We’ve said that if oil prices don’t retreat significantly before year end, airlines will be asking for bailiouts. One travel agent who is a wholesaler tells me that premium seats (business and first class) are seriously undersold. That’s a major blow in combination with skyrocketing fuel costs.
From Reuters (hat tip reader Saboor):
There will be “spectacular casualties” in the airline industry over the next 12 months, billionaire Richard Branson, the owner of Britain’s No. 2 long-haul airline Virgin Atlantic, was quoted as saying on Saturday.
The U.S. airline industry — including Virgin America — has been battered by soaring fuel costs that are pinching even the healthiest airlines.
“The financial state of the world is just about the worst I’ve ever known it,” Branson told The Times newspaper in an interview. “It’s getting perilously close to being worse than the 1990s.
“You have the perfect storm — you’ve not only got the banking crisis and the housing crisis, you’ve got the soaring fuel prices as well. One of the big American carriers will almost definitely go.”