Ryanair can afford to delay long-haul take-off 23 Mar 2015 Europe’s top no-frills carrier has confused investors with ambiguous statements about its intentions toward the transatlantic market. It’s easy to see why Ryanair might be in two minds. One problem is a lack of planes. And “low-cost long-haul” is a model full of contradictions.
Asian airlines need the right kind of mojo 23 Mar 2015 A soon-to-be-launched Malaysian carrier, Flymojo, is the latest cloud in Southeast Asia’s overcrowded skies. More competition is the last thing a recovering sector needs. It’s a reminder that in aviation, overcapacity and financial losses are always just around the corner.
U.S. airlines throwing stones from glass hangars 27 Feb 2015 Delta, United and American want trade deals changed, arguing Gulf rivals are unfairly subsidized. That’s rich, given the bailouts, antitrust exemptions and other goodies these three enjoy. Blowback from domestic peers may persuade them that whining to Uncle Sam won’t fly.
Weak euro can lift Airbus profit further 27 Feb 2015 The European aircraft maker pleased investors with higher-than-expected operating profit and a 60 pct dividend hike. Higher profitability was driven by a weaker euro. With that currency tailwind likely to persist, the annual results give a foretaste of future improvements.
Dividend shocker puts Lufthansa aerobatics to test 20 Feb 2015 The airline is scrapping payouts for the second time in three years - after two profit warnings and a long-running labour dispute. And new CEO Carsten Spohr has a worrying appetite for growth in a challenged industry. He needs some successes before his credibility is grounded.
Rolls-Royce’s margin of error is narrowing 13 Feb 2015 The UK engineer has met lowered 2014 revenue and profit targets but has become more pessimistic. Free cashflow, down 42 pct last year, is likely to halve again this year. Rolls’ strong balance sheet can cope for now. But if the trends continue, management faces some tough choices.
Aena IPO marred by its success 11 Feb 2015 The privatised Spanish airports group rose 20 pct on its debut thanks to a chunky yield and faith in the Iberian recovery. The issue did not look underpriced based on fundamentals. Even so, in Spain’s politically charged atmosphere, taxpayers may feel shortchanged.
Heathrow upstarts have London’s best airport plan 4 Feb 2015 A new runway may be finally built near the UK capital at a cost of up to $28 billion. The three rival proposals all seem to be financially viable, but the independently conceived scheme that would double the length of one of Heathrow’s existing runways looks best placed.
Big airports IPO requires faith in Spain’s future 3 Feb 2015 Aena, the $9 bln operator of airports in Madrid, Barcelona and beyond, needs flocking tourists to mint money. For now, it’s a safe bet. Low capex needs and ample capacity are a plus. But the state still calls the shots and a new regulatory regime stores up some uncertainty.
Ryanair finds it harder to get “always better” 2 Feb 2015 Europe’s largest low-cost carrier upped its fiscal-year forecast again, eyeing a 60 pct net profit jump. But sober days lie ahead. Hedges limit the impact of lower oil prices. Other costs will rise. After gaining nearly 50 pct lately, the richly valued stock looks vulnerable.
Qatar stake is vote of confidence in BA-owner IAG 30 Jan 2015 Taking a 10 pct stake worth $1.7 bln makes Qatar Airways the biggest investor in British Airways’ parent company. The immediate strategic benefit is limited: the groups already cooperate and IAG gets no new capital. But a deep-pocketed, long-term backer can be helpful.
BA owner’s new pitch to Aer Lingus is nearly there 26 Jan 2015 British Airways owner IAG lifted its bid proposal by another 6 pct to 1.4 bln euros. It’s still not generous. But given the conditions Ireland is likely to impose, which will limit the value of Heathrow slots, this might be enough for the Irish carrier’s board to start talking.
Cheap oil comes with hidden risks for airlines 19 Jan 2015 Falling oil prices cut airlines’ fuel bills and will lift earnings this year. European carriers’ share prices are up, but weaker players will find it easier to stay in business so needed consolidation may slow down. Excess capacity could soon put pressure on ticket prices.
IAG can pay more for Aer Lingus 12 Jan 2015 The UK airline’s sweetened 1.3 bln euro offer for the Irish national carrier is still too low. The price covers the value of the target’s fleet, its Heathrow slots and net cash. But the modest 32 pct premium ascribes little worth to Aer Lingus’ growing operating business.
AirAsia’s minority structure clouds crash impact 6 Jan 2015 The Malaysian carrier owns just 49 percent of the tragedy-hit Indonesian unit. Accounting rules partly insulate the parent from profit fluctuations. But a shared brand, intercompany loans, and leasing agreements mean the woes of its minority partners aren’t neatly contained.
Aer Lingus attractive yet tricky target for IAG 18 Dec 2014 The Irish carrier has rebuffed an approach by the owner of British Airways. At the right price, Aer Lingus looks like a natural partner for IAG. But its unwieldy shareholder structure – including a large holding by Ryanair – and anti-trust concerns will be obstacles.
SpiceJet rescue is no fix for India aviation woes 17 Dec 2014 The government is cajoling banks to lend to the indebted airline, which really needs more equity. The lifeline just might prevent a repeat of Kingfisher’s high-profile failure. But high fuel taxes and the lack of a bankruptcy law will keep the industry stuck in an air pocket.
Airbus investors are caught in crosswinds 11 Dec 2014 The aircraft maker disappointed investors with a lacklustre 2016 outlook, mainly due to big R&D outlays and increasing costs of producing new planes. Yet medium-term prospects look good and a sale of the $5 bln Dassault stake could bridge temporary shortfalls.
EasyJet can finally close valuation gap on Ryanair 18 Nov 2014 Europe’s second-largest no-frills carrier has set the tone in the sector in recent years. Better customer service on cheap flights propelled a 13 pct rise in earnings. A weak euro may hurt, but the strategy is solid. A 10 pct discount to Ryanair is hard to justify.
Virgin Galactic business model could still work 4 Nov 2014 After Friday’s fatal crash, Virgin will need to make new investments in its space programme. The start date for paid flights has been deferred. But if the safety issues can be overcome, the project might yet stack up commercially.