In the current issue of Air Transport World there is a great article to how everything is rosy in the garden of the US Airlines. One quote is from the very first sentence: "Incredible Turnaround' "On Jan 1 (2008) for the first time in six years, the US airline industry began a new year with no carriers operating under (Chapter 11) bankruptcy protection."
Clearly not for long.
Aloha airlines was first to jump pack entering court protection for the second time in under 2 years on March 20th. The result of the credit markets melt down and a complicated transaction involving United Airlines and Yucaipa - the holding company of Aloha Airlines. The stated reason of competition from Mesa's go! airlines is somewhat BS in my opinion. This was a screw up. Anyone who thinks UAL would make a good investor has been misreading the tea leaves.
We predict that this will not be a solo event in 2008. We already have another carrier on doom watch. If oil stays above $100/pbl (read above $2.70 for avgas) then this is for us a certainty that there will be others.
Sad but in our opinion true.
Thanks to AS and RE for contributions to this story.
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