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  3. (1)Darkening economic clouds, oil at $114 a barrel, cut-throat competition and disappearing credit lines are confronting airline

(1)Darkening economic clouds, oil at $114 a barrel, cut-throat competition and disappearing credit lines are confronting airline

admin2021-08-05  57
问题     (1)Darkening economic clouds, oil at $114 a barrel, cut-throat competition and disappearing credit lines are confronting airlines with their biggest crisis since the dark days after September 11th 2001. It is a measure of the panic sweeping the industry that Delta and Northwest said they would push ahead with their $3.6 billion merger to create the world’s biggest airline by traffic. Previously both firms had said that gaining agreement with their 11,000 unionized pilots over pay and conditions was an essential pre-condition to the deal. Yet even though Northwest’s pilots remain bitterly opposed, due mainly to unresolved seniority issues, the two airlines have decided to take the risk of a potentially long-drawn-out and fractious integration of their operations because they calculate that a merger is their best chance of survival as the industry’s woes deepen.
    (2)In the past few weeks, four smaller airlines in America—Aloha, Skybus, ATA and Frontier—have filed for bankruptcy. Maxjet, an all business-class transatlantic airline, went bust in December; its rival Silverjet is desperately looking for a buyer. Oasis Hong Kong, a pioneer of low-cost long-haul services, abruptly collapsed on April 9th. Alitalia may experience a similar fate unless a takeover by Air France-KLM, sabotaged by unions and Italy’s newly elected Prime Minister, Silvio Berlusconi, can be revived. Nothing links these airlines, which span every conceivable business model in aviation, other than their inability to cope with the brutal economics of the business, especially the near-doubling of fuel prices in the past 18 months.
    (3)Delta and Northwest are not yet in such a hole, but having only recently emerged from Chapter 11 bankruptcy protection themselves, they know that time is not on their side. After a strong recovery by America’s airlines in the past few years, profitability has fallen fast this year. And balance sheets are still weak, even at the big network carriers. IATA, the international organization that represents the industry, observed last September that American carriers were "vulnerable to shocks"—and that was when oil was at $67 a barrel and the credit crunch had yet to bite. Adding to that vulnerability is the realization by America’s airlines that there is little, if any, fat left to trim if they stay as they are. The industry has reduced its workforce by 39%, cut wages by 30% and defaulted on pensions to the tune of $20 billion.
    (4)To make matters still worse, as carriers elsewhere in the world ordered around 7,000 new, fuel-efficient aircraft in recent years, those fragile balance sheets meant that American airlines sat on their hands. Delta has 117 McDonnell Douglas MD-88s with an average age of 18 years; Northwest soldiers on with more than 90 DC-9s with an average age nudging 40 years. These planes are up to 40% thirstier man their more modern counterparts, a crippling burden given the price of fuel. They are also more difficult to maintain—as last week’s grounding of American Airlines’ similarly elderly MD-80s highlighted.
    (5)Delta and Northwest have little scope to cut front-line staff or replace their ageing fleets any time soon— production lines at Boeing and Airbus are fully booked. But they think they can secure cost reductions of about $1 billion a year by centralizing their back-office operations and cutting management jobs. They also hope to boost revenue by combining route networks and strengthening their appeal to lucrative corporate customers.
    (6)Other American network carriers are watching closely. A similar tie-up between United and Continental, the second- and fourth-biggest, is under discussion, and American, the largest carrier, waits menacingly on the sidelines. Northwest’s attempt to merge with Continental was blocked in 1998, but regulatory approval is more likely this time, given the lack of route overlap between Delta and Northwest. The prospect of a union-friendly Democrat in the White House next year is a further spur to getting deals done quickly.
    (7)The assumption in the industry is that consolidation will result in stronger airlines. That is probably true, but difficulties remain. As long as the barriers to new entrants remain absurdly low, intense—even suicidal— competition will persist at home. On international routes, "open skies" liberalization is an opportunity, but the superior financial clout and modern planes of the big European network carriers, such as Air France-KLM and Lufthansa, are a threat. For hard-pressed airline managers with the urge to merge, relief is more likely to be fleeting than permanent.
The merger of Delta and Northwest______.
选项 A、has gained agreement with their 11,000 unionized pilots over pay and conditions
B、is made possible mainly due to the unresolved seniority issues of the two airlines
C、is viewed as a best chance for the two airlines to survive under current conditions
D、has gained support from me pilots because it will create the world’s biggest airline
答案C
解析 第1段讲述了在当前越发低迷的经济条件下，两家公司进行了合并，而他们将这次合并看作是在不断恶化的产业环境中生存下去的最好方法，故C正确。
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