March 31, 2004. The cash reserves are crucial to the company's ability to receive continued financing from the federal Air Transportation Stabilization Board. If cash reserves drop below $300 million, the ATSB could find US Airways in default on its loan."
So if you were to divide $191 million by 3 months and assume that fule prices stay the same US Airways has less than 3 and a half months to find funding before they dip below the $300 million barrier. Otherwise using that formula they would have to liquidate on July 15th (give or take, tons of assumptions).
"ARLINGTON, Va. -- US Airways Group Inc.'s (UAIRQ) first-quarter loss widened as the company struggled with a combination of high fuel costs and low fare prices.
In a press release Friday, the carrier, which is operating under bankruptcy protection, posted a first-quarter loss of $191 million
The company reported $513 million in unrestricted cash as of March 31, compared to $978 million on March 31, 2004. The cash reserves are crucial to the company's ability to receive continued financing from the federal Air Transportation Stabilization Board. If cash reserves drop below $300 million, the ATSB could find US Airways in default on its loan."
So if you were to divide $191 million by 3 months and assume that fule prices stay the same US Airways has less than 3 and a half months to find funding before they dip below the $300 million barrier. Otherwise using that formula they would have to liquidate on July 15th (give or take, tons of assumptions).
May 2, 2005, 12:51 pm
#6
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US is supposed to show an operating profit in March, so that might be why they are less on a death watch than DH.
May 2, 2005, 1:11 pm
#7
Join Date: Feb 2005
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At these prices...
I just bought 2 tix form ATL - BWI last week for $114 rt / pp. When I reserved seats, the plane was empty (I was able to snag exit rows going and coming).
How can they afford to make $$ when they are charging such low fares?
How can they afford to make $$ when they are charging such low fares?
May 2, 2005, 2:37 pm
#8
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Originally Posted by flygirl555
I just bought 2 tix form ATL - BWI last week for $114 rt / pp. When I reserved seats, the plane was empty (I was able to snag exit rows going and coming).
May 2, 2005, 2:46 pm
#9
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Originally Posted by whlinder
US is supposed to show an operating profit in March, so that might be why they are less on a death watch than DH.
May 2, 2005, 2:50 pm
#10
Join Date: Jul 2004
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Originally Posted by flygirl555
I just bought 2 tix form ATL - BWI last week for $114 rt / pp. When I reserved seats, the plane was empty (I was able to snag exit rows going and coming).
How can they afford to make $$ when they are charging such low fares?
How can they afford to make $$ when they are charging such low fares?
May 2, 2005, 4:19 pm
#11
Join Date: Feb 2005
Posts: 196
Where is March?
Originally Posted by whlinder
US is supposed to show an operating profit in March, so that might be why they are less on a death watch than DH.
May 2, 2005, 6:01 pm
#12
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They lost 191mil in the 1st quarter (which is Jan-Mar for US), but apparantly that was mostly during Jan/Feb, and it appears (from what I have read elsewhere) that they will eke out a small operating profit for March. Maybe DH can do the same...