Air Transportation

EasyJet valuation is heading for lower altitudes

20 November 2018

The budget airline carried a record number of passengers in 2018. That will be hard to replicate since rivals are finally resolving their problems. Stiffer competition and higher costs will weigh on revenue. The premium at which the company is trading over most peers will shrink.

India could clear flight for Singapore Airlines

14 November 2018

The $8 bln carrier posted dismal quarterly earnings, weighed down by fuel costs. But opportunity may be knocking, as indebted rival Jet Airways comes into play. A deal by Singapore’s influential Indian partner Tata would bring newfound clout in a promising growth market.

Air France take-off will be pipped by Lufthansa

31 October 2018

The French carrier boosted revenue in the third quarter and is finally resolving long-running problems with unions whereas its German rival has been forced to scale back ambitions for 2019. However, the former has lower passenger targets and may take time to reach full speed.

Ryanair wings recovery on consolidation prayer

22 October 2018

Strikes, lower fares and higher fuel costs lopped 7 pct off the budget airline's earnings in its busiest season. Ryanair's high margins and oil hedges are a buffer. But it's relying on less well-protected rivals stalling for its own performance to take off.

Italy tries more state medicine to heal Alitalia

12 October 2018

The radical government wants the finance ministry and local railways to support a 2 bln euro rescue for the ailing airline. State involvement may scare off potential international partners and make it harder to cut costs. Taxpayers would once again bear the costs of failure.

Losing reliability is biggest threat to Ryanair

1 October 2018

Europe’s largest budget airline cut its full-year profit forecast by 12 pct due to strikes and higher fuel costs. Less profitable rivals are facing similar headwinds. But Ryanair customers are unsure it will fly at critical times like Christmas. That’s a harder issue to fix.

Fastjet turbulence flags African continental drift

28 September 2018

The airline set up by easyJet founder Stelios Haji-Ioannou needs equity after Tanzanian intransigence. A bet on Africa’s growing middle class, it underplayed local resistance. Hostility to foreign capital means less investment, fewer cross-border firms and lower growth.

India’s Jet can redeem some air miles to ease pain

28 August 2018

After a quarterly net loss of $190 million, the country’s second-largest airline badly needs cash. It has laid out a list of planned fixes, including somehow tapping its loyalty programme. That won't solve its engine trouble, but may help smooth out some of the turbulence.

Unions the first of many fights for Air France CEO

17 August 2018

As the airline’s first foreign boss, Ben Smith will face labour strife that ousted his predecessor and has cost 335 million euros. But the former Air Canada executive must also tackle the weak governance, competition and soaring costs that threaten the carrier’s survival.

Ryanair budget model is being eroded

23 July 2018

The carrier’s post-tax profit fell by a fifth due to strikes and a heatwave that encouraged people to holiday at home. But these one-off problems pose less of a challenge to CEO Michael O’Leary’s low-cost business than rising staff costs and the risk of a chaotic Brexit.

HNA’s market thaw provides only cold comfort

20 July 2018

Three listed units of the troubled Chinese conglomerate lost a combined $1.5 bln in value after long trading halts ended. It signals a lack of confidence about HNA’s restructuring plans as it regroups without its late chairman. Pity investors trapped by a 10 pct downside limit.

Europe airlines show strike pain is for passengers

18 July 2018

EasyJet expects a 45 pct rise in pre-tax profit in 2018 thanks to more passengers and charges on checked bags. The limited damage that French air controllers’ strikes inflicted on the company and its peers reveals such disruptions are more a problem for customers than carriers.

Delta’s refinery is short of fuel-price alpha

12 July 2018

The $35 bln U.S. airline’s growing top line has so far outpaced the rising cost of oil. But the company warned fuel will squeeze its profit for the full year. The 2012 purchase of a refinery has only modestly mitigated the problem. To justify owning it, Delta needs more juice.

Norwegian Air profit breathes life into bid battle

12 July 2018

The transatlantic budget carrier reported a surprise profit. Rising passenger numbers and falling costs will help convince airlines circling the group that its unorthodox model can fly. Suitors like IAG or Lufthansa will be more wary of letting Norwegian fall into rival hands.

Boeing’s $3.8 bln deal looks sleek, may not fly

5 July 2018

The aerospace giant is paying a fair price for 80 pct of Brazilian rival Embraer’s commercial-jet unit. Boeing can use the new joint venture to extend its dogfight with Airbus across the full range of aircraft. But Brasilia hasn’t signed off yet, and an election looms in October.

Air India sale could take off again

20 June 2018

New Delhi has shelved the disposal of the indebted national carrier after failing to attract bidders. It’s a bad time to push privatisation, with a general election looming. If Premier Narendra Modi wins the poll, though, the p-word could still be his big reform set piece.

Rolls-Royce has partial flight plan to destination

14 June 2018

The UK engine maker announced plans to cut 4,600 jobs ahead of its investor day in London. The resulting cost savings are welcome. The bigger question for investors is how CEO Warren East can more than double free cash flow in under two years to hit his 1 billion pound target.

EasyJet’s winning streak relies on rivals’ pain

15 May 2018

The UK airline reported its best ever first-half revenue and turned a pre-tax loss into a small profit after stripping out Berlin expansion costs. Problems that plagued Ryanair and Air France flattered the results. The 6.7 bln pound carrier could use a more reliable propellant.

Air France-KLM staff chaos allows IAG to fly ahead

4 May 2018

The European airline warned that much of its 2018 operating profit will be wiped out by French strikes. Higher fuel charges and increased competition are creating headwinds for all carriers. But British Airways owner IAG’s success in slashing costs helps protect its bottom line.

KLX purchase gives Boeing a boost over Airbus

1 May 2018

Paying $4.25 bln for the parts provider lifts the U.S. plane maker’s services arm. It’s the latest bolt-on enabling Boeing to bring more manufacturing in-house and maintain aircraft long after delivery. Yet CEO Dennis Muilenburg still has more to do to reach cruising altitude.