Friday, July 25, 2008

In the early 21st century, the death of air travel

Who woulda thunk?
clipped from

$130-a-barrel oil won't save the airlines — travelers must save themselves

Even as the nation's network carriers began reporting billions in second-quarter losses last week, a furious rally drove share prices up by 45 to 60 percent. The market shrugged off the $1.4 billion loss reported by the parent of American Airlines, the nation's largest carrier, and ran its stock up 59 percent. The nation's second-largest airline, United, will report losses in the $3 billion range this week, yet its shares climbed 58 percent.

But irrational exuberance is nothing if not irrational. The biggest airlines — American, United, Delta, Northwest, Continental and US Airways — can't make money at $130 a barrel. They can't make money at $100 a barrel, either. Nor can their smaller competitors.
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