NEWS: US Airways Profit Propaganda
OK, before I even start I am asking everyone to act like an adult when I post this.
US Airways is predicting that it will finally turn things around next year and make a profit of $50 million (all of you in the back stop snickering). They predict a $288 million dollar loss this year and then say they will be in the black for the first time in seven (yes...seven) years. I'm not buying it. Why? Because it directly contradicts testimony given by US Airways ex-CFO Dave Davis who said the carrier would lose money in 2005 and 2006 and would not be profitable until 2007. And that was taking into consideration the billion dollars in savings they had gotten via salary, benefit and work rule changes. Any guesses why he is ex-CFO?
I can't prove it but part of it may be that Mr. Davis wasn't helping to pump out the propaganda needed by US Airways to garner more investor dollars...something they desperately need. I have seen estimates that the airline needs anywhere from $250 million to $500 million to help float its bankruptcy exit plan. Let's not forget that US Airways says they need another $500 million from the employees as well. My opinion is that Mr. Davis' story is closer to the truth than the one currently being told by US Airways.
We will continue to see this from US Airways...more "news" about how they are turning things around and how things will be better after the 1st quarter blah blah blah. But here is a harbinger...traffic IS rebounding for US Airways as it is for most carriers but revenue IS NOT. US Airways is under intense low fare carrier pressure in nearly market they serve. They simply do not have the cash to stick it out in this environment. Nor do they have a business plan that can compete.
US Airways is predicting that it will finally turn things around next year and make a profit of $50 million (all of you in the back stop snickering). They predict a $288 million dollar loss this year and then say they will be in the black for the first time in seven (yes...seven) years. I'm not buying it. Why? Because it directly contradicts testimony given by US Airways ex-CFO Dave Davis who said the carrier would lose money in 2005 and 2006 and would not be profitable until 2007. And that was taking into consideration the billion dollars in savings they had gotten via salary, benefit and work rule changes. Any guesses why he is ex-CFO?
I can't prove it but part of it may be that Mr. Davis wasn't helping to pump out the propaganda needed by US Airways to garner more investor dollars...something they desperately need. I have seen estimates that the airline needs anywhere from $250 million to $500 million to help float its bankruptcy exit plan. Let's not forget that US Airways says they need another $500 million from the employees as well. My opinion is that Mr. Davis' story is closer to the truth than the one currently being told by US Airways.
We will continue to see this from US Airways...more "news" about how they are turning things around and how things will be better after the 1st quarter blah blah blah. But here is a harbinger...traffic IS rebounding for US Airways as it is for most carriers but revenue IS NOT. US Airways is under intense low fare carrier pressure in nearly market they serve. They simply do not have the cash to stick it out in this environment. Nor do they have a business plan that can compete.
posted by The ACK at
08:12
