Air Transportation

Thomas Cook wipeout forces Fosun to double down

12 July 2019

The ailing UK tour operator is finalising a 750 mln pound recapitalisation which would give creditors control of the airline and the Chinese group its travel unit. That allows Fosun to salvage its 250 mln pound equity stake. Other shareholders are likely to be left with nothing.

IndiGo row makes case for clipping founders’ wings

10 July 2019

The two top owners of India's largest and most profitable airline are at war over an old shareholder deal handing one of them outsize control. Now that the country has laid out strict rules for dual class shares and more, such pacts look like a relic of bad governance past.

British Airways hacking fine is painful precedent

8 July 2019

The UK data commissioner wants to fine the airline 183 mln pounds after customer information was stolen last year. Even though that is at the lower end of the possible penalties, it dwarfs what Facebook had to pay under old rules and sets a higher bar for such security breaches.

Bombardier feeds Japanese jet dreams, not reality

26 June 2019

Mitsubishi Heavy is buying the Canadian company’s regional jet business for $550 mln. A support network and new customer ties will help get its troubled SpaceJet off the ground. But adding a struggling unit suggests executives have eyes on the sky, not the bottom line.

Lufthansa is early loser in European airfare war

17 June 2019

The German carrier’s Eurowings unit has been dinged by aggressive pricing from rival budget operators. With costs per seat almost double those of market leader Ryanair, it’s not hard to see why. A change of course is needed but, given domestic labour rules, that won’t be easy.

Viewsroom: When dealmaking gets difficult

13 June 2019

Raytheon and United Technologies’ planned $114 bln tie-up raises questions about strategy, cost cuts and executive overreach. It’s prompted their shares to tank and activist Bill Ackman to oppose it. And Fiat Chrysler and Renault’s mooted merger has crashed. Can they salvage it?

Boeing order drought compounds 737 MAX woes

12 June 2019

Airlines have turned stingy this year, ordering fewer planes from the $200 bln aerospace giant and 100 bln euro rival Airbus. Boeing already faces a long delay getting its grounded jet back in the air. A weakening aviation market is the last thing the company and its owners need.

Ryanair left dependent on pricier sandwiches

20 May 2019

The budget carrier’s costs soared due to expensive fuel and the need to pay pilots more. Boss Michael O’Leary can’t do much about that, nor the price war Ryanair has flown into. The only way to get margins back up is to sell customers even more pricier in-flight stuff.

Aviation is acid test for UK climate credibility

7 May 2019

Britain’s proposal for zero net carbon emissions by 2050 is laudable. But given it’s already struggling to hit a less ambitious goal, success implies tough state action. One way to tell if the UK is serious is if it ramps up taxes that curb customer demand for air travel.

Air France-KLM descent is double Dutch blow

3 May 2019

The airline’s Dutch arm swung to a first-quarter operating loss, weeks after the Netherlands government bought a 14 pct stake. KLM is still faring better than its French partner. But the wobble undermines demands for special treatment and leaves its political backers red-faced.

Airbus struggles to profit from Boeing misery

30 April 2019

The European planemaker is wary of ramping up output despite its U.S. rival’s 737 MAX problems. Avoiding a price war may be one reason and airlines have yet to commit to switching suppliers. Without firm orders, investing in more production would squeeze free cash flow further.

Boeing’s supine owners invite tougher co-pilots

29 April 2019

Investors rejected a fresh call for an independent chair of the $214 bln plane maker. Its boss, Dennis Muilenburg, has been slow to respond to the 737 MAX crisis, and resolving it is more than a full-time job. If owners won’t tighten oversight, regulators and politicians will.

Boeing has a chance to get ahead on governance

23 April 2019

The $212 bln aerospace giant is facing calls to strip chair-CEO Dennis Muilenburg of the former title. Half of the S&P 500 now split the roles. Boeing's sluggish response to 737 MAX crashes shows why it makes sense. An 11 pct fall in the share price provides a handy excuse, too.

Thomas Cook survival relies on risky breakup

23 April 2019

The indebted UK tour operator’s shares jumped on reports it could be bought by Chinese group Fosun or private equity. Either would likely see the group sell its airline, making it hard to get a good price. And the rump that remains would be even more challenged.

India’s Jet Airways is too frail to fail

11 April 2019

Planes are grounded, but a bankruptcy of the country’s once-top private carrier is unthinkable, especially as the nation votes. Related job and bank losses would be politically toxic. Even a well-structured out-of-court deal could yet leave New Delhi with a second state airline.

Crash findings keep Ethiopia reform dreams intact

4 April 2019

An early probe into Ethiopian Airlines’ March 10 disaster found the company’s pilots were not to blame. That’s a double relief for Prime Minister Abiy Ahmed. With the flag carrier central to his privatisation push, internal failings could have stymied wider plans for reform.

Brexit gives easyJet handy excuse for summer blues

1 April 2019

The low-cost airline blamed political turbulence in Britain for weak passenger demand. Anaemic euro zone growth is probably a bigger culprit. With fuel costs rising and air-traffic disruption still likely, easyJet will struggle to repeat last year’s high-flying performance.

Crash report clarifies Boeing’s 737 exposure

29 March 2019

Officials think a suspect anti-stall system activated before last month’s airliner crash in Ethiopia, the WSJ reported. That raises the plane-maker’s legal liability. But it also makes it clearer how to fix the problem and get the bestselling jet back in the sky.

Cathay’s budget-airline deal may add HNA surcharge

28 March 2019

Buying Hong Kong Express from the ailing Chinese conglomerate for $630 mln is a sensible defensive move. One investor – maybe the target’s own chairman – has threatened to fight the sale, however. That could raise the price for Cathay, and is a warning to suitors for HNA assets.

Hadas: Boeing undermined by too-positive thinking

27 March 2019

The aircraft maker’s hasty introduction of new software may have led to two fatal crashes. If so, the problem was probably not greed or lack of concern for safety, but something just as dangerous: overconfidence. As global banks learned in 2008, the worst sometimes does happen.