Airlines continue to suffer, United loses $47 on each passenger
The continuing woes of the airline industry are reported in this Wall Street Journal story (subscription required):
In the past three months, which just happens to be the strongest season of the year for airlines, the nation's three biggest carriers posted a stunning collective net loss: $2.14 billion. Though the "Big 3" of AMR's American Airlines, UAL's United Airlines and Delta amount to about 60% of industry, they were responsible for 95% of the losses reported so far by airlines. The Big 3 are in Big Trouble.
United, of course, paced this elite field. It suffered the worst revenue drop as passengers went elsewhere and fares came down. Consider also that you're comparing the most recent quarter with the dismal levels of the third quarter last year, when terrorists struck and airlines were grounded. Net losses for the latest quarter totaled $889 million. For every passenger that got on a United airplane in the past three months, the company lost $47. Every day during the quarter, on average, United burned $7 million in cash....
"American and United really designed their business plans on the extraction of very, very high fares," says J.P. Morgan analyst Jamie Baker. Delta did, too, but to a lesser degree since low-fare traffic into Florida forced it to do a better job relatively at holding down costs.