Branson predicts ‘spectacular’ airline casualties
13.07.08
There will be ‘spectacular casualties’ in the airline industry over the next 12 months, Sir Richard Branson was quoted as saying on yesterday. The airline industry has been battered by soaring fuel costs that are wiping out the profits of even the healthiest airlines, such as Ryanair and BA.
Sir Richard told the Times: ‘The financial state of the world is just about the worst I've ever known it. It's getting perilously close to being worse than the 1990s. You have the perfect storm - you've not only got the banking crisis and the housing crisis, you've got the soaring fuel prices as well. One of the big American carriers will almost definitely go.’
He also confirmed Virgin was interested in buying bmi, 50 percent plus one share owned by Sir Michael Bishop. It is expected to change ownership in 2009 due to an agreement between Sir Michael and 30 percent minus one share co-owner Lufthansa.
Despite making a small profit in 2007 - and with the outlook far worse for 2008 - bmi's value is in its control of 11 percent of the highly prized airline slots at Heathrow. Sir richard also called for an end to BAA's monopoly of Britain's major airports.
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