Times: 50 airlines face significant financial difficulty
03.08.08
Dozens of airlines across Europe face post-summer bankruptcies due to rising fuels costs and consumer travel cutbacks, according to a report in the Times newspaper. It says that at least 50 airlines will face significant financial trouble after the summer travel season is over and the quieter winter months approach.
On Friday Willie Walsh, chief executive of British Airways, said the outlook for the aviation industry has become decidedly grim, telling reporters, ‘We will see a number of failures as there are quite a lot of weak carriers that will not survive. We are in the worst trading environment the industry has ever faced.’
Weaker carriers will not survive the post summer holiday crunch, aviation analysts say, as passenger demand falls because of higher fares and the worsening economy and fuel hedging unwinds, significantly increasing costs.
Douglas McNeil of Blue Oar investments said in a report entitled 'Into thin air', quoted by The Times, that the airlines under threat include SAS (Scandinavia), Alitalia (Italy), Olympic (Greece), Malev (Hungarian) and Lot (Poland), as well as, smaller British airlines such as bmi, Flybe and Monarch.
Mr Walsh said: ‘It’s a positive thing if some of these carriers go out of business, as it will take capacity out of the market. Look at Alitalia – it should not be allowed to continue in business. It is propped up by the illegal state aid from the Italians.’
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