At Aloha Airlines the reason for Chapter 11 was high fuel costs and too much competition. Overnight ATA Airlines went into bankruptcy because it lost a key military contract. As the reasons add up, filing Chapter 11 is back for the industry.
Carriers like AMR (AMR) and Delta (DAL) are still near 52-week lows. High fuel costs and falling passenger bookings due to a recession could make those stock prices worse. Most airlines have too much debt and are heading toward a period of too little cash flow.
The airline industry is one were going into bankruptcy is almost a badge of honor. It is likely to happen to some large carriers this year..
Or, they could merge with the car companies.
Douglas A. McIntyre
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