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Industry Sees Air Bankruptcies, Liquidations On The Horizon.

Publication: Business Travel News
Publication Date: 21-JUL-08 		Format: Online
Delivery: Immediate Online Access

Article Excerpt
With fuel maintaining historic highs and an emerging consensus that the airline business is unsustainable at its current size, the industry is awaiting the next shoe to drop in the form of bankruptcies or liquidations.

Though airline analysts, credit rating firms and representatives from an aviation bankruptcy advisory firm said major U.S. carriers have enough cash and assets to carry them through 2008, next year is likely to bring capacity reductions in a less voluntary form than the ones implemented this year, as smaller carriers go under and majors struggle with solvency. On the domestic industry's current path, the question is not whether more carriers will go away, but which ones and when.

Fitch Ratings this month said U.S.-based legacy carriers "will experience rapid erosion of cash levels in the post-Labor Day period. This erosion could threaten their survival if adverse fuel trends continue, and multiple bankruptcies and liquidations are...

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