Under serious threats from several sides challenging the survival of airlines, a leading analyst has claimed that only the most competitive players in the airline industry can hope to survive the present turmoil threatening the airlines.
According to Davy Stockbrokers, a few airlines that are very well placed to comfortably withstand the slowdown haunting the sector include Air France, Lufthansa, easyJet and Ryanair. The core issue among several others is the alarmingly increasing fuel costs.
Addressing a group of investors, Davy analyst Stephen Furlong noted, "The current oil-price-driven crisis could well be the worst to hit the airline industry. We view the long-term winners as the stronger airlines."
Stephen Furlong argued that the airlines in this list are in a comfortable position as they are partly protected by their ready cash flow besides low operating costs. However, he too stressed that carriers like Air Berlin and Clickair were more vulnerable to the present threats. Furlong was highly positive that stronger airlines could always capitalize on any sort of bankruptcies arising in course of the present turmoil.
He continued, "We would expect large-scale cutbacks, with weaker players having to restructure, merge or disappear."
Closely analyzing the present challenges faced by the airline industry, The International Air Transport Association recently cautioned that the arena is highly struggling for survival. It has also forecasted that the industry is likely to face the extra costs of not less than $99 billion (£50 billion) over the next year.