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Rationalization in Europe

As the industry continues to suffer worldwide, it seems the challenges facing European airlines continue to increase. There is overcapacity and yields are down (partly because of that overcapacity). Currency issues, uncertainty over the European economies, weakness in China and throughout Europe as well as currency devaluations are creating a difficult situation. Fuel prices hide many sins Low fuel prices are a godsend for many European airlines. They help offset currency losses and dropping demand. But they're not enough. All low fuel prices do is delay the pain. European airlines continue to add caapcity in an effort to lower unit costs. But demand is falling, so the prospect of lower unit

Cloudy skies over Europe

Airlines are enjoying unprecedented profits Airlines around the world are enjoying a profitable summer and the prospects for 2015 and 2016 look highly positive. This is due to airlines in North America having restructured costs multiple times over the past decade, while European airlines have only recently been improving costs (though some remain far behind). European and Asian airlines benefit from the rational nehaviour of their American and Canadian counterparts being rational with capacity and keeping costs low. Profits hide structural cost problems As airline profits are rolling in, there is a dark cloud over the horizon. Peeling back the profit improvements from lower fuel prices, unde

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