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The Economic Effects of Airline Industry

259). Continental's net profitability has been even more dismal. The only postderegulation years in which the carrier has post net profits have been 1984twopercent, 19851.6 percent, and 19862.3 percent (Collins, 1991c, p.

259). Depreciation increased from $81.8 million in 1984 to 623 million in 1988. Subsequent to 1988, the carrier has reduced its depreciation charges by selling much of its newer aircraft. Continental appears "to be holding its own" under Chapter 11 protection; however, there are no firm estimates on when the airline is likely to return to profitability (Collins, 1991c, p. 259). Continental's longterm debt exceeds that of American. At the end of 1989prior to Chapter 11 filing, the carriers longterm debt was $4.9 billion, or 9.2 times the company's negative equity at that time (Collins, 1991c, p. 259).

Operating profitability reached a postderegulation peak 13.1 percentat Delta Air Lines in 1984 (Sharav, 1991a, p. 260). By 1990, operating profitability had slipped somewhat to 10.2 percent; however, operating profit for 1991 was only twopercent (Sharav, 1991a, p. 260). Overall, Delta remained profitable through 1990. For all of 1991, however, Delta posted a net loss of fourpercent (Sharav, 1991a, p. 260). Depreciation charges at Delta increased somewhat from $346.5 million in 1984 to $459.2 million in 1990, and $540 million for all of 1991 (Sharav, 1991a, p. 260). Delta's net profit margin in 1984 was 4.1 percent, and rose to 5.7 percent by 1989 (Sharav, 1991a, p. 260). Net profitability dropped to threepercent in 1990, and, the carrier posted a net loss of fourpercent for all of 1991 (Sharav, 1991a, p. 260). Delta is expected to post a net profit of 1.6 percent in 1992, and to increase net profitability to 2.5 percent by 1996 (Sharav, 1991a, p. 260). Delta's longterm debt in 1991 was 1.6 billion, or 0.7 times shareholder equity (Sharav, 1991a, p. 260).

Pan American achieved...

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The Economic Effects of Airline Industry. (1969, December 31). In LotsofEssays.com. Retrieved 15:24, November 28, 2014, from http://www.collegetermpapers.com/viewpaper/1303479796.html
 
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