Merged Carrier Sees Robust Profits In 2007

[USA320Pilot]

Merged carrier sees robust profits in 2007

US Airways and America West Airlines, if allowed to merge this fall, project that the new combined carrier will earn $316 million in 2007 -- the first year it anticipates making a profit.

The projections, filed with a U.S. Bankruptcy Court in Alexandria. Va., show the new US Airways losing $204 million in this year's fourth quarter and $65 million on revenue of $10.7 billion next year, assuming it clears all regulatory, shareholder and bankruptcy-court approvals required for the merger to be final.

Its assumption, according to bankruptcy-court documents, is that oil will remain at $57.60 through 2006 and $56.67 in 2007, on average.

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Regards,

USA320Pilot

 

[hharotz]

Its assumption, according to bankruptcy-court documents, is that oil will remain at $57.60 through 2006 and $56.67 in 2007, on average. It also admits that a $1 increase in the average price per barrel would mean an additional $40 million in annual fuel expenses.

:blink:

So if oil ends up staying at around the $65 mark, the carrier posts a 2007 loss. Aren't we already at the $61ish mark today? This overly optimistic outlook sounds hauntngly similar to the cool-aid Dave Siegel was trying to feed us prior to bankruptcy one. All it will take is another terror attack on US soil and all of these revenue projections and such will be thrown out the window.

Also, don't forget the staggaring debt load the company will carry....how much does US/HP combined owe the ATSB? Keep in mind we've burned pretty much all the furniture as it is, do we own an aircraft now? ....IMO, it will take decades for the new company to build a strong balance sheet. If Parker brings on any of the old-skool CCY mgt I don't see it ever happening.

:end of rant, back to rebooking PHL misconnects and giving PHL bags to the delivery service at $18/delivery:

 

[USA320Pilot]

Today NYMEX West Texas Intermediate for August delivery closed up $0.14 at $57.46 per barrel.

In regard to industry problems and the potential for capacity reductions, United, Delta, and Northwest are having a lot of problems per the columns below:

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Regards,

USA320Pilot

 

[robbedagain]

Today NYMEX West Texas Intermediate for August delivery closed up $0.14 at $57.46 per barrel.

In regard to industry problems and the potential for capacity reductions, United, Delta, and Northwest are having a lot of problems per the columns below:

See Story

See Story

Regards,

USA320Pilot

[post="282764"][/post]​

can you tell me which of the two you believe would be in CH11 before long? according to USATODAY yesterday, NWA looks as though they could be in it within 2 months if I read it correctly but I thought Delta was in worse shape?

 

[stoopidute442]

Today NYMEX West Texas Intermediate for August delivery closed up $0.14 at $57.46 per barrel.

So this tells us that if bin laden scratches his balls tommorow our $316 million profit will disappear faster than a set of rims in the phl employee lot.

 

[Heinrich]

I think this is sort of a shell game to see what carrier will be the first to go. I think Delta's plan has been to force US out of business. That plan was unsuccessful. Now they're going "oh crap, what's plan B?"

I'm not sure who will be the first to disappear...as hard as US has been to kill, my guess is that the other carriers will shrink and then combine...throughout the next 5 years and no one will actually just liquidate outright.

 

[roadtrip]

Heard about all of these profits before and as of this date havent seen any.

 

[whlinder]

In regard to industry problems and the potential for capacity reductions, United, Delta, and Northwest are having a lot of problems per the columns below:

[post="282764"][/post]​

IMHO, the only meaningful capacity reduction the industry will see before 2007 will be Independence Air shutting down.

 

[700UW]

Assumptions Last Time

When US Airways exited its last bankruptcy protection in March 2003 after seven and a half months, it did so with a business plan that predicted profits would come the next year.
Instead, the airline filed for Chapter 11 bankruptcy protection a second time on Sept. 12, 2004. The reason: US Airways' plan was overly bold in some of its predictions.

• Oil. The airline's plan predicted the price per barrel would be $28.05 in 2003 (it ended up closer to $31) and $25 in 2004 (it actually was $41). Because of that, the airline underestimated how much it would spend on jet fuel. Instead of an estimated $813 million in 2004, US Airways spent $1.1 billion on jet fuel.

• Revenue. The airline didn't see how deeply air fares would fall because of low-cost carriers' strengthening hold on the market. The airline predicted it would have $7.2 million in revenue in 2003 (it ended up with $6.85 million) and $8.2 million in 2004 ($7.1 million in reality).

 

[jimntx]

Today NYMEX West Texas Intermediate for August delivery closed up $0.14 at  $57.46 per barrel.
Regards,

USA320Pilot

[post="282764"][/post]​

Is this suppose to be a correction and slap on the wrist to the person who said that oil was at $61/bbl? Aren't you the one who less than 3 months ago was stating that your experts (who were the only ones worth listening to, of course) had assured you that oil would be back in the $40-45/bbl range within a few weeks?

 

[madders]

Hey my take on Usa is that Usa is a great pusher of sunshine up one a$$

 

[usair_begins_with_u]

The operating margins in consumer aviation when they are not negative, will never be high enough to be a good investment, or to be a stable place to earn a living.

Have a nice day.

 

[jack mama]

the current assumptions are for oil at $50...meanwhile the reality is oil is already higher than that!

 

[jimntx]

The operating margins in consumer aviation when they are not negative, will never be high enough to be a good investment, or to be a stable place to earn a living.

Have a nice day.

[post="282888"][/post]​

Amen! I read an article that traced overall Commercial Airline Industry profits for the last 20 or 30 years. I don't remember which. In any case, the industry showed a major loss over the span of the study, and showed profits in only 1 out of every 4 years on average IIRC.

Investment in an airline is a vanity thing. Like Lorenzo and Icahn. Southwest is the only airline that has consistently made a profit, but as I recall, they didn't do anything foolish with their profits like pay dividends. Only way to make money with the stock was to hope that the market price went above what you paid for it. And, I don't mean that as a slam against SWA. Microsoft did exactly the same thing for a long, long time.