Airlines

New-look Ryanair follows familiar flight path

4 Feb 2019

The budget airline will split into four units overseen by CEO Michael O’Leary. The changes, including a replacement for Chairman David Bonderman, look encouraging. But given that O’Leary will remain in charge and large-scale acquisitions are unlikely, they are mostly cosmetic.

IAG is surprise first loser in airline fuel casino

24 Jan 2019

The BA owner is set to sell its stake in Norwegian Air. When IAG bought in last April, higher oil prices made it plausible that its unhedged smaller rival would become vulnerable to a takeover. As it happens, a sharp fall in crude values means the egg is instead on its own face.

Ryanair will weather fare squeeze

18 Jan 2019

The low-cost carrier expects to make less post-tax profit this financial year than previously anticipated as CEO Michael O’Leary cuts fares to attract customers. That’s tough as he is having to pay staff more. But passenger numbers are growing fast enough for his bet to pay off.

Stalling Jet Airways puts Narendra Modi in a bind

17 Jan 2019

To save the private carrier, India’s premier may have to choose between relaxing foreign ownership rules for Abu Dhabi’s Etihad and letting state banks take a hit. Both options touch the sorest points of Indian finance: it's an awkward dilemma in the run-up to a general election.

Shutdown tests U.S. companies’ stress filters

16 Jan 2019

Delta Air Lines says it loses $25 mln of revenue every month the government stays closed. Big deal. Like the market plunge that hit bank earnings, the shutdown has high visibility but little lasting impact. There are bigger risks to valuations that are harder to visualize.

Virgin takes low-risk punt to lift its UK flights

11 Jan 2019

Richard Branson’s airline is part of a group buying loss-making Flybe for a token 2 mln pounds. The domestic operator’s turboprops could funnel more people onto Virgin’s long-haul flights. Joining up with infrastructure firm Stobart and private equity firm Cyrus spreads the risk.

IAG tests EU appetite for destruction

9 Jan 2019

The parent of British Airways and Spain’s Iberia may fall foul of European ownership rules if the UK leaves without a deal, according to the FT. That could force it to sell Iberia. IAG’s best hope is that European states have little to gain from unwinding airline consolidation.

Budget air guru was passenger more than pilot

4 Jan 2019

Herb Kelleher’s Southwest Airlines took the romance out of flying, and undercut the industry’s luxury pricing with cheap, direct flights. Budget travelers owe him thanks, but they owe more to the influence of plunging airplane-manufacturing costs and rising passenger demand.

Hapless oil bets will drive airline M&A

4 Jan 2019

Air operators are divided into two camps on fuel prices. Ryanair and Lufthansa are prepared for a hike after locking in hedges. Smaller carriers are hoping for a fall. If their bet goes wrong, they could be gobbled up.

Airlines’ nosedive hints at wider turbulence ahead

3 Jan 2019

Delta sent sector stocks plunging by warning of slightly slower revenue growth even as it affirmed earnings guidance. With high fixed costs, the industry is vulnerable to any slowdown. Investors’ outsized reaction suggests fear about the economy has the upper hand over greed.

Etihad holds first class ticket for Jet’s tailspin

3 Jan 2019

The Indian carrier just missed a bank payment, deepening its market plunge. As it tries to flog assets and haggle with lenders, big Abu Dhabi backer Etihad can impose tough terms to salvage the company and its investment. It could even cost Jet founder Naresh Goyal control.

Drones prove disruptive capacity – in a bad way

20 Dec 2018

Rogue devices forced London's Gatwick airport to close, grounding flights and stranding thousands of passengers the week before Christmas. Even known risks with new technology - already highlighted by UK aviation authorities - can be hard to manage.

Thomas Cook epitomises Brexit cliff-edge risk

27 Nov 2018

The UK travel operator gave a second profit warning in two months. Foreign bookings hit by a hot summer aren’t the issue. Rising leverage, a suspended dividend and an outlook that depends on strong consumer demand are – and will stay bad until Britain’s EU exit is clarified.

EasyJet valuation is heading for lower altitudes

20 Nov 2018

The budget airline carried a record number of passengers in 2018. That will be hard to replicate since rivals are finally resolving their problems. Stiffer competition and higher costs will weigh on revenue. The premium at which the company is trading over most peers will shrink.

M&A can bring relief to Asia’s crowded skies

19 Nov 2018

Too many carriers, with too many planes, offering cheap fares have left the industry on its knees, and put price controls back on the agenda. Consolidation is a better fix. With Indonesia’s Garuda taking over a rival and India’s Jet Airways in play, a turning point may be near.

India could clear flight for Singapore Airlines

14 Nov 2018

The $8 bln carrier posted dismal quarterly earnings, weighed down by fuel costs. But opportunity may be knocking, as indebted rival Jet Airways comes into play. A deal by Singapore’s influential Indian partner Tata would bring newfound clout in a promising growth market.

Air France take-off will be pipped by Lufthansa

31 Oct 2018

The French carrier boosted revenue in the third quarter and is finally resolving long-running problems with unions whereas its German rival has been forced to scale back ambitions for 2019. However, the former has lower passenger targets and may take time to reach full speed.

Ryanair wings recovery on consolidation prayer

22 Oct 2018

Strikes, lower fares and higher fuel costs lopped 7 pct off the budget airline's earnings in its busiest season. Ryanair's high margins and oil hedges are a buffer. But it's relying on less well-protected rivals stalling for its own performance to take off.

Italy tries more state medicine to heal Alitalia

12 Oct 2018

The radical government wants the finance ministry and local railways to support a 2 bln euro rescue for the ailing airline. State involvement may scare off potential international partners and make it harder to cut costs. Taxpayers would once again bear the costs of failure.

Losing reliability is biggest threat to Ryanair

1 Oct 2018

Europe’s largest budget airline cut its full-year profit forecast by 12 pct due to strikes and higher fuel costs. Less profitable rivals are facing similar headwinds. But Ryanair customers are unsure it will fly at critical times like Christmas. That’s a harder issue to fix.