European Airlines: A Gradual Ascent

Due to demand and better oil prices, S&P says the major airlines are coming back from the disruption caused by the August terrorist plots

European airlines should continue to benefit from rising passenger numbers, generally stable or rising yields, and a moderation in crude-oil prices in recent months to record strong improvement in operating profits in 2006. Credit quality in the sector should continue to gradually strengthen but is unlikely to improve materially given underlying cost pressures.

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