24 Mar What Do Aloha Airlines And You Have In Common?
Aloha Airgroup, Inc, recently filed for Chapter 11 bankruptcy protection. Aloha Airgroup, Inc. is the parent corporation of Aloha Airlines, Inc. This is the company’s second bankruptcy in less than three (3) years.
You may be asking yourself, what do I have in common with Aloha Airlines? I will answer that soon, but before I do, I will need you to ask yourself another question. Is your cash being eaten up quickly, by food, insurance, gas and housing costs? If you answered yes, then you do have something in common with Aloha Airlines.
Aloha Airlines is in a transition period right now. Back in 2004, Aloha Airlines filed Chapter 11 and came out of bankruptcy approximately 2 years later. During that time, they had an opportunity to come out of the bankruptcy a much stronger and aggressive company with much less debt.
In 2006, a competitor Mesa Airlines started flying many of the same routes and charging lower fares. Aloha felt the need to compete in the low fare wars, and even though it could afford to do so for a limited time, the fare wars could not have come at a worse time. Gas prices are spiraling out of control and wreaking havoc on their financial statements. Likewise, lower fares mean less revenue to cover the general overhead.
The bottom line is that Aloha didn’t keep an eye on their bottom line. The goal of this article is not to criticize Aloha’s management team. The goal is for the reader to look around you, see what is going on, and make the right financial decisions.
How does this relate to you, the reader of this wonderful blog? Well, it’s pretty simple. Aloha failed to see the threats to its bottom line in its everyday operations, or, in the alternative, saw the threats and failed to take appropriate actions to manage the threats.
Either way this behavior can cause significant problems. It is no different when an individual uses a credit card for something that they cannot pay off this month or refinances a home that they cannot afford, or uses a tax refund check to buy a blue ray player instead of saving for retirement. Aloha’s behavior was the same, but on a much larger scale.
You are reading this blog either because you have financial problems or you want to learn more about financial issues so you can help others. I read this blog because quite honestly I happen to have both. Although I don’t have an immediate financial problem, something could happen, the snowball would start rolling down the hill, and I could have significant financial problems. Likewise, I like to help people with financial issues. One of the areas I always focus on with my clients is seeing the trends like overspending and waste and trying to avoid them.
So, in a nutshell, Aloha Airlines, Inc., you and I have one thing in common, we are all facing financial threats on a daily basis. Unlike Aloha, I cannot make a call and have a private lender wire millions of dollars into my bank account, yet. But, I will be watching the financial threats and making decisions to properly use the resources that I have at my fingertips. You can too.
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