Who will be first to file? An airline bankruptcy oddsmaker
As the airline industry braces for the worst year in the history of modern aviation, it’s time to ask which of the major airlines will be the first to run to bankruptcy court. Airline deathwatches may be amusing, but let’s be honest — do you think the federal government will let a big airline die? Nah.
A bankruptcy watch is no academic exercise. When your airline goes Chapter 11, it could affect everything from the routes it flies to your rights as a passengers.
Here are the contestants, in the order they’re likely to file:
1. United Airlines. Its executives are scrambling to come up with a business model that will hold up to the stresses of $128 per barrel crude oil and a sluggish economy. But it’s not looking good.
2. US Airways It was listed as one of the “most vulnerable” carriers by airline analyst Jamie Baker, who added, “there will be blood.” Whoa.
3. Northwest Airlines The other airline mentioned by Baker? You guessed it. And with Chief Executive Doug Steenland predicting a merger with Delta Airlines would produce a smaller company, thanks to rising fuel costs, it doesn’t take an airline analyst to know that on its own, Northwest may be doomed to bankruptcy court.
4. Delta Air Lines It just came out of bankruptcy protection. Now it wants to merge with Northwest Airlines. But with results like these, it doesn’t exactly make an attractive partner.
5. Continental Airlines Bracing for a slowdown? Might as well hang out a billboard on Wall Street that says “sell your Continental stock!” No, my friends, this does not look good.
What can we do about this? Nothing, really. Bankruptcy is an inevitable part of the boom-bust cycle the airline industry has found itself in since deregulation. Only the government can stop this madness from continuing.
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