Airlines

Fastjet turbulence flags African continental drift

28 Sep 2018

The airline set up by easyJet founder Stelios Haji-Ioannou needs equity after Tanzanian intransigence. A bet on Africa’s growing middle class, it underplayed local resistance. Hostility to foreign capital means less investment, fewer cross-border firms and lower growth.

Emirate airline M&A makes sense, if not quite yet

20 Sep 2018

Dubai’s Emirates and Abu Dhabi’s Etihad denied merger talks. But higher fuel costs, overlapping networks and Etihad’s woes make it an idea worth considering. A single UAE player might better address the threat from long-haul routes that will inevitably bypass the Middle East.

BA is guinea pig for tougher EU data rules

7 Sep 2018

The UK airline said some customer payment records were hacked. Companies used to shrug off such attacks. But this breach comes after the rollout of new data protection laws. Now that non-compliance means fines, such lapses are a headache for investors as well as customers.

Unions the first of many fights for Air France CEO

17 Aug 2018

As the airline’s first foreign boss, Ben Smith will face labour strife that ousted his predecessor and has cost 335 million euros. But the former Air Canada executive must also tackle the weak governance, competition and soaring costs that threaten the carrier’s survival.

HNA aircraft arm flies higher with $2.2 bln deal

8 Aug 2018

Selling a 30 percent stake in its Avolon leasing unit to Japan’s Orix lets the cash-strapped Chinese group repay debt. The deal could also help reassure creditors the division is insulated from the parent’s woes. If elevated borrowing costs fall, all shareholders will benefit.

India’s top airline can evade a turbulent patch

31 Jul 2018

Shares in InterGlobe Aviation, which owns IndiGo, fell sharply after first-quarter earnings plunged 97 pct. A fare war at home is to blame, as are rising fuel prices. But rivals are suffering too, and high costs will encourage the carrier to pause a planned long-haul splurge.

Ryanair budget model is being eroded

23 Jul 2018

The carrier’s post-tax profit fell by a fifth due to strikes and a heatwave that encouraged people to holiday at home. But these one-off problems pose less of a challenge to CEO Michael O’Leary’s low-cost business than rising staff costs and the risk of a chaotic Brexit.

HNA’s market thaw provides only cold comfort

20 Jul 2018

Three listed units of the troubled Chinese conglomerate lost a combined $1.5 bln in value after long trading halts ended. It signals a lack of confidence about HNA’s restructuring plans as it regroups without its late chairman. Pity investors trapped by a 10 pct downside limit.

Europe airlines show strike pain is for passengers

18 Jul 2018

EasyJet expects a 45 pct rise in pre-tax profit in 2018 thanks to more passengers and charges on checked bags. The limited damage that French air controllers’ strikes inflicted on the company and its peers reveals such disruptions are more a problem for customers than carriers.

Delta’s refinery is short of fuel-price alpha

12 Jul 2018

The $35 bln U.S. airline’s growing top line has so far outpaced the rising cost of oil. But the company warned fuel will squeeze its profit for the full year. The 2012 purchase of a refinery has only modestly mitigated the problem. To justify owning it, Delta needs more juice.

Norwegian Air profit breathes life into bid battle

12 Jul 2018

The transatlantic budget carrier reported a surprise profit. Rising passenger numbers and falling costs will help convince airlines circling the group that its unorthodox model can fly. Suitors like IAG or Lufthansa will be more wary of letting Norwegian fall into rival hands.

Air India sale could take off again

20 Jun 2018

New Delhi has shelved the disposal of the indebted national carrier after failing to attract bidders. It’s a bad time to push privatisation, with a general election looming. If Premier Narendra Modi wins the poll, though, the p-word could still be his big reform set piece.

Rolls-Royce has partial flight plan to destination

14 Jun 2018

The UK engine maker announced plans to cut 4,600 jobs ahead of its investor day in London. The resulting cost savings are welcome. The bigger question for investors is how CEO Warren East can more than double free cash flow in under two years to hit his 1 billion pound target.

Air France check-in lacks logic for AccorHotels

4 Jun 2018

Buying the French government’s 450 mln euro stake in the ailing airline might help it get tough with unions. But the hotel group would not enjoy any strategic benefits. That AccorHotels is even considering the purchase shows the state’s continuing sway over the private sector.

United shareholders fly into more turbulence

18 May 2018

CFO Andrew Levy, hired to help the embattled $19 bln airline in dogfights with cheaper rivals. is leaving after less than two years. As its chairman also takes off, United looks less able than peers to combat rising oil prices and seat capacity hitting margins. Time to buckle up.

Singapore Airlines is cruising comfortably

18 May 2018

The $10 bln flag carrier beat forecasts with a 148 pct jump in annual earnings. Its overhaul is working, and a plan to absorb regional arm SilkAir looks sensible. There is more to do, but the group can afford to take its time evaluating growth options, including India.

China’s airlines are set for a long-haul price war

17 May 2018

Beijing is freeing local carriers to raise fees at home and fight for share on international routes. State ownership endures, however, as do distorting airspace restrictions. A painful battle over fares is in the offing, and will come at foreign rivals' expense.

EasyJet’s winning streak relies on rivals’ pain

15 May 2018

The UK airline reported its best ever first-half revenue and turned a pre-tax loss into a small profit after stripping out Berlin expansion costs. Problems that plagued Ryanair and Air France flattered the results. The 6.7 bln pound carrier could use a more reliable propellant.

Air France offers Macron a hands-off opportunity

7 May 2018

The French-Dutch airline’s CEO quit after staff rejected his pay deal, triggering market chaos. The travails of insolvent peer Alitalia provide a window into the toxicity of unruly unions and bad state policy. Resisting the urge to meddle will help the president’s pro-business push.

Air France-KLM staff chaos allows IAG to fly ahead

4 May 2018

The European airline warned that much of its 2018 operating profit will be wiped out by French strikes. Higher fuel charges and increased competition are creating headwinds for all carriers. But British Airways owner IAG’s success in slashing costs helps protect its bottom line.