profitability-cycle-peaks-for-airline-industry

Profitability cycle peaks for airline industry

Weaker airlines will be forced to restructure and some will go out of business due to high oil prices and falling demand, according to UBS analysis.
Slower demand, together with high oil prices will lead to further consolidation, restructuring and some bankruptcies in the airline industry, according to Damien Horth, managing director and head of Asian transport research for UBS.

ôIf the oil price remains at current high levels, the present profitability cycle for airlines which started in 2003 has peaked,ö he said during a presentation to reporters yesterday.

UBS is forecasting a recession in the US in the first half of the year, but positive growth for the full year. But the downturn, according to Horth, will lead to a softening of demand for air travel. This together with higher oil prices will force weaker airlines to restructure or...
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