Air Transportation

GE’s aircraft deal is another long goodbye

10 Mar 2021

The conglomerate is merging its plane-leasing unit with Ireland’s AerCap. Boss Larry Culp will, for now, be stuck with just under half of a highly leveraged business. Investors in GE know that divestments can take years and that, in the meantime, they can't expect a clean break.

GE is getting tantalizingly close to take-off

8 Mar 2021

Merging the aircraft leasing unit with rival AerCap may not erase debt that weighs on the U.S. conglomerate. But it would leave a sleeker GE with more options to raise cash. Boss Larry Culp has to navigate politics, though. And like Baker Hughes, risks to execution loom large.

Boeing stares down a future that’s a bit like GE

22 Feb 2021

The $127 bln aircraft maker run by General Electric alum David Calhoun now has problems with some engines it uses. It comes just as 737 MAX issues are in the rear view. Boeing's future is burdened by inertia and a growing debt load. As GE shows, that can take decades to unwind.

Capital Calls: Petrobras CEO, Kohl’s

22 Feb 2021

Concise views on global finance in the Covid-19 era: Brazilian President Jair Bolsonaro nominates a former general to replace the oil group's market-friendly boss, tanking the shares; and U.S. department store Kohl’s has some unhappy shareholders.

HNA’s final agonies deserve investor study

29 Jan 2021

The indebted Chinese travel group looks set to enter bankruptcy. That’s unusual but unsurprising: Beijing already let a bank go under last year, and allowed market-rattling bond defaults. Given the empire’s complexity and broad creditor base, distributing haircuts could get ugly.

Airlines’ virus parachutes warrant minimal padding

29 Jan 2021

Quarantines could mean carriers like easyJet face further losses over the summer boom months. In extremis, they can flog planes or tap investors for cash, although neither are ideal. Given CO2 emissions and their non-strategic nature, they don’t merit special treatment.

Corona Capital: Vaccines, Dr. Martens

29 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Quantity matters with vaccines, while Permira gets an extra kick from the bootmaker.

If only American Airlines’ stock pop helped it

28 Jan 2021

Shares of the struggling government-supported $10 bln airline surged 60% in premarket trading after a mention on the same online forum that boosted GameStop. Ideally, American could issue equity at a pumped-up valuation. But the phenomenon may be too fleeting to take advantage.

Boeing’s kitchen sink lacks a plug

27 Jan 2021

The company posted a record loss in 2020 and took a $6.5 billion write-down on a new jet program that has been delayed. Problems with its MAX model are giving way to ongoing Covid-19 issues. Given a lack of visibility on how those will resolve, Boeing’s valuation looks too high.

Clean-shaven GE finally heaves into view

26 Jan 2021

Larry Culp is targeting the kind of cash flow the U.S. group was making two years ago, only with fewer workers and $30 bln less debt. Success depends on the still-grounded aviation division. But the chief executive’s revamped bonus plan means he’s well motivated to hit his goal.

Corona Capital: Music deals

26 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Warner Music may take a stake in the music business owned by Saudi Arabian Prince Alwaleed bin Talal.

Chevron makes bet on being last man standing

12 Jan 2021

Mike Wirth, the $180 billion energy firm’s boss, thinks oil demand will stay strong. That contrasts with rivals like BP, which sees production down 40% by 2030. Chevron has the advantage of size. But plans to outlast or acquire rivals are risky in a rapidly evolving industry.

Infrastructure funds get case of private jet envy

11 Jan 2021

GIP has outgunned rival Blackstone with a $4.6 bln bid for Signature Aviation, offering a 51% premium for the aircraft servicer. Catering to the flying habits of the mega-rich is hardly a stable business, though, and private aviation faces climate-change clouds on the horizon.

“Big Four” U.S. airlines will go down to three

4 Jan 2021

Stricken travel is worsening carriers’ positions. They’ve already slimmed staff, and restructuring is next. But U.S. taxpayers are invested in them succeeding, and have already benefitted from a long descent in ticket prices. A merger stamped by the government is on the horizon.

U.S. airlines need rules as well as rescues

17 Dec 2020

They could get another $17 billion if Congress approves a new relief bill. Since American Airlines and its peers merit taxpayer rescues, bailouts ought to come with tighter strings. That could mean limits on debt, or ensuring they have enough cash to remain aloft for longer.

Corona Capital: Private jet deal

17 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Blackstone bets that plutocrats will be back in the air before the rest of us.

Corona Capital: Gaming M&A, Beauty’s bold face

9 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Consolidation in video games reaches the next level as Sweden’s MTG buys Hutch Games for $375 million; and Spanish cosmetics, fashion and perfume group Puig predicts revenue will double by 2023.

Corona Capital: Chevron, Boeing, OPEC, Orange

3 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Chevron cuts spending, prudently; Boeing orders are a solid step; OPEC makes up its mind; and Orange’s Belgian deal has some juice.

Corona Capital: Skis, Italian banks, Dividends

26 Nov 2020

Concise views on the pandemic’s corporate and financial fallout: Europe’s hopes for a common ski policy hit a mogul; Italian lender Credito Valtellinese faces a lonely bidding war; Aviva’s payout cut is less stingy than it looks.

Corona Capital: Cash stockpiles, Empty real estate

23 Nov 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. companies hoard money; retailer rout causes real estate double whammy.