Full-Service Airlines Are "Basket Cases"
 

Quite an interesting article from Business Week Online.

Link:

http://biz.yahoo.com/bizwk/020912/nf200209127642_1.html

The article is almost completely devoid of knowledgeability vis-a-vis airline industry financials. Among the full-service majors, DL and NW have greatly recovered from post-9/11 operating lows. B6 will have to contend with ballooning leases and a maturing workforce, and WN's business model won't allow it to fly everywhere.

You are assuming that the flying public is going to put up with the continued assault on their pocketbooks that the (formerly) major airlines are waging.

He had some points that are the big elephant in the room that no one seems to want to talk about:

- The large airlines are so bloated that they cannot survive without government handouts
- Ryannair and Southwest continue to make money, while the two you cited are expected to lose $7+/share (DAL) and $4+/share (NWAC) this year, even after govt handouts
- The (former) majors haven't figured out that when they screw over a customer (additional fees for baggage, ticket changes, even cashing in awards), those customers DON'T COME BACK! Look at year-on-year growth/loss in customers
- Code-sharing partnerships are nothing but tactics to exercise market power
- For short-haul flights, the (former) major airlines are selling a more expensive product that is actually inferior to the discounters in many respects, and cannot figure out why they are losing money
- Why does an airline have to fly "everywhere" to make money? These are businesses, not the local transit authority

Please continue following this "In The News"...

------------------
Craig6z
Buzz & United Moderator
[email protected]