Air Transportation

Alitalia rights issue offers sure-fire profit

15 Nov 2005

Surely some mistake? But no, it is possible for investors to profit from an arbitrage between the prices of nilpaids and shares. Normally professional investors would close this gap like a shot. But this time, they seem to be steering clear.

Alitalia squeaks out unwanted rights issue

11 Nov 2005

The Italian airline looks to have scaled back the size and price of its offering to the minimum to push it out of the door. Even now it could still be a stretch. The nominal discount may look huge, but the real position is much less comfortable.

Time to turn off Alitalia’s cash incinerator

31 Oct 2005

The Italian airline has destroyed mountains of capital in the last seven years. The culprits? Italy s politicians. The latest cashraising plans talk of reform. But Rome is unlikely to change. Brussels should say boo to this goose.

BA’s new boss needs to focus on efficiency

30 Sep 2005

Willie Walsh's key task is to manage the airline s move to Heathrow s Terminal Five. The potential efficiency gains from this move are huge. Walsh s reputation hinges on whether he can capture them.

Aircraft industry booming despite airline woes

26 Sep 2005

While two more US airlines file for bankruptcy, aircraft makers Boeing and Airbus enjoy nearrecord order books. Why the disconnect? Rising aircraft prices and lease rates are luring financial investors into aircraft finance. But that can't last forever.

US shouldn’t buckle to bust airline pension demands

19 Sep 2005

Delta and Northwest want the government to allow them up to 20 years to make good their $16bn combined pension deficits. That would just delay the day of reckoning, meaning a bigger tab when the government's own pension agency finally has to clean up the mess.

Branson to build $2bn oil refinery

14 Sep 2005

Fed up with soaring fuel prices, the entrepreneur says he is taking matters into his own hands. But Branson s latest plan if ever implemented probably won t solve his fuel bill problem.

TPG avoids Gate Gourmet fallout

25 Aug 2005

For all the mudslinging in the Gate Gourmet saga, very little has landed on the catering company s private equity backers. That may be because TPG isn't a novice with tricky situations. But private equity will have to be increasingly careful to avoid a backlash.

BA throws a lifeline to Gate Gourmet

24 Aug 2005

British Airways has agreed a more generous contract with its beleaguered caterer, provided it resolves its dispute with the unions. This may seem like a charitable move. But the reality is that BA has few cards to play.

Airline investors lulled into false security

15 Aug 2005

Airline shares are up across the board mainly because travellers have so far taken fare increases on the chin. But that might not last. If the oil price stays high, and airlines continue with their expansion plans, investors may be in for a rude awakening.

British Airways union fires a warning shot

12 Aug 2005

It has seized a flimsy pretext to launch the airline's third wildcat strike in as many summers. The union's real agenda may be to flex its muscles ahead of the arrival of new chief executive Willie Walsh.

Ryanair posts record profit

2 Aug 2005

If airlines are going through a difficult patch, someone forgot to tell Ryanair. Its net profit was up 21% in the quarter. Soaring oil prices appear to be driving more passengers towards the Irish nofrills carrier, so operating margins are holding up for now.

Thatcher’s bovver boy dies

13 Jul 2005

Lord King s amazing turnaround at British Airways in the 1980s is part of the folklore of privatisation. He was at the forefront of a trend that, warts and all, has transformed the world for the better.

British Airways goes for it with surcharges

28 Jun 2005

BA is taking a risk with a higher surcharge than rivals to cover fuel costs. Given its stiff margin targets, it may not have a choice. So far the gamble has paid off perhaps because customers haven't figured out what it's up to. That may well change.

EU airlines rush to sell shares

7 Jun 2005

Oil prices are skyhigh and consumer spending is under pressure. It seems an odd moment for airlines to tap the markets. Why are they doing so? The industry is finally dealing with the backlog of privatisations and IPOs that built up over the past four years.

At least some investors hopeful about US airlines

23 May 2005

First, United dumped its pension liabilities. Now America West and US Air plan to merge, with private equity coinvesting in the deal. That s a rare dose of optimism in the industry. But the investment may have been made because there is little downside.

Lufthansa circles closer to Swiss rescue

14 Mar 2005

The Swiss still don't really want the Germans to take control of their national airline. But they don't have much choice. Swiss is still losing bucketloads of money, and its attempt to tie up with British Airways fell through last year.

EU wants right to get into US airline business

4 Mar 2005

The EU's old negotiating goal was the right for its airlines to fly within the US. Now it wants full foreign ownership. The EU is keen to support an unprofitable industry. But US nationalism may deprive it of this opportunity to lose money.

Ryanair expands routes with E3bn Boeing order

24 Feb 2005

Instead of the budget airline "bloodbath" that chief Michael O Leary warned about, Ryanair is further expanding its capacity. The irony is that one of the companies that has done most for European integration is doing so with US planes.

Ryanair revels in other airlines’ problems

31 Jan 2005

Ryanair has gained from the collapse of other low cost carriers, and fuel surcharges and higher ticket prices among national carriers. This supported yields during the third quarter. Most important, though, was the remarkable surge in other revenues.