USA Today: Airlines Emerge from Profit Killing Oil Slick
I'm willing to invest in anything if it can make money... but prefer to find evidence of a chance of profitability. So
despite peeving customers off... nevermind them anyhow
- United's decision to end free meals on certain flights – including on some trans-Atlantic routes – appears to have struck a chord with frequent-fliers. United sent a memo to its workers Monday detailing the changes, which included the elimination of free meals for coach-class customers flying between United's Washington Dulles hub and Europe. Also eliminated: complimentary meal service in domestic business class.
- "With so much bad news breaking lately, travelers have become pretty inured to the next fee, the next service cut, the next frequent flier devaluation, the next flight cancellation," Winship says. "In that context, any response at all is noteworthy. And the reaction so far to United's suspension of meal service on some international flights has been vociferously negative."
- "This is not necessarily new, just the latest in a long line of claw-backs of services and amenities that were once complimentary."
- "I am furious and outraged with United's change," says Emil Amato, of Los Angeles. Amato says he's ready to change to a new primary carrier, adding that he's already contacted other airlines to see if they'll match the 100K status that he currently holds in United's Mileage Plus frequent-flier program.
- Premier Executive- Mileage Plus member Michael Berman of Monroe, Wash., is another who says the move doesn't make sense. "It boggles my mind to think that they are not going to be serving meals in coach on trans-Atlantic flights," he says. "As far as the removal of meals in domestic business class, United seems to be intent on alienating its loyal, most profitable customers with this nickel-and-diming. I'm fed up enough to be very seriously considering switching my loyalty to Alaska."
....
is there some price where airlines can make a profit? (after all, with the hub and spoke system there are a lot of people 'hostage' to specific carriers no matter what they do) Or, does eventual profitability even matter anymore if/when quant hedge funds decide it is time to "buy buy buy"? Inquiring minds want to know.
- In early July, U.S. airline stocks were so battered you could buy one share each of five big airlines for less than the cost of checking a single bag. With oil prices then approaching $150 a barrel and air travel demand sinking, Wall Street's view was that most of the USA's airlines were destined for bankruptcy reorganization — some for liquidation — when their cash ran out within 18 months. One or two, the thinking went, would be toast by spring.
- ....conventional wisdom about airlines' survivability is changing rapidly, thanks in large measure to a $30-plus drop in the price of a barrel of oil. Don't get too excited yet — airlines' financial health is notoriously volatile.
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