U.S. Airline Industry Headed Toward ‘Catastrophe’ at Current Oil Prices

Several Airlines Likely to Fail; Affordable, Frequent Air Travel
and Jobs at Risk

WASHINGTON and RADNOR, Pa., June 13 /PRNewswire/ — At current oil
prices, several large and small U.S. airlines will default on their obligations
to creditors beginning at the end of 2008 and early 2009, according to a study
issued today by AirlineForecasts, LLC and the Business Travel Coalition. The
study shows that $130/barrel oil prices will increase yearly airline costs by
$30 billion, while airlines will be able to generate only $4 billion in fare
increases and incremental fees. The implication of this alarming trend is that
several large and small airlines will ultimately end up in bankruptcy, and of
those, some will be forced to liquidate.

"If oil prices stay anywhere near $130/barrel, all major legacy airlines will
be in default on various debt covenants by the end of 2008 or early 2009," the
study conducted by AirlineForecasts for BTC states. "U.S. commercial aviation is
in full blown crisis and heading toward a catastrophe."

"Airlines are the primary source of inter-city transportation, critical to
national and local economic development, the flow of human capital, movement of
just-in-time parts for manufacturing, perishable food and other goods critical
to our economy," the study says. "With airlines gravely threatened, so is our
economic well-being."

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