EasyJet’s growth will get harder to replicate 19 Nov 2013 The low-cost carrier is turning improved customer service into bundles of cash. The 50 pct jump in profit and the chunky special dividend marks easyJet out from peers. The shares have doubled in the past year. But future growth may be harder to win.
EADS profit lift-off will be held back by A380 14 Nov 2013 The Airbus maker is enjoying a surge in global demand for civil aircraft. Yet it has sold none of its flagship A380 for more than a year. For now EADS has a decent backlog of orders for the super-jumbo. But the weakness will make it harder to lift mediocre group margins.
U.S. trustbusters make skies friendly for lobbyists 12 Nov 2013 American Airlines and US Airways resolved antitrust issues with their merger by dumping slots at LaGuardia and Reagan airports. That should mean better service and lower prices for fliers. But the biggest winners may be paid schmoozers plying the Washington to Wall Street corridor.
Ryanair shares still expensive despite rapid descent 4 Nov 2013 Europe’s largest low-cost airline has spooked investors with a second profit warning in two months. Ryanair has strengths, but confidence is leeching fast. Stability may return most quickly if the company prunes its growth ambitions and focuses more on sustaining profit.
Investors unfairly ground Lufthansa 31 Oct 2013 Europe’s largest airline faces many challenges, but is in much better shape than its battered stock-market valuation suggests. The numbers are confusing, but Lufthansa is en route to becoming a leaner and more profitable airline by 2015. The market hasn’t caught on.
Ferrovial hedges regulatory risk at Heathrow 23 Oct 2013 The Spanish infrastructure group has sold an 8.7 percent stake in the company that controls Heathrow to a top UK pension fund, USS. Ferrovial gets a good price and remains the airport’s largest investor. Bringing in a local partner makes sense for such a regulated asset.
Italy plays hot potato again with Alitalia 11 Oct 2013 The Italian airline-cum-financial black hole may be rescued with a little help from the state’s postal service. It marks a reversal from Silvio Berlusconi’s messy private-sector fix of 2008, but the aim is similar: indulge national sensibilities, avoid restructuring and buy time.
Cathay-Qantas spat to clear cloudy Hong Kong skies 11 Oct 2013 The city’s dominant carrier is challenging its Australian rival’s plan to set up a local budget operator. The dispute hinges on the vague definition of airline ownership in Hong Kong’s constitution. Greater legal clarity could freeze Qantas out, or spark a competitive scramble.
Italy’s corporate zombies haunt Letta reboot 9 Oct 2013 The Italian premier has derailed Silvio Berlusconi’s attempt to take down his government. Now his grand reform promises are tested by the problems of Alitalia and Telecom Italia, both victims of past attempts to block foreign ownership. So far, not so good.
Airbus has got the sales. Now how about profit? 7 Oct 2013 The European aircraft maker won over Japan Airlines, one of the few remaining Boeing-only carriers. The order of 31 A350 jets confirms the string of Airbus’ recent sales successes over its U.S. competitor. Now it should get to work on what its rival does better: profit.
Doubling down on Alitalia bad idea for Air France 3 Oct 2013 After having burnt 1.1 billion euros since its 2009 “fresh start”, the loss-making Italian carrier is once again close to the brink. It is trying to convince Air France-KLM to add to its 25 percent stake. The French group isn’t overly excited at the prospect - for good reasons.
Ryanair’s gloom may signal end of growth era 4 Sep 2013 Europe’s biggest low-cost airline has issued a profit warning barely a month after it got embroiled in a debate about potential safety issues. The group stresses that there’s no link between the two events. In any case, it looks like it must brace for times of slower growth.
Ryanair should reflect on why it is getting flak 16 Aug 2013 The airline complies with all safety regulations and has a good record. Yet its safety culture is in focus following a pilots’ survey that Ryanair disputes. The saga is a culmination of needlessly toxic labour relations that bring little obvious benefit to the group.
Lufthansa restructure puts it on right flight path 2 Aug 2013 Europe’s largest airline is in the midst of a painful reformation. It could be a long haul, but despite dismal headline figures for the first half, it has made headway in bringing costs down. Much hinges on a success of Lufthansa’s revamped no-frills airline Germanwings.
HS2 train decision must wait for Heathrow 2015 4 Jul 2013 The HS2 high-speed rail project is under fire as cost estimates mount. But that is not the only problem with this massive project. A financial commitment now would pre-empt the 2015 report on airport strategy. Better to wait and not box the country into keeping the Heathrow hub.
Brazilian airline IPO requires sky-high optimism 4 Jun 2013 David Neeleman, JetBlue’s founder, is taking public his latest creation, Azul. Based on its U.S. cousin’s valuation, it’s worthless. Potential shareholders need to assume Azul keeps climbing fast and encounters no economic or operational turbulence to justify jumping on board.
The refining business may yet pay off for Delta 22 May 2013 The biggest U.S. airline’s decision to buy a refinery a year ago looked barmy. Yet there are signs that for the price of a Boeing 777, the deal is helping reduce Delta’s $12 bln fuel bill in meaningful ways. Just shaving a nickel off jet fuel prices justifies the purchase.
Turkish Airlines can ride out turbulence 16 May 2013 Big aircraft orders and celebrity adverts signal the airline’s desire to be in the global top 10. Now Turkish must contend with strikes and its CEO taking leave. Still, the firm’s strategy is credible. Good execution and removal of an overhang would close the shares’ discount to peers.
Record aircraft orders point to global growth bump 8 May 2013 When airlines embark on a frenzy of expansion, economic slowdown tends to follow. That’s the conclusion implied by Breakingviews’ study of historical data. If the relationship holds, recent big orders by Asian airlines suggest rising risks of turbulence in the economy next year.
Lufthansa governance farce marks new low point 7 May 2013 Europe’s largest airline was hit by turbulence of its own making on the eve of its AGM. Former CEO and nominated chairman Wolfgang Mayrhuber initially dropped his candidacy - then changed his mind again. The bizarre flip-flops tarnish the new chairman and the company.