Airlines

Capital Calls: Delta’s earnings are bad and worse

13 Jul 2022

Concise views on global finance: Shares in the company fell 7% after the company missed earnings expectations. That’s bad, but worse is that its main strength – pricing power – has limits.

Americans’ urge for the open road knows few bounds

1 Jul 2022

Travelers book flights for convenience – and in theory rising gas prices help that trend. But time is money, too, and plane delays are increasing. Assign a reasonable value for an airport setback, and it suggests holiday travelers should blare "Holiday Road."

JetBlue has its “Top Gun: Maverick” moment

28 Jun 2022

With two days before a key deal deadline, the budget airline has pulled out some creative aerobatics to win over target Spirit, and swat away a favored rival bid by Frontier. The offer of more cash up-front is daring – but takes JetBlue’s shareholders deep into the danger zone.

Airlines M&A plays regulator roulette

27 Jun 2022

Budget carrier Frontier raised its offer for peer Spirit to $2.6 bln. That’s just enough to compete with rival JetBlue’s bid. Now shareholders have to weigh merger-skeptical regulators. It’s not just a calculation of who can win, but what the buyer will give up for it to happen.

Spirit investors should pick price over certainty

15 Jun 2022

The budget airline’s shareholders have the choice of a $2.2 bln cash-and-stock offer from Frontier, or a much higher but less secure offer from JetBlue. Even adjusted for the likelihood of failure, JetBlue’s offer looks better. Frontier’s choice: pay more, or get bumped.

Aeroflot’s travails are metaphor for Russia

9 Jun 2022

Sanctions have curtailed the state-run carrier’s routes and grounded its jets. Moscow will underpin a $3 bln rights issue by raiding its rainy-day fund. As its economic isolation deepens, more oil dollars will have to be diverted to struggling domestic enterprises.

Boeing’s chief pilot has risky path out of dive

20 May 2022

A blizzard of bad news has pushed the $75 bln U.S. plane-maker’s market value below rival Airbus for the first time. Customers are fuming about delayed orders. Assuming it can actually deliver jets, the risk is CEO Dave Calhoun keeping buyers sweet with ever bigger discounts.

Spirit shareholders can push for more legroom

19 May 2022

The budget airline wants shareholders to reject a $3.3 bln hostile offer from JetBlue, and stick by a merger with rival Frontier. But Spirit investors would be losing out on a potential bidding war. Frontier can probably pay more, and sitting tight could nudge it into doing so.

Spirit shareholders are flying without a pilot

16 May 2022

JetBlue launched a $3.3 bln hostile, all-cash offer for the ultra-cheap carrier. That’s almost 60% more than Spirit’s agreed cash-and-stock deal with Frontier. A JetBlue tie-up could face more antitrust scrutiny. But without an open process, Spirit shareholders are on their own.

Capital Calls: Business travel, Adidas China woes

6 May 2022

Concise views on global finance: British Airways owner IAG faces stormy UK skies; Chinese lockdowns and boycotts are slowing down the German sneaker maker.

Capital Calls: JetBlue antitrust risk haunts Spirit

2 May 2022

Concise views on global finance: The low-cost U.S. airline rejected its midmarket rival's takeover offer. Spirit reckons that even a price 50% higher than its agreed sale to Frontier doesn't compensate for Washington's anti-merger stance.

Stranded jets are least of plane lessors’ problems

14 Apr 2022

Big fleet-owners like AerCap may have to write off $10 bln of planes trapped due to Russian sanctions. Ultimately, though, insurers should cover their losses. A bigger brake on the aircraft-leasing industry’s rapid ascent is the rising cost of debt from jittery lenders.

Antitrust worries can ground JetBlue’s Spirit bid

6 Apr 2022

The U.S. airline’s shock $3.6 bln bid for its ultra-budget rival offers few cost savings and could lead to higher fares. That increases the risk that competition regulators – or Spirit’s board – stop it getting off the ground. For skeptical shareholders, that would be a relief.

Capital Calls: Continental, Harley-Davidson

8 Feb 2022

Concise views on global finance: German car-parts maker Continental may spin off its self-driving unit, while the iconic maker of motorbikes has turned supply shortages to its own advantage.

Frontier and Spirit are flying into the wind

7 Feb 2022

The two U.S. budget airlines say their $5 bln deal would help passengers, workers and shareholders by creating cut-price alternatives to pricier carriers. That may be a stretch for merger-averse regulators. And the market’s muted response suggests their logic is running on fumes.

Capital Calls: Wizz investor sides with workers

7 Feb 2022

Concise views on global finance: Denmark’s AkademikerPension picks an odd moment to offload its stake in the $6 bln budget airline over a lack of union representation among its staff.

MSC gives Lufthansa cover for Italian raid

27 Jan 2022

The shipping giant and German carrier want to buy Alitalia successor ITA, a boon for Italian taxpayers. A reported 1.2 bln euro price tag will surprise Berlin, which retains a 14% stake from a 2020 airline bailout. If MSC does the heavy lifting, the swoop is easier to justify.

Incompetence and greed fuel U.S. airline 5G battle

20 Jan 2022

Major airlines said a rollout of 5G could make flights dangerous. Airlines, wireless firms, and government agencies had over a year to solve the problem. The weakened air industry may not want extra costs. But other countries figured it out while U.S. taxpayers are left hanging.

Airlines fly close to downwards debt spiral

15 Dec 2021

Top U.S. and European carriers have added $44 bln of net debt to ride out Covid-19, taking average leverage to nearly 5 times next year’s EBITDA. Raising new equity to repair balance sheets is tough. But paying it off via cash flow will leave shareholders empty-handed for years.

Airline investors weigh up more pandemic baggage

24 Nov 2021

U.S. travelers may log their busiest day since the pandemic during Thanksgiving. In Europe, government clampdowns may crimp winter travel. And airlines on both sides still have to contend with what happens in China, which could knock some wind out of valuations.