Which airline is going out of business next?

Quote from Port1385:

Yesterday at LAX the spot price for Jet A Kerosene was a staggering $3.93 a gallon. Thats more than you are probably paying for the gas in your car and a 777-300ER holds 47,890 gal of the stuff. That's $188,000 for them to fill'er up. The same day in 2003, Jet A Kerosene was 74 cents/gal at LAX.

So 5 years ago a 47,890 gallon tank o' gas was only $35,000. Now if you fig're the 777's hold 316 passengers fully loaded, if you simply divide the $188,000 tank of gas by 316 thats $595 per passenger if you took off from LAX and flew the 777 until it crashed into the ocean out of fuel. All kinds of complicated factors come into play but I think it is safe to say it would 'almost' make it to BKK from LAX without refueling so for the sake of argument say it now costs the airline $600 just for fuel alone ONE WAY LAX-Hong Kong. That's $1200!!! round trip per passenger just for fuel alone, never mind the cost of the plane, the crew or anything else. The economics are crystal clear. If fuel prices remain where they are now or continue to climb..... some airline is going out of business.

Now does anyone on here want to make a suggestion as to who?
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Although the airlines don't pay it the national average "retail" price for jet fuel is $5.90/gallon.
 
$XAL is very close to the July 2008 low of 12.66.

Airlines have been noticeably weak in February and March.

Rather than high oil prices it looks like reduced demand will usher at least one carrier towards bankruptcy / US taxpayer bailout.

http://finance.yahoo.com/q?s=AAI,LCC,UAUA,AMR,JBLU,CAL,DAL,ALK,RJET,SKYW&d=s

aai lcc uaua amr jblu cal dal alk rjet skyw

http://www.marketwatch.com/news/story/weak-february-data-lower-wall/story.aspx?guid={5B7ACF92-C9CF-43EC-8160-FB1D0F0C339B}&siteid=yhoof

http://www.marketwatch.com/News/Story/Story.aspx?column=Airline+Stocks

NEW YORK (MarketWatch) -- Airline stocks stumbled Thursday morning, giving back prior-day gains and falling with the wider market.

[snip]

The airline sector has been under pressure as passenger demand wanes with the contracting economy. The carriers have been slashing seat capacity, but ticket prices have been falling across the board as more leisure and business travelers stay close to home.

February traffic numbers were generally weak, with capacity cuts lagging behind falling demand and unit-revenue declines.

In a note to investors, FTN Midwest analyst Mike Derchin slashed his 2009 earnings estimate for AMR by more than half to 79 cents a share from $1.95 a share, reflecting lower revenue assumptions.

"Our new consolidated [unit revenue] forecast is a 6.7% decline [for the year] compared with our prior flattish projection," Derchin said.

For the first quarter, Derchin expects AMR to report a loss of $1.04 a share, compared to his prior estimate for a loss of 40 cents a share.

On average, analysts polled by FactSet Research expect AMR to earn $1.39 a share in the full year and to lose 83 cents a share in the first quarter.
 
A few weeks ago on here, I said the government will nationalize the airlines (consolidate and eliminate). Most people said I was insane, or it wasn't going to happen!!


Like GM, the airlines will go to nothing. Be nationalized, then (hopefully) be sent out "to fly" (business wise) on their own. Lufthansa was set free in 1994. But I could see Germany taking them back under their wings (sorry for the pun) again!!


Ownership
Lufthansa was a state-owned enterprise (and flag carrier) until 1994.
 
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