European airlines’ hot summer belies sector clouds 23 Apr 2024 Jet shortages mean that carriers may be able to charge higher fares this summer, ending years of overcapacity. For stronger players like $25 bln Ryanair, that could mean fatter margins. But it’s likely to be a short-term reprieve for a sector that’s grappling with other costs.
How Boeing’s woes change everything but planes 11 Apr 2024 Grave problems with the jetmaker’s 737 MAX have sparked a crisis. In this Viewsroom podcast, Breakingviews columnists explain whether rival Airbus offers a template for policymakers, the impact of a US export champion floundering, and why others may struggle to capitalize.
Airbus obsessives have a shaky grasp of history 9 Apr 2024 The $140 bln pan-European group is flying high as rival Boeing stutters. Now carmakers and others are wondering if similar collaboration could help them face down overseas competitors. But Airbus’s idiosyncrasies and convoluted road to success make copycat plans pie-in-the-sky.
How to get the best new boss for Boeing? Ask GE 25 Mar 2024 Dave Calhoun failed to fix the 737 MAX maker’s problems; ensuring its next CEO does better requires financial incentives equal to the mammoth task. Engine manufacturer GE’s controversial $232 mln inducement for boss Larry Culp offers a blueprint, if Boeing avoids its missteps.
Boeing’s reverse deal thrust augurs small tailwind 4 Mar 2024 Jettisoning supplier Spirit AeroSystems in 2005 benefited the plane-maker, but only temporarily. Financial weakness is now compounding 737 MAX woes and hurting shareholders of both companies. Buying back the $4 bln former subsidiary should generate value in quality improvement.
Capital Calls: Airline recovery, AMS Osram 29 Feb 2024 Concise views on global finance: A travel boom lifted 2023 operating profit at the $10 bln parent of British Airways and Iberia above its pre-pandemic level; shares in the sensor company, a supplier of Apple, fell 43% after the group cancelled a major micro-LED project.
JetBlue’s turbulence gives Carl Icahn an easy ride 13 Feb 2024 The corporate rabble-rouser took a stake in the airline as it struggles with a defunct deal and business turmoil. That resembles Illumina, where Icahn won a 2023 campaign. Quick-fix activism can’t mend a panoply of issues. But striking at a weak moment can help activists anyway.
Capital Calls: TUI decamps 13 Feb 2024 Concise views on global finance: Europe’s largest travel firm is encouraging investors to vote in favour of cancelling its London listing, but the UK need not mourn the loss.
Boeing’s market value belies weak market position 6 Feb 2024 The troubled plane maker’s $125 bln valuation assumes its duopoly with Airbus will outlast manufacturing problems with its 737 MAX. Yet the European group has more aircraft in the sky and a bigger order book. This leaves Boeing at a long-term structural disadvantage.
Ryanair clear skies contain Boeing-shaped cloud 29 Jan 2024 Despite a weaker-than-expected third quarter, the $23 bln carrier still predicts record full-year net profit. Assuming holiday bookings hold up, that looks doable. But Ryanair is exposed to the uncertainty surrounding key supplier Boeing in a way that its close rivals are not.
Capital Calls: Greek airport IPO 25 Jan 2024 Concise views on global finance: The Athens government is selling 30% of the country’s biggest airport operator, aiming for a market capitalisation of up to 2.4 bln euros.
Spirit deal loss eases anxiety for everyone else 16 Jan 2024 A judge grounded JetBlue’s $4 bln purchase of the ultra-cheap carrier. The defeat avoided a potentially unprecedented intervention by regulators that would have clouded the industry, while affirming antitrust blowback. But Spirit’s shares halved, for good reason.
Dead power deal shows limits of M&A futurology 2 Jan 2024 Avangrid and PNM have given up on a $8 bln merger after three years of waiting for regulatory approval. Yet investors repeatedly priced the target as if the tie-up were in the bag. Political twists can easily wrong-foot arbitrageurs. Trouble is, such twists may get more common.
Capital Calls: Ryanair 18 Dec 2023 Concise views on global finance: The 21 bln euro budget airline’s potential 100 mln euro bonus for its CEO looks all the more awkward given the board’s decision last year to tweak the conditions.
Airline investors have reason to grab the barf bag 4 Dec 2023 Alaska Air’s $1.9 bln buy of Hawaiian could reap big benefits, yet tanked the buyer’s shares by 15%. A deal only works if it survives hostile trustbusters and doesn’t wreck Alaska’s balance sheet. Until turbulence clears, shareholders are right to distrust the captain’s promises.
Capital Calls: Ferrovial/Heathrow 29 Nov 2023 Concise views on global finance: The Spanish infrastructure giant has offloaded its final 25% stake to Saudi Arabia’s sovereign wealth fund and private equity group Ardian for 2.4 bln pounds, but a chunky premium means the new owners should hope for a smoother ride.
Ryanair’s valuation can climb to a higher altitude 6 Nov 2023 Soaring demand means the 18 bln euro airline’s earnings are above even pre-pandemic levels. Investors’ recession fears have prevented Ryanair’s share price from reflecting the good cheer. Still, history suggests budget vacations are among the last things that consumers cut.
Capital Calls: Birkenstock flop 11 Oct 2023 Concise views on global finance: The sandal maker took a tumble, as its shares opened more than 10% below the IPO price, leaving questions about its venue and valuation.
Deaths haunt Corporate America via labor strikes 15 Sep 2023 Auto workers, pilots, and truck drivers have had upper hands in labor strikes. That’s despite labor supply healing. One reason may be that men have left the workforce. Opioids and Covid are partly to blame. But it highlights the dangers of demographically concentrated jobs.
Qantas CEO’s exit will barely reduce turbulence 5 Sep 2023 Alan Joyce hopes retiring early from the airline will “accelerate its renewal” after months of scrutiny culminating in a watchdog accusing it of bad conduct. But real change won’t come cheap for his successor. And more sacrifices from the board's long haulers are likely.