Air Transportation

Boeing needs MAX insurance more than a dividend

22 January 2020

The $175 bln aircraft giant’s new CEO, David Calhoun, says he won’t cut its $4.6 bln a year dividend. Yet Boeing will burn cash as long as the 737 MAX remains grounded. Borrowing more can paper over problems, but cutting the payout would be prudent in case of further delays.

Bombardier trips twice in deleveraging two-step

16 January 2020

The indebted Canadian group warned 2019 profit would fall short. It’s trying to cut borrowing, so the last thing it needs is a charge against rail projects combined with a possible cash call at its joint venture with Airbus. Exiting the JV in a hurry may be the least bad option.

Flybe is ominous UK test flight for Johnsonomics

15 January 2020

Britain has rescued the struggling regional airline operator by deferring a tax bill, and more help could follow. Boris Johnson can trumpet his aid for poorer bits of the UK. But downgrading climate change and free markets sends a grim signal of the prime minister’s priorities.

Climate is a good reason for U.S. aerospace merger

13 January 2020

It’s tempting to see the $13.7 bln combo of Woodward and Hexcel as a response to the 737 MAX woes of Boeing, a mutual major customer. Sure, combining creates more heft with Boeing and Airbus. But a focus on making aircraft lighter and less polluting has better long-term logic.

Aussie fires could be tipping point for carbon tax

13 January 2020

Horrendous bushfires are pushing CO2 emissions cuts ever further into the spotlight. The scope for sharp hits to earnings at domestic champions like airline Qantas has stopped Canberra properly pricing carbon before. But inaction is becoming increasingly unsustainable.

Boeing CEO’s top task is to re-engineer culture

10 January 2020

David Calhoun knows the importance of a company ethos, after having a front seat at General Electric’s rise and fall. Disturbing messages released by Boeing show a multi-year overhaul facing him – refocusing the firm from profit to engendering trust and making great planes.

Rising fares squeeze Ryanair’s budget mantra

10 January 2020

The low-cost carrier lifted its full-year earnings forecast by 17% after a bumper holiday season. Boss Michael O’Leary can thank Thomas Cook’s demise and grounded 737 MAX planes for dearer tickets. But price hikes dent the halo of the self-appointed patron saint of cheap flights.

IAG dealmaking will outlast Willie Walsh

9 January 2020

The Irishman is disembarking after nine years at the helm of the BA and Iberia owner. The holding structure he led from its birth has been more successful than Air France-KLM and makes it easier for his successor to go shopping, say for a carrier that flies to South America.

Greta Thunberg will clog EU budget-airline engines

2 January 2020

Climate change will make regulators rethink free carbon credits and impose fuel taxes, hitting easyJet and Norwegian Air hard. More pain would come if the teen activist-inspired drop in Swedish air travel spreads across Europe. All in, 48 bln euros of industry value is at risk.

Boeing CEO ejection brings stability, temporarily

23 December 2019

The aviation giant’s decision to put chairman David Calhoun in the pilot’s seat offers a chance to reset strained regulator and customer relations. But the former GE exec’s appointment may also indicate Boeing’s engineering and cultural problems are more severe than expected.

Boeing woes help Airbus customers more than Airbus

17 December 2019

The U.S. plane maker is suspending production of its grounded 737 MAX jet. Its European rival is already working at full capacity, but Airbus-reliant airlines, including easyJet, are in a sweep spot. They can keep expanding, while a capacity squeeze pushes up fares and margins.

Boeing 737 MAX cuts will speed margins descent

16 December 2019

Limited competition has insulated the $185 bln aircraft maker’s shares from the long grounding. The plane may fly again soon, but investors and CEO Dennis Muilenburg expect rising profitability. Newly zealous regulators, overstretched staff and economic winds say otherwise.

EasyJet finds budget way to offset Greta Thunberg

19 November 2019

The low-cost carrier will pay 25 mln pounds a year to compensate for CO2 emissions. That’s less green than it sounds. The benefits of offset schemes are disputed and, at just 25 pence per passenger, won’t change behaviour. It’s more about countering the Swedish teen’s guilt trip.

Ryanair’s ascent could yet hit a 737 MAX ceiling

4 November 2019

The European budget carrier’s shares have soared, mainly since a price war is proving less painful than feared. Yet darker clouds lie ahead. Delays in reviving the troubled jet are crimping growth in passengers. Without the more efficient plane, costs will be harder to control.

Boeing CEO’s mea culpa is too backward looking

29 October 2019

Dennis Muilenburg expressed contrition to U.S. senators, and offered a decent account of how Boeing corrected problems that contributed to 346 deaths. He was less reassuring on Boeing’s remaining flaws, such as its cozy relationship with regulators and sub-optimal governance.

Boeing CEO is flying into even worse turbulence

23 October 2019

Dennis Muilenburg still has no fix for the 737 MAX after two crashes and the firm will slow 787 production. The company is burning cash, borrowing heavily, may face a credit-rating cut yet is still paying dividends. It leaves him exposed as he heads for a grilling in Congress.

Boeing governance fig leaf is too little, too late

14 October 2019

The $211 bln airplane maker stripped CEO Dennis Muilenburg of his role as chairman. Ensuring he is focused on the 737 MAX mess is an overdue step, but insufficient. Wells Fargo offers one example of how efforts to fix a culture take time, and eventually an outsider’s perspective.

Where are Boeing’s boardroom engineers?

8 October 2019

The aircraft maker is still playing defense as it tries to fix problems with its 737 MAX after two fatal crashes. CEO Dennis Muilenburg is the face of Boeing’s mistakes, but the real flaws lie with the board. It’s dominated by financial expertise rather than engineering nous.

Airbus and Boeing expose triple folly of subsidies

3 October 2019

The WTO fired the starter pistol for tit-for-tat tariffs over government aid for aircraft makers. Soon U.S. and European consumers will have paid three times: for unnecessary subsidies, for the cost of pursuing trade complaints, and for higher-priced imports of unrelated goods.

Viewsroom: WeWork overhaul won’t be enough

26 September 2019

Adam Neumann lost his CEO role and control of the shared-office provider after its valuation plummeted in preparation for a now-postponed IPO. But WeWork’s business model remains a problem. Plus: Thomas Cook’s collapse hits China’s Fosun. And: parsing financial climate pledges.