Global Airport News
US airlines are projected to post $4 billion USD in profits for 2010, the chairman of the newly formed United Continental Holdings said.
Speaking to an industry group in Washington, Glenn Tilton also said that United Continental needs a "tremendous amount of de-leveraging" and it may be time to make balance sheets more resilient industrywide.
"I think with these interest rates, everybody is focused on opportunities to refinance debt," Tilton said. "It's a timely thing."
Still, he said airlines "have come a long way" since the early and middle part of the last decade when United and other major carriers fell into bankruptcy. He said the industry is trying to make itself more appealing to Wall Street as a long-term investment.
United/Continental was formed this year from a USD$3.17 billion merger of United Airlines parent UAL and Continental Airlines with the goal of delivering USD$1 billion to USD$1.2 billion in annual cost and revenue benefits by 2013.
The combined company has about USD$9 billion in cash, which exceeds its market capitalisation by nearly USD$400 million.
The airline industry has been hit in recent years by overcapacity and an economic recession that drained travel demand. But carriers are beginning to recover, posting strong profits in the third quarter. US carriers lost USD$2.5 billion last year.
Tilton said debt reduction, as well as US progress on global trade initiatives, modernising aviation infrastructure and simplifying industry taxes and regulation are priorities for helping industry achieve "our ambition of sustained profitability."
He pointed to merged United, the new Delta Air Lines formed through its merger with Northwest, and Southwest Airlines growing through acquisition, as healthy changes that successfully addressed overcapacity and can drive new profits.
