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Richard Branson predicts a US airline will go bust in 12-18 months.

Richard Branson predicts a US airline will go bust in 12-18 months.

Old Jun 2nd, 2009, 10:06 AM
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Richard Branson predicts a US airline will go bust in 12-18 months.

Virgin’s Sir Richard Branson predicted Tuesday at a press conference in Tokyo, Japan that at least one or two U.S. airlines will not be around within the next 12-18 months.

Even though Virgin America profits doubled within the last 12 months, Virgin’s CEO just does not believe the economy is strong enough to allow all companies to turn a profit in 2009. He also feels that the government will not be there to bail them out because they learned their lesson with the failing auto industry.

Branson was at the press conference to announce that Virgin Atlantic is interested in offering flights between Australia and Tokyo’s Haneda Airport, in the next 12 to 18 months.

So what do you think? Will an airline go under within the next year or so? Will maybe an airline be purchased by another airline? Or is Branson just getting press and you feel that all of the U.S. airlines will be just fine after a year or so.

You can even cast your vote here: http://tinyurl.com/cvul6m


I personally believe if anyone is going out of business, it would be Spirit Airlines, Air Tran or US Airways. JetBlue, Virgin and Southwest seem to be the only three airlines that "get it" when it comes to being innovative and interactive with customers.
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Old Jun 2nd, 2009, 10:26 AM
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"Getting it" and going bankrupt are two different things. Going bankrupt is all about cash flow. And, FWIW, customers don't really seem to care about the things that they claim to care about. Most purchase almost exclusively based upon price.

Indeed, Virgin America may be among the most vulnerable, as they gave their US investors a guaranteed out. Should those investors back out, they would have to quickly raise more capital from US investors to keep from running afoul of the foreign ownership rules. In this market, I am skeptical that they could manage to get enough capital should their US investors pull out.

AirTran, FWIW, is a pretty well-run company.

If I had to guess, US Airways is most vulnerable, but even they could probably last the year.
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Old Jun 2nd, 2009, 10:27 AM
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I vote Jet America will not be around (assuming they even get started).
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Old Jun 2nd, 2009, 11:12 AM
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I've noticed that a lot of the airlines have cut back on domestic and increased their international travel. Unfortunately, they can't get you to their hub anymore. A good example is American. They can't get you from Orlando or West Palm Beach to JFK anymore.

I hope the government doesn't bail out the U.S. airlines. Just think how much money the airlines make flying our troops around the world.

It's amazing how an airline can file for bankruptcy and then turn around and buy another airline. (Delta/Northwest)

So is it true that the newest trick for the U.S. airlines, is to cut back on International meal service portions and sell snacks during the flight?

If you read the comments on www.airlinequality.com, it is amazing how everyone mentions how unfriendly the flight attendants are--except on Southwest.
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Old Jun 2nd, 2009, 04:36 PM
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Interesting, 'cause about 6 months ago I was talking to a high-ranking UA official, a family friend, who told me the one airline expected not to make it, is Virgin America....
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Old Jun 2nd, 2009, 10:55 PM
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Most US airlines - like the car companies - would have been dead and buried elsewhere in the world. It's only the curious rules the US has that keeps them afloat
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Old Jun 3rd, 2009, 12:52 AM
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alan, alan, alan... I offer you Alitalia. Or the Asian airlines like Thai or Malaysian. Heck, SAS is 50% government-owned (and gasping for air). Air France was majority-owned by the French government until just 5 years ago. Don't kid yourself into thinking that many other major countries would actually let a big carrier go under. They'll let the little fish fold up shop (just as the US has done before), but anything bigger will be subsidized or given to someone else in a state-led "sell"-off.
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Old Jun 3rd, 2009, 04:12 AM
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Branson is reasonably good at making things happen. But even better at telling the world things are going to happen the way he'd like them to.

But he's no fortune teller and his track record in predicting what the US government will do has been simply awful.

All this bit of loudmouthing tells us is that Branson wants a US carrier to go broke.

And that's news?
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Old Jun 3rd, 2009, 06:50 AM
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Perhaps the cameras failed to pan down to see him clicking his ruby slippers' heels together.
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Old Jun 3rd, 2009, 03:06 PM
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If US Airways went away, would anybody notice?
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Old Jun 3rd, 2009, 11:58 PM
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Seems like U.S. laws, bankruptcy laws, help to keep weak airlines going, and are based on a belief that a competitive airline industry is good for the economy. And it apparently easy for anybody to start their own airline. Lots of carriers, with several weak ones, is better than just a few strong ones. USAir's demise has been predicted several times in the past decade or so, but it still keeps flying.

Still, airlines come and go, so Branson's prediction could have been made anytime in the past 10 years (or in then next 10).
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Old Jun 4th, 2009, 12:26 AM
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All this bit of loudmouthing tells us is that Branson wants a US carrier to go broke.

What he really wants to do is to make the case that the US needs foreign investment in the airline industry.
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