Air Transportation

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.

U.S. industrial giants need to be better than good

25 April 2018

Boeing shares took off after the $200 bln plane maker beat forecasts and raised its outlook. Rivals with strong earnings that cast even faint doubt on the future, like Northrop Grumman and Lockheed, lost market value. With equities priced for perfection, investors are seeking it.

IAG picks good time to ride Norwegian jet stream

12 April 2018

The owner of British Airways may bid for budget carrier Norwegian Air Shuttle. The target’s plan to disrupt transatlantic travel is taking off, but its finances are stretched, and rival bidders may struggle to match an offer from IAG. Investors shouldn’t bet on too big a premium.

Cerberus Alitalia carve-up would not fly with Rome

11 April 2018

The private equity firm is reported to be plotting a three-headed bid for the Italian airline. It would see easyJet take short-haul routes and Air France-KLM long ones, while Cerberus puts up the cash. But a breakup plan will not pass muster with a new nationalist government.

GKN owners should stick with the devil they know

23 March 2018

The UK engineer’s shareholders must choose whether to accept Melrose Industries’ $11 bln hostile cash-and-share bid. The buyer has a record for turnarounds, while GKN has missed targets. But Melrose’s plans are vague and riskier. GKN deserves the benefit of the doubt.

Mile-high stake swap could feed Air India bid

20 March 2018

Jet Airways may be interested in the soon-to-be privatised national carrier. However, Naresh Goyal’s airline would need serious financial help to make an offer fly. Abu Dhabi’s Etihad may need to make room for a new large strategic investor.

Lufthansa’s next challenge will be domestic

15 March 2018

The German airline is reaping the rewards of a 2014 plan to take on no-frills giants like Ryanair. Barring an unexpected rise in oil prices, Chief Executive Carsten Spohr’s next challenge will be to fight off cut-price competitors when they try to encroach on his home turf.

Cathay Pacific is on a better flight path

14 March 2018

Fares remain under pressure and oil prices lofty but the airline is carrying more cargo and, separately, collecting more income through its stake in Air China. The result is a profitable second half. Unwinding fuel hedges and tackling costs should help it fly higher.