Air Transportation

Ryanair’s strategic restart can take off faster

19 May 2014

Europe’s biggest low-cost carrier has reacted quickly to tougher competition. The gains from better customer service, more advertising and wooing business customers could come more quickly than management’s cautious guidance implies. But investors are already on board with that.

China’s big airlines stuck in economy

29 Apr 2014

Earnings have plunged as a weaker currency adds to pressure from high-speed rail, and cheap carriers like Spring Airlines. But budget valuations don’t reflect two things: the benefits of rapidly rising incomes, and a government happy to put the brake on competition.

Edward Hadas: How can a plane vanish in a small world?

19 Mar 2014

The information vacuum around flight MH370 is as unusual as it is disturbing. In the interconnected globalised economy, things usually work well. When they don’t, the causes are identified, and changes often follow to prevent recurrence. MH370 is, so far, the distressing exception.

Market wakes up to Lufthansa turnaround

13 Mar 2014

Shares in the German carrier are up 36 pct in six months. Successful cost-cutting and a strong operating performance explain the upswing. Lufthansa shares still trade at a discount – but it is only midway through its turnaround plan, and its 2015 profit targets look ambitious.

State aid may just prolong Qantas’ pain

28 Feb 2014

The Australian carrier, which just cut 5,000 jobs, is struggling to compete against its loss-making, foreign-backed rival. Lifting a cap on foreign ownership will only help if Qantas can find a deep-pocketed investor. A state guarantee for its debt may just extend the price war.

United Tech activist defenses look mostly robust

11 Feb 2014

Talk of the $100 bln conglomerate selling chopper-maker Sikorsky raises questions about whether a breakup could unlock value. A Breakingviews analysis suggests the pieces are worth just 8 pct more than the whole. But a performance slip could weaken the ramparts to an attack.

Ryanair’s loss highlights need to change

3 Feb 2014

Revenue at the low-cost airline has stalled, plunging the group to a heavy third-quarter loss. The shares, however, are up smartly. Investors are relieved that guidance is unchanged. But they are putting a lot of faith in the company’s new strategy to be nice to its customers.

Travel tech IPO charts familiar round trip

28 Jan 2014

Seven years after taking airline reservations operator Sabre private for $5 bln, TPG and Silver Lake are making the return journey to public markets. It’s one of many big buyouts that should land safely despite a badly timed takeoff. The tardiness will cost investors, though.

EasyJet’s shares flying into ever thinner air

23 Jan 2014

Decent quarterly results show that the no-frills carrier has not yet reached the limits of its business model. The steep rise of its share price, which quadrupled in the last two years, is still likely to end. EasyJet’s fundamentals have yet to catch up to its sky-high valuation.

Boeing needs to push hard to keep defying gravity

17 Dec 2013

A big dividend hike and fresh buybacks show the jet maker in high spirits after its shares nearly doubled this year. Investors should keep their feet on the ground. Despite strong deliveries, aerospace remains a cyclical business. And there are structural clouds on the horizon.

Qantas needs help to escape financial nosedive

5 Dec 2013

The Australian carrier, which warned on profits, is a political hybrid. As a national champion it faces limits on raising foreign capital, but it lacks the financial advantage openly state-backed rivals enjoy. Something has to give, but Qantas could also do more to help itself.

Amazon’s drone promise is yet more jam tomorrow

2 Dec 2013

The online retailer expects airborne deliveries just a few years hence. It’s a striking vision, but it seems as overly optimistic as investors’ expectations of the company overall. Amazon’s market value has ballooned to $180 bln despite big profits always hovering in the future.

EasyJet’s growth will get harder to replicate

19 Nov 2013

The low-cost carrier is turning improved customer service into bundles of cash. The 50 pct jump in profit and the chunky special dividend marks easyJet out from peers. The shares have doubled in the past year. But future growth may be harder to win.

EADS profit lift-off will be held back by A380

14 Nov 2013

The Airbus maker is enjoying a surge in global demand for civil aircraft. Yet it has sold none of its flagship A380 for more than a year. For now EADS has a decent backlog of orders for the super-jumbo. But the weakness will make it harder to lift mediocre group margins.

U.S. trustbusters make skies friendly for lobbyists

12 Nov 2013

American Airlines and US Airways resolved antitrust issues with their merger by dumping slots at LaGuardia and Reagan airports. That should mean better service and lower prices for fliers. But the biggest winners may be paid schmoozers plying the Washington to Wall Street corridor.

Ryanair shares still expensive despite rapid descent

4 Nov 2013

Europe’s largest low-cost airline has spooked investors with a second profit warning in two months. Ryanair has strengths, but confidence is leeching fast. Stability may return most quickly if the company prunes its growth ambitions and focuses more on sustaining profit.

Investors unfairly ground Lufthansa

31 Oct 2013

Europe’s largest airline faces many challenges, but is in much better shape than its battered stock-market valuation suggests. The numbers are confusing, but Lufthansa is en route to becoming a leaner and more profitable airline by 2015. The market hasn’t caught on.

Ferrovial hedges regulatory risk at Heathrow

23 Oct 2013

The Spanish infrastructure group has sold an 8.7 percent stake in the company that controls Heathrow to a top UK pension fund, USS. Ferrovial gets a good price and remains the airport’s largest investor. Bringing in a local partner makes sense for such a regulated asset.

Italy plays hot potato again with Alitalia

11 Oct 2013

The Italian airline-cum-financial black hole may be rescued with a little help from the state’s postal service. It marks a reversal from Silvio Berlusconi’s messy private-sector fix of 2008, but the aim is similar: indulge national sensibilities, avoid restructuring and buy time.

Cathay-Qantas spat to clear cloudy Hong Kong skies

11 Oct 2013

The city’s dominant carrier is challenging its Australian rival’s plan to set up a local budget operator. The dispute hinges on the vague definition of airline ownership in Hong Kong’s constitution. Greater legal clarity could freeze Qantas out, or spark a competitive scramble.