Airlines earnings: More trouble than expected
Filed under: Energy, Company News, Economy
The International Air Transport Association in March projected global airlines would lose $4.7 billion this year compared to $8.5 billion last year. The number for 2009 is almost certain to be worse than the forecast from three months ago as both passenger and freight loads drop.
The news reopens the question of whether all of the major U.S. carriers will survive as they are or whether there is more consolidation ahead that could turn two American airlines into one.
There has been a great deal of talk that American Airlines (AMR) cannot stand on its own if its losses increase through the year. If oil moves from $67 to a price $10 to $15 above that, airlines would be faced with the crippling fuel costs that came close to taking some of them under last year.
Big airline M&A may be back on the horizon again.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
6-04-2009 @ 7:15AM
sgentilejr said...
No airline and no auto company can earn profits when consumers have empty pockets and cannot afford to pay more. What we are seeing now in our economy are the end effects of wages not keeping pace with inflation for the last 30 years.
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