Italy just can’t quit its terrible Alitalia habit 15 May 2020 Using the virus as cover, Rome earmarked 3 bln euros for the stricken airline, twice the boost it’s offering to its education system. That adds to 10 bln euros taxpayers wasted on Alitalia since 2008. The EU may declare it unfair state aid. But the cash will have already flown.
Corona Capital: Exxon, Clorox 1 May 2020 Concise views on the pandemic’s corporate and financial fallout: Exxon is getting clean by manufacturing much-needed medical-grade hand sanitizer while bleach maker Clorox will likely continue its winning streak.
British Airways jobs cull sends EU bailout Mayday 29 Apr 2020 The airline owned by IAG is axing a quarter of its staff amid the virus fallout, rather than seek state aid. The move highlights the limits of using government funds in the face of wrenching change. It’s ominous for Paris and Berlin, who may dole out $17 bln of taxpayer cash.
Corona Capital: Primed debt, Lysol 24 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Senior creditors get “primed”; Reckitt Benckiser warns customers not to inject Lysol.
Branson’s asset-light touch leaves Virgin exposed 21 Apr 2020 Despite his reputed billions, the bearded businessman is struggling for cash to save Virgin Atlantic. Like the ailing airline, Branson owns little: His assets include a Caribbean island and stakes in ventures like space tourism. The brand-centric business has found its limits.
EasyJet files turbulent post-virus flight plan 16 Apr 2020 The budget carrier hopes face masks and empty middle seats will speed up a return to the skies. Such measures will reduce profit as well as infection risks but lower taxes and fuel prices could help. The bigger question is how soon punters will feel safe enough to travel again.
Mnuchin gives airlines right mix of bailout fuel 15 Apr 2020 The U.S. Treasury secretary negotiated potential equity stakes in the likes of American and United, as well as insisting they repay some of the $25 bln in virus grants. Airline officials aren’t happy. But the terms seem less punitive than banks got in 2008. On balance, it’s fair.
Norwegian Air is lesson in bare-bones bailout 14 Apr 2020 The airline’s future hinges on creditors swapping $4.3 bln of debt for its nearly worthless equity. That would unlock enough state funds to allow the company to operate as a regional carrier. Its loss-making dream of a low-cost transatlantic revolution is dead whatever happens.
Corona Capital: Lufthansa, JPMorgan, Foursquare 7 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Lufthansa parks hopes of a quick airline-industry recovery in the hanger; JPMorgan skirts close to committing an early earnings faux pas; and Foursquare checks into the M&A market.
Virgin has bailout headwinds besides Branson 3 Apr 2020 The bearded businessman’s airline wants 500 mln pounds in UK state aid. Supplier Rolls-Royce wants it to stay aloft; arch-rival British Airways does not. Branson’s non-resident status, a big U.S. co-owner and Virgin’s shaky financial record mean the government may agree.
Viewsroom: Lingering lockdowns 2 Apr 2020 Breakingviews journalists around the globe check in with Editor Rob Cox to discuss Silicon Valley’s response to the coronavirus, how European regulators are forcing banks to hoard dividends, and one of the biggest corporate rescues yet of the crisis: Singapore Airlines.
Airlines face overdue dilemma taking Treasury cash 1 Apr 2020 U.S. bailout funds come with strings attached, like handing the feds stock. Taking the money means keeping more employees, but diluting shareholders. For arch-capitalists, that's objectionable. For society at large – and to ensure readiness for a recovery – it's only fair.
America should bail out airlines the American way 26 Mar 2020 A $50 billion government lifeline hardly sounds like capitalism. But the U.S. has been an outlier in not propping up its airlines. Bank bailouts already showed the public can emerge better off. The key is to strike a good deal, even if that means taxpayers end up holding equity.
U.S. bailout needs fewer diversions, more speed 24 Mar 2020 Lawmakers are wedging non-Covid-19 concerns into the stimulus bill. Some are worthy causes, like getting airlines to cut emissions. But the $2 trln-odd rescue package’s goal should be to get aid where it’s needed fast. As the 2010 Dodd-Frank Act showed, broader issues can wait.
Trump bumps smart infrastructure punters to coach 12 Mar 2020 The U.S. president’s Europe travel curbs crushed securities in the region’s top airports. Robust revenues attracted sharp, long-term investors to hubs like Paris-de Gaulle and London Heathrow. Plummeting footfall and high debt levels will challenge their status as safe havens.
Virus-hit airlines can fly without state thrust 12 Mar 2020 A U.S. ban on European travellers hammered airline stocks on both sides of the Atlantic. Washington doled out $15 bln of aid after the post-9/11 shutdown. But airlines are bigger now and fitter, letting them ride out turbulence. Regulatory leeway may suffice.
Boeing airworthiness takes new viral hits 9 Mar 2020 The aircraft maker’s shares have plunged 25% in under a month – double the damage to the S&P 500. On top of the 737 MAX grounding, a possible pandemic weakens Boeing’s airline customers while also disrupting its supply chain. New CEO David Calhoun needs more than an apology tour.
Airlines are pure punt on V-shaped virus recovery 5 Mar 2020 The coronavirus has hammered demand for air travel, knocking share prices and pushing UK budget carrier Flybe into bankruptcy. Yet past outbreaks like SARS suggest it will be a blip on air travel’s steady upward trajectory. If that’s the case, stronger airlines will bounce back.
Viewsroom: BP, Delta shift out of climate neutral 20 Feb 2020 The British fossil-fuel giant and the largest U.S. airline have each pledged to effectively stop emitting carbon over time. The ambition is encouraging and puts them ahead of most rivals. But both fall short on all-important details. There’s plenty of runway to do better.
Air France lays down worrying coronavirus marker 20 Feb 2020 The Franco-Dutch airline’s shares fell 7% as it warned of a 200 mln euro hit from the virus. Rivals BA-owner IAG and Lufthansa will also feel the travel drag. Yet Air France-KLM’s estimates count on a quick resolution. That suggests even more pain could be ahead for investors.