Monarch suffers very British failure 2 Oct 2017 The airline’s past reliance on tourism to Egypt and Tunisia, now danger areas, started the rot. But the Brexit-induced slump in sterling worsened things, and a laissez-faire resistance to government intervention – unlike the German help handed to Air Berlin – finished the job.
Etihad’s airlines fail, but odd CDO remains aloft 17 Aug 2017 Air Berlin and Alitalia are insolvent. Their debt is probably worthless, except for an unusual collateralised debt obligation that part-owner Etihad used to fund them. It is trading at a price that suggests Etihad might bail it out. Fuzzy guarantees often end badly.
Cathay’s ugly first half points to further woes 17 Aug 2017 Cathay Pacific has posted its worst half-year loss in at least two decades. Despite attempts to cut costs, the Hong Kong carrier is still locked into costly fuel hedging contracts and faces tough competition. Investors shouldn’t expect a return to profitability any time soon.
HNA shines dim light on ownership 25 Jul 2017 A restructuring of the acquisitive Chinese conglomerate’s shareholding structure is meant to allay concerns about opacity. It loses two mysterious investors and will now be majority owned by a pair of charities. More clarity is welcome, but this web still looks pretty tangled.
Air India fix would give Modi reform miles 21 Jul 2017 The carrier is a travelling advertisement for India's inefficiencies. It has made losses for nine years and turnaround efforts have failed. A sale may push a multi-billion dollar writedown on lenders, but would validate Prime Minister Modi's reform credentials.
EasyJet can afford a spell on autopilot 17 Jul 2017 Losing its chief executive to broadcaster ITV is manageable for the UK airline, one of the FTSE-100’s best performers this year. While Carolyn McCall did a good job – and bagged easyJet a higher valuation than Ryanair – what she leaves behind has structural advantages over rivals.
Qatar’s American Airlines ticket not just politics 22 Jun 2017 Buying a stake in the carrier has all the hallmarks of a politically motivated deal. Flexing its financial muscles in the United States sends a defiant message to its enemies circling in the Gulf. But American Airlines also offers commercial value on top of diplomatic leverage.
IAG can weather turbulence at BA 30 May 2017 The owner of Britain’s flag carrier is reeling from an IT glitch that grounded hundreds of flights. While unions blame cost cutting, the airline has little choice but to bear down on expenses. The impact will fade: customers have short memories and focus on prices in the end.
Singapore Airlines and Cathay fight same headwinds 19 May 2017 Singapore's disappointing results echo troubles at its Hong Kong rival. Chinese competition is hitting both. Neither has a big domestic customer base and their traditional hub role is under threat. At least the Singaporeans have a smarter-looking approach to budget travel.
EasyJet gives lesson in counter-cyclical aviation 16 May 2017 As European airlines engage in a costly battle for market share, the UK no-frills carrier is buying ever-larger aircraft. EasyJet’s cost advantage and the impending demise of weak rivals suggest boss Carolyn McCall is right to look beyond the short-term clouds.
Viewsroom: United joins corporate culture chaos 13 Apr 2017 Taking three days to offer a basic apology to the passenger dragged off a flight suggests deeper problems at the U.S. airline. Poor leadership and processes took a toll on Wells Fargo and Toshiba, too. Executives and boards ignore the lessons of cultural failures at their peril.
United fiasco puts a value on the humble apology 12 Apr 2017 It's a sad affair when an airline reliant on consumer loyalty can be so wholly upstaged in the contrition department by White House flack Sean Spicer. United's ham-fisted response to “re-accommodate-gate” is a warning to all corporations: Say sorry first, ask questions later.
United shows service and shareholders don’t fly 10 Apr 2017 The airline’s stock jumped even after video of an innocent passenger being ejected from a flight went viral. Behind the PR flub, United’s second in a month, is an industry at its healthiest in years. Crummy service and low-cost rivals may yet bring shares down to earth.
Airline cycle goes roundtrip with Frontier’s debut 4 Apr 2017 The no-frills U.S. carrier filed for an IPO eight years after going bust. Like most airlines, Frontier has gained from efficiencies, low fuel prices and passenger growth. Its liftoff has risks, but low-cost carriers are well positioned relative to legacy operators for a downturn.
American Airlines buys China upgrade, earns points 28 Mar 2017 The carrier is joining forces with China Southern, and taking a sub-3 pct stake for $200 mln. AA ought to end up with more Chinese passengers and fewer empty seats. Ideally it wouldn’t have to buy a stake to do so. Consider it one of the irksome hidden costs of air travel.
Delta refinery is adding financial impurities 16 Mar 2017 Five years after its unconventional acquisition of a crude-processing plant, the $35 bln airline has called in consultants to review the operation. In 2012, oil was scarcer and more expensive. Falling prices and other costs should prompt Delta to refine its strategy.
Cathay can’t fly around Hong Kong’s fading hub 15 Mar 2017 The Hong Kong carrier's first loss since 2008 points to a deeper threat. Asian rivals are undercutting it on long-haul trips; budget airlines poach the short ones. But Cathay is still adding destinations. Fewer, high-value routes and aggressive restructuring would fly further.
Iran needs friends beyond Boeing 12 Dec 2016 The U.S. aircraft-maker's order for $16.6 bln of planes may force U.S. President-elect Donald Trump to choose between jobs and his tough stance on the Islamic Republic. Iran is in a weak position. It can help itself a bit, starting by rebuilding bridges with near neighbours.
Trustbusters barely dent air oligopoly with Alaska 6 Dec 2016 The U.S. Department of Justice forced Alaska Air to cut code-sharing with American Airlines before approving its $2.6 bln bid for Virgin America. That'll improve competition a tad. But with the top four carriers piloting 80 pct of all domestic flights, it's just tinkering.
Buffett’s love for moats trumps fear of flying 15 Nov 2016 The billionaire's Berkshire Hathaway has bet over $1 bln on four U.S. airlines. Buffett once called the industry a "bottomless pit," and jokingly wished aviator Orville Wright had been shot down at Kitty Hawk. That was before a spate of mergers created a profitable oligopoly.