PHL-CAW
6/25/2004
  The Financial Condition Of The Airline Industry --sobering
Testimony from hearing 06-03-04. From 2001 through 2003, the U.S. airline industry has reported net losses of $23.2 billion dollars, compounded by an additional $1.6 billion in the first quarter of 2004. This $24.8 billion shortfall exceeds the total profits earned over the entire six-year period 1995-2000. Airlines have taken on a significant increase in debt in order to survive. The average carrier is now well over 90 percent leveraged (net debt to capital ratio) compared to 60-70 percent historically, which means many air carriers are completely leveraged and unable to obtain capital. In addition, this has added to significant debt service costs and will make the industry even more vulnerable to any future economic downturns.

With industry debt well over $100 billion -- much of it due in the next 24 months -- 11 of the 12 passenger airlines are rated “junk bonds” by Standard & Poor’s. Only Southwest remains “investment grade,” even though American and Delta both enjoyed that status on September 10, 2001. United carries a “D” rating and currently awaits a decision on its application for a federal loan guarantee.


So what does the FAA want us to do --build more runways.

Stephen Donato
www.phl-caw.org


http://www.house.gov/transportation/aviation/06-03-04/06-03-04memo.html
 
Comments:
Steve, please forward to your DL....

Why don't the citizens of New Castle County and Other local PA entities just give their property to the airlines so they can
pave the whole damn thing over ...might as well - they have pretty much ruined it anyway.

I do not want my tax dollars going to bail anybody out!!! If the so called executives can't run a business and make enough
money to pay their workers and not rip off the community with noise and pollution then get out of business. I'm sure the
executives are still taking compensation ...how come there is a deficit if they are still getting paychecks...and then they come
whining to the government. Pretty lame!

Nate
 
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