LuxCal

With all the talk of a US/HP merger possibility, do people think that US will survive past the June 30 date they claim they'll come out of C11? The reason I ask is that I have a vacation planned in late July, and I'm wondering whether I should go ahead and book the FF award tix for Mrs. LuxCal and myself...

John

hp_fa

Depending on your amount of cash and happiness with taking risks, here is a possible solution.

1) Book the FF award ticket.

2) If you get it booked the way you want it, buy a fully refundable ticket on another carrier for the vacation.

If U has a problem, the worst scenario is it cost you a lot for airfare. The best scenario is you fly U for free and only lose a few months interest on the "insurance policy."

Make sure you check the refundability policy before you buy.

prhs1989

If your concern is that they will go completely out of business, you shouldn't be worried. People thought they were going to die months ago, so they will probably be around to the end of the year and probably even further.

Concerning the merger, I don't know how fast that it would actually happen. Even if they merge (which they probably will), they won't cut any destinations and they will still honor their customers.

Jumpgate

I think for July you should be just fine. Even US squeezed out a tiny tiny profit last summer, so I don't think any airline would choose to call it quits right at the peak of the most popular travel season.

martin33

I worry at the extrapolation there. While US certainly could have died months ago, they managed to pull enough rabbits out of enough hats to struggle onward. The supply of hats and rabbits is not limitless, however. Assuming they can survive the seasonally strong Q2 is reasonable. Assuming they can take another round of heavy losses in Q3 and Q4, to reach the end of the year, is no gimme.

drewsnav

Yes, but fuel costs are up approx. 35% since then, while revenues have slipped approx. 9%. That's not a good combination.

My own feelings would be to wait it out and see. For July travel, you could probably still get a revenue ticket for less than $500 in June, which is most likely far less than a refundable ticket would run you on another carrier, anyhow.

abeflyer

US has joined SWA and AWA showing a profit in March after a high cash burn and losses in JAN and FEB. They seem to have turned the corner.

Those predicting demise I think are trying to build up their favorite airlines that haven't turned their corners. Look at UA or DL for example. Take a look at commentors profile and see programs they have status. Evalaute the comments in that light. I am a US1 who looked at NW in January and decided to stick. Facts speak for themselves and anyone can make something worse than it is. Trust me-- I do that for a living as a lawyer. Use your own common sense.

prhs1989

It is kind of soon to be saying that they "have turned the corner." There are a lot of things there that still need to be changed, and fast, for them to change their current direction.

TomBascom

To the original question...

The odds of survivial thru July are as near 100% as anything in this industry can be.

Personally, I'd peg the odds of survival in one form or another for the rest of the year at 95% or so.

IMHO

FWAAA

Uhh, sort of. Maybe. But let's not get carried away.

USAir may have shown a small operating profit (before debt service) for March, assuming that the Jan-Feb monthly reported operating losses were accurate; nevertheless, its yield and RASM (unit revenue) were down substantially from the first quarter of 2004. Costs were down as well, but not as sharply as the drop in revenue.

Some other legacy airlines actually showed improvements in unit revenue year over year.

At least one showed an operating profit for the entire quarter - AA - of $23 million. Of course, before interest expense.

US will probably be around to satisfy the OP's vacation plans. Still, hp_fa's idea is excellent - book a refundable WN or HP ticket (expensive, but not as bad as other airlines) as an insurance policy.

otralot

If you are worried see if you can get a dirt cheap fare on any airline. If you can find a great fare take it. Use your miles later. As for % US will be around...? No one really knows.They have yet to line up all exit financing but there is still time. Profit for the 1/4 is great but must sustain an exit from chap 11. Cash resources on hand, if I remember correctly, are not that impressive so even with small profit they may have other issues.

If you can't find a cheap fare use the other methods described. remember WN has pretty good last minute fares so if you are flying their routes you are kinda proetcetd if you can get a seat

martin33

we don't yet know march's cash position. if it were good, I suspect it would have been mentioned in the PR... a small operating profit in a month helped by an unusual holiday occurrence is nice, but not a corner turned. Interest on US's debt runs about $25m a month, currently. oops, there went March's operating profit...