Airlines

IAG picks good time to ride Norwegian jet stream

12 Apr 2018

The owner of British Airways may bid for budget carrier Norwegian Air Shuttle. The target’s plan to disrupt transatlantic travel is taking off, but its finances are stretched, and rival bidders may struggle to match an offer from IAG. Investors shouldn’t bet on too big a premium.

Cerberus Alitalia carve-up would not fly with Rome

11 Apr 2018

The private equity firm is reported to be plotting a three-headed bid for the Italian airline. It would see easyJet take short-haul routes and Air France-KLM long ones, while Cerberus puts up the cash. But a breakup plan will not pass muster with a new nationalist government.

Lufthansa’s next challenge will be domestic

15 Mar 2018

The German airline is reaping the rewards of a 2014 plan to take on no-frills giants like Ryanair. Barring an unexpected rise in oil prices, Chief Executive Carsten Spohr’s next challenge will be to fight off cut-price competitors when they try to encroach on his home turf.

Georgia gives Amazon one great reason to stay away

27 Feb 2018

The Peach State's Lt. Governor hoisted a big red flag for the e-commerce giant. By lobbying to remove tax breaks for Delta Air Lines, a punishment for withdrawing discounts for NRA members, he makes Georgia an untrustworthy partner – and a poor choice for Amazon’s new HQ.

Airbus’s sunnier skies still contain clouds

15 Feb 2018

Shares in the aerospace giant jumped by one-tenth on Thursday following an 8 percent rise in operating profit, higher than analysts expected. But its operating margin still lags those of U.S. rival Boeing. Closing the gap could be complicated by a fresh stateside corruption probe.

United puts airlines’ stability into tailspin

25 Jan 2018

CEO Oscar Munoz plans to put more planes in the skies, sparking fears of a price war and wiping billions off United’s and rivals’ market values. Industry profitability has already lost some altitude. A return to rampant competition will make that worse – especially for Munoz.

EasyJet’s life is about to become harder

23 Jan 2017

Rivals’ misery helped boost the budget airline’s revenue in the last three months of 2017. New boss Johan Lundgren is optimistic passenger numbers will grow but may run out of beginners’ luck. Rising fuel costs and a fightback by Ryanair make rosy promises difficult to deliver.

Ryanair pilots are key to regaining European crown

11 Jan 2018

Lufthansa overtook the Irish carrier to become Europe’s largest airline in 2017. Though acquisitions boosted the German group, Ryanair’s target of 200 mln passengers by 2024 depends on steady expansion. Unless it can win over irate pilots, its growth prospects will be grounded.

Ryanair investors faintly see higher-cost future

18 Dec 2017

They have knocked over 2 bln euros off the budget airline’s market value since it caved in and recognised unions on Friday, averting a Christmas strike. That’s more than the extra staff outlays may be worth. If easyJet is a guide, though, Ryanair’s expenses will rise further.

Alitalia needs help to regain cruising altitude

1 Dec 2017

The insolvent airline has attracted bidders including Lufthansa and easyJet. Its 12,000 staff make it look bulky compared to budget carriers. Though the Italian government opposes drastic layoffs, further cost-cutting is necessary to return the carrier to financial health.

Singapore Airlines seeks altitude to outfly rivals

8 Nov 2017

The city-state’s $9 bln flag carrier has embraced change. It has a restructuring plan, a low-cost arm, and a fancier first class. But with Norwegian Air and Qantas invading profitable routes, it will have to crack on. That includes deciding what to do with regional arm SilkAir.

Qatar Airways gets seat for any Cathay dealmaking

5 Nov 2017

The Middle Eastern group is buying 9.6 pct of the troubled Hong Kong outfit for $661 mln. Building small stakes in rival airlines rarely works well. But should top shareholder Swire seek to sell, it now has a second party to play off against Air China, Cathay’s other big backer.

Twin tailwinds help Ryanair weather pilot crisis

31 Oct 2017

The 20 bln euro no-frills airline will meet its full-year profit goal despite a rostering mess that cost it thousands of flights. Passenger numbers were up 11 pct in the six months to September. Ryanair’s fare cuts helped, but it also got lucky with rivals’ bankruptcies.

Qantas has clear skies ahead

26 Oct 2017

The Aussie airline briefly unsettled investors by warning of stiffer competition, rising fuel costs and a few months of lower growth. But the domestic outlook is good and its market position is strong. Despite a breakneck rally, Qantas's share price is still grounded in reality.

Monarch suffers very British failure

2 Oct 2017

The airline’s past reliance on tourism to Egypt and Tunisia, now danger areas, started the rot. But the Brexit-induced slump in sterling worsened things, and a laissez-faire resistance to government intervention – unlike the German help handed to Air Berlin – finished the job.

Etihad’s airlines fail, but odd CDO remains aloft

17 Aug 2017

Air Berlin and Alitalia are insolvent. Their debt is probably worthless, except for an unusual collateralised debt obligation that part-owner Etihad used to fund them. It is trading at a price that suggests Etihad might bail it out. Fuzzy guarantees often end badly.

Cathay’s ugly first half points to further woes

17 Aug 2017

Cathay Pacific has posted its worst half-year loss in at least two decades. Despite attempts to cut costs, the Hong Kong carrier is still locked into costly fuel hedging contracts and faces tough competition. Investors shouldn’t expect a return to profitability any time soon.

HNA shines dim light on ownership

25 Jul 2017

A restructuring of the acquisitive Chinese conglomerate’s shareholding structure is meant to allay concerns about opacity. It loses two mysterious investors and will now be majority owned by a pair of charities. More clarity is welcome, but this web still looks pretty tangled.

Air India fix would give Modi reform miles

21 Jul 2017

The carrier is a travelling advertisement for India's inefficiencies. It has made losses for nine years and turnaround efforts have failed. A sale may push a multi-billion dollar writedown on lenders, but would validate Prime Minister Modi's reform credentials.

EasyJet can afford a spell on autopilot

17 Jul 2017

Losing its chief executive to broadcaster ITV is manageable for the UK airline, one of the FTSE-100’s best performers this year. While Carolyn McCall did a good job – and bagged easyJet a higher valuation than Ryanair – what she leaves behind has structural advantages over rivals.