EU Transport Holds On Against Recession Buzz

Standard & Poor said Europe's certain airline, shipping, and logistics companies are dealing well with high oil prices so far this year, but an anxiety sentiments that a U.S. recession could damage European growth the rest of the year seems to be unclear.

S&P said airlines are already seeing early signs of a slowdown ahead in passenger traffic and operating profits with British Airways Plc. cautioning that its operating profit margin target would decline to just 7 percent in this fiscal year ending March 2009, from its earlier guidance of 10 percent.

The ratings agency said shipping enterprises, however, are still keeping up well against rapidly rising input prices and more difficult access to capital in the wake of financial market turbulence.

S&P added that the effects of a weak U.S. greenback are limited in the European logistics sector because the sector relies on locally based business.