04-03-2008, 07:19 AM
Damon, the article you gave the link for on Delta and Northwest bankruptcy was dated March 30, 2007. Both of them exited bankruptcy within a few months of that article and even posted some profitable quarters before fuel prices went through the roof.
Just to put all this airline news into perspective, over the past ten years or so, several economists and other researchers have gone over the financials of past, present, and defunct carriers. What was their consensus finding? There has never been any overall profit in the entire history of the US airline industry. There have been multiple mergers, bankruptcy reorganizations, liquidations, government bailouts, and favorable regulatory measures, but never any profits for the industry as a whole. Southwest Airlines in recent years has been the only consistently profitable airline, and they follow a business and route model radically different from the rest. No one with any sense makes long-term investments in airline companies. Some speculators have managed to make some short-term gains, often with inside information about mergers or lucrative new foreign routes.
Not a pretty picture.
Cheers,
Jerry
Just to put all this airline news into perspective, over the past ten years or so, several economists and other researchers have gone over the financials of past, present, and defunct carriers. What was their consensus finding? There has never been any overall profit in the entire history of the US airline industry. There have been multiple mergers, bankruptcy reorganizations, liquidations, government bailouts, and favorable regulatory measures, but never any profits for the industry as a whole. Southwest Airlines in recent years has been the only consistently profitable airline, and they follow a business and route model radically different from the rest. No one with any sense makes long-term investments in airline companies. Some speculators have managed to make some short-term gains, often with inside information about mergers or lucrative new foreign routes.
Not a pretty picture.
Cheers,
Jerry