.....My question is, if UA goes belly up, liquidation, then AA goes belly up, Chapter 7, do you think that by THEN, ALPA and the 'Teamsters' (appropriately named for their 19th Century mind-set), will ever get the message? Will DL, CO, NW and others EVER figure things out? Bryant Petitt Cumming, GA BTW, It will be OK with me if the airlines do away with FF programs....On CO I can rarely redeem miles for what I want, and the upgrades are non-existant with (my bottom tier) Elite Status..... --- Bill Hough <psa188@xxxxxxxx> wrote: > =20 > ---------------------------------------------------------------------- > This article was sent to you by someone who found it > on SF Gate. > The original article can be found on SFGate.com > here: > http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2003/03= > /12/MN142439.DTL > ---------------------------------------------------------------------- > Wednesday, March 12, 2003 (SF Chronicle) > Airlines worry they will be war casualties/Fears of > takeover by the governm= > ent > George Raine, Chronicle Staff Writer > > > War with Iraq could result in $13 billion in > losses for already staggeri= > ng > U.S. airlines and even bring about a "forced > nationalization" of the > business, the industry warned Tuesday. > An outbreak of war would come just as jet fuel > prices are spiking -- up > 108 percent over last year -- and have a chilling > effect on travel, the > airlines said. > "The mere prospect of war with Iraq has already > further weakened this > industry, which is literally struggling to survive," > according to the > report by the Air Transport Association, a trade > association and lobbyist > for major carriers. > In the event of a war, the airlines could lose > $10.7 billion, cancel 2,2= > 00 > daily flights and result in the loss of 70,000 more > jobs, the report said. > A more extreme scenario, which combines war with > Iraq and a domestic > terror attack, envisions losses of $13 billion, a > reduction of 3,800 daily > flights and the loss of 98,000 additional jobs. > Against the backdrop of its dire forecast, the > association is seeking $4 > billion from President Bush and Congress "to > mitigate the damage that is > being done by the extraordinary 'nonmarket' impact > of terrorism and the > prospect for war." > The group also is asking Congress to suspend $9 > billion in annual taxes > and extend war-risk insurance. And it has asked Bush > to release U.S. oil > reserves to force fuel prices down. > Congress came to the airlines' aid after the > Sept. 11 attacks, granting > them $5 billion in cash and $10 billion in loan > guarantees to help offset > losses resulting from the grounding of airplanes for > four days and the > reluctance of the public to fly. > Earlier this year, however, Bush said market > forces should shape the > industry. It remains to be seen whether the > association can successfully > appeal to Congress. > LOSSES OF $18 BILLION > Rep. Ellen Tauscher, D-Walnut Creek, a member of > the aviation subcommitt= > ee > of the House Transportation Committee, supports > continuing war-risk > insurance, and she often has said the federal Air > Transportation > Stabilization Board, which backs loans to airlines, > "is clearly broken and > needs to be fixed." > Of the possible war, she said, "If we > pre-emptively or unilaterally stri= > ke > Iraq, we could have worldwide disruptions in oil > prices and a spike in > aviation fuel prices, which could be the potential > end for United > Airlines, which employs thousands of people in the > Bay Area." > The association's report, titled "Airlines in > Crisis: The Perfect Econom= > ic > Storm," is a collection of findings based on recent > bookings, assumptions > about the economy and passenger behavior, and data > from the 1991 Persian > Gulf War, after which four airlines were liquidated: > Eastern, Pan > American, Midway and Markair. > U.S. airlines have lost $18 billion since the > Sept. 11 attacks, the > association said in the report. > "With the imminent prospect of a war with Iraq, > market trends and > experience with the first Gulf War indicate strongly > that this economic > crisis could deepen rapidly," the industry said. > "Should that occur, there > is serious risk of chaotic industry bankruptcies and > liquidations." > It said, "The prospect of a forced > nationalization of the industry is not > unreasonable." > "We pray we never, ever get to that point," said > James May, chief > executive of the association. > United Airlines and US Airways Inc. have sought > bankruptcy court > protection, > and American Airlines, the nation's largest > carrier, is reportedly making > inquiries about obtaining $2 billion in financing > should it decide to > follow. > The centerpiece of United's proposed makeover is > an airline-within-an- > airline, a smaller carrier that would compete > against Southwest and > JetBlue, with employees paid less than those of the > regular airline. > Unions oppose the plan. > Industry losses could mount to $10.7 billion this > year, the report said. > Jet fuel prices reached $1.20 per gallon in > February, compared with 57 > cents a year ago. Additionally, the association > said, the airlines' cash > reserves are nearly exhausted, and they have no > ability to borrow. And > taxes, fees and unfunded mandates since Sept. 11 > have added $4 billion > annually, the group complained. > The association predicted losses of $6.7 billion > this year even without > war with Iraq. > AIRLINES BLAMED > Much of the industry's wounds are self-inflicted, > said Morten Beyer, an > aviation consultant with Morten Beyer & Agnew in > Arlington, Va. "It's like > Japanese hari-kari. They're cutting their guts out, > not making any basic > changes," he said. "They stick to what is tried and > true -- 'My airline is > better than your airline.' " > The major airlines maintain expensive hubs, three > times more costly than > what Southwest, the profitable major airline, pays, > and they give away 10 > percent of their seats to frequent fliers, Beyer > said. > "United and American are doing the same thing -- > holding their model as = > it > is -- and there's no way they can compete with > low-cost airlines with that > level of service and cost," Beyer said. > Both carriers have a minimum number of seats in > 777 airplanes that are > licensed for more, he said. > "If you want to go San Francisco to Boston, you > can go any day of the we= > ek > on 300 flights operated by probably eight different > airlines," Beyer said. > "That is pretty wasteful competition, and even the > nonstop flights have > narrow- body, small airplanes, and that is wasteful. > "The industry will not go away. People have to > fly to get there from A to > B. > But the form of the industry may change. The > government may have to buy > them or take them over as they did Amtrak." > For its part, the Air Transport Association said > the federal government's > raising of the terror alert status last month > resulted in a 20 percent > decline in advance bookings, even with fares at > 15-year lows. > The association's May said: "To try to meet the > economic reality of the > past two years, carriers are cutting tens of > billions of dollars in > expenses, have laid off 100,000 employees and have > taken several hundred > aircraft out of service. The nation's air carriers > will continue to do all > we can, but we fear that the consequences of this > war will be severe." > Predictably, the airlines' shares fell Tuesday. > United's shares fell 2 > === message truncated === __________________________________________________ Do you Yahoo!? Yahoo! Web Hosting - establish your business online http://webhosting.yahoo.com