In the midst of the pandemic, Bernstein wrote, airlines have been provided with a lifeline, with which they can avoid bankruptcy, but now they may find themselves in a difficult position due to rising fuel and labor costs, as well as a seasonal drop in travel. All this at a time when governments are focusing on the rising bills for families.
According to Bernstein Analysts’ Model – which assesses the risk of bankruptcy based on levels of competition, capacity, route networks, and the expected costs of leasing and replacing aircraft – Smaller airlines in Central and Eastern Europe will be most at risk.
According to Bernstein, Europe’s six largest airlines are at negligible risk, Ryanair, easyJet and Wizz Air still have an investment-grade credit rating, and Air France-KLM, IAG SA and Deutsche Lufthansa AG can still count on state aid if needed command. .
The airlines most at risk include one in Cyprus and two in Albania, as well as Belarus, Bulgaria, the Czech Republic, Georgia, Moldova and Romania.
The analyst added that if there were bankruptcies, they might prefer the strongest players in Eastern Europe, led by Wizz and Ryanair, which are able to quickly allocate aircraft to newly vacant markets.
