State of the Airlines

Tuesday, January 18, 2005

OPINION: Airlines 4th Qtr 2004 - Here Comes the Pain

Plenty of rumbling amongst the industry pundits and analyst regarding the fourth quarter losses that are going to be posted by nearly every airline in the US except Southwest Airlines. Overall the losses for the industry will be big...really something in excess of $2 billion big by all estimates. Oil prices remained high, the pressure to discount ticket prices remained high and the cost cutting measures of late have not had time to impact the bottom line. Just an early warning for my readers (all 3 of you) that, by the time we are done talking about this, you'll be unfazed by very large numbers. Your reality will be skewed to the point that losses in the hundreds of millions will seem like a victory for the ailing airline industry. Hopefully this warning will help you all avoid the need for therapy.