CNNmoney.com is reporting that thousands of layoffs, hundreds of grounded planes and twenty-one recent price increases may not be enough to save the airline industry from the effects of high fuel prices.

According to the Fitch Ratings, record fuel costs and weak cash flow may lead to “multiple bankruptcies and liquidation” for major U.S. Airlines in 2009.

Airlines have been trying to save the industry by reducing capacity, downsizing, hiking fares and fees, and even making pleas to the public to help lobby congress about oil prices. However, despite all of this the airline structure remains unsustainable in the current fuel environment.

According the the Fitch Report, “After Labor Day … all the U.S. legacy carriers will see a rapid erosion of cash levels that could threaten their survival in 2009 if adverse fuel trends continue.”

The following airlines seem to be having the most difficulties:

United
Delta
US Airways
Southwest
JetBlue

American Airlines and Continental are listed as “stable.”

It is clear from this information, however, that airlines are going to need to continue cutting back. American Airlines has trimmed 6,800 jobs, or 8 percent of it’s work force. They also cut 200 pilots to cope with the cost of jet fuel. Midwest Airlines, announced on Monday it will cut 1,200 jobs or 40 percent of its staff and will ground 12 planes by this fall.

All in all, analyst expect the airlines will cut capacity by 9 percent in 2008, while continuing to hike fees and cut staff.

-Austin Chu

According to the International Herald Tribune, United Airlines and Delta Air Lines are looking to new revenue streams to offset the high prices of fuel by placing advertisements, coupons and weather forecasts on boarding passes when travelers check-in online.

The program is fueled by a new start-up, Sojern. Sojern brings customized, destination-oriented content to travelers throughout their trip. They also provide opportunities for advertisers to connect with customers.

Other airlines that are participating in the new program include:

American Airlines
Continental Airlines
Northwest Airlines
US Airways Group

The boarding passes will have a weather report and about five coupons or ads for retailers, restaurants and other businesses in a traveler’s arrival or departure city. Fliers eventually will be able to tailor ads to their interests.

According to Sojern, “advertisers are willing to spend money on targeted personal advertising if they know you’re going to be in town on such-and-such day.” “Passengers can call and make a dinner reservation for that night, and maybe get a coupon for a free appetizer.”

-Austin Chu

 According to NECN.com, twenty-three year old Ashley Day plead guilty to a list of charges in Worchester Superior Court Thursday. This included stealing almost $90,000 from her grandparents and great grandparents.

What she spent the money on:

A vacation to Germany, Aruba, and Mexico
An SUV

Day also stole her sister’s credit card, charging $8000 dollars to it, in addition to stealing customers’ credit card information to buy gift cards while working as a waitress.

She did not act alone, and commented that her boyfriend ‘cajoled’ her into stealing.

She was sentenced to 18 months in prison. The eight months she has spent behind bars awaiting trial will count toward that sentence. She’ll spend five years on probation.

-Austin Chu

In the midst of retailers filing for bankruptcy and closing down, on retail giant says they are staying healthy: Macy’s.

With the whole retail industry in a less than ideal state, people have been worried about Macy’s, but CEO Terry Lundgren said the retailer is ‘financially healthy’ and that it is actually taking market share away from many of it’s major rivals.

According to MarketWatch, Lundgren states, “Our cash flow remains strong,” he said in a letter that was disclosed in a filing with the Securities and Exchange Commission. “I realize how distracting the economy is. We’ll get through this difficult period. Our company will be poised to win over more customers.”

There were two interesting comments left on the MarketWatch post:

greenboy:
Macy’s will lose in the long term to Kohl’s, JCP, Target or anyone else in the discount sector……they need to decide if they want to be a discount house or fashion source with new and exciting product…..they currently lose on both accounts. Only hope is to close 25-30% of their crumbling stores and invest capital to make the remaining locations stand up to their “brand” ideal. Hopefully, someone will take them out and remove the incompetent corporate management.

DCartier:
The only real problems at Macy’s are that the shareholders haven’t fired Terry Lundgren and that the buyers need to ask the customers what it is that they want. They certainly don’t want a lot of the c*** that the buyers are putting in the stores. If you have to sell it all at 60-75% off clearance prices you are only devaluing your company brand image. I’m still hearing about critical inventory shortages in standard-sized mens shoes and summer tailored clothing across the company.

I haven’t been to Macy’s in a long time. I do remember a time when they dominated the mall, and expanded very much like the Roman Empire. I think they expanded too quickly and too much when the cash flow was high. This next move will be an important one. Either they stick to their guns and win, or they will follow the other retailers waiting at the morgue. It’s tough to say, whether or not they will file for bankruptcy. I’ll keep you posted, meanwhile, if you got some Macy’s gift cards, now is the time to spend time. Better safe than sorry.

Don’t know how much is on your gift card? Register and earn interest on your gift card on LeverageCard.com or check your balance here. You may also call 1-800-511-2752.

NOTE: Gift cards that were sold on or after 2/3/08 do not expire. Cards sold before that, expire after two years. Either way, spend them!

Do you think Macy’s is going to survive?

-Austin Chu