Business and Finance

ATLANTA–Business-class niche carrier Eos Airlines Inc. ceased operations yesterday after filing for bankruptcy protection, the latest casualty of a credit crunch and a money-losing airline industry that has been hit hard by high fuel prices.

Smaller carriers like Eos face stiff competition from deeper-pocketed large airlines that offer business-class service along similar routes.

While business class service can be very profitable, it’s also a very thin market, airline experts say. Eos said its main problem was cash to keep it going.

"It’s no surprise," Calyon Securities airline analyst Ray Neidl said. "We saw it happen with other smaller, undercapitalized airlines http://paydayloans-on.com payday advance lenders. Basically, there are too many airlines. We’re in a period of consolidation. The weaker guys, with $120-a-barrel oil, are finally succumbing." One of Eos’ main rivals, MAXjet Airways, stopped flying in December.

In another airline development yesterday, Continental Airlines Inc. said it would not pursue a combination with another carrier right away, a surprising move after weeks of growing speculation that it would join with United Airlines to create the world’s biggest airline.

From Star wire services

Source