Fernando MonteiroThe Airline Industry will be Re-shaped
June 1st 2008 10:24
According to the SMH.com.au today, 1 June 2008, Britain’s Silverjet, flying between London and New York, has become the latest airline to collapse. It nominated administrators but said it does not believe there is any value left for shareholders.
It reports also that “rising fuel costs and worsening economic conditions in Britain and the United States have buffeted Silverjet, having already sent rivals Eos and MAXJet out of business.”
Moreover “in the US, any hope that more airlines could merge their way out of trouble ended on Friday when United Airlines parent UAL Corp and US Airways Inc said they would not go ahead with a deal.
“Delta Air Lines Inc will acquire Northwest Airlines Corporation however the other major carriers will concentrate on surviving, experts say.”
As it seems competition and fuel costs are causing all the problem with the air transportation industry and in Australia we can see that reflected in Qantas latest price increases and Virgin Blue Australia profit reduction.
In my calculations, Virgin Blue is becoming ripe with P/E at 3.54 times current earnings, but wait. As it seems more is to come. I would let the dust settle before doing any purchasing.
It reports also that “rising fuel costs and worsening economic conditions in Britain and the United States have buffeted Silverjet, having already sent rivals Eos and MAXJet out of business.”
Moreover “in the US, any hope that more airlines could merge their way out of trouble ended on Friday when United Airlines parent UAL Corp and US Airways Inc said they would not go ahead with a deal.
“Delta Air Lines Inc will acquire Northwest Airlines Corporation however the other major carriers will concentrate on surviving, experts say.”
As it seems competition and fuel costs are causing all the problem with the air transportation industry and in Australia we can see that reflected in Qantas latest price increases and Virgin Blue Australia profit reduction.
In my calculations, Virgin Blue is becoming ripe with P/E at 3.54 times current earnings, but wait. As it seems more is to come. I would let the dust settle before doing any purchasing.
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