Airlines

Air China edges closer to Cathay Pacific’s cockpit

27 Aug 2019

Unrest in Hong Kong may prompt the local $5 bln airline to change course. Bookings have fallen, and Beijing’s ire over protesting employees forced out its CEO. The mounting pressure makes it a bit easier to see owner Swire selling out to its rival and big mainland shareholder.

Viewsroom: How to read the recession runes

22 Aug 2019

A U.S. downturn is near, judging by past early warning signals from yield curves to bank valuations. But fallout from the 2008 crisis has sapped them of some predictive power. Plus: what the exit of Cathay Pacific’s CEO says about Beijing’s response to the Hong Kong protests.

Airlines flash economic warning lights Down Under

22 Aug 2019

Profit at Qantas and Air New Zealand fell, hurt both by pricey fuel and headwinds at home. Corporate and discount travellers alike are pulling back, and neither carrier is offering much future guidance. Any benefits of rock-bottom interest rates are taking time to trickle down.

Hadas: Boeing lens refracts a Beijing dilemma

21 Aug 2019

Xi Jinping wants both tight government control and a modern economy. That combination has never worked, for good reasons. China’s leader could learn from the U.S. aerospace giant’s mess. A politically uncomfortable free press can be an economically helpful check on corruption.

Cathay shakeup clarifies China’s corporate muscle

16 Aug 2019

Boss Rupert Hogg and a top deputy resigned abruptly after the $5 bln airline scrambled to quell a mainland backlash related to Hong Kong protests. State carrier Air China owns a smaller stake than Swire, but Beijing’s sway looks bigger. The timing couldn’t be worse for Cathay.

Cathay Pacific yields to its Beijing co-pilot

12 Aug 2019

The Hong Kong carrier will allow Chinese authorities to vet staff flying to and over the mainland, as anti-government protests heat up at home. “Overly radical" employees will be kept away. Local roots and links leave Cathay and parent Swire vulnerable, and with limited options.

Hong Kong protests cloud Cathay Pacific’s skies

7 Aug 2019

The $5 bln airline delivered decent earnings and expects a better performance in the second part of the year. It won’t look so rosy, though, if anti-China clashes continue and prompt flyers to pick other hubs. Worse, Cathay’s ties to Air China are unlikely to provide shelter.

Brexit casts a double cloud over IAG

2 Aug 2019

The British Airways owner’s top and bottom lines are growing, a rarity among ravaged European carriers. Yet the risk of Britain crashing out of the EU weighs on its valuation. IAG can’t reduce its dependence on UK travellers, but more clarity on post-Brexit ownership would help.

Only taxes can close aviation’s carbon gap

29 Jul 2019

The industry wants its 2050 emissions to be a third those of today. With traffic set to treble by then, that’s unlikely. Electric airliners remain a pipedream and relying on biofuels would mean ploughing up a third of the U.S. Curbing demand via taxes may be the only solution.

Boeing’s 737 disruption is still not maxed out

18 Jul 2019

The aerospace giant is owning up to nearly $7 bln in charges and increased costs over the grounding of its troubled MAX jet. The tally is bound to grow, and a return to service in the fourth quarter is far from guaranteed. Airlines and investors should brace for more turbulence.

Thomas Cook wipeout forces Fosun to double down

12 Jul 2019

The ailing UK tour operator is finalising a 750 mln pound recapitalisation which would give creditors control of the airline and the Chinese group its travel unit. That allows Fosun to salvage its 250 mln pound equity stake. Other shareholders are likely to be left with nothing.

British Airways hacking fine is painful precedent

8 Jul 2019

The UK data commissioner wants to fine the airline 183 mln pounds after customer information was stolen last year. Even though that is at the lower end of the possible penalties, it dwarfs what Facebook had to pay under old rules and sets a higher bar for such security breaches.

Delta is uncertain wingman for Korean Air Lines

24 Jun 2019

The $37 bln U.S. carrier bought a 4% stake in the parent of its Asian peer and plans to lift it to 10%. Delta is being regarded by investors as protection for the controlling family’s messy succession plan. Funds aligning against KAL, however, suggest the fight will persist.

Lufthansa is early loser in European airfare war

17 Jun 2019

The German carrier’s Eurowings unit has been dinged by aggressive pricing from rival budget operators. With costs per seat almost double those of market leader Ryanair, it’s not hard to see why. A change of course is needed but, given domestic labour rules, that won’t be easy.

Ryanair left dependent on pricier sandwiches

20 May 2019

The budget carrier’s costs soared due to expensive fuel and the need to pay pilots more. Boss Michael O’Leary can’t do much about that, nor the price war Ryanair has flown into. The only way to get margins back up is to sell customers even more pricier in-flight stuff.

HNA’s Hong Kong spat is a sign of worse to come

9 May 2019

The indebted Chinese conglomerate is stuck in a bizarre boardroom brawl at Hong Kong Airlines. The sight could lead buyers to demand steeper discounts as HNA unwinds a $50 bln acquisition spree. Creditors like China Development Bank have cause to be anxious.

Qantas captain flies into risky tenure territory

8 May 2019

Alan Joyce agreed to serve as CEO of the $6 bln Aussie airline for another three years. He’s young and has led an impressive turnaround over the past decade, but problems often pile up for bosses who stick around too long. Succession should be atop the Qantas board’s to-do list.

Aviation is acid test for UK climate credibility

7 May 2019

Britain’s proposal for zero net carbon emissions by 2050 is laudable. But given it’s already struggling to hit a less ambitious goal, success implies tough state action. One way to tell if the UK is serious is if it ramps up taxes that curb customer demand for air travel.

Air France-KLM descent is double Dutch blow

3 May 2019

The airline’s Dutch arm swung to a first-quarter operating loss, weeks after the Netherlands government bought a 14 pct stake. KLM is still faring better than its French partner. But the wobble undermines demands for special treatment and leaves its political backers red-faced.

Thomas Cook survival relies on risky breakup

23 Apr 2019

The indebted UK tour operator’s shares jumped on reports it could be bought by Chinese group Fosun or private equity. Either would likely see the group sell its airline, making it hard to get a good price. And the rump that remains would be even more challenged.