Airlines

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.

Airlines’ net-zero pledges fly on fumes

1 Nov 2021

Aviation accounts for only 2.5% of global emissions and technologies to help operators decarbonise appear numerous. Yet batteries, hydrogen, biofuels and e-kerosene all have big practical challenges and are too pricey. The risk for airlines is anxious states clipping their wings.

Airlines’ constraints send investors to the tarmac

20 Oct 2021

Southwest’s network melted down earlier this month with thousands of canceled flights. It in part reflects a faster recovery, thanks to a domestic focus. But a disproportionate rebound has shown up in stock prices. Now efficient airlines are butting up against self-made problems.

Cox: Arrivederci Alitalia, you won’t be missed

14 Oct 2021

After 74 years, Italy’s once-glamorous national carrier disappears for good tonight. The airline had become the butt of bad jokes and a dent to Italian pride. Poor management was a factor in its demise. But there are reasons to celebrate Alitalia’s end, and ITA’s new beginning.

Capital Calls: Merck pill, Zoom deal

1 Oct 2021

Concise views on global finance: Investors are being stingy about the pharma firm’s new drug to treat Covid-19; the video-conference company and Five9 are dropping their $15 bln transaction.

Capital Calls: Vaccinating kids, U.S. eases travel

20 Sep 2021

Concise views on global finance: Pfizer says its Covid-19 jab is good for children, paving the way for more parents to be able to work; Joe Biden is finally allowing vaccinated Europeans to visit the United States – a boost for airlines, but only a step towards the old normal.

Capital Calls: Biden channels Trump on China

16 Sep 2021

Concise views on global finance: After losing an Australian submarine deal, the French accused the U.S. president of acting like his predecessor. They’re right that there’s bipartisan antipathy towards Beijing in Washington. They’d better hope the similarity ends there.

Sydney Airport sensibly clears deal for takeoff

13 Sep 2021

The board is finally ready to back a takeover bid after the suitors sweetened their offer to more than $17 bln. An extra 4% helps, but extended travel delays also make the decision easier. With so much financially up in the air, it’s best to take the cash and hand over the risk.

Capital Calls: Vaccine mandates, U.S. debt ceiling

10 Sep 2021

Concise views on global finance: New White House requirements for Covid-19 injections will provide cover for businesses while Washington lawmakers arguing about borrowing limits make themselves look foolish.

EasyJet packs M&A reserve chute into safety plans

9 Sep 2021

The low-cost carrier is raising $1.7 bln from shareholders after another virus-hit summer. That, plus a $400 mln loan facility, gives CEO Johan Lundgren a plump cushion if the recovery stalls again. If all else fails, ambitious budget rivals like Wizz Air are poised to pounce.

Business travel fixes risk grounding recovery

27 Aug 2021

The $1.4 trln industry of selling expensive plane tickets and hotel rooms to itinerant executives faces a bleak future as firms like HSBC slash travel budgets. Making ordinary customers pay more would bolster margins. But raising prices may also dampen an already slow revival.

Capital Calls: Delta Air Lines’ vaccine stick

25 Aug 2021

Concise views on global finance: The U.S. carrier will charge unvaccinated stateside employees $200 per month towards healthcare. Adding some push to the pull of incentives makes sense.

Capital Calls: Oatly, Sonos/Google

16 Aug 2021

Concise views on global finance: The Swedish oat milk producer’s decent results are only good in parts; Sonos gets a boost with a preliminary trade ruling that Google infringed its patents.

Capital Calls: Brookfield, Macquarie

9 Aug 2021

Concise views on global finance: An insurance wing of the Canadian financial empire may bring a dash of risk to a conservative Texan insurer, while Australian investment bank Macquarie has snapped up a stake in British utility Southern Water.

U.S. airlines serve investors before passengers

22 Jul 2021

Southwest and American have stopped burning cash. Both carriers turned a profit too, even though revenue is below 2019’s levels, and they have cash in case conditions worsen again. The risk is that customers – who helped fund airline bailouts – have their patience tested.