Europe’s Airlines Face a Chilly Winter

Midwinter in Iceland can be brutal, with temperatures struggling to rise much above freezing and daylight spanning barely four hours. For the North Atlantic island nation’s two main airlines, Icelandair Group Hf and Wow Air Hf, times are equally bleak. With competition from larger carriers depressing fares and fluctuating oil prices making it tougher to manage costs, mounting losses and weak balance sheets are stoking concern about the airlines’ future.

Iceland isn’t alone in feeling the chill. Six European airlines have gone bust since June, while debt-laden Norwegian Air Shuttle has been targeted for takeover, Alitalia has been in insolvency for 18 months, and Britain’s Flybe Group is seeking a buyer as it tries to preserve cash. Even once-thriving operators such as Finnair Oyj have seen their share prices plunge as investors fear profit headwinds.