KAREN WALKER / WASHINGTON DC
US major airlines are preparing for conflict in the Gulf as losses mounted in the fourth quarter of 2002. The only exception was Southwest Airlines, which marked its 30th successive year of profits with net earnings of $241 million. News from other US major carriers was worse.
American Airlines chief financial officer Jeff Campbell warns that the possibility of war adds another level of uncertainty. "Nobody knows exactly what will happen there and how it will play out," he says.
Southwest chief financial officer Gary Kelly agrees. "The unknown is what will the war look like? How long? What change in oil prices? No-one has any idea." American, the world's largest carrier, posted a $3.5 billion net loss - the industry's worst full-year loss. The carrier lost $1.8 billion in 2001. Chief executive Don Carty is appealing for urgent talks with employees on achieving another $2 billion in cost cuts, on top of the $2 billlion already identified.
Northwest Airlines will seek new cost cuts after incurring a $798 million full-year loss, and America West's full-year losses rose to $430 million compared to $148 million in 2001.
United Airlines, operating in Chapter 11 bankruptcy protection, was to post its 2002 results on 31 January. Meanwhile, a bankruptcy court approved US Airways' reorganisation plan on 17 January, but the carrier now faces legal action after terminating an underfunded pension scheme.
Source: Flight International
