Air Transportation

Trustbusters barely dent air oligopoly with Alaska

6 Dec 2016

The U.S. Department of Justice forced Alaska Air to cut code-sharing with American Airlines before approving its $2.6 bln bid for Virgin America. That'll improve competition a tad. But with the top four carriers piloting 80 pct of all domestic flights, it's just tinkering.

Starboard takes tricky tack with Rockwell deal

1 Dec 2016

The activist wants the aircraft-parts maker to consider ditching a $6.4 bln tie-up with B/E Aerospace. Grounding the merger has merit, but Carl Icahn and others have had mixed results agitating against M&A. A Trump-inspired rally in Rockwell's stock complicates Starboard's case.

Making pilots shareholders may save Lufthansa

23 Nov 2016

The carrier's pilots are striking to get a 20-pct pay rise that Lufthansa, dogged by high costs, cannot afford. Paying them in shares might end the gridlock. The airline would save cash, and entrepreneurial spirit in the cockpit could soften the pilots' outlandish demands.

Infrastructure dream grounded by Heathrow reality

25 Oct 2016

Britain has finally agreed to add a runway to London’s main airport. Even now, the plan may yet founder. Western democracies face challenges when launching big projects. The benefits of a renewed splurge of infrastructure spending will take decades to materialise.

EasyJet misery a foretaste of European airmageddon

6 Oct 2016

Growing overcapacities fuelled by cheap oil, security scares and Brexit jitters are hitting even highly efficient airlines like easyJet hard. The low-cost carrier expects a 28 pct fall in pre-tax profit. Less nimble rivals like Lufthansa and Air France can brace for worse.

Airlines add another crash to disaster scenarios

12 Aug 2016

Delta's tech meltdown is the latest in a string of industry IT failures. Some 2,100 flight cancellations are preferable to fatalities. But like air disasters, it stemmed from problems falling like dominos. Companies can do more, but such complex networks will always pose risks.

Boeing and Airbus could use Obama’s help on Iran

11 Jul 2016

The U.S. Congress wants to block the sale of about 200 planes to Iran Air. Easing sanctions on Tehran after the nuclear deal made transactions like this doable. Firms have been encouraged to open their doors. But they aren't getting enough cover from the White House once they do.

Britain joins China in investment limbo

1 Jul 2016

Heathrow Airport's expansion is on hold. Now the UK has voted to leave the EU, controversial or financially demanding decisions may be left dangling. There's a precedent in China, where a graft purge led to widespread dawdling. British inertia could be much tougher on growth.

UK profit pain to spread beyond airlines, housing

27 Jun 2016

Warnings by British Airways’ owner IAG, easyJet and Foxtons show the referendum shock is already hitting some sectors hard. Yet travel and housing are both leading indicators for the wider economy. Investors can brace for worse, and safe havens are in short supply.

Virgin Australia buoyed by China’s M&A tourists

10 Jun 2016

Chinese conglomerate Nanshan is buying 20 pct of Australia’s No. 2 carrier weeks after HNA took a 13 pct stake. Both pledge to prop up its balance sheet. The benefits for the buyers are vague. That puts them in the same camp as the foreign airlines that already back Virgin.

China’s HNA takes Gulf route with rash airline M&A

7 Jun 2016

The acquisitive owner of Hainan Airlines is building a portfolio of minority stakes in global rivals. Other carriers, notably Etihad of Abu Dhabi, have also used deals to grow faster. But the returns are dubious. Airline M&A is tricky, and works best when buyers have control.

Thomas Cook is shock absorber for tourist turmoil

19 May 2016

Despite increased like-for-like revenue, the UK holiday group’s shares dropped by almost a fifth as it reported half-year results. A missing Egypt-bound airplane underlines how difficult the tourism business has become. 

Brexit advocates: heed the tale of Herb Kelleher

6 May 2016

The co-founder of U.S. budget airline Southwest took the glamour out of air travel. But the increased connectivity has had unexpected benefits - like more scientific breakthroughs, a new study shows. Those who seek a British exit from the EU may be giving up more than they know.

Top Chinese travel agent makes an odd diversion

22 Apr 2016

Ctrip is buying a $463 mln stake in China Eastern Airlines, and could yet buy more. Investors in China’s largest web travel agency probably did not expect to own a minority stake in a state carrier. But this may be the only way Ctrip can avoid a damaging boycott by big airlines.

China’s airline food bid is low on flavour

11 Apr 2016

HNA Group wants to gobble up Swiss airline caterer Gategroup for 1.7 bln Swiss francs including debt. Despite a 33 pct premium, the price is best described as bland, and the timing looks a bit opportunistic. Shareholders ought to wait for something more appetising.

Wanted: candidates for Europe’s worst CEO job

6 Apr 2016

Air France-KLM’s boss Alexandre de Juniac has vacated an unenviable managerial position. Europe’s weakest legacy carrier is hobbled by high costs, mighty unions and a wayward state shareholder. His successor will need fluent French, modest pay expectations, and little ambition.

Alaska Air pays through nosecone for U.S. Virgin

4 Apr 2016

The carrier is securing coveted airport slots in its $2.6 bln deal for Richard Branson’s stateside flier. Cost savings are slim, however, leaving an expected sales uplift to justify the 87 pct premium. It’s a risky bet that the airline industry’s destructive ways have changed.

Brussels blasts send European unity two steps back

22 Mar 2016

A recent Turkish deal over migration showed the EU can solve problems collectively, if imperfectly. Yet new attacks will inflame misgivings over security and free movement. As Britons mull whether to stay or go, the risk is that questions of prosperity and fairness get sidelined.

United Airlines board dogfight could be win-win

8 Mar 2016

Two hedge funds are gunning to get six new directors appointed, including a retired Continental boss. It’s a headache for CEO Oscar Munoz as he returns from sick leave. Despite heated rhetoric, though, a compromise on a revamped board should suit both sides better than a battle.

IAG ready to rise above investor scepticism

26 Feb 2016

The British Airways owner’s profitability is ascending into the sphere of top low-cost rivals like easyJet, its 2016 guidance suggests. Yet shareholders still treat the group as an ailing legacy carrier. If CEO Willie Walsh continues to cut costs, he can break through the clouds.