if i were an airline ceo i'd be crying bloody murder. the gov't bailed out all banks so why don't they open the discount window to airlines and all other businesses? i can argue airlines are 100% central to our nations well being. com'on fed you started the moral hazard ball going so don't stop now. you have a printing press so keep it going. its ironic as hell but the feds constant printing is whats caused oil to run to $120 and commodities to go wild. since the bond market vigalantes lost there back bone and didn't punish bernanke the commodity markets will.
AAI is one of the best run airlines out there, but the fuel expense is absolutely killing them compared to just a year ago . . . They have watched the average price per gallon of fuel rise 49% in the first quarter of 2008 vs Q1 of 2007. True, about 45% of their fuel needs are hedged, but we are talking about numbers that are still awfully high in absolute cost. About the only adjustment that a carrier like AAI can make in this kind of environment is to halt planned capacity increases. ie.) they were gonna expand another 10% next year (2009), but all of that has been put to a stop given the current fuel environment.
Today UAUA cost me 23% of my account. OK that happens but what is actually the logic behind their business? Lets open an airline firm and when oil is hitting 120+ sometime we are out off business? Why are they not hedging their fuel needs? In my view its an essential thing when running an airline firm.
Why do you seem so surprised at "bankrupt???" United, one of the biggest, just came out of bankrupcy, all previous stock holders got nothing. AMR looks like they are headed there. I fly American all the time, they have one of the oldest fleets in business and they have no profit to enter new long term leases to replace them. If the G-men do bailout airlines, it is going to take several more big bankrupcies, think AMR, before anything happens. Oil is going higher, ther might be bumps along the way, but oil is going higher. To the poster that asked why they aren't hedging... They don't want to "lock in" their prices with crude near $120/barrel, they think it will come back down. That is all 5yr
yep the feds came running in 02 and 03 when UAL, LCC, DAL, and NWA all went broke. keep playing the copy and paste game s2007...
He obviously has very little knowledge about the industry. All he does is "cut and paste" . . . Does little of his "own" thinking.
Yes I guess they should have thought of that in 1930. Why didn't I buy microsoft when I was 10.... 5yr