Air Transportation

BA cashes in on £438m Qantas stake

8 Sep 2004

The sale makes sense. There was little point in having that much capital tied up in an Australian airline. That doesn't mean the UK airline will now go on a spending spree. BA is much better off cutting its debt mountain and fixing its business.

Air France-KLM profit doubles

2 Sep 2004

That's no small feat, considering the oil price. But it is probably more to do with KLM s own cost cutting efforts than any real synergies. With average fares still falling and more capacity coming through, it is hard to see shares continuing to outshine peers.

Alitalia’s unions drive it towards bankruptcy

31 Aug 2004

This may not be as topsyturvy as it sounds. The unions calculate the Italian government still hasn t the stomach for largescale job cuts. But if Alitalia is to avoid going bust, the government needs to persuade the unions this won t be the case.

Sickies are part of the airline crisis

27 Aug 2004

Absenteeism is running at absurd levels at many European carriers. That s bad news in a service business. Alitalia s boss blames the ethics of his employees. But airlines need to sharpen up on people management.

BA still has more fat to cut

25 Aug 2004

The latest airport chaos is down to poor management, not too much costcutting. In fact, more is needed. But BA can't afford to lose its reputation either. Cuts mustn t lead to poor quality service.

Alitalia crisis lurches from desperate to absurd

9 Aug 2004

The Italian government is threatening rivals such as British Airways with legal action unless they increase their fares on certain flights. When Blair meets Berlusconi at the latter's Sardinian villa, he should make clear this is an unacceptable way to treat holidaymakers.

Rising oil price spooks airline investors

4 Aug 2004

That may sound obvious. Oil is a big cost for airlines. But they don t always underperform when the oil price rises. What really matters is whether the economy is picking up. With a recovery looking less certain, expect airlines to underperform.

Ryanair overpunished for BAA row

22 Jul 2004

Even if Ryanair loses its case it is fighting against the airport operator, the cost will be small. What s more, there is an incentive for both sides to kiss and make up rather than slug it out.

Airbus too bullish about aviation recovery.

21 Jul 2004

The announcement of a big Middle Eastern order may appear to give credence to its argument that things are on the mend. But it doesn t change the fact that there is still too much capacity around. Airbus s plans to crank up production look foolhardy.

Low-cost poster child runs into problems

16 Jul 2004

Ryanair and Easyjet love comparing themselves to Southwest. But the US carrier is being hit by rising labour costs and competition. These problems may be coming to Europe sooner than people think.

Stelios would struggle to buy Easyjet back

5 Jul 2004

Easyjet s founder would be making a cheeky move if he tried to buy back the airline on the cheap. But who will back him? He himself warned that entrepreneurs shouldn't hang on to their creations too long.

Are airlines due another rally?

2 Jul 2004

There are signs that airlines are gaining pricing power on the longhaul routes. That tends to kick off a bull run in the sector. But talk of a rally sounds premature. Capacity is on the increase, interest rates are rising, and oil is still a risk.

Italy goes the wrong way about saving Alitalia

23 Jun 2004

What is needed is a crisis at the airline to bring the unions to their senses. Instead, the government keeps writing cheques. Sadly, while this is gutless, it has a certain opportunistic logic. It allows Rome to blame Alitalia's collapse on Brussels.

Alitalia risks doing a Swissair

14 Jun 2004

By leaving its rescue plan to the last minute, the Italian carrier risks bankruptcy in the same spectacular fashion as the Swiss airline. Its only hope is to get a bridge loan. But for that the banks will need some serious coaxing.

Easyjet issues yet another profit warning

7 Jun 2004

The budget airline believes it is essential to fight the price war vigorously in order to drive weaker rivals out of the market. That's probably true. But it doesn't disguise what an awful year Easyjet is having.

Swiss turns its back on BA

3 Jun 2004

British Airways seems to have sought the benefits of a takeover without paying for them. What cashstrapped Swiss does next is not clear. It is talking about a capital raising but a deal with Lufthansa looks more likely.

Ryanair investors are in for a bumpy ride

28 May 2004

The Irish budget carrier says the latest airline price wars will be a bloodbath for twobit new entrants. But Ryanair will feel the pinch too, because of its giddy expansion and choice of destinations.

Lufthansa raises E750m it shouldn’t need

24 May 2004

The German flag carrier says it needs the cash for new planes. But it should be able to pay for them out of internal resources. Either Lufthansa is being prudent, or it knows something investors don't. It will have to persuade them to cough up.

BA shows airline recovery is still a long shot

17 May 2004

It s a good thing British Airways overshot its cost savings target this year. Otherwise it would have made a loss. And unless BA takes an axe to costs again this year, earnings won t grow at all. So much for the cyclical recovery.

Alitalia rescue still far away

7 May 2004

To save something from the ashes will require firm leadership, a willingness to cut costs and no political interference. None of those conditions are in place.