Airline Trouble

Airlines ruined (or almost ruined) by financial collapse in the last while:

• Canada3000
• AirNewZealand?
• AnsettAustralia?
• QantasNewZealand?
• SwissAir?
• Sabena
• Midway
• United

        *Delta
        *Northwest
        *AmericaWest?
        *USAir

In contrast, SouthwestAirlines? and JetBlue? seem to be doing just fine.

It's worth noting that the ailings of big national airlines in Europe has led to a rise in traffic for the cheapie budget airlines: Go, EasyJet?, Ryanair, etc. The reason is that the budget airlines were never constrained by a lack of demand, but by a lack of slots at the big airports, which always went to bigger airlines for other reasons. With less big fancy airlines taking up space, the cheapies are free to move in and support even more traffic.

Is this really so? Most of the cheapies (especially Ryanair) still fly largely to and from secondary airports. I don't think it's the woes of the big airlines, but the prices that lead people to use the budget ones instead. And, apart from Swissair and to some extent BA, who's actually given up a significant number of slots recently?

Don't forget Belgian flag carrier Sabena, which collapsed in November. From http://biz.yahoo.com/ifc/be/news/111501-1.html:

Those slots have not been made available to other (budget) carriers. Like in the SwissAir? case, the slots were passed on to a daughter company which survived the bankruptcy.

Meanwhile, Europe's budget carriers such as Ryanair and easyJet seem to go from strength to strength, with profits soaring. The Europe-wide drop in demand for airline travel since September 11th could see the no-frills airlines muscle into landing slots they had earlier avoided on cost grounds at Europe's more prestigious airports.

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News item: A banker on a flight to South America gets plastered on the in-flight refreshments, and tries to break into the cockpit for no reason.

-- PhlIp

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I read somewhere that the entire airline industry as a whole (in its nearly 100 years of existence) has never turned a profit.

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Can't speak for non-USA carriers. The hay-day of the industry was 1940's to 1970's. Government regulation in the USA kept prices high enough to pay for cost. After deregulation, low-cost carriers and competition have driven many poorly managed and over-indebted companies into bankrupcy. Companies have had to seriously re-think how they operate and re-structure to remain competitive. Profit margins generally run at 2% over cost.

SouthWest? has had an advantage over other major carriers because of their single fleet. Carriers with multiple fleets have multiple maintenance costs, multiple spare parts inventories, multiple training, multiple manning issues; thus multiplying overhead costs requiring higher ticket prices.

JetBlue? started with the SouthWest? concept but has recently begun to add fleets. Additionally, "start-up" airlines tend to have an advantage because the government gives them lower costs and tax breaks. Their new fleets come with "free" maintenance. JetBlue? no longer has the free maintenance, their employee base is getting more senior (meaning higher pay) so they are beginning to have trouble.

-- BrucePennington