Air Transportation

Ryanair boss’s bonus gets an apt level of anger

19 September 2019

Almost half the budget airline’s shareholders voted against a package that could see CEO Michael O’Leary get 99 mln euros over five years. They stand to gain if he hits his targets. But given it looks relatively easy to do so they are right that it’s only barely acceptable.

Air China edges closer to Cathay Pacific’s cockpit

27 August 2019

Unrest in Hong Kong may prompt the local $5 bln airline to change course. Bookings have fallen, and Beijing’s ire over protesting employees forced out its CEO. The mounting pressure makes it a bit easier to see owner Swire selling out to its rival and big mainland shareholder.

Brexit casts a double cloud over IAG

2 August 2019

The British Airways owner’s top and bottom lines are growing, a rarity among ravaged European carriers. Yet the risk of Britain crashing out of the EU weighs on its valuation. IAG can’t reduce its dependence on UK travellers, but more clarity on post-Brexit ownership would help.

Only taxes can close aviation’s carbon gap

29 July 2019

The industry wants its 2050 emissions to be a third those of today. With traffic set to treble by then, that’s unlikely. Electric airliners remain a pipedream and relying on biofuels would mean ploughing up a third of the U.S. Curbing demand via taxes may be the only solution.

Boeing is in a textbook crisis of its own making

24 July 2019

The aerospace giant’s 737 MAX scandal has not only hit the top and bottom lines. It has also exposed worrying cracks below the surface, from an obsession with margins to a weak board and management to supine investors. Without proper fixes, Boeing is on a dangerous course.

Boeing’s 737 disruption is still not maxed out

18 July 2019

The aerospace giant is owning up to nearly $7 bln in charges and increased costs over the grounding of its troubled MAX jet. The tally is bound to grow, and a return to service in the fourth quarter is far from guaranteed. Airlines and investors should brace for more turbulence.

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.