Spain’s $10 bln airports IPO is just shambolic 31 Oct 2014 Auditor-related technicalities have grounded one of the largest European share issues this year. The Aena airports sale will probably go ahead in early 2015. But the IPO process will be easier to re-rail if the government makes its commitment unequivocal.
Ferrari spinoff looks great but lacks oomph 29 Oct 2014 The hottest name in sports cars is joining the spinoff bandwagon. Fiat Chrysler will sell 10 pct of Ferrari and hand the rest to investors. Fiat shares zoomed up. Yet the split is largely symbolic. Ferrari needs to stay linked to Fiat, and the cash proceeds will be limited.
Ferrovial is back in conquistador mode 22 Oct 2014 The Spanish group is chasing deals worth 1.8 bln euros in three countries including Australia. The spree echoes its 2006 pursuit of airport operator BAA, which nearly dragged it down. But these acquisitions look less risky. Thanks to savvy sales, Ferrovial has cash to spend.
Global airline IPOs still need tailwind to fly 3 Oct 2014 From America to Asia, airlines are eyeing share sales. Most offers since 2010 have lost altitude. The industry’s returns are improving but remain below the cost of capital. The latest listings will need a gimmick or something special to buck the trend of value destruction.
Frothy M&A talk will worsen San Miguel’s hangover 26 Sep 2014 The Philippine conglomerate is eyeing an overseas oil and gas deal and says it remains interested in Britain’s United Biscuits. With a mixed track record in its recent deal-making, all the chatter will only weigh on the group’s already underperforming shares.
EasyJet’s divi policy imposes useful constraint 18 Sep 2014 The budget airline has said it will now distribute 40 percent of earnings, up from one-third. That’s brave given aviation’s inherent cyclicality and the need to spend on aircraft. Still, it’s a welcome step. Management has credibility and the move will enforce discipline.
Airlines find hidden value in miles 4 Sep 2014 Loyalty schemes are reliable money spinners in a cyclical and fiercely competitive industry. In times of financial strain, carriers can also sell stakes to outside investors to raise cash. But the potential opportunity isn’t equal for all. A big home market helps.
London’s island airport may yet fly 2 Sep 2014 Opponents of the plan to build a brand new airport in the Thames estuary have won support from a government-appointed arbiter. The four-runway project is hard to square financially. But Boris Island has a champion who may yet win the power needed to push the proposal through.
Qantas maps out smoother flight path for investors 28 Aug 2014 The Flying Kangaroo has capped a torrid year with a record loss. But CEO Alan Joyce is cutting costs, writing down the value of Qantas’ fleet, and separating its international unit. Debt is down, while capacity growth in the industry is slowing. No wonder the shares are rising.
Aircraft leasing flies back into vogue in Asia 12 Aug 2014 Western financial groups bailed out of the business after the crisis. Now China’s sovereign fund and Li Ka-shing may be getting on board. Strong forecast demand for aircraft orders explains the appeal. Even so, access to cheap and reliable sources of finance will be crucial.
Virgin America needs clear skies for IPO to fly 11 Aug 2014 Executives reckon the airline’s worth $1 bln. If it can keep climbing at a fast clip and hold costs down, that’s possible. But the industry’s prone to regular painful downturns. And those using Richard Branson’s Virgin brand don’t have the best track record as public companies.
Malaysia throws airline investors a parachute 8 Aug 2014 The state investment fund is paying $436 million to buy out the remaining shares of Malaysia Airlines. The offer gives investors a price they last saw in February, before the already-troubled carrier was struck by two disasters. Taxpayers and employees may not be so fortunate.
Safeguarding the A380’s future will cost Airbus 30 Jul 2014 Investors welcomed the aircraft maker’s strong sales and improving margins. But the slow-selling flagship A380 needs a costly redesign and could benefit from Airbus’ expertise in modernising proven models. In the short run, that will dent profit.
U.S. airline payouts to investors neglect history 25 Jul 2014 A year out of bankruptcy, American has set its first dividend in 34 years. United will buy back stock. But the industry has a woeful record of rarely covering its cost of capital and often losing billions. On a 7-9 year cycle, U.S. carriers should already be conserving cash.
Low-cost plan at Air France-KLM is a bad idea 25 Jul 2014 The Franco-Dutch carrier is mulling a move on Europe’s no-frills carriers. Air France-KLM has reaped rewards from a painful but mostly successful cost-cutting programme. It could undo the good work by challenging super-efficient budget airlines Ryanair and easyJet.
Asian airlines strive for return to mediocrity 22 Jul 2014 Tragedy and political upheaval provide a chance for Malaysia Airlines and Thai Airways to restructure deeper than before. State shareholders can help or hinder. Even when in good shape, running an airline in an oversupplied region is a tough business.
Business faces tough adjustment to post-MH17 world 21 Jul 2014 Western governments are rounding on Russia after the crash of MH17. Sanctions against the country will be toughened, regardless of business not being ready for a prolonged economic conflict. Obstinate Russian bulls should be prepared to pay the price of escalating tensions.
Malaysia Airlines plight points to riskier world 18 Jul 2014 Fatal air passenger accidents almost never happen. Malaysia Airlines has been struck by tragedy twice in four months. The aviation industry has its own challenges. Yet even more robust businesses need to consider political risk carefully.
Boeing can weather the loss of U.S. Ex-Im Bank 10 Jul 2014 The export lender financed 18 pct of the jet maker’s deliveries last year, or about $8 bln worth of planes. If Congress grounds the bank, Boeing might have to triple the credit it extends to sometimes risky customers. That could cloud the bottom line but won’t ruin the forecast.
Lufthansa embarks on ill-fated no-frills odyssey 9 Jul 2014 New CEO Carsten Spohr is pushing the German carrier into a high-risk experiment – pioneering low-cost, long-haul flights. The strategy rests on an unproven business model and is hobbled by inconsistencies. Lufthansa might want to cancel the flight.