Airlines

European airlines’ tough summer adds to M&A logic

11 Nov 2024

Carriers such as $8 bln Lufthansa and $2 bln Air France-KLM saw rising costs and competition on Eastern routes from Chinese rivals. The logical response for EU players is to look West instead. Bidding for Portugal’s state-owned TAP would drive much-needed consolidation.

Budget US airlines look clearer for deal takeoff

23 Oct 2024

Frontier may be mulling a fresh offer to buy struggling rival Spirit two years after JetBlue’s doomed interruption. Stern trustbusters and $3 bln of debt will be steep hurdles. But boss Barry Biffle has a better shot now, if he stays disciplined with a bid this time.

Elliott takes flyer with elite intimidation status

14 Oct 2024

The hedge fund escalated its battle with $18 bln Southwest and CEO Bob Jordan by calling for a shareholder meeting to shake up the board. It’s a rare public clash as companies increasingly acquiesce to pushy investors. If the airline prevails, it may embolden others to push back.

Capital woes are no rebuttal to merger foes

4 Oct 2024

Budget airline Spirit may file for bankruptcy after competition cops grounded a merger with rival JetBlue. A judge ignored pleas that the firm is failing – but even now, Spirit doesn’t meet a legal test that’s strict for good reason. The market has ways to fix bad businesses.

Bain jets towards first-class lounge Down Under

2 Oct 2024

The private equity firm is selling 25% of Virgin Australia to Qatar Airways for an undisclosed sum ahead of an IPO. Fold in last year’s dividend recap and assume it’s growing like larger rival Qantas, and the airline is en route to delivering Bain a sky-high 40%-plus return.

Southwest’s new flight plan carries excess baggage

27 Sep 2024

The $18 bln airline expects seat fees to help lift its operating margin to 10%, but not until 2027. Captain Bob Jordan and his crew also have consistently missed targets. A tough overhaul and a weak track record will weigh them down in the dogfight with pushy investor Elliott.

Southwest shareholders needn’t act like passengers

14 Aug 2024

Rabble-rouser Elliott escalated its battle with the $15 bln airline by unveiling a dissident board slate. The timing is odd: sitting directors just won overwhelming support. It’s a question of persuading investors they deserve a smoother ride than sheep-like flyers tolerate.

Airlines’ margins head to lower cruising altitude

2 Aug 2024

Carriers from $2 bln Air France-KLM to $7 bln Lufthansa reported healthy demand in the first half of 2024. But earnings are falling as expenses bite. With the switch to sustainable aviation fuel threatening to push costs ever higher, investors are bracing for smaller margins.

Boeing and Airbus headwinds are hard to escape

23 Jul 2024

The troubled US jet maker and its European rival aren’t delivering as many planes as customers want. On this Exchange podcast, AirInsight co-founder Addison Schonland explains how some problems stretch back to Covid, whether a third player can break the duopoly, and much more.

Ryanair leads airline sector into strategic cloud

22 Jul 2024

The $17 bln carrier’s shares sank 15% after it warned of weaker summer fares. The airline had hoped slow delivery of planes would mean less competition, allowing it to hike prices and weather higher costs. If customers are now saying no, that’s a problem for the whole sector.

Cyber meltdown points to downsides of efficiency

19 Jul 2024

A software update by $83 bln CrowdStrike grounded flights and disrupted financial markets. That’s possible because businesses work with a small number of providers, seeking lower costs. It supports rich tech valuations, but also heightens the risks of a catastrophic failure.

Airbus hit leaves investors flying without a radar

25 Jun 2024

The $110 bln planemaker’s shares fell 11% after it said that engine shortages scuppered its delivery target. The group is struggling to capitalise on rival Boeing’s woes. Supply-chain uncertainty is also stopping the wider sector from putting the pandemic in the rear-view mirror.

Barbarians at Southwest gate overdo upgrade plea

13 Jun 2024

The $17 bln airline’s slow response to weak performance made it an easy target for pushy investor Elliott. Boss Bob Jordan may struggle to keep his job, let alone reshape the business model. Yet his new dissident is too facile about jettisoning defining parts of the culture.

Antitrust worries risk clipping EU airlines’ wings

24 May 2024

Groups like Lufthansa and IAG are seeking greater scale to better compete globally. But Brussels frets that regional tie-ups will lead to higher fares and reduced consumer choice. Blocking the $8 bln German firm’s play for smaller peer ITA could mean other deals won’t take off.

European airlines’ hot summer belies sector clouds

23 Apr 2024

Jet shortages mean that carriers may be able to charge higher fares this summer, ending years of overcapacity. For stronger players like $25 bln Ryanair, that could mean fatter margins. But it’s likely to be a short-term reprieve for a sector that’s grappling with other costs.

How Boeing’s woes change everything but planes

11 Apr 2024

Grave problems with the jetmaker’s 737 MAX have sparked a crisis. In this Viewsroom podcast, Breakingviews columnists explain whether rival Airbus offers a template for policymakers, the impact of a US export champion floundering, and why others may struggle to capitalize.

Airbus obsessives have a shaky grasp of history

9 Apr 2024

The $140 bln pan-European group is flying high as rival Boeing stutters. Now carmakers and others are wondering if similar collaboration could help them face down overseas competitors. But Airbus’s idiosyncrasies and convoluted road to success make copycat plans pie-in-the-sky.

How to get the best new boss for Boeing? Ask GE

25 Mar 2024

Dave Calhoun failed to fix the 737 MAX maker’s problems; ensuring its next CEO does better requires financial incentives equal to the mammoth task. Engine manufacturer GE’s controversial $232 mln inducement for boss Larry Culp offers a blueprint, if Boeing avoids its missteps.

Boeing’s reverse deal thrust augurs small tailwind

4 Mar 2024

Jettisoning supplier Spirit AeroSystems in 2005 benefited the plane-maker, but only temporarily. Financial weakness is now compounding 737 MAX woes and hurting shareholders of both companies. Buying back the $4 bln former subsidiary should generate value in quality improvement.

Capital Calls: Airline recovery, AMS Osram

29 Feb 2024

Concise views on global finance: A travel boom lifted 2023 operating profit at the $10 bln parent of British Airways and Iberia above its pre-pandemic level; shares in the sensor company, a supplier of Apple, fell 43% after the group cancelled a major micro-LED project.