Air Transportation

Lufthansa should consider a spin-off

12 Nov 2003

Selling the noncore businesses at the bottom of the market wouldn t be a good idea, but spinning them off to shareholders might be. The German carrier thought diversifying away from its passenger business would make the group less cyclical. That hasn t really happened.

BA still faces headwinds

10 Nov 2003

The UK carrier says revenue decline may have finally bottomed out, and sees signs of life in the US. The snag is that volumes haven't picked up yet. But investors appear to have already priced in a recovery in the stock.

Brussels expected to get tough with Ryanair

7 Nov 2003

Although a pain, this wouldn t be disastrous for the nofrills airline. The EU will reportedly rule that Ryanair s subsidised airport deals are tantamount to illegal state aid.

Ryanair yields still on the decline

3 Nov 2003

After slashing fares to ribbons, the results could have been much worse. But the Irish carrier still managed to increase profits. Ryanair has so far proven a free seat is not necessarily a lossmaking seat.

Alitalia unveils restructuring plan

31 Oct 2003

The plan to turn around the lossmaking Italian carrier is largely sensible. But the trick is to actually deliver. Fear of being left out of European consolidation might just be the stick it needs to get its act together.

European airline stocks jump the gun

24 Oct 2003

The sector seems to have rebounded on hopes that rationalisation is finally underway. That may be an overoptimistic assessment of recent events.

Concorde says goodbye

24 Oct 2003

The supersonic jet has caused a lot of headaches at BA and Air France. But when the market returns, highflying executives will be looking for a classy way to cross the Atlantic.

Motorola to spin off chips division

6 Oct 2003

The spinoff should eradicate part of the US technology giant's conglomerate discount. But shareholders should not get carried away until they understand the funding requirement of the lossmaking chip business.

Investors see hurdles to Air France/KLM merger

3 Oct 2003

Even though the deal has been artfully structured from a regulatory standpoint, plenty of things could go wrong. And because there isn't that much upside in the deal for Air France, any one of them could derail things.

Alitalia wants to join Air France merger

1 Oct 2003

That looks a vain hope unless the Italian carrier solves its own problems first. Alitalia should focus on restructuring itself and not chase corporate deals.

Air France swallows KLM for E784m in stock

30 Sep 2003

On paper, the deal looks decent. Factor KLM's turnaround into promised synergies and the return on investment may be close to 11%. But the synergies are not high enough to bring the group's operating margins to where they need to be. And the execution risks are high.

BA should look at alliance with KLM

21 Aug 2003

KLM is in alliance talks with Air France after finding a potential tieup with BA unappealing. BA should lure the Dutch airline back into alliance talks by softening its uncompromisingly tough line on proposed flight and job cuts.

BA reports worst ever Q1 operating result

31 Jul 2003

BA says it has less visibility on revenues than it used to. At least the costcutting plan seems to be going well. Despite Sars and the Iraq war, the UK airline jacked up volumes. But that was only achieved by cutting prices.

Switzerland mulls future without a national airline

30 Jul 2003

In order to save Swiss International, it may be necessary to sell it to Lufthansa. The cult of the flag carrier is on the wane. This would deal it a further blow.

British Airways mustn’t cave over strike threat

24 Jul 2003

A strike would hurt the airline, but unlike many European rivals, it can afford it. The longterm cost of backing off would be much worse.

Swiss International casts around for rescuers

14 Jul 2003

Lufthansa could perhaps justify wading in if only to take out a competitor. But a deal would be messy, offering scraps for investors. There are unlikely to be many takers for the old Swissair. Switzerland Inc burned its fingers two years ago when it rescued the airline.

Holiday firms may embark on mergers – report

15 Jun 2003

Times are certainly tough for European holiday operators. But further consolidation is not the answer. Both Thomas Cook and Kuoni have shot down rumours of a tieup. Indeed, all such stories should be taken with a dollop of salt.

EU gets OK to negotiate aviation pact with US

6 Jun 2003

An open skies deal would open the way towards rationalisation of Europe's tattered airline industry. But this is only a first step on a very long road.

Ryanair tries to wound Easyjet

3 Jun 2003

The Irish carrier is slashing fares to ribbons deliberately to hurt its struggling rival. Its own returns may suffer but Easyjet will hurt more

European airlines should merge – but won’t

23 May 2003

Airline bosses recognise that excessive fragmentation is compounding the industry s problems. But red tape, Pollyannaish management and political opposition still stand in the way of consolidation.