Air Transportation

European airlines’ tough summer adds to M&A logic

11 Nov 2024

Carriers such as $8 bln Lufthansa and $2 bln Air France-KLM saw rising costs and competition on Eastern routes from Chinese rivals. The logical response for EU players is to look West instead. Bidding for Portugal’s state-owned TAP would drive much-needed consolidation.

Bain jets towards first-class lounge Down Under

2 Oct 2024

The private equity firm is selling 25% of Virgin Australia to Qatar Airways for an undisclosed sum ahead of an IPO. Fold in last year’s dividend recap and assume it’s growing like larger rival Qantas, and the airline is en route to delivering Bain a sky-high 40%-plus return.

Boeing pays belated price for shareholder primacy

13 Sep 2024

Some 33,000 workers voted to strike, adding to the $100 bln jet-maker’s woes. Union wages have been flat over 50 years as benefits shrank, while the CEO earned 600% more and investors pocketed lavish buybacks and dividends. Labor is understandably squeezing now-weakened capital.

Germany gives DSV a sweet deal on freight takeover

12 Sep 2024

The Danish group will acquire Schenker, the logistics arm of indebted German railway operator Deutsche Bahn, for 14 bln euros, beating a higher CVC offer. Berlin may be hoping that an industry player will be a more stable owner. But DSV’s share price jump shows it got a bargain.

Airlines’ margins head to lower cruising altitude

2 Aug 2024

Carriers from $2 bln Air France-KLM to $7 bln Lufthansa reported healthy demand in the first half of 2024. But earnings are falling as expenses bite. With the switch to sustainable aviation fuel threatening to push costs ever higher, investors are bracing for smaller margins.

Boeing and Airbus headwinds are hard to escape

23 Jul 2024

The troubled US jet maker and its European rival aren’t delivering as many planes as customers want. On this Exchange podcast, AirInsight co-founder Addison Schonland explains how some problems stretch back to Covid, whether a third player can break the duopoly, and much more.

Ryanair leads airline sector into strategic cloud

22 Jul 2024

The $17 bln carrier’s shares sank 15% after it warned of weaker summer fares. The airline had hoped slow delivery of planes would mean less competition, allowing it to hike prices and weather higher costs. If customers are now saying no, that’s a problem for the whole sector.

Cyber meltdown points to downsides of efficiency

19 Jul 2024

A software update by $83 bln CrowdStrike grounded flights and disrupted financial markets. That’s possible because businesses work with a small number of providers, seeking lower costs. It supports rich tech valuations, but also heightens the risks of a catastrophic failure.

EU’s China trade weak spots hide in plain sight

9 Jul 2024

Beijing may retaliate after Brussels imposed tariffs on Chinese-made electric vehicles. Of the 5,000 product groups the People’s Republic imports from the EU, many are too crucial or too small to bother with. But luxury goods, petrol cars and some foods are plausible targets.

Airbus hit leaves investors flying without a radar

25 Jun 2024

The $110 bln planemaker’s shares fell 11% after it said that engine shortages scuppered its delivery target. The group is struggling to capitalise on rival Boeing’s woes. Supply-chain uncertainty is also stopping the wider sector from putting the pandemic in the rear-view mirror.

Antitrust worries risk clipping EU airlines’ wings

24 May 2024

Groups like Lufthansa and IAG are seeking greater scale to better compete globally. But Brussels frets that regional tie-ups will lead to higher fares and reduced consumer choice. Blocking the $8 bln German firm’s play for smaller peer ITA could mean other deals won’t take off.

European airlines’ hot summer belies sector clouds

23 Apr 2024

Jet shortages mean that carriers may be able to charge higher fares this summer, ending years of overcapacity. For stronger players like $25 bln Ryanair, that could mean fatter margins. But it’s likely to be a short-term reprieve for a sector that’s grappling with other costs.

UAE is timely reminder of climate plan B urgency

18 Apr 2024

Torrential rains have flooded Dubai’s airport. Spending cash to prepare for the impact of global warming often takes a back seat to slashing emissions. The more richer states upgrade climate defences, the more they highlight the need to help poorer ones do so too.

Guess what: Boeing can be spelled without G and E

17 Apr 2024

Instead of investing in a new model, the 737-maker embraced the gospel of Jack Welch and returned $60 bln to shareholders over a decade. McDonnell Douglas suffered a similar fate before infusing Boeing with GE’s toxic ethos. It’s not too late to excise it and build another plane.

How Boeing’s woes change everything but planes

11 Apr 2024

Grave problems with the jetmaker’s 737 MAX have sparked a crisis. In this Viewsroom podcast, Breakingviews columnists explain whether rival Airbus offers a template for policymakers, the impact of a US export champion floundering, and why others may struggle to capitalize.

Airbus obsessives have a shaky grasp of history

9 Apr 2024

The $140 bln pan-European group is flying high as rival Boeing stutters. Now carmakers and others are wondering if similar collaboration could help them face down overseas competitors. But Airbus’s idiosyncrasies and convoluted road to success make copycat plans pie-in-the-sky.

How to get the best new boss for Boeing? Ask GE

25 Mar 2024

Dave Calhoun failed to fix the 737 MAX maker’s problems; ensuring its next CEO does better requires financial incentives equal to the mammoth task. Engine manufacturer GE’s controversial $232 mln inducement for boss Larry Culp offers a blueprint, if Boeing avoids its missteps.

Boeing’s reverse deal thrust augurs small tailwind

4 Mar 2024

Jettisoning supplier Spirit AeroSystems in 2005 benefited the plane-maker, but only temporarily. Financial weakness is now compounding 737 MAX woes and hurting shareholders of both companies. Buying back the $4 bln former subsidiary should generate value in quality improvement.

JetBlue’s turbulence gives Carl Icahn an easy ride

13 Feb 2024

The corporate rabble-rouser took a stake in the airline as it struggles with a defunct deal and business turmoil. That resembles Illumina, where Icahn won a 2023 campaign. Quick-fix activism can’t mend a panoply of issues. But striking at a weak moment can help activists anyway.

Capital Calls: TUI decamps

13 Feb 2024

Concise views on global finance: Europe’s largest travel firm is encouraging investors to vote in favour of cancelling its London listing, but the UK need not mourn the loss.