European airlines in for ‘bumpy ride’, EBITDAR for region to fall for third year in a row in 2018

    Scope Ratings stated (28-Jun-2018) Europe‘s airline sector “is in for a bumpy ride after several months with no major airline failures”. Rising fuel prices, excess capacity and “relentless” low cost and foreign competition are “making it tough for all but the biggest carriers to survive”, Scope Ratings said. The European industry’s profitability is on the decline as fuel prices are back at their highest level since 2014. Earnings before interest, taxes, depreciation, amortisation and rent (EBITDAR) will fall for third year in a row in 2018 from a median 17.4% of revenue in 2017 and a peak of 19.3% in 2015, according to Scope Ratings. Upward pressure on wages, evident in strikes over pay at RyanairLufthansa and Air France, and airport fees are also “squeezing” margins. [more – original PR]