S&P: Airlines abuzz with consolidation

Standard & Poor's said that consolidation is in the air for the airlines and most other North American transportation sectors are continuing to benefit from steady demand.

The agency said that US Airways Group Inc.'s (B/Watch Dev) recent hostile acquisition bid for bankrupt Delta Air Lines Inc. (rated D) raised questions not only about the future of those two companies, but also about further potential consolidation of the U.S. airline industry and subsequent reports linked UAL Corp. (B/stable) and Continental Airlines Inc. (B/stable/B-3), according to the S&P report.

"These events take place against the backdrop of improved profitability and cash flow, evidenced in generally encouraging third-quarter results," said S&P credit analyst Philip Baggaley.

Both the freight railroad and transportation equipment leasing sectors are seeing steady demand, the agency noted, adding that the U.S. domestic shipping companies are continuing to produce solid results, but the long stretch of favorable conditions won't last forever.

Industry fundamentals remain healthy for trucking companies, although some have experienced a softening in volumes, according to the report.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.