Travel & Tourism

Cards played well in three-handed casino deal

29 Apr 2020

Blackstone is buying 10% of Australia’s Crown Resorts from Lawrence Ho’s Melco. The buyout shop antes up at a discount while the Macau operator sensibly folds a busted bet. And amid a crisis, Crown gets staked by a shrewd backer. It may take time, though, for the pot to grow.

EasyJet files turbulent post-virus flight plan

16 Apr 2020

The budget carrier hopes face masks and empty middle seats will speed up a return to the skies. Such measures will reduce profit as well as infection risks but lower taxes and fuel prices could help. The bigger question is how soon punters will feel safe enough to travel again.

Corona Capital: Saudi/Carnival, PG&E

6 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: Today, Saudi Arabia’s Public Investment Fund takes an 8% stake in beleaguered cruise outfit Carnival, and the coronavirus may dislodge one of the moving parts in California utility PG&E’s plan to exit bankruptcy.

Amadeus ups the bar for travel-sector crisis prep

3 Apr 2020

The $20 bln Spanish IT group is raising $1.6 bln in debt and equity to bolster its balance sheet. The financial terms are fairly beneficial for Amadeus, implying that it’s not exactly desperate for cash. Still, with steep declines in air traffic it’s wise to plan for the worst.

Bond market throws Carnival a costly lifeline

1 Apr 2020

The virus-stricken cruise operator is finalising a $4 bln bond issue, secured against its ships, at an eye-watering 12% yield. That reflects fears the industry may be permanently submerged. Still, it shows that even the most troubled companies still have access to emergency cash.

Singapore Airlines secures business-class bailout

27 Mar 2020

State investor Temasek is supporting a whopping $13 bln funding package. Deeply discounted equity and a zero-coupon convertible bond provide other shareholders a chance to bet on a post-crisis recovery. The hard-to-copy playbook could even give the carrier a longer-term edge.

Korean Air drama risks ending in corporate tragedy

25 Mar 2020

Feuding siblings, white knight Delta Air Lines, and a pushy activist are all battling over the country’s top carrier. Change is overdue, but debt worth 862% of equity has left Korean Air more vulnerable than peers to a pandemic. Any victory from the proxy battle will be pyrrhic.

New Zealand airline rescue puts taxpayers in first

24 Mar 2020

The national carrier has received a $514 mln state lifeline that ensures its survival. A high interest rate should ensure any loan is repaid quickly, while shareholders share the pain through suspended dividends. It’s a model for other countries considering bailouts to follow.

Trump Org bailout would be ultimate self-deal

19 Mar 2020

The U.S. hotel industry is seeking $150 bln in government aid as it reels from virus fallout. Where does that leave the president’s hotels and golf resorts? Ideally, Trump would set an example by using his own wealth to preserve jobs. To let taxpayers do so would set a new low.

Chinese travel site charts course out of virus fog

19 Mar 2020

As most of the world hunkers down in place, $12 bln Trip reckons it may be through the worst of it. First-quarter sales are expected to halve, but boss Jane Sun also sees a rebound at home where the epidemic may be ebbing. It offers a glimmer of hope in a sea of economic gloom.

Disney business risks getting frozen

16 Mar 2020

More than half the $171 bln entertainment giant's sales come from divisions encompassing theme parks and movie theaters, both empty thanks to the coronavirus. Canceled sporting events are also trouble for ESPN. Former CEO Bob Iger has left his successor with serious headaches.

Trump bumps smart infrastructure punters to coach

12 Mar 2020

The U.S. president’s Europe travel curbs crushed securities in the region’s top airports. Robust revenues attracted sharp, long-term investors to hubs like Paris-de Gaulle and London Heathrow. Plummeting footfall and high debt levels will challenge their status as safe havens.

Virus-hit airlines can fly without state thrust

12 Mar 2020

A U.S. ban on European travellers hammered airline stocks on both sides of the Atlantic. Washington doled out $15 bln of aid after the post-9/11 shutdown. But airlines are bigger now and fitter, letting them ride out turbulence. Regulatory leeway may suffice.

Donald Trump is rising risk factor in virus battle

11 Mar 2020

The U.S. president’s address to the nation sparked more market panic. A $50 bln pledge for small businesses hit by Covid-19 is good, but his speech lacked public-health remedies, was full of mixed messages and focused on a Europe travel ban. He’s missing both diagnosis and cure.

U.S. virus bailouts require good instructions

11 Mar 2020

Donald Trump wants to help airlines weather the hit from Covid-19. Unlike cruise lines, also on his list, that makes sense. Some carriers, like Delta and United, may not need aid. But taxpayer rescues can work with the right structures. Breakingviews offers a bluffer’s guide.

Oyo is not wasting the WeWork crisis

5 Mar 2020

The Indian hotel room provider is cutting 5,000 jobs, including half its China staff, and focusing on profitability and governance. Slower growth might deflate a $10 bln valuation. But it highlights the more grounded new look of Masayoshi Son’s SoftBank empire.

Virgin’s galactic valuation

26 Feb 2020

Richard Branson’s space-tourism enterprise is worth nearly $7 billion. That’s high even based on the company’s rosy projections, and it’s stratospheric on more realistic assumptions.

Virgin Galactic’s valuation looks stratospheric

26 Feb 2020

The space-tourism outfit is up eightfold in enterprise value in three months to $7 bln. That’s some 25 times the company’s forecast EBITDA in 2023. A more realistic outlook makes that multiple, and the valuation, look hyperstretched, as a new Breakingviews calculator shows.

Unizo check-in borders on being inhospitable

25 Feb 2020

Bids for the Japanese hotelier have reached $1.9 bln, and could go even higher. The company is already loaded with debt, meaning that any buyout will require some serious housekeeping to generate a solid return. Blackstone, Lone Star or Fortress may be sweating their equity.

China shocks to global tourism have room to grow

5 Feb 2020

Travel curbs on the virus-hit country have shaken airlines and hotels. Even with a fast recovery as with the SARS epidemic, it’s a reminder of China’s vital role in the $1.7 trln tourism market. With millions more set to travel, any future jolts will only be more brutal.