Airlines

Boeing needs to think faster than its watchdog

12 Mar 2019

Europeans joined others in suspending flights of the 737 MAX 8 after two crashes, and two U.S. senators called on the FAA to follow suit. The company’s stock lost another 7 pct. Rather than waiting for its regulator, Boeing could get ahead of the crisis by grounding the plane.

Boeing investors fear worst from 737 tragedy

11 Mar 2019

The aerospace giant’s shares lost over $25 bln in value after the second crash of its newest model in six months. That overstates the likely financial impact even if U.S. regulators copy China and ground the plane. The real threat is creating an opening for a Chinese competitor.

Dutch activism could ground Air France recovery

27 Feb 2019

The Hague has snapped up 12 percent of the carrier to counter the influence of the French government and protect Dutch jobs. More state meddling may undermine new boss Ben Smith’s cost-cutting plan, and exacerbate tensions with French unions, raising the risk of more strikes.

Storms won’t keep Qantas from higher flight path

21 Feb 2019

Australia's flag carrier said fuel costs pulled first-half earnings down by nearly a fifth to $559 mln. Domestic business proved resilient, though; its fleet and balance sheet are in good shape too. Choppy weather lies ahead, but Qantas looks sturdier than higher-valued rivals.

Ryanair CEO’s 100 mln euro bonus is within reach

15 Feb 2019

That’s how much Michael O’Leary stands to gain if he doubles the budget airline’s net profit or share price by 2024. Falling fares and strikes make the target look a stretch. But if Ryanair hits its 200 mln passenger goal while keeping costs down, the sky’s the limit for rewards.

Jumbo reality check frees Airbus to fly higher

14 Feb 2019

The European aerospace group will stop making A380s in 2021. Passengers who love the spacious cabins will regret the decision more than the airlines that fly the gas-guzzling behemoth. A focus on nimbler, greener two-engine jets will help narrow Airbus’ valuation gap with Boeing.

Alitalia’s bidders are cruising for a bruising

14 Feb 2019

It’s like the start of a bad joke: Delta, easyJet and Italy’s railways walk into a bar and buy the national carrier. But there’s nothing funny about Alitalia’s serial cash incineration. Even if their goal is to thwart Lufthansa, the pain they’ll suffer isn’t worth the effort.

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.