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Thursday, March 13, 2008

Fuel, Recession Threaten Airline Financials

Just as the airline industry is emerging from the last economic downturn with only two consecutive profitable years, the price of fuel will likely mean collective losses of as much as $9 billion this year, according to JP Morgan Analyst Jamie Baker who published his latest investment report Wednesday. Airline stocks, which rose with merger reports, dropped yesterday. Baker said the best case would be industry-wide losses of $4 billion. Airline revenues, he said would be hit by the combined rising fuel and falling demand owing to the economy, preventing further fare increases to cover fuel hikes.
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