Air Transportation

A little U.S. airline concentration not so bad

29 Apr 2010

The idea of Continental and United merging may make consumer advocates worry about higher ticket prices. But the current situation where nearly all the benefits accrue to flyers rather than airline shareholders is not a good longterm recipe for capitalism.

Volcano’s airline fallout starts toxic debate

22 Apr 2010

European law puts airlines like Ryanair on the hook for hotel costs for stranded passengers. The airlines think this case is special and governments should help them out. Ultimately, the bills will be paid, probably through both higher fares and some taxpayer contributions.

How to stop worrying and love that volcano

19 Apr 2010

Relax, you're not Willie Walsh. You don't run BA. You can now miss that ghastly meeting. Teleconferencing doesn't need a suit, and they can't see you're fiddling with your BlackBerry. Be honest: flying is a displacement activity for work, and travel broadens the waistline.

Volcano exacerbates global uncertainties

19 Apr 2010

Disruptions from the Icelandic eruption are multiple and potentially critical for airlines. Exportdependent Kenya is being hurt, tourismdependent southern Europe soon will be, and Greek financial deliberations may be delayed. Iceland again seems symbolic of wider uncertainties.

Low-cost airlines should rise above volcanic ashes

19 Apr 2010

Strength breeds strength. Ryanair and easyJet have lower costs and stronger balance sheets than traditional network airlines. That leaves them better placed to recover from Eyjafjallajokullinduced travel chaos. Investors should be more discriminate about selling airline shares.

Cost cuts lure United, US Air back to merger table

8 Apr 2010

In theory, a combination of the U.S. carriers could yield synergies worth $10 bln to shareholders, more than double the two firms' combined market caps. That's enticing, but similar talks have failed twice. Still, the reality of a bigger Delta makes some big merger more likely.

EasyJet could conceivably lose its brand

1 Apr 2010

A simmering twoyear dispute between easyGroup and easyJet over the limits to the orange airline's use of the brand is slated for a court hearing on June 8. The eventual outcome could be a loss of the name and an expensive rebrand for those garish aeroplanes flying over Europe.

Willie Walsh gains upper hand in labour struggle

30 Mar 2010

The BA boss is playing a risky game by warring with his staff. Predecessor Bob Ayling was forced out of the UK airline a decade ago partly because he couldn't handle the unions. But, helped by public sympathy and support from shareholders, Walsh appears to be winning the war.

Open skies dream not yet shattered

26 Mar 2010

European airlines wanted to get more out of the latest draft EU agreement with the U.S. than a few almost token improvements. But considering the domestic American political situation, the deal plus a commitment to keep on pushing forward is not a bad outcome.

Lack of flying hours is no handicap at easyJet

24 Mar 2010

The UK airline's next CEO comes from the newspaper trade. She joins a new chairman from accountants KPMG and an incoming CFO from music group EMI. Last year's acrimony with the founder is resolved, and the departing board has set the flight path at steady expansion. Just as well.

It’s BA 1, unions 0

22 Mar 2010

Willie Walsh is having a good war. He needs to. The UK airline's CEO must defeat striking crew for the airline to survive. That still leaves a crippling pension deficit and merger with Iberia to resolve. Walsh had to fight but his determination is impressive all the same.

Ryanair has been punished long enough

1 Feb 2010

The budget airline is coping well with the recession and is raising guidance. Investors should see that as a validation of Ryanair's strategy. Operational management also looks strong. The shares' poor performance against the sector should now reverse.

JAL bail-out doesn’t fix Japan’s crowded skies

20 Jan 2010

Japan's flag carrier will get a clean balance sheet. If all goes to plan, the state could even double its $3.3 billion equity injection in two years. The maths are good. But the rescue means Japan will keep two international airlines. That may be one more than it can support.

Christmas comes early for BAA

21 Dec 2009

The UK Competition Commission had ordered the airport group, controlled by Spain's Ferrovial, to sell three airports. But a court has decided the decision was tainted. BAA may still have to, or want to, sell more airports. But it will certainly have a better negotiating position.

BA can’t declare victory yet

16 Dec 2009

The UK airline has averted a Christmas strike. Unions have suffered a credibility blow. But the episode has damaged the BA brand and fully exposed the dire state of labour relations. Willie Walsh, the already unpopular CEO, must keep up the pressure. BA badly needs restructuring.

Striking at BA’s pension deficit

14 Dec 2009

The future beneficiaries of the pension schemes that threaten to bankrupt British Airways told the management what they think of them today. By a ninetoone margin, the employees have voted to ground the airline for what might be described as the 12 days of Christmas.

China will blow Blackberry a raspberry

8 Dec 2009

Research In Motion is hailing China as the next frontier for Blackberry. But don't expect too much success out of the world's largest mobile market. Blackberry will not appeal to China's masses, and some of the expats have already been served out of Hong Kong.

American could be more immediate prize for BA

20 Nov 2009

British Airways may hear before Christmas what it will need to do to get a deal with American Airlines approved. That could bring more shortterm benefits than the Iberia deal provided regulators on both sides of the ocean don t force BA to give up too many slots at Heathrow.

BA pension trustees face dilemma in Iberia tie-up

19 Nov 2009

Contrary to popular belief, the UK airline s pension scheme is not ringfenced and could pose a threat to Iberia s cashpile in their proposed merger. The pension fund trustees will have to play current negotiations with BA carefully if they do not want to scare Iberia away.

BA/Iberia structure is an unappealing fudge

13 Nov 2009

Like Air France/KLM before them, the UK and Spanish flag carriers have devised a convoluted structure to circumvent regulatory hurdles. The snag is that neither party has real control. Extracting the claimed E400m of synergies will be tough. This deal is off to a bad start.