US Low-Cost Airlines Face Merger Wave as Oil Spike Squeezes Budget Carriers
Updated
Updated · Bloomberg · May 11
US Low-Cost Airlines Face Merger Wave as Oil Spike Squeezes Budget Carriers
2 articles · Updated · Bloomberg · May 11
Deutsche Bank analyst Michael Linenberg said US low-cost airlines are ripe for mergers, with joint ventures also likely as financial pressure builds across the sector.
Higher oil prices are pushing up gasoline and airfares, a combination he said could curb bookings from budget-conscious travelers and hit carriers such as JetBlue and Frontier.
That squeeze is most acute for discount airlines, whose customer base is more sensitive to rising travel costs and whose margins are vulnerable to fuel-price shocks.
The call points to a potential new consolidation phase in US aviation if weaker demand and cost pressure persist.
After Spirit's collapse, will the next airline merger save the industry or just ground affordable travel for good?
As the government rethinks antitrust rules, which airline is poised to win the race for market dominance through consolidation?