Airlines

Qatar’s American Airlines ticket not just politics

22 Jun 2017

Buying a stake in the carrier has all the hallmarks of a politically motivated deal. Flexing its financial muscles in the United States sends a defiant message to its enemies circling in the Gulf. But American Airlines also offers commercial value on top of diplomatic leverage.

IAG can weather turbulence at BA

30 May 2017

The owner of Britain’s flag carrier is reeling from an IT glitch that grounded hundreds of flights. While unions blame cost cutting, the airline has little choice but to bear down on expenses. The impact will fade: customers have short memories and focus on prices in the end.

Singapore Airlines and Cathay fight same headwinds

19 May 2017

Singapore's disappointing results echo troubles at its Hong Kong rival. Chinese competition is hitting both. Neither has a big domestic customer base and their traditional hub role is under threat. At least the Singaporeans have a smarter-looking approach to budget travel.

EasyJet gives lesson in counter-cyclical aviation

16 May 2017

As European airlines engage in a costly battle for market share, the UK no-frills carrier is buying ever-larger aircraft. EasyJet’s cost advantage and the impending demise of weak rivals suggest boss Carolyn McCall is right to look beyond the short-term clouds.

Viewsroom: United joins corporate culture chaos

13 Apr 2017

Taking three days to offer a basic apology to the passenger dragged off a flight suggests deeper problems at the U.S. airline. Poor leadership and processes took a toll on Wells Fargo and Toshiba, too. Executives and boards ignore the lessons of cultural failures at their peril.

United fiasco puts a value on the humble apology

12 Apr 2017

It's a sad affair when an airline reliant on consumer loyalty can be so wholly upstaged in the contrition department by White House flack Sean Spicer. United's ham-fisted response to “re-accommodate-gate” is a warning to all corporations: Say sorry first, ask questions later.

United shows service and shareholders don’t fly

10 Apr 2017

The airline’s stock jumped even after video of an innocent passenger being ejected from a flight went viral. Behind the PR flub, United’s second in a month, is an industry at its healthiest in years. Crummy service and low-cost rivals may yet bring shares down to earth.

Airline cycle goes roundtrip with Frontier’s debut

4 Apr 2017

The no-frills U.S. carrier filed for an IPO eight years after going bust. Like most airlines, Frontier has gained from efficiencies, low fuel prices and passenger growth. Its liftoff has risks, but low-cost carriers are well positioned relative to legacy operators for a downturn.

American Airlines buys China upgrade, earns points

28 Mar 2017

The carrier is joining forces with China Southern, and taking a sub-3 pct stake for $200 mln. AA ought to end up with more Chinese passengers and fewer empty seats. Ideally it wouldn’t have to buy a stake to do so. Consider it one of the irksome hidden costs of air travel.

Delta refinery is adding financial impurities

16 Mar 2017

Five years after its unconventional acquisition of a crude-processing plant, the $35 bln airline has called in consultants to review the operation. In 2012, oil was scarcer and more expensive. Falling prices and other costs should prompt Delta to refine its strategy.

Cathay can’t fly around Hong Kong’s fading hub

15 Mar 2017

The Hong Kong carrier's first loss since 2008 points to a deeper threat. Asian rivals are undercutting it on long-haul trips; budget airlines poach the short ones. But Cathay is still adding destinations. Fewer, high-value routes and aggressive restructuring would fly further.

Iran needs friends beyond Boeing

12 Dec 2016

The U.S. aircraft-maker's order for $16.6 bln of planes may force U.S. President-elect Donald Trump to choose between jobs and his tough stance on the Islamic Republic. Iran is in a weak position. It can help itself a bit, starting by rebuilding bridges with near neighbours.

Trustbusters barely dent air oligopoly with Alaska

6 Dec 2016

The U.S. Department of Justice forced Alaska Air to cut code-sharing with American Airlines before approving its $2.6 bln bid for Virgin America. That'll improve competition a tad. But with the top four carriers piloting 80 pct of all domestic flights, it's just tinkering.

Buffett’s love for moats trumps fear of flying

15 Nov 2016

The billionaire's Berkshire Hathaway has bet over $1 bln on four U.S. airlines. Buffett once called the industry a "bottomless pit," and jokingly wished aviator Orville Wright had been shot down at Kitty Hawk. That was before a spate of mergers created a profitable oligopoly.

Shadow activist takes flyer at Colombian airline

6 Oct 2016

Paul Singer's investment firm is urging a sale of Avianca, where it isn't directly an investor. Elliott wants to protect the value of the stake it was offered as collateral for loans it extended to Avianca's controlling shareholder. The logic is clear but the method is fuzzy.

EasyJet misery a foretaste of European airmageddon

6 Oct 2016

Growing overcapacities fuelled by cheap oil, security scares and Brexit jitters are hitting even highly efficient airlines like easyJet hard. The low-cost carrier expects a 28 pct fall in pre-tax profit. Less nimble rivals like Lufthansa and Air France can brace for worse.

German airlines leave logic in the ejector seat

28 Sep 2016

In most sectors, a heavily loss-making company with liabilities that exceed its assets would disappear. Yet German carrier Air Berlin is still airborne, and Lufthansa may take on a chunk of its fleet. Aviation bosses continue to think they can defy financial gravity.

Better to fly Europe’s airlines than buy them

12 Sep 2016

Fuel prices have fallen, but that has incentivised European carriers to keep too many planes airborne. Demand is too weak to meet the supply, which means ticket prices are set to fall, and with them airlines’ profitability.

EasyJet is post-Brexit bet for the brave

21 Jul 2016

The UK airline says it doesn’t know what security scares, currency turmoil and Britain’s exit from Europe will do to earnings. The shares have fallen around 30 pct in less than a month. Yet in past downturns easyJet has snatched market share. There’s no reason it can’t again.

Airbus will spend longer in Boeing’s slipstream

13 Jul 2016

The European group is cutting production of its flagship A380 jumbo sharply and has warned of potential new charges on the fraught transporter A400M. Both are likely to dent profitability and will it make ever more difficult to reduce Airbus' margin gap with U.S. rival Boeing.