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Airline sector continues to slim down

With news that Aer Lingus, British Airways, Air France and Iberia are looking to slim down their costs and their employee base, there are concerns that the worldwide airline industry will be very different in the short to medium term. As we covered early this week, British Airways, like Aer Lingus, is pushing ahead with significant job cuts even though unions are dead set against such moves.

It would appear that the airlines listed above are more concerned about their immediate future and financial stability than potential spats with UK unions over the winter period. Whether this is a situation and a strategy which will come back to bite them in 2010 remains to be seen but the unions should not be underestimated as they can and have caused significant disruption. All of the major worldwide airlines are now saddled with significant debt and looking to cut costs in every area of their business, something which will see short-term pain but hopefully long-term gain.

There are still fears that at least one of the major airlines around the world will go under before the sector recovers although who this will be and when this may happen is unclear. Would investors be willing to bankroll the likes of British Airways if it required significant investment? Is the airline industry a viable investment in the short to medium term?

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