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Thursday, July 3, 2008 $6.5 billion in losses seen for airline industry
(Reuters) - Calyon Securities's Ray Neidl widened his
second-quarter and 2008 loss estimates for some large U.S. carriers, and
forecast an industry-wide loss of about $6.5 billion for the year, saying fuel
costs had increased faster than expected. "Persistently ever higher fuel costs remain the industry's
major threat at this time with economic softness, labor unrest and what seems
to be government indifference over aviation infrastructure," Neidl said in
a research note. Neidl expects an industry-wide loss of about $800 million for the
second quarter. The analyst, who has a "neutral" rating on all the
airline stocks that he covers, said though he expects the airlines to continue
to take drastic actions, it was too early to determine if the planned capacity
cuts for the slower post-summer travel season would be successful. Though most stocks are already trading near bankruptcy levels,
Neidl said they could still make it at least into 2009 without filing for
bankruptcy. "If oil prices stay high, we expect a vastly smaller industry
for at least a few years until adjustments and restructuring can be completed,
the analyst said. |
