British Airways chief expects dozens of airlines to go bankrupt

Willie Walsh, British Airways’ chief executive officer, has predicted that around 30 more airlines will likely go bankrupt in the near future, due to high oil prices and softening demand caused by the current economic slowdown and credit crunch. Walsh believes that most of these bankruptcies will occur within a matter of four months. The UK flag carrier’s CEO believes that many small and medium sized companies-and especially the non-legacy airlines-will find it increasingly difficult to compete and survive as the economic situation turns ever more dire.

Walsh’s remarks seem especially timely, considering that three major airlines went bankrupt over a period of just two weeks. Canadian-British discount carrier Zoom Airlines had all of its planes grounded at the end of August, while Futura Gael, a charter company, suspended operations last week. This past weekend, the XL Leisure Group-Britain’s third largest leisurely tour operator-also filed for bankruptcy, stranding tens of thousands of Britons all over the world. Major British carriers and aviation authorities are still scrambling to clean up the mess left behind the defunct company.

Some of the smaller airlines, as well as low-cost carriers may find it very difficult to survive this period, especially because they rely so heavily on leisurely travelers, many of who are scaling back vacation plans, in light of the current economic uncertainty.

Thank you to Evelyn Ring and Brian Hutton of the Irish Examiner for the initial report.

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