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Airlines Going Under
Wednesday
October 10, 2001
Midway Airlines: out of business. Swiss Air: bankrupt. United, American, Delta, Continental, US Air, and Northwest all have had massive layoffs and cancelled flights.
The U.S. air strikes in Afghanistan mean even more bad news for an already reeling airline industry.
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Travel expert Peter Greenberg says several unstable carriers may not survive. He says, “It's entirely possible we could see some airline failures in February and March."
Northwest, US Airways, and America West were already teetering on the brink of bankruptcy before September 11th, and could be the first to go belly up. The nation's leading plane manufacturer, Boeing, is handing out pink slips and trimming production by 20 percent. Virtually every company is hurting, except for Southwest. There have been no layoffs, not now, and not ever in the company's 30-year history.
The no frills, no food, no first class airline makes survival look almost easy, and for mere peanuts. Southwest spokesperson Ed Stewart says, “We decided early on we're not going to let this thing beat us."
Even more impressive, Stewart says it's the only U.S. carrier to turn a profit in September. Stewart says, “We can offer the lowest fares in the industry because we have the lowest costs in the industry."
Those costs are so low because Southwest owns most of its planes instead of leasing like other carriers. They fly only one kind of jet, the 737, and they have very loyal customers.
So while many other airlines are being forced to slash fares, they're making more seats available for frequent fliers, and Delta is even giving away free tickets in an effort to fill planes.
As long as people are afraid to fly, the industry will continue to lose millions of dollars a day. Even the government's five billion dollar bailout may not be enough to save some airlines from going under.
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For more information on restaurants that will
be donating portions of their receipts to families
of vistims of September 11th, visit
Windows of Hope
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