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AirTran: We Are Not a Bankruptcy Risk

(Thanks to longtime reader IAHPHX for the heads up on this):

AirTran’s stock collapsed by about 1/3 on Friday after Frontier announced its bankruptcy and caused unfounded speculation that AirTran would face a cash crunch.  As IAHPHX points out, AirTran actually has one of the strongest financial positions of any carrier, and the airline put out a press release basically saying that.  Shares rebounded in after hours trading, but it just goes to show how far reaching this mess has gotten – even the solid airlines are now getting hit.

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  1. I’m not prepared to say that AirTran has “one of the strongest financial positions of any carrier.” Given the insane price of fuel — and the absolute unpredictability of where speculators will take that price in the next year –I’d love to see AirTran have another $500 million in cash sitting in the bank.

    But the fact that they don’t doesn’t make them a forseeable bankruptcy risk. That’s where the market made a mistake and — even though the stock bounced back some — I believe the market is still undervaluing the company. It’s basically selling for what it was when the were ValuJet and had to shutdown after that Everglades accident. They’ve come a long way. :)

    If anyone here is crazy enough to invest in airlines, I’d make a similar assessment about US Airways. As their President said the other week, their stock these days is selling as a “call option” on their survival — down almost 90% from the heady days of the proposed Delta acquisition. US Airways still has almost $3 billion in the bank, and few short-term debt payments due. If oil doesn’t reach $200 barrel and the economy stays out of depression, their survival (or an accretive merger) seems highly likely.

  2. Well since Frontier announced bankruptcy protection I am concerned about Airtran too as I have booked airtran departing and Frontier arriving back and if airtran files for bp what am I to do?

    Since I booked Frontier into August I hope to hear very sooner than later so I can make alternate flights so FRONTIER BETTER HURRY OR RISK LOSING customers to other airlines@@@

  3. Not only that, US airways have knocked their flight to 149.00 and Frontier has increase similar flight to 195.00

    so you see, the vultures are coming in the KILL!

  4. They might not be bankrupt, but they are scamming the public big time with their actions of today.

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