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European Carriers With Serious Problems  
User currently offlineRacko From Germany, joined Nov 2001, 4887 posts, RR: 19
Posted (13 years 3 months 16 hours ago) and read 4023 times:

What do you think, which european carriers will face serious problems if a war in Iraq will occur?

I think that at least 1 major carrier will go belly-up.

My candidates are: BD, OS, LX, AZ and EI.

What are the options for these airlines?

British Midland:
I guess they would just die, or Lufthansa expands their 30% shares and runs them as a British subsidiary.

I doubt they'll die. I guess the Austrian government would do "a swissair" with them, huge public funds to rescue the national airline. An austrian failure would leave Austria without any big airline, as Austrian, Lauda & Tyrolean all belong to OS. At least Tyrolean is profitable afaik. Another option would again be their Star Alliance partner Lufthansa to buy a stake and rum them as a subsidiary.

Could the Swiss government again help them out? I doubt it, the public would probably go mad if their government wants to spend billions on the airline just 2 years after the first failure. Could one of the Oneworld partners step in ? And another question is, do countries like Austria or Switzerland really need a big national airline, or could the majors from big countries just serve them?

My money would be on a bail-out by the Italian government, Italy needs their national carrier. How's the public attitude towards AZ? Another option would be Air France, they seem to be in the financial situation to buy at least a stake in them.

Aer Lingus:
Hm, I don't know. I guess they would just die, as FR offers enough cheap flights to Britain. How close is the relation between EI and the Irish? Imagine that, Ryanair as the Irish flagcarrier...

16 replies: All unread, jump to last
User currently offlineThomas_Jaeger From Switzerland, joined Apr 2002, 2471 posts, RR: 25
Reply 1, posted (13 years 3 months 15 hours ago) and read 3924 times:

At least BD and OS are already in huge danger of a grounding in the next few weeks even without war in Iraq.

Swiss aviation news junkie living all over the place
User currently offlineDonder10 From Canada, joined Oct 2001, 6660 posts, RR: 20
Reply 2, posted (13 years 3 months 15 hours ago) and read 3907 times:

IMO BD are a bit of a pick and match airline at the moment:
a 3 class transatlantic airline
an apparently low-cost arm
massive 'traditional' airline operations at LHR and to some extent MAN
UK regional routes eg Aberdeen to Norwich

User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3813 posts, RR: 26
Reply 3, posted (13 years 3 months 15 hours ago) and read 3875 times:

From precedent set by various recent EU rulings (of which I am aware), is state aid a realistic possibility for troubled airlines based in EU member nations?

User currently offlineAirways From Switzerland, joined Mar 2001, 880 posts, RR: 11
Reply 4, posted (13 years 3 months 14 hours ago) and read 3817 times:

Thomas: Could you give us some more details about your statement? Is the situation for BD and OS really that bad? I knew BD is facing some problems right now, but I thought OS is in a better shape right now.


User currently offlineGDB From United Kingdom, joined May 2001, 13605 posts, RR: 76
Reply 5, posted (13 years 3 months 13 hours ago) and read 3779 times:

Add BA to that list, they won't get any help, maybe when it's all too late they might.

User currently offlineBestWestern From Hong Kong, joined Sep 2000, 8727 posts, RR: 57
Reply 6, posted (13 years 3 months 13 hours ago) and read 3788 times:

LH wont let BD collapse due to the value of the LHR slots. Next Winter will see make or break for Baby and the trans-atlantic operations.

VS must be in trouble at present. It would be a shame if they collapsed. I hope that Richard Branson has enough cash to keep them alfoat.. If UK openskies happens, VS will face even more competition from LH using those BD slots.

LX and SN are in trouble.. OA too. AZ will survive, so will IB, TP and EI.

The majority of the so called low cost carriers will cease operations this winter, following those who have collapsed already in the last few months BerlinJet... GoodJet... Buzz...

Other so called lowcost airlines will go back to charter only operations, especially Air Berlin and Hapag, coming under increased Ryanair competition
My Travel Lite cannot survive with the parent company unable to inject further capital for growth.

Smaller carriers such as Maersk Uk, Norwegian, FlyBe, Spanair, Gandalf, AirEurope Italy, will have difficulties, allowing breathing space for the majors and the tertiary carriers, such as Aer Arann, Eastern, Augsburg, Air Nostrum, Climber Air.

The world is really getting smaller these days
User currently offlineMD-11 forever From , joined Dec 1969, posts, RR:
Reply 7, posted (13 years 3 months 13 hours ago) and read 3739 times:

No doubt that LX is in trouble, but still they are among the carriers which have a comfortable cpital situation. They at least have the finacial "breath" to restructure. So I'm confident that they will survive, but the size will be different.....

Cheers, Thomas

User currently offlineBmi330 From United Kingdom, joined Nov 2001, 1455 posts, RR: 1
Reply 8, posted (13 years 3 months 12 hours ago) and read 3672 times:

One solution BD might have would be to merge with virgin that would be a perfect fit and they already code for euro via LHR to international destinations or did which would create a quite strong airline group. Baby and Virgin Express would fit well and make a nice lo-cost airliners. Also if they where one airline they would be strong with a sizable presence at LHR.

User currently offlineJosseposse From Netherlands, joined Jan 2003, 49 posts, RR: 0
Reply 9, posted (13 years 3 months 8 hours ago) and read 3517 times:

Maybe a little off-topic... I booked a flight AMS-VIE-JFK-VIE-AMS on OS for this upcoming summer. Say that a war breaks out and say OS is grounded/bankrupt/etc. Will (e.g.) LH take over my flights? Will my tickets be worthless??

Thanks for any info.

User currently offlineBoeing 747-311 From United States of America, joined Mar 2001, 795 posts, RR: 0
Reply 10, posted (13 years 3 months 8 hours ago) and read 3485 times:

Is LH doing that good? I mean that they are able to just buy parts of airlines. They sound like they are doing really well.

Come fly with US
User currently offlineILOVEA340 From United States of America, joined Oct 1999, 2100 posts, RR: 4
Reply 11, posted (13 years 3 months 4 hours ago) and read 3427 times:

LX (swiss) is not in trouble for at least another 2 years considering their capital. If they can turn profitable by then, which the claim they will, then they should not have any major unforseen problems. Its not going to be easy though,

User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3813 posts, RR: 26
Reply 12, posted (13 years 3 months 3 hours ago) and read 3409 times:

Boeing 747-311 writes: "Is LH doing that good?"

To speak to the flip side of the topic "European Carriers With Serious Problems".....

Lufthansa is among the handful of traditional European airlines who are best prepared to get through potentially more trying times ahead. Others are British Airways, SAS and Finnair. Air France is in a favorable position relative to others in the industry. While Iberia has improved its standing dramatically in recent times, IMO it remains a question mark. All others (based in EU member nations) would appear to be vulnerable if the EU maintains and enforces its hardline stance toward prohibiting or strictly limiting state aid for troubled airlines.

User currently offlineTreg From Estonia, joined Oct 2001, 544 posts, RR: 0
Reply 13, posted (13 years 2 months 4 weeks 1 day 18 hours ago) and read 3235 times:

Tango-Bravo wrote:
Others are British Airways, SAS and Finnair.

Exclude SAS from the list. As it is today they are in serious trouble. There are several articles about SAS in this week's "Veckans Affärer" which is the largest swedish business journal. If one can swedish then here is the link: http://www.va.se. The bottom line: by 2005 they have to save 6.5 bilj SEK (ca 0.65 bilj Euros) in order to survive. This will mainly come from salaries (SAS cabin personnel salary is in average 72600 USD per year (1998) while in BA it is only 29600) and layoffs.

And something maybe not so surprising: one of the biggest competitors for SAS is their close alliance partner Lufthansa (16% of the premium passangers (business and first class) market).

User currently offlineBestWestern From Hong Kong, joined Sep 2000, 8727 posts, RR: 57
Reply 14, posted (13 years 2 months 4 weeks 1 day 18 hours ago) and read 3218 times:

Europes major carriers will be focused around their principal alliance partners:

Star Alliance

Others, such as EI, KL, OS, AY and TP will be eventually merged into one of the above.

Low cost carriers are in serious trouble, the yields are not there to justify the huge capacity they are placing into markets, such as Cologne and London. We have seen two of the top four low cost carriers dissappear in the last twelve months. The same will happen in Germany, where the battle is just about to commence... HLX, Germanwings, Germania, FlyDBA, Air Berlin and Ryanair all ready to battle it out for the passengers... who will win??? Ryanair and FlyDBA (easyJet?).... Virgin Express were right to step away from the battle when they did... 2002 saw many low cost brands cease flying... Go, Ciao Fly, GoodJet.... 2003 will see the end of six-ten low cost brands, so far three have gone, Buzz, BerlinJet, AirLib... thats one a month...

The world is really getting smaller these days
User currently offlineZauberfloete From Austria, joined Nov 2000, 302 posts, RR: 0
Reply 15, posted (13 years 2 months 4 weeks 1 day 18 hours ago) and read 3183 times:

Where did you get the info from that Austrian is going to be grounded Thomas Jaeger?
I do not expect that. They will make a profit this year, and they where not doeing that bad last year. As I understand it there is no danger for Austrian to file for bankruptcy even with a war in iraq. If a war in Iraq occurs, they will reduce production to the middle east, but that's it. Maybe they will be on profit that year even with a war in Iraq. As far as I understand it, the airline is on its way, and I do not see an obstacle that is that bad.

User currently offlineRacko From Germany, joined Nov 2001, 4887 posts, RR: 19
Reply 16, posted (13 years 2 months 4 weeks 1 day 18 hours ago) and read 3135 times:

I don't think that DBA will survive this year.
HLX (Preussag) and 4U (LH) have big companies behind them, Ryanair is strong enough to survive alone, Germania has a smart manager who has always proven to find a solution and Air Berlin is a strong player in the tourist market. DBA has to fly low-cost with planes with a usual seat-pitch, and they are not really known to the public as a low cost carrier.

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