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Preventative surgery
19 October 2008
The last wave of major restructurings has happened in the US. The next could be more global. Sophie Segal reports.
Read more:
John Luth
Seabury
Chapman & Cutler
United Airlines
Skyworks
Spring-cleaning is enough to make anyone's head spin. Usually it is a time- and labour-intensive project. However, at the end of the clean up, the house is reorganized. Airline restructuring is similar in that it gets rid of inefficiencies and helps loss-making carriers return to profitability.
But this can take years, like the Air Canada restructuring, which started in 2003 and still has not been finalized.
As passenger demand decreases and oil prices continue to rise, airlines are going to be forced to reconsider their operations.
"We didn't anticipate the cost of fuel going above $100 barrel – $75 to $80 would have been sufficient to drive industry worldwide into a rethinking of their business," says John Luth, chief operating officer, Seabury Group.
One of the issues that airline advisory groups will face is how airlines can prepare their fleets in response to...
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