US legacy carriers: shakeout to begin this autumn?

摘要

Crude oil prices averaging mid-to-high 30s (dollars per barrel) would mean another heavy $2-4bn aggregate net loss for the US major carriers in 2004 - the year when many of them had expected to return to modest profitability at long last. The industry is now scrambling to find ways to cut non-fuel costs further, but can anything meaningful be achieved outside bankruptcy? And what about the heavy debt burden? It has to be noted, first of all, that the large US carriers are clearly worse affected by the high fuel prices than their European and Asian counterparts - many of the latter are still likely to turn in profits this year. US airlines are suffering because, unlike carriers like BA and Singapore Airlines, they have not been able to deploy the standard tactic used by most industries to mitigate external cost increases: raising prices. In other words, they have not been able to introduce fuel surcharges in the domestic market.