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Iata : Eurozone Crisis Can Kill Some Airlines  
User currently offlineGonzalo From Chile, joined Aug 2005, 1987 posts, RR: 2
Posted (2 years 3 months 1 week 9 hours ago) and read 8758 times:

Mr. Brian Pearce, Chief Economist of the International Air Transport Association, was pessimistic about the industry's prospects in Europe.


"I think there is a serious risk to the financial viability of some airlines," he said.

http://www.telegraph.co.uk/finance/n...-warns-economist-Brian-Pearce.html

The Malev case is just an example according to Mr. Pearce, and he predicts that even some flag carriers could be in danger, but he did'n mention any specific airline.

Your thoughts ?

G.


80 Knots...V1...Rotate...Gear Up...DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20 / B732 / B763
43 replies: All unread, showing first 25:
 
User currently offlinesweair From Sweden, joined Nov 2011, 1823 posts, RR: 0
Reply 1, posted (2 years 3 months 1 week 9 hours ago) and read 8712 times:

SAS..Even before this crisis they were in the deep red. Many still hope for LH to buy them I guess.

User currently offlineLHCVG From United States of America, joined May 2009, 1574 posts, RR: 2
Reply 2, posted (2 years 3 months 1 week 8 hours ago) and read 8594 times:

Quoting sweair (Reply 1):
SAS..Even before this crisis they were in the deep red. Many still hope for LH to buy them I guess.

Were there ever any developments on that front? Last I heard it was mere speculation around here, but I wasn't clear if any action has taken place.


User currently offlineordjoe From United States of America, joined Aug 2010, 707 posts, RR: 0
Reply 3, posted (2 years 3 months 1 week 8 hours ago) and read 8569 times:

I love how he ripped those dam taxes like the APD and other PFC's, it is getting out of hand. I think the smaller legacies of eastern Europe like CSA and the like are in serious danger, didn't LOT need a big cash injection from TK.

Tough to say, Europe is on the brink now much the way the global financial system was on the brink 3 years ago, whether they fall off the cliff or recover is anyones guess. My thought is things are going to get a bit worse before they get better,


User currently offlineLJ From Netherlands, joined Nov 1999, 4428 posts, RR: 0
Reply 4, posted (2 years 3 months 1 week 8 hours ago) and read 8488 times:

Quoting ordjoe (Reply 3):
didn't LOT need a big cash injection from TK.

LOT is/was privatised. TK won't be one of the investors (they're not interested anymore).


User currently offlineGonzalo From Chile, joined Aug 2005, 1987 posts, RR: 2
Reply 5, posted (2 years 3 months 1 week 8 hours ago) and read 8455 times:

Quoting LHCVG (Reply 2):
Were there ever any developments on that front? Last I heard it was mere speculation around here, but I wasn't clear if any action has taken place.

I didn't hear anything either, but the steps of DY could be a sign of the hard times ahead for SAS, and certainly a weak market in Europe does not help.

G.



80 Knots...V1...Rotate...Gear Up...DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20 / B732 / B763
User currently offlineLAXintl From United States of America, joined May 2000, 25357 posts, RR: 49
Reply 6, posted (2 years 3 months 1 week 7 hours ago) and read 8298 times:

  

Survival of the fittest

The European airline scene has too many players, too much capacity, plus there are many carriers that suffer under unrealistic cost base much due to uncompetitive labor burden.

Its will be healthy to see the weak shrink, merge, or perish.

The airline industry is a global market place, and like the blood letting in the US industry, the European airline scene including the majors need to go through the pain to adjust to the modern day macro-economic realities of the industry.

My only fear is that national politics will continue to get in the way of the needed house cleaning at these enterprises.



From the desert to the sea, to all of Southern California
User currently offlineLHCVG From United States of America, joined May 2009, 1574 posts, RR: 2
Reply 7, posted (2 years 3 months 1 week 7 hours ago) and read 8266 times:

Quoting LAXintl (Reply 6):
My only fear is that national politics will continue to get in the way of the needed house cleaning at these enterprises

Indeed so! I'm starting to think that the likes of OS, SK, TP, etc. will have to depend on larger group ownership in order to survive. Even OS has troubles, but I do think we'll see more of these carriers get absorbed into the LH, IAG, AF/KL folds.


User currently offlineLOWS From Austria, joined Oct 2011, 1153 posts, RR: 1
Reply 8, posted (2 years 3 months 1 week 7 hours ago) and read 8201 times:

Quoting sweair (Reply 1):
SAS..Even before this crisis they were in the deep red. Many still hope for LH to buy them I guess.

LH can't afford to buy SAS too. They need to get their act together.


[quote=LHCVG,reply=7Even OS has troubles
[/quote]

LH Group needs to start consolidating OS into LH group on the administrative side.


User currently offlineLHCVG From United States of America, joined May 2009, 1574 posts, RR: 2
Reply 9, posted (2 years 3 months 1 week 6 hours ago) and read 7942 times:

Quoting LOWS (Reply 8):
LH Group needs to start consolidating OS into LH group on the administrative side.

Agreed! That will certainly generate additional savings yet to be realized under the current arrangement.


User currently offlineTeamInTheSky From United States of America, joined Apr 2011, 535 posts, RR: 0
Reply 10, posted (2 years 3 months 1 week 5 hours ago) and read 7749 times:

I wouldn't be surprised if AZ was to be rolled into AF/KL sooner than later. However, not sure if that would actually make put the airline in better or worse shape....


Since 2010: DL, KL, AF, WX, IG, FR , FL, U2, AK, BA, OK, UX, VS, VN, K6
User currently offlineju068 From Vanuatu, joined Aug 2009, 2640 posts, RR: 6
Reply 11, posted (2 years 3 months 1 week 4 hours ago) and read 7463 times:
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On top of this the European Commission had launched an official investigation into government subsidies given to some airlines (and airports). Apparently the countries in question are France, Germany, Austria and a few others.
Fun times ahead... not.


User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7605 posts, RR: 3
Reply 12, posted (2 years 3 months 1 week 3 hours ago) and read 7390 times:

Given the more general issues faced by Greece, how about OA?.

User currently onlineViscount724 From Switzerland, joined Oct 2006, 25305 posts, RR: 22
Reply 13, posted (2 years 3 months 1 week 3 hours ago) and read 7300 times:

Quoting LJ (Reply 4):
Quoting ordjoe (Reply 3):
didn't LOT need a big cash injection from TK.

LOT is/was privatised.

Not yet. Nobody has shown much interest in investing in LOT. The most serious candidate was TK which was considering taking a stake but they just announced a few days ago that they're no longer interested.
http://atwonline.com/airline-finance...ot-invest-lot-polish-airlines-0604


User currently offlineGonzalo From Chile, joined Aug 2005, 1987 posts, RR: 2
Reply 14, posted (2 years 3 months 1 week 3 hours ago) and read 7274 times:

Quoting bennett123 (Reply 12):
Given the more general issues faced by Greece, how about OA?.

OA is a private company since the end of 2009. Maybe they could be in trouble due to the lack of passengers ( the tourists not going to Greece and that ), but at least they don't rely in the ( broken ) state for cash.
I think IB could be in a similar situation if the Spanish crisis doesn't end "soon", a 22 % of unemployment is not a very good sign for the market, and the AZ situation could be bad also if this Euro crisis last for too long..

Rgds.

G.



80 Knots...V1...Rotate...Gear Up...DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20 / B732 / B763
User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2360 posts, RR: 1
Reply 15, posted (2 years 3 months 1 week 3 hours ago) and read 7207 times:



Quoting LJ (Reply 4):
LOT is/was privatised. TK won't be one of the investors (they're not interested anymore).

IAG was mentioned earlier as being interested. This isn't good for LH/*A. With the TK deal in ashes, this will force LH into making an offer or possibly face losing LOT to another alliance.

Quoting TeamInTheSky (Reply 10):
I wouldn't be surprised if AZ was to be rolled into AF/KL sooner than later.

Doubtful, AF isn't having an easy time in this recession either.

Quoting bennett123 (Reply 12):
Given the more general issues faced by Greece, how about OA?.

I personally would like to see OA rolled into OW. If either Greek carrier has to fail, I would rather it be A3.

[Edited 2012-06-11 14:38:19]


The 747: The hands who designed it were guided by god.
User currently offlineGonzalo From Chile, joined Aug 2005, 1987 posts, RR: 2
Reply 16, posted (2 years 3 months 1 week 3 hours ago) and read 7206 times:

Another link, but the same dark clouds ahead :

http://atwonline.com/airline-finance...-doubles-next-months-critical-0611

"European carriers are expected to report combined losses of $1.1 billion for the year, almost double the previous forecast of a $600 million loss, according to IATA. The next months will be critical ."      



80 Knots...V1...Rotate...Gear Up...DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20 / B732 / B763
User currently offlinePHX787 From Japan, joined Mar 2012, 7560 posts, RR: 18
Reply 17, posted (2 years 3 months 1 week 2 hours ago) and read 7123 times:

Quoting LAXintl (Reply 6):
Survival of the fittest

This is why the whole Bailout thing is killing ME. If they start bailing out the airlines, I think the whole Eurozone system would collapse.

Either way, I see AF/KL and IAG being the only two that survive without serious issues, albeit I think IB is really going to bring down the revenue for IAG. We already saw Malev go under, remember.



次は、渋谷、渋谷。出口は、右側です。電車とホームの間は広く開いておりますので、足元に注意下さい。
User currently offlineFerroviarius From Norway, joined Mar 2007, 225 posts, RR: 0
Reply 18, posted (2 years 3 months 6 days 12 hours ago) and read 4785 times:

Quoting sweair (Reply 1):
SAS..Even before this crisis they were in the deep red. Many still hope for LH to buy them I guess.

There is one thing, which gives hope for SAS. The Norwegian government lets taxpayers pay an incredibly high price to keep some farmers in the province alive. It's outrageous, the largest part of Oslo, Bergen, Stavanger citizens' tax goes to subsidize what they call "Distrikten". AND when there are elections, the ballots cast by those living a luxury life every day with fresh water and air and no traffic jams count considerably more than those by Oslo, Bergen, Stavanger citizens.

Among the many advantages, which the province is granted, are local airports, which economically are totally unviable. The Norwegian government pays airlines - i.e. chiefly SAS - to provide connections to these airports. If SAS would die, there would be a considerable problem.

This also might be one of the reasons, why the Norwegian government seemingly is un-interested in a high speed rail link between Stockholm and Oslo. While technically feasible without the slightest problems - it actually had existed years ago as "Lynx" and was killed despite economically viable - this would take most SAS customers from OSL-ARN, and it is them who pay for things like Harstad Narvik, Kirkenes, and I do not know what air fields out in the "Distrikt".

This said and completely independent of this, I am frequently using SAS on my own and am very satisfied with them!

Best wishes,
Ferroviarius


User currently offlineSASDC8 From Norway, joined Mar 2006, 756 posts, RR: 1
Reply 19, posted (2 years 3 months 6 days 12 hours ago) and read 4550 times:
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Quoting sweair (Reply 1):
SAS..Even before this crisis they were in the deep red. Many still hope for LH to buy them I guess


Sorry but I don't see your point here? SK is in the red yes, but they are only to a smaller degree hit by the euro-zone crisis. Chiefly because they fly people from countries (Norway, Sweden and Denmark) that are not directly involved in the crisis.

I would be more worried about carriers located in the parts of Europe that is really affected by the crisis.



2-3-2 is NOT a premium configuration
User currently offlineaeroblogger From India, joined Dec 2011, 1363 posts, RR: 0
Reply 20, posted (2 years 3 months 6 days 12 hours ago) and read 4507 times:

Quoting Byrdluvs747 (Reply 15):
I personally would like to see OA rolled into OW. If either Greek carrier has to fail, I would rather it be A3.

Why?? A3 is in better financial health...



Airports 2012: IXE HYD DEL BLR BOM CCU KNU KTM BKK SIN ICN LAX BUR SFO PHX IAH ORD EWR PHL PVD BOS FRA MUC IST
User currently offlineTobias2702 From Germany, joined Sep 2008, 720 posts, RR: 0
Reply 21, posted (2 years 3 months 6 days 9 hours ago) and read 3584 times:

Quoting Byrdluvs747 (Reply 15):

Quoting LJ (Reply 4):
LOT is/was privatised. TK won't be one of the investors (they're not interested anymore).

IAG was mentioned earlier as being interested. This isn't good for LH/*A. With the TK deal in ashes, this will force LH into making an offer or possibly face losing LOT to another alliance.

Why would troubled IAG invest in an airline TK (which is quite well performing) is not interested in? And does LH really care about the fate of LOT, rather than getting their own act together? I mean, LOT isn't that important for Star Alliance anyway, are they?



PA, AF, UK, BA, AB, DL, LH, FR, BD, A3, EZY, DY //// A319/320/346, B733/735/73G/738/744/763, AT4, 146, CR2, DH4
User currently offlineleftyboarder From Turkey, joined Apr 2008, 693 posts, RR: 1
Reply 22, posted (2 years 3 months 6 days 9 hours ago) and read 3536 times:

Quoting Tobias2702 (Reply 21):
Why would troubled IAG invest in an airline TK (which is quite well performing) is not interested in? And does LH really care about the fate of LOT, rather than getting their own act together? I mean, LOT isn't that important for Star Alliance anyway, are they?

TK gave up on LO because the lawyers tried hard (according to TK CEO) to find a loophole in EU law that allows TK majority ownership of LO, but they couldn't. Without majority control, such an investment a la B&H Airlines isn't attractive. IAG doesn't face the same restrictions since it is an EU company.


User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 23, posted (2 years 3 months 6 days 9 hours ago) and read 3516 times:

For as much criticism as U.S. based airlines receive from a service perspective, airlines in Europe will start to look more and more like their U.S. counterparts. Frills such as food service on short duration flights, free alcohol, etc. need to be eliminated in an effort to save costs and stay financially competitive.

There is a lot of fat that needs to be cut out of these European carriers and the ones who survive are those who address these costs sooner rather than later.


User currently offlinesweair From Sweden, joined Nov 2011, 1823 posts, RR: 0
Reply 24, posted (2 years 3 months 6 days 9 hours ago) and read 3504 times:

Sorry but I just think the bailout 2008 was enough, SAS should fix its problems or go under. Taxpayers should not have to bail them out every now and then. Make it work or go bust, this is not Soviet Union.

25 Ferroviarius : Indeed, a political question. But as long as the Norwegian Government - and its electorate - insist on having cheap flights to small airports in the
26 VV701 : My opinion is that IAG will not be absorbing any other airlines for the next few years. BA needs to successfully absorb BD first. And the prospects f
27 sweair : SAS problem is they missed the part when they lost the monopoly on air travel. And still the Danish unions mess around thinking its 1982.. I don't thi
28 ODAFZ : You are turning this post into a political post , that, we, as aviation fan, have no interest at all. I am astonished and ashamed that you are holdin
29 zeke : I think his comments are valid, a number of airlines in Europe will need to close. Many have unsustainable practices from when they were government o
30 MillwallSean : When we look at airlines that have enough money and possibility to buy competitors in Europe the list is very small indeed. capital injections from mi
31 PezySPU : Tobias, I'm under an impression that TK is one of those airlines that talk a lot but never get past that, plus they sort of compete with LH. And TK i
32 VV701 : Very misleading. The American economy grew at a faster rate in the first quarter of 2012 than any of the countries identified excepting only Norway (
33 PHX787 : Even when privatized i don't think any of the troubled ones will be able to make a profit. I honestly think that airlines need to be a little careful
34 ju068 : Olympic is owned by the Marfin Investment Group so I guess that they are going to be ok (at least for now). Yes but Aegean is owned by a group of Gre
35 ju068 : I would also like to add that this should be a clear sign of how much the EU needs to be reformed. You cannot have an institution such as the European
36 ODAFZ : I am on the side of respect for which Ferrovarius has none and I quote : It's culturless wilderness anyway, whether or not some thousands are living
37 ju068 : Libertarianism promotes the removal of state from the private sector. If the private sector cannot be self-sustaining then close it down. If these re
38 EagleBoy : I do agree with your point but I would argue that pride is not a problem in Ireland. The problem of Irish debt is that the Irish political class deci
39 TWA902fly : Those views are fine, but calling the areas outside of the major cities a "cultureless wilderness" is what I think was disrespectful. It's an implica
40 ju068 : I read his replies once again, just in case I missed something, but I still believe that his statements are directed towards communities which are no
41 sweair : Its horrible waste of tax money to have flights in rural areas. Most sane people would agree. If you want to live in a rural area, you have to live wi
42 mutu : it is true IB is shrinking a little due to poor local economy but BA premium traffic continues to grow strongly and the forward outlook more optimist
43 mikey72 : Europe is a mess at the moment and god knows where it's all going to end. Intra European cross border traffic is starting to collapse. IATA are foreca
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