Air Transportation

Boeing’s supine owners invite tougher co-pilots

29 Apr 2019

Investors rejected a fresh call for an independent chair of the $214 bln plane maker. Its boss, Dennis Muilenburg, has been slow to respond to the 737 MAX crisis, and resolving it is more than a full-time job. If owners won’t tighten oversight, regulators and politicians will.

Boeing has a chance to get ahead on governance

23 Apr 2019

The $212 bln aerospace giant is facing calls to strip chair-CEO Dennis Muilenburg of the former title. Half of the S&P 500 now split the roles. Boeing's sluggish response to 737 MAX crashes shows why it makes sense. An 11 pct fall in the share price provides a handy excuse, too.

Thomas Cook survival relies on risky breakup

23 Apr 2019

The indebted UK tour operator’s shares jumped on reports it could be bought by Chinese group Fosun or private equity. Either would likely see the group sell its airline, making it hard to get a good price. And the rump that remains would be even more challenged.

India’s Jet Airways is too frail to fail

11 Apr 2019

Planes are grounded, but a bankruptcy of the country’s once-top private carrier is unthinkable, especially as the nation votes. Related job and bank losses would be politically toxic. Even a well-structured out-of-court deal could yet leave New Delhi with a second state airline.

Crash findings keep Ethiopia reform dreams intact

4 Apr 2019

An early probe into Ethiopian Airlines’ March 10 disaster found the company’s pilots were not to blame. That’s a double relief for Prime Minister Abiy Ahmed. With the flag carrier central to his privatisation push, internal failings could have stymied wider plans for reform.

Brexit gives easyJet handy excuse for summer blues

1 Apr 2019

The low-cost airline blamed political turbulence in Britain for weak passenger demand. Anaemic euro zone growth is probably a bigger culprit. With fuel costs rising and air-traffic disruption still likely, easyJet will struggle to repeat last year’s high-flying performance.

Crash report clarifies Boeing’s 737 exposure

29 Mar 2019

Officials think a suspect anti-stall system activated before last month’s airliner crash in Ethiopia, the WSJ reported. That raises the plane-maker’s legal liability. But it also makes it clearer how to fix the problem and get the bestselling jet back in the sky.

Cathay’s budget-airline deal may add HNA surcharge

28 Mar 2019

Buying Hong Kong Express from the ailing Chinese conglomerate for $630 mln is a sensible defensive move. One investor – maybe the target’s own chairman – has threatened to fight the sale, however. That could raise the price for Cathay, and is a warning to suitors for HNA assets.

Hadas: Boeing undermined by too-positive thinking

27 Mar 2019

The aircraft maker’s hasty introduction of new software may have led to two fatal crashes. If so, the problem was probably not greed or lack of concern for safety, but something just as dangerous: overconfidence. As global banks learned in 2008, the worst sometimes does happen.

Kuala Lumpur can give up Malaysia Airlines

21 Mar 2019

The flag carrier has been losing cash for years. Now Premier Mahathir Mohamad is asking if it should fly at all. State-meddling has hampered a turnaround and there’s too much local capacity. Folding the airline would show that his government is ready to rein in the state.

Airbus can only nibble at Boeing’s 737 lunch

18 Mar 2019

Logically, the U.S. aerospace giant’s problems with the ill-fated MAX 8 should benefit its arch European rival. But chock-full order books and production mean Airbus will struggle to take up the slack. If the MAX 8 faces long-term problems, it could just mean fewer planes.

Pricier fuel forces Lufthansa onto leaner path

14 Mar 2019

The German carrier will have to fork out an extra 650 mln euros on fuel this year. With revenue barely growing, CEO Carsten Spohr will have to squeeze other costs, including staff, to maintain altitude. A leaner Lufthansa will add to the pressure on industry laggard Air France.

Boeing investors fear worst from 737 tragedy

11 Mar 2019

The aerospace giant’s shares lost over $25 bln in value after the second crash of its newest model in six months. That overstates the likely financial impact even if U.S. regulators copy China and ground the plane. The real threat is creating an opening for a Chinese competitor.

Dutch activism could ground Air France recovery

27 Feb 2019

The Hague has snapped up 12 percent of the carrier to counter the influence of the French government and protect Dutch jobs. More state meddling may undermine new boss Ben Smith’s cost-cutting plan, and exacerbate tensions with French unions, raising the risk of more strikes.

Storms won’t keep Qantas from higher flight path

21 Feb 2019

Australia's flag carrier said fuel costs pulled first-half earnings down by nearly a fifth to $559 mln. Domestic business proved resilient, though; its fleet and balance sheet are in good shape too. Choppy weather lies ahead, but Qantas looks sturdier than higher-valued rivals.

Ryanair CEO’s 100 mln euro bonus is within reach

15 Feb 2019

That’s how much Michael O’Leary stands to gain if he doubles the budget airline’s net profit or share price by 2024. Falling fares and strikes make the target look a stretch. But if Ryanair hits its 200 mln passenger goal while keeping costs down, the sky’s the limit for rewards.

Jumbo reality check frees Airbus to fly higher

14 Feb 2019

The European aerospace group will stop making A380s in 2021. Passengers who love the spacious cabins will regret the decision more than the airlines that fly the gas-guzzling behemoth. A focus on nimbler, greener two-engine jets will help narrow Airbus’ valuation gap with Boeing.

New-look Ryanair follows familiar flight path

4 Feb 2019

The budget airline will split into four units overseen by CEO Michael O’Leary. The changes, including a replacement for Chairman David Bonderman, look encouraging. But given that O’Leary will remain in charge and large-scale acquisitions are unlikely, they are mostly cosmetic.

IAG is surprise first loser in airline fuel casino

24 Jan 2019

The BA owner is set to sell its stake in Norwegian Air. When IAG bought in last April, higher oil prices made it plausible that its unhedged smaller rival would become vulnerable to a takeover. As it happens, a sharp fall in crude values means the egg is instead on its own face.

Ryanair will weather fare squeeze

18 Jan 2019

The low-cost carrier expects to make less post-tax profit this financial year than previously anticipated as CEO Michael O’Leary cuts fares to attract customers. That’s tough as he is having to pay staff more. But passenger numbers are growing fast enough for his bet to pay off.