Squeezed airlines clip wings

Several US airlines, roiled by unrelenting fuel costs, disclosed this week that they are winnowing daily flights to certain destinations, eliminating entire routes, and in some cases withdrawing from airports – and this is just the beginning.

A Goldman Sachs report issued yesterday indicated such cuts will not be enough to compensate for the cost of fuel.

“We expect carriers to explore any and all options – capital raises, foreign capital infusions, strategic transitions, asset sales, alliances – in an attempt to bolster their positions financially and strategically in this quickly deteriorating environment,” wrote analyst Christopher Cuomo. “But in a world of sustained $100-plus oil, we are not convinced these actions can provide enough relief to offset the challenges that lie ahead.”

Boston.com