Independence Air seen running out of cash by year end

[onlyboeingifly]

Heard this before;

atwonline reports:

Independence Air is likely to have only around $5 million in cash by year end, a level that is "inconsistent with continued operations," JP Morgan analyst Jamie Baker stated in a report released Friday.Furthermore, with "no identifiable assets to leverage," debtor-in-possession financing for Independence "appears elusive." The airline, which markets itself as FLYi, lost $192.2 million in 2004 and ended the year with $169.2 million in cash and short-term investments, according to Baker. He forecasts it will lose $183.2 million this year.

Should Independence shut down, the biggest beneficiary is likely to be United Airlines, which Baker expects would pick up "nearly all" of the carrier's nonstop revenue, estimated at $200 million annually. It would pick up another $50 million of connecting revenue, leaving $150 million to be shared by 11 carriers, with Delta taking the most at $37 million, followed by American at $27 million and Continental at $19.2 million.

Although Baker figures that AirTran Airways will capture only $3.4 million in revenue, FLYi's disappearance should have a positive impact on that airline's yield because Independence offers fares in markets that account for 29% of AirTran's revenue. His estimate: AirTran yield could improve 16% if Independence goes away

[DAL767-400ER]

Well, that's an improvement for them, seeing as they were expected to run out of money by mid-year in previous reports. That means they are not burning money as fast as before.

[Crunk415balla]

Its obvious they're hurting for money. Just look at the fares. They can't make money off of that, they arn't WN.

To me, it's not a good sign when an airline won't let you book past August 31st. Their booking engine has September on the dropdown menu, and you can enter dates in September, but the only date the offer you is August 31st. I discovered this the other day as I am checking on airfares for a weekend trip to Vegas in late September I'm thinking about doing (Currently Delta is in the lead in both the fare and time I want to leave and get to Vegas and return to ATL.).

[DAL767-400ER]

Here's further proof of how FlyI tries to catch public interest and passengers:
http://biz.yahoo.com/prnews/050502/dcm030.html?.v=7

DULLES, Va., May 2 /PRNewswire-FirstCall/ -- As a way to highlight its growing reputation for excellence in customer service and operational performance, low-fare airline Independence Air (Nasdaq: FLYI - News) is proud to announce a new service promise unlike anything that has ever been offered in the U.S. airline industry:

In the rare event that a customer's checked bag does not arrive at their final destination when they do, Independence Air will gladly offer a credit for future travel in the amount of the one-way fare paid for that flight, to be used by the customer any time within the next year.

Ok, they have a hub in Washington. Now imagine one of those nice winter blizzards the Northeast can get (given that FlyI even makes it until next winter), thousands of pax stranded, and baggage handling a mess . There is a reason why other airlines have never started a publicity stunt like this!

[FlyCharlestonSC]

Hmmm...sounds like what people said LAST TIME THIS YEAR.
Well...they are still around, US Airways didn't go under in February, Delta didn't file for Ch. 11.................

[CathayPacific]

I wonder whether US Airways or IAir will run out of $ first.

[BlueMatt]

Originally Posted by FlyCharlestonSC

Hmmm...sounds like what people said LAST TIME THIS YEAR.
Well...they are still around, US Airways didn't go under in February, Delta didn't file for Ch. 11.................

Give it time... there will be consolidation in the US airline industry... by 2007 I'd expect that there will be less US carriers.. with fuel this high, the obvious overcapacity in the US, someone is gonna loose out... but in the long term it will probably better cause the airlines that survive will be much healthier and not bleeding so much red ink.

[FlyCharlestonSC]

I too think there will be less US Airlines, but I think that they will be eliminated in the form of mergers. Independence Air's load factor is on the rise and their CASM continues to be lowered. They offer a unique product and I would hate to see them go. They have a ton of support in South Carolina. I would go out on a limb and say (with the exception of the CHS-MCO/TPA flights they discontinued...that was a really good move...no market) that South Carolina could be the state with the highest load factors.
As for US Airways, I think they will merge with someone. I think United would be better off for the rest of the industry (and possibly for themselves), but America West is better than nothing.

[avro_arrow_25206]

Originally Posted by srbmod

To me, it's not a good sign when an airline won't let you book past August 31st. Their booking engine has September on the dropdown menu, and you can enter dates in September, but the only date the offer you is August 31st. I discovered this the other day as I am checking on airfares for a weekend trip to Vegas in late September I'm thinking about doing (Currently Delta is in the lead in both the fare and time I want to leave and get to Vegas and return to ATL.).

At least they are not trying to pull a Jetsgo