Air Transportation

Northwest enters US Airways’ airspace

10 Jan 2007

Delta has done its best to keep US Airways on the tarmac. But its rival s sweetened $10.2bn offer has doomed Delta s goitalone strategy. After its overpriced acquisition of Skype hurt confidence in management and left investors puzzled, this looks like a smart deal. This may explain why Delta is cuddling up to its other rival in the bankruptcy court, Northwest.

Branson charm backfires in US

29 Dec 2006

The US regulator has tentatively ruled that the billionaire s latest Virgin airline spawn violates rules on foreign control. Virgin America needs to prove that Branson isn t in control. That will be tough without changing its financing.

American Airlines will benefit from merger wave

28 Dec 2006

Not being a likely merger candidate makes American a more appealing investment. It can reap consolidation benefits without execution risks. That might explain why Iceland's FL Group has bought 6% of American s stock. It seems to hope US airline mergers will boost its profits.

Delta strikes back meekly

20 Dec 2006

The bankrupt airline says that US Airways hostile bid is structurally flawed and that its standalone plan promises greater value. The plan has many questionable assumptions but looks just feasible enough to force US Airways to pony up some more dough.

Alitalia stake sale a step in the right direction

4 Dec 2006

It's about time the Italian state sold down its controlling stake. Its influence has hindered rather than promoted reform at the carrier. Finding a buyer for 20% looks hard. Perhaps the best bet is the Asian option: a cashrich, statecontrolled carrier looking for traffic.

Iberia tries to bounce British Airways into a deal

30 Nov 2006

European consolidation is finally taking off, and Iberia wants to join in before competition savages its home market. But BA is playing it cool. So the Spanish airline is flashing its eyes at other carriers to try and pique the ardour of its usual ally.

Willie Walsh is a man in a hurry

26 Nov 2006

The British Airways chief executive is making progress on the big problems, like the pension deficit and the sale of the regional business. But this is far from done and dusted. And crowing about such "successes" could easily backfire.

Berlin leans on German banks to buy Eads stake

23 Nov 2006

Or that s how it looks. There's no other reason why the banks would buy part of Daimler's unwanted Eads stake. The move means there's still a big "German bloc" in Eads. It would be surprising if the banks hadn't extracted something in return.

Macquarie, TPG in A$10bn Qantas LBO bid

22 Nov 2006

This looks like another sign of buyout mania. Few private equity investors have bought airlines, and even fewer have made money. True, TPG has been one of the lucky few. And Australia s Flying Kangaroo looks less risky than others. But it s far from an ideal buyout.

US Airways makes opportunistic $8bn bid for Delta

15 Nov 2006

More than half disappear if Delta emerges before bankruptcy first. And the merger could create more problems than it would solve. The airline promises its hostile bid would generate synergies worth a massive $8.3bn. But there s a catch.

Iberdrola approach sign of utility euphoria

9 Nov 2006

The European utility sector is feeling its M&A oats, and there are highpriced deals and rumoured offers everywhere. There was a similar frenzy four years ago, when many firms overpaid and learnt their lesson. But this time private equity is involved too.

Accountants’ self-serving ideas miss the point

9 Nov 2006

The chiefs of the big firms want constant disclosure of key business parameters. But that would only drive more companies to go private. The big problem with audits is conflict of interest. The best reform would be to get rid of them. Investors should get more involved.

German meddling will handicap Eads

7 Nov 2006

The German government has rounded up banks to take a stake in the aerospace company. This will handicap the aircraft maker s turnaround. Troubled Airbus restructuring will only succeed if it is freed from politicking. Investors will come back if governments go out.

Eads shareholders should cut their losses

7 Nov 2006

Delays in the A380 have finally cost Airbus a customer FedEx. While it s only ten planes, it may be a sign of worse things to come. The A380 may eventually prove to be a big winner. But Eads shareholders should cut their losses while they can.

Ryanair cries wolf on winter of discontent

6 Nov 2006

The Irish budget airline warned prices would fall over the tough winter period. Now it expects them to rise, despite its heady expansion. The reason? Several rivals have given up competing against Ryanair. Except, of course, for Aer Lingus.

Aer Lingus bid turns into slanging match over O’Leary’s bounty

27 Oct 2006

The Ryanair boss had claimed Aer Lingus employees would get E60k each if they accepted his bid. The real figure may be almost half that. That s very embarrassing as O Leary needs employee support to win the bid battle. To make good his promise will cost him dear.

Aer Lingus workers hold key to Ryanair bid

22 Oct 2006

Investors hostile to O Leary s offer control almost 44% of the Irish carrier. That s why he needs the employee s support they own 12%. The payout employees will get if they support his bid boosts O Leary s chances so long as they vote with their heads and not their hearts.

O’Leary dares Brussels to flex its muscles

10 Oct 2006

On the face of it Ryanair's bid for Aer Lingus looks to land it hot water on competition grounds. But the waters are muddier than they look. Another worry for Ryanair is how to hang on to Aer Lingus's valuable US routes. But there may be a way around that too.

Legacy airline mergers are a bad move

9 Oct 2006

Continental s chief executive was wise to pass on a merger with United. A legacy matchup does little to create value. Legacy carries would do better to merge with a discount airline. They would feed the legacy s breadandbutter international routes.

Airbus chief resignation deepens Eads crisis

9 Oct 2006

The departure of Christian Streiff shows that the problem is deeper than the A380 mess. It goes to the root of Eads governance. Before it can address its industrial and financial mess, the company must abandon its politicking and francogerman quota management system.