State of the Airlines

Friday, April 22, 2005

OPINION: Delta Precariously Perched on the Precipice of Bankruptcy

Delta wasn't kidding when they warned us all that they are expecting substantial losses this year. I must need my "substantial meter" re-calibrated because their $1.1 billion loss in Q1 was just a tad bigger than I expected. My only point in all of this is that Delta cannot survive too much longer outside bankruptcy if conditions stay the same (high fuel costs, low fares)

And its really too bad because I think Delta has done the most towards creating a business plan that works (Simplifares, Operation Clockwork). But the fact remains they are increasingly cash poor and are unable to stem the bleeding. Cost cutting measures and operational improvements are just about maximized for them...few options remain...revenue has to improve and that means fare increases. Delta is on bankruptcy watch