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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (854377)	5/6/2015 12:57:29 AM
From: tejek	Read Replies (1) \| Respond to of 1577931

Bankruptcy does not suggest break even numbers. It doesn't suggest otherwise. Au contraire. With BK, its more likely you are losing more money than you are making........not break even. FROM taking foreign holidays to eating out-of-season fruit, once-exotic experiences have become commonplace thanks to the airline industry, which has shrunk the globe in the 60 years or so since commercial flights started in earnest. In those six decades passenger kilometres (the number of flyers multiplied by the distance they travel) have gone from almost zero to more than 5 trillion a year. But though the industry has done much to connect the world, it has done little to line the pockets of the airlines themselves. Despite incredible growth, airlines have not come close to returning the cost of capital, with profit margins of less than 1% on average over that period. In 2012 they made profits of only $4 for every passenger carried. Why has a booming business failed to prosper? economist.com And you just made my point..........profit margins of less than 1% for all global airlines, many of which are national carriers that are subsidized by their gov'ts : en.wikipedia.org Going back to what I originally stated...........public transport is rarely profitable. And airlines have a very poor record when it comes to ROIC: *Airlines have one of the lowest levels of ROIC of any industry** In theory, in an industry where market forces operated freely to create an efficiently competitive market, ROIC should equal the WACC. If ROIC is greater than the WACC, this should attract new entrants until the excess returns are competed away. Similarly, if ROIC is less than the WACC, this should create an incentive for investors to withdraw their capital, thereby reducing the number of competitors until returns increase to the required level (i.e. the WACC). In reality, some industries consistently achieve excess returns (ROIC > WACC), often due to structural or regulatory factors. In any regulated industry, entry - and exit - are typically distorted in some way. The airline sector achieves one of the lowest levels of ROIC of any industry and is one of the few that consistently fails to meet its WACC. centreforaviation.com *global airlines. Finally.......break even? I don't think so...............airline profitability from 1989-2006 [and that doesn't even cover the dark days of deregulation in the 1980s and the great recession years from 2008-2011]: web.mit.edu In summary, US Airlines: there were 8 years that were profitable and 9 years that were unprofitable between 1989 and 2006. And the unprofitable years were much worse than the profitable years were good.