A discussion about the airline industry, airline employees, and all things related

What a year 2006 was in the airline industry.  So what can we expect for the up coming 2007 year?  Well a lot probably.  Merger mania will probably continue.  Prices will continue to rise and who knows, Virgin America might start flying sometime before New Years 2008!

First before continuing, last week this blog turned 1 year old.  Thanks to all that contribute and make the blog what it is.  Thanks to all that comment.  Thank you to all that read daily.  Thanks to KnowMoreMedia.com   Keep the comments coming!

Predictions for the year 2007.  

 

When Delta Air Lines and Northwest Airlines filed for bankruptcy protection within hours of each other back in September 2005, it was odd.  Now that each carrier has shed billions of dollars in labor costs, reorganized airplane leases, and have managed to get their total costs under control, it is time to emerge from bankruptcy protection.  Now, the interesting part comes as a bidder for Delta has stepped forward, offering to buy the company out. 

I have always had this theory in the back of my mind; one of the two airlines, Delta or Northwest, buying the other and making one truly global airline.  Northwest with their upper Midwest and Asian dominance linking up with Delta’s southeastern and Latin America dominance would make for one powerful airline.  There have been a few situations that are more than coincidences.  Filing for bankruptcy protection on the same day within hours of each other might have been a coincidence, but I think not.  Submitting your reorganization plan on nearly the same day, highly coincidental.  But you can take it however you want. 

I believe that Delta wants to be a play in any merger.  They do not want to be the product being bought out.  They want to keep their name.  Northwest has had so many labor and management issues that a collapse of the company would probably best serve them.  A clean slate to start from would be best for them.  Delta’s management got upset because they rebuffed US Airways because they have other plans, not to remain independent, but rather be the player who is purchasing the airline, not the sideline member. 

As for other predictions for the year of 2007.

American Airlines will be in turmoil, facing the fact that they might not be the number one airline in size anymore and the fact that a lack of profits are hitting them hard, they will be looking for a merger partner.  Alaska Air looks to be a nice fit, but would Alaska go along?  Also merger pains from absorbing TWA back in 2001 still linger.  A merger here would be surprising but not shocking. 

United and Continental will keep talking and talking and talking but until something happens with Northwest Airlines and that golden share, Continental is not going to be a merger partner for anyone. 

As for oil prices:  If the winter continues to be mild, and yes I know a major cold snap has gripped the nation, oil will be cheaper this winter and spring.  However, if we have a bad year with hurricanes, political unrest in the oil producing nations, or anything to disrupt the flow of oil, watch for it to be near record highs again, if not breaking them. 

With the sale of Qantas Airways to a private investment group, it could be something catching on.  Look for some airlines to go private this year.  They may be smaller or they may be larger (United). 

Does anyone else have any predictions for the year?