Japan makes better hangar for RBS air unit 17 Jan 2012 Selling its aircraft leasing arm to Sumitomo of Japan for $7.3 bln frees up vital capital for the UK lender at a good price. It’s better yet for the buyer, which has low funding costs, a strong yen and needs to diversify. If only divestments were always so easy.
Usual suspects finally drag down American Airlines 29 Nov 2011 Parent company AMR was the only big U.S. airline to avoid bankruptcy - until now. Rivals had already scrubbed out the worst of their handicaps. Now American gets its chance to cut its labor costs and debt load and fight again despite high fuel costs and ruinous competition.
Gulf airlines can afford a little arrogance 16 Nov 2011 Qatar Airways’ CEO gave Airbus a lecture on strategy before placing a $6 bln order, just after rival Emirates did an $18 bln deal with Boeing. It may sound like hubris. But it’s not hard to see how investment could become market share in a recovering world.
Qantas vindicated in workforce battle 4 Nov 2011 The Australian airline’s decision to ground its fleet a week ago looked like commercial madness, and followed tactical errors by the CEO. But a resolution with recalcitrant unions is in sight. The gamble will pay off as long as Qantas wins back passenger confidence.
Abu Dhabi’s airline strategy lacks coherence 19 Oct 2011 Etihad, the UAE’s official national carrier, wants tie-ups with Virgin Atlantic and Aer Lingus via minority stakes. Its ambition is to catch up with Dubai rival Emirates. Such deals may deliver tactical gains. But they won’t replicate Emirates’ impressive organic success.
Air France-KLM will struggle to gain altitude 18 Oct 2011 The Franco-Dutch carrier is being squeezed on all sides. It has high costs, stiff competition and large debts. Market conditions are poor, too. Changes to the boardroom crew will help if they approach restructuring seriously. But investors are right to be sceptical.
American Airlines feels market’s Darwinian wrath 3 Oct 2011 In volatile markets, the weak are hunted. The U.S. airline’s struggling parent, AMR, fell prey on Monday, with its stock diving 41 pct on bankruptcy talk. Kodak and Morgan Stanley have been in the crosshairs, too. Hoards of cash may be the only way to survive.
Kuwait Airways sale may not be a runway success 2 Aug 2011 The state of Kuwait wants to offload a 35 pct stake in its national carrier to a strategic partner. But the airline has been in the red for two decades, the asking price is lofty and bidders risk political pitfalls. Plans for a regional rail link don’t help the business case.
Russia’s airport crackdown looks like shakedown 27 Jul 2011 A judicial investigation into Moscow's Domodedovo airport is fuelling suspicions that the Kremlin is again expropriating private property, to the benefit of friendly oligarchs. Security concerns and the airport's murky ownership look like excuses for a Russianstyle takeover.
BAA faces rock bottom Stansted airport selloff 20 Jul 2011 The UK airports group, no stranger to bad timing, would only be able to sell Stansted at a big discount to its 1.32 bln pound regulated value. The secondstring London airport is too reliant on Ryanair and on cashstrapped holidaymakers. No wonder BAA is playing for time.
Air Lease investors put wallets in pilot’s hands 19 Apr 2011 A firm with leasing pioneer Steven UdvarHazy at the controls can't be ignored, and investors jumped on board at a heavy premium to peers. But its $2.4 bln IPO came with barely half a year of figures and the CEO's Rolodex as the main asset. The market has its head in the clouds.
Surely, U.S. plane ticket prices can’t go up more? 7 Mar 2011 Don't call us Shirley but yes, they can. Cheap seats are up 14 pct in the past year, but airfares had fallen on average 40 pct in real terms over three decades thanks in large part to deregulation. With oil prices again threatening airline profits, seat prices are taking flight.
Boeing highlights pension rollercoaster 27 Jan 2011 Higher pension expenses knocked the aircraft maker's earnings outlook. That's partly because the Fed's low interest rates make retirement obligations look bigger for many industrial firms. When the economy and rates pick up, Boeing and its peer group should get a double boost.
Moscow bombing hits out at worldwide interests 24 Jan 2011 Russian risks have acquired a dangerous new dimension with the explosions at Moscow's Domodedovo airport. Russia's economy has shaken off past violent incidents, but this attack is serious in human, political and economic terms because it raises global fears.
EasyJet is a poor omen for airline results 20 Jan 2011 Travel disruption, lower nonticket revenue and high fuel prices trashed fullyear profit estimates for the UK lowcost carrier. Rivals face similar pressures, and EasyJet could make a comeback. But investors are unlikely to give its rookie management much benefit of the doubt.
Snow chaos impact more reputational than financial 21 Dec 2010 If the spring's volcanic ash cloud is any guide, the aviation industry can swallow the financial cost of Europe's snow disruption. Hence the muted reaction of airline share prices. But Heathrow's operator, Ferrovialowned BAA, has suffered a hardertoquantify reputational hit.
Heathrow chaos could be eased by demand management 21 Dec 2010 Investment to boost capacity is, of course, part of the solution. But inducements for those passengers and airlines that have less need to travel and extra payments from those that do should also be pushed more actively, says Hugo Dixon who spent Monday at the airport.
London slides, again, because of Heathrow, again 20 Dec 2010 The snow and ice in Europe is extreme but the situation at the region's most important airport is still shocking. The logistical failings are bad, the customer service woeful even for premium travellers. London must get a grip of its gateway to the global business community.
Whole airline industry shakes in Rolls turbulence 2 Dec 2010 The aeroengine maker's reputational fug may deepen as new details of the Qantas engine explosion emerge. Though the nearterm financial damage to Rolls is unchanged, the industrywide finger pointing serves only to beggar civil aviation neighbours.
Kayak floats, or sinks, behind U.S. antitrust boat 18 Nov 2010 The $50 mln IPO of the fastgrowing travel website looks promising. There s one big hitch Google s purchase of ITA Software means the giant wants to dominate online travel search. A bet on Kayak is a wager that Uncle Sam will halt Google s acquisition which isn t far fetched.