AMR Loses Over $500M

B767Driver

B767Driver

New Member
I'm beginning to think that the carnage by the end of the year could be massive and industry altering. I know there's some fancy financing that takes place in the airline industry (to a degree that could be a central plot in a Grisham novel), but supposedly the debt market is closed leaving no way to finance bankruptcies.

I look very soon for flying to become a privilige, not a right, for the very wealthy.
 
I've seen dire situations turn rosy on a dime and then back again. So I never worry too much. It's pretty much the nature of the beast.
 
UAL lost $537 mil just reported. I thought AMR lost $300 and change reported a week or so ago. I don't know the other airlines situations but apparently US Airways has 2 years of cash at current revenue/expense levels, that's it.
 
wheelsup said:
UAL lost $537 mil just reported. I thought AMR lost $300 and change reported a week or so ago. I don't know the other airlines situations but apparently US Airways has 2 years of cash at current revenue/expense levels, that's it.
Click to expand...

That's a lot of cushion for an airline!
 
When the airlines are expanding and hiring, everyone is happy and doesn't want it to end.
When the airlines stop hiring and post losses, people think the world is over.

it's all about the cycles...
 
My gut is telling me that with these unbelievable fuel costs, coupled with a locked up debt market...this cycle is going to cause some seismic changes in the 'biz.
 
Rumot around the ....well...we don't even HAVE a water cooler.....so..umm.....anyway...

Rumot is that management STILL took their bonuses.

Nice. :rolleyes:

R2F <-----AMR employee
 
Regulation is NOT the savior here.
There is no perfect answer. Energy costs are climbing exponentially, how is regulation going to help that?
My crystal ball says a complete re-alignment of the industry via thinning of the herd. And that is going to hurt, big time. When gas hits 6 or 7 a gallon, Joe Shmoe 'aint going flying. He won't even drive much. A poster above says a return to the wealthy. Well, that will happen, but with a lot fewer a/c and crews.

If after the dust settles, and there are one or two fewer legacy's, regulation might be needed to exercise control of a monopoly. But, it is not the answer.

All just my guess, worth what you paid for it! The sky is falling!:D (maybe not)
 
The industry has done this to themselves....with load factors being what they are, how these idiots lose money baffles me.
 
ready2fly said:
Rumot around the ....well...we don't even HAVE a water cooler.....so..umm.....anyway...

Rumot is that management STILL took their bonuses.

Nice. :rolleyes:

R2F <-----AMR employee
Click to expand...

Word around the school house (iron kitchen) is management is trying to say stock options don't count as a bonuses.
 
Itchy said:
Regulation is NOT the savior here.
There is no perfect answer. Energy costs are climbing exponentially, how is regulation going to help that?
Click to expand...

The theory is that once a fare is attached to a route, a carrier is prevented from undercutting the rest despite their inability to make money while doing so.

For example, though SkyBus is now gone, while they were competing with other carriers on some routes, they were obviously not making money yet other carriers may have been forced to reduce their prices to retain passengers, and they were perhaps not making a profit either.

Now that the situation is over, the fares would have returned to normal by now but that airline is never going to recuperate that lost money.
 
ready2fly said:
Rumot is that management STILL took their bonuses.
Click to expand...

Gee, there's a surprise. :sarcasm:

Itchy said:
Regulation is NOT the savior here.
There is no perfect answer. Energy costs are climbing exponentially, how is regulation going to help that?
Click to expand...

Regulation provides subsidies for the airlines as well as setting minimum fares to prevent losses. Route authority would also prevent multiple carriers from flooding a market with seats just to snag market share. Regulation is indeed needed.
 
I find it entertaining that they are posting losses of that extent when their airplanes are near full all the time... Can you say mis-managed?
 
I think the number one way to bring back the airline idustry is to get out of the war in Iraq. The 115 dollars a barrel price is only speculative because of all the violence in the Middle East. If we were to leave Iraq investors would stop freaking out so much about oil.

Also, The government needs to stop subsidizing corn for ethanol. This makes the price of all corn based products go up and people lose faith in the economy as a whole.
:yeahthat:
 
I agree the subsidies on corn need to be halted. Before, it was to promote an overproduction for a "just in case" scenario of drought. Now, you've got guys in Iowa looking to plant corn or soybeans in their backyards to cash in. If I had the space, I'd be planting soybeans, too. The sad part of it is, most of the farming in America is done by large corporations. The subsidies were started to help out working farmer FAMILIES. Now that they've mostly been pushed outta business, the corporations are reaping the benefits of the subsidies.

As for the price of oil, I think it has more to do with the weak dollar than anything. Oil is priced in dollars around the world. So, if you get paid in Euros, oil is probably a smart investment since you can pick up almost twice as much oil as someone that gets paid in dollars. People are using oil as a safe haven for their $$$ were gold and silver used to be the hot commodity for that. Strengthen the dollar, price of oil goes down. Catch 22 is it's hard to strengthen the dollar when the economy is going down the tubes, but the economy is going down the tubes b/c no one can buy anything b/c they can't afford to get to and from work.

Now, here's something interesting. CNN did a run on the fact that gas is $4 a gallon in the SF bay area. They mentioned people parking their SUVs, taking the train and generally not driving as much. Auto sales are down a lot except for hybrids. So, assuming this is not a local issue, that would mean that demand for oil is going DOWN. So, in a true supply and demand system, the price SHOULD go down. However, b/c of all the speculation in the commodities market, my bet is on the price still climbing, no matter how much demand drops.

Getting out of Iraq won't totally fix the issue. It won't hurt, but I'm not even sure it will help. We've got to fix the dollar and the economy. Either that or OPEC is gonna switch the world wide price from dollars to something else......
 
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