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Alliances Soar in Value as Europe's Airlines Grapple Industry Constraints Oct 01
Standard & Poors, Oct 2001
Abstract
(Editor's note: This article, originally published on Sept. 14, 2001, has been republished to take into account updated operating performance figures in table 3, as well as recent developments in the sector and certain recently revised ratings.) Europe's airline industry is fragmented, highly competitive, beset by overcapacity, and--in light of the recent terrorist attacks in the U.S.--now affected by falling passenger demand. Furthermore, Standard & Poor's believes that it will take at least several years before supply fragmentation in Europe is noticeably alleviated by consolidation. Cross-border mergers have proved very difficult, witness the failure of the proposed tie-ups between British Airways PLC (BA; BBB-/Watch Neg/--) and KLM Royal Dutch Airlines (KLM; not rated), and between KLM and Alitalia SpA (not...
Companies mentioned in this report are: American Airlines Inc.,Delta Air Lines Inc.,Northwest Airlines Inc.,United Air Lines Inc.,British Airways PLC
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Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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