Things With Wings

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  • Worries About European Airlines Mount
    Posted by Robert Wall 9:04 AM on Aug 24, 2011

    The deteriorating economic outlook in Europe is starting to cause concerns in the investment community about the prospects for the region's airlines.

    In a new research note, Credit Suisse analysts note that "the demand outlook seems to have sharply deteriorated" causing the analysts to lower their revenue expectation. Demand in 2012 is expected to be "sluggish."

    Similarly, Deutsche Bank has removed IAG -- parent of British Airways and Iberia -- from its "Buy" list, raising concern about corporate travel and worries that the airline group is losing business to Middle East carriers.

    Credit Suisse analysts are more optimistic about the prospects for IAG (as well as Lufthansa), citing their "superior self-help potential" but also note that low-fare carriers Ryanair and EasyJet "are distinctly less vulnerable than sector peers" in a double-dip recession scenario.

    Tags: tw99, airlines

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