How Is the Economic Downturn Affecting the Airline Industry?

EXECUTIVE SUMMARY ?Stagflation in US stinting system threatens outlook for the air passage industry profitability. US airlines forecasting Q108 losings citing high open fire costs and a potential economic slowdown. ?Other regions of the world will complicate such as Asia, Middle eastern and Latin America. ?Slowdown has already affected some US small-mid cap carriers with the recent onslaught of bankruptcies. ?US big league ar better armed to combating the effects of the sharp increase in jet fuel. Cost reduction initiatives have been announced. ?Slowdown in the US economy is expected to accelerate consolidation dialog between the majors. ?Cash cushions at most US majors from a profitable 2007 will help them in the short-term. fiscal impact of slowdown could be delayed to 2009. ?FAA investigations into major US airlines maintenance practices regarding ADs were heightened as a takings of the increased scrutiny following lapses of compliance. ANALYSIS ?Stagflation in US economy threatens outlook for the airline industry profitability. US airlines forecasting Q108 losses citing high fuel costs and a potential economic slowdown. Downturn in Economy ?Profitability for the airline industry alter to $4.5B ?US airlines are most exposed to the risks in the commerce milieu.

?US airlines forecast cut to $1.8B net profit in 2008. ?This could turn into a net loss if the economic environment deteriorates further. ­If central banks fail to reverse the credit crunch, the outlook could be worse. ­US consumer confidence slumped in March to levels consistent with a serious recession Increase in Jet Fuel Prices ? repose high numbers of $130+/barrel. ?Airlines like Delta only hedged at $90/barrel ?The offset to travel prices during 2004-2007 provided by rising US consumer confidence and travel demand has come to an brusk end in 2008. ?Other regions of the world will expand such as Asia, Middle East and Latin America.... If you neediness to get a full essay, order it on our website: Orderessay

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