German meddling will handicap Eads 7 Nov 2006 The German government has rounded up banks to take a stake in the aerospace company. This will handicap the aircraft maker s turnaround. Troubled Airbus restructuring will only succeed if it is freed from politicking. Investors will come back if governments go out.
Eads shareholders should cut their losses 7 Nov 2006 Delays in the A380 have finally cost Airbus a customer FedEx. While it s only ten planes, it may be a sign of worse things to come. The A380 may eventually prove to be a big winner. But Eads shareholders should cut their losses while they can.
Ryanair cries wolf on winter of discontent 6 Nov 2006 The Irish budget airline warned prices would fall over the tough winter period. Now it expects them to rise, despite its heady expansion. The reason? Several rivals have given up competing against Ryanair. Except, of course, for Aer Lingus.
Aer Lingus bid turns into slanging match over O’Leary’s bounty 27 Oct 2006 The Ryanair boss had claimed Aer Lingus employees would get E60k each if they accepted his bid. The real figure may be almost half that. That s very embarrassing as O Leary needs employee support to win the bid battle. To make good his promise will cost him dear.
Aer Lingus workers hold key to Ryanair bid 22 Oct 2006 Investors hostile to O Leary s offer control almost 44% of the Irish carrier. That s why he needs the employee s support they own 12%. The payout employees will get if they support his bid boosts O Leary s chances so long as they vote with their heads and not their hearts.
O’Leary dares Brussels to flex its muscles 10 Oct 2006 On the face of it Ryanair's bid for Aer Lingus looks to land it hot water on competition grounds. But the waters are muddier than they look. Another worry for Ryanair is how to hang on to Aer Lingus's valuable US routes. But there may be a way around that too.
Airbus chief resignation deepens Eads crisis 9 Oct 2006 The departure of Christian Streiff shows that the problem is deeper than the A380 mess. It goes to the root of Eads governance. Before it can address its industrial and financial mess, the company must abandon its politicking and francogerman quota management system.
Legacy airline mergers are a bad move 9 Oct 2006 Continental s chief executive was wise to pass on a merger with United. A legacy matchup does little to create value. Legacy carries would do better to merge with a discount airline. They would feed the legacy s breadandbutter international routes.
O’Leary takes on the Irish state 8 Oct 2006 He may be able to buy Aer Lingus cheaply, or trade it for regulatory concessions or financial gain. But it will take his eye off the ball. Ryanair s bid for Aer Lingus is not a reckless affront to the Irish government. The airline s maverick boss has considered most angles.
Ryanair launches shock hostile bid for Aer Lingus 5 Oct 2006 O'Leary's budget airline is offering a budget cost price for its domestic rival just an 8% premium to the Irish carrier s fair value. This is a big Uturn. It takes Ryanair into the unfamiliar long haul market. And competition issues mean there's plenty of execution risk.
Aircraft leasers hit the eject button 21 Sep 2006 The airline leasing business is booming. One operator, Q Aviation, has put itself up for sale and another has floated on the stock market. Q Aviation s owners, who bought at the bottom of the cycle, have done well. But the good times can t last forever.
Focus’s distress highlights risks from LBO boom 8 Sep 2006 The UK DIY retailer is wrestling with too much debt at a time of weak trading. It overgeared itself through a leveraged recap last year. Its problems may make lenders think hard about backing these deals. They will encourage vulture funds that hope to profit from LBO distress.
BAE throws in the towel with Airbus 7 Sep 2006 It s hard to see the UK aerospace giant s decision to exit Airbus at Rothschild s low price as anything but bearish for the planemaker. But fair value wasn t BAE s only consideration. It was fed up with its minority stake and wants to press on with its US expansion.
Tacit collusion thrives in US skies 31 Aug 2006 Take the recent launch by Jet Blue of cheap daily NYWashington flights, which raised the prospect of competition on a lucrative route. But Delta and USAirways are clinging to identical $608 fares. There s more than just loyalty for the "Shuttle" service at work here.
Aer Lingus shouldn’t be greedy at IPO 30 Aug 2006 The Irish flag carrier likes to call itself a lowcost, low fare airline. In the runup to the IPO, it s easy to see why. But it is no Ryanair. And while its growth strategy might make sense, it s still risky.
Marsh is a good breakup candidate 29 Aug 2006 Mike Cherkasky inherited a mess when he took the helm of Marsh & McLennan in the wake of regulatory scandal. He has stabilised the business, but it remains well below its breakup value. Activists and bargain hunters take note.
Naps kill Boeing’s $1bn in-flight internet system 18 Aug 2006 The US aircraft maker s inflight internet service, Connexion, was an engineering marvel that overcame tremendous technical problems. But the programme was killed by a simple problem. Most passengers prefer lowtech pursuits like sleeping.
Ryanair threat against UK looks duplicitous 18 Aug 2006 Michael O Leary, the outspoken boss of the lowcost airline, is clearly angry about the way BAA has handled extra airport security. But it is hard to avoid the impression that the real reason for his outburst is to try to force a breakup of BAA.
Terrorism threat a red herring for BAA’s £12bn financing 17 Aug 2006 The financing for Ferrovial s takeover of BAA isn t in jeopardy despite losses from flight cancellations. The real hurdle will be convincing existing bondholders to migrate their bonds into the new financing structure.
Airlines will bounce back – again 10 Aug 2006 Flights to the UK have been cancelled. Hand luggage, even mobiles, have been banned. Airline shares have suffered. Carriers typically rebound fast from such scares. High oil prices have hardly hurt either. But sectoral pressures are rising.