racko
Posts: 4548
Joined: Tue Nov 06, 2001 12:06 am

European Carriers With Serious Problems

Mon Mar 03, 2003 12:29 am

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.

Austrian:
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.

Swiss:
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?

Alitalia:
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...
 
Thomas_Jaeger
Posts: 2200
Joined: Fri Apr 26, 2002 5:35 pm

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 12:43 am

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
 
donder10
Posts: 6944
Joined: Sun Oct 21, 2001 5:29 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 12:52 am

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



 
Tango-Bravo
Posts: 2887
Joined: Sun Jun 17, 2001 1:04 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 1:12 am

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?
 
airways
Posts: 852
Joined: Sun Mar 11, 2001 7:35 pm

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 2:20 am

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.

Michael
http://airsider.net
 
GDB
Posts: 12652
Joined: Wed May 23, 2001 6:25 pm

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 2:42 am

Add BA to that list, they won't get any help, maybe when it's all too late they might.
 
BestWestern
Posts: 6998
Joined: Fri Sep 08, 2000 8:46 pm

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 2:44 am

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.
You are 100 times more likely to catch a cold on a flight than an average person!
 
MD-11 forever
Posts: 550
Joined: Wed Mar 14, 2001 12:15 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 3:19 am

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
 
bmi330
Posts: 1429
Joined: Sun Nov 11, 2001 9:04 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 4:00 am

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.
 
josseposse
Posts: 49
Joined: Mon Jan 06, 2003 6:25 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 7:45 am

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.
 
boeing 747-311
Posts: 777
Joined: Fri Mar 30, 2001 10:29 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 8:07 am

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
 
ILOVEA340
Posts: 2064
Joined: Sat Oct 30, 1999 9:49 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 12:30 pm

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,
 
Tango-Bravo
Posts: 2887
Joined: Sun Jun 17, 2001 1:04 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 1:22 pm

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.
 
Treg
Posts: 488
Joined: Tue Oct 16, 2001 8:55 pm

RE: A320 Vs B757

Mon Mar 03, 2003 9:43 pm

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).
 
BestWestern
Posts: 6998
Joined: Fri Sep 08, 2000 8:46 pm

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 10:00 pm

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

Star Alliance
LH
SK
OneWorld
BA
IB
SkyTeam
AF
AZ

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...





You are 100 times more likely to catch a cold on a flight than an average person!
 
zauberfloete
Posts: 297
Joined: Mon Nov 20, 2000 7:07 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 10:11 pm

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.
 
racko
Posts: 4548
Joined: Tue Nov 06, 2001 12:06 am

RE: European Carriers With Serious Problems

Mon Mar 03, 2003 10:32 pm

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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