Rising fuel costs "major threat" to airlines' profits: S and P

LONDON (AFP) — High fuel costs represent a "major threat" to airlines' profitability, although European carriers are better placed than their US rivals to withstand the impact, according to a report published by credit rating agency Standard and Poor's.

The immediate impact of high oil prices largely depended on the ability of companies to pass on increased expenses to their customers, said Standard and Poor's credit analyst Leigh Bailey.

Airlines that sold directly to consumers and found it difficult to pass on costs in a competitive environment were worse off, he added.

"High fuel prices represent a major threat to airlines' profitability," the report warned.

Rising fuel costs had prevented the European airline industry from translating improving passenger numbers into increased profitability this year.

"In an ...