Aviation

Transportation M&A nightmare worth the trip

8 Aug 2022

Often when industries with monopolistic traits consolidate – airlines, trains - there’s a race to be an acquirer. Buyers end up paying top dollar, and regulatory concessions can be steep. Still other industries have shown the finish line is rewarding if investors stick it out.

JetBlue buckles up for long, turbulent M&A flight

28 Jul 2022

After a near-four-month tussle, the U.S. budget airline clinched a $3.8 bln deal with rival Spirit. It stacks up if hoped-for extra profit results. The price is still high: If the merger fails – as it might – JetBlue may have to pay Spirit one-fifth of its market value.

GE’s new branding is appropriately pedestrian

18 Jul 2022

It took six months and thousands of conversations to name the $69 bln firm’s post-split divisions: GE Healthcare, GE Aerospace, and – the creative bit – GE Vernova. The separation is an effort to help shareholder value. With those names, GE is setting expectations low.

Capital Calls: Delta’s earnings are bad and worse

13 Jul 2022

Concise views on global finance: Shares in the company fell 7% after the company missed earnings expectations. That’s bad, but worse is that its main strength – pricing power – has limits.

JetBlue has its “Top Gun: Maverick” moment

28 Jun 2022

With two days before a key deal deadline, the budget airline has pulled out some creative aerobatics to win over target Spirit, and swat away a favored rival bid by Frontier. The offer of more cash up-front is daring – but takes JetBlue’s shareholders deep into the danger zone.

Review: Pandering to Beijing has shrinking payback

1 Apr 2022

One difference between the Cold War and current Sino-U.S. tensions is the crowd of capitalists rooting for the communists. In “America Second,” Isaac Stone Fish lambasts the CEOs and lobbyists who take China’s side. Yet the return on sucking up, never high, is falling sharply.

Airline investors weigh up more pandemic baggage

24 Nov 2021

U.S. travelers may log their busiest day since the pandemic during Thanksgiving. In Europe, government clampdowns may crimp winter travel. And airlines on both sides still have to contend with what happens in China, which could knock some wind out of valuations.

Airlines’ constraints send investors to the tarmac

20 Oct 2021

Southwest’s network melted down earlier this month with thousands of canceled flights. It in part reflects a faster recovery, thanks to a domestic focus. But a disproportionate rebound has shown up in stock prices. Now efficient airlines are butting up against self-made problems.

Sydney Airport becomes Covid-19 rebound hub

15 Jul 2021

It rejected a $17 bln takeover proposal despite the hefty premium on offer. The airport operator reckons it can land post-pandemic value unaided. Any bid sweetener would require an even rosier view of travel, turning the deal into a stark proxy for fuzzy recovery prospects.

AirAsia super-app SPAC will require sick bag

8 Jul 2021

The Malaysian carrier led by Tony Fernandes is swapping a 4.8% stake in its fledgling e-commerce and fintech division for Gojek’s Thai business. The deal imputes a $1 bln valuation, and a sky-high multiple of sales. A planned spin into a public listing promises a dizzying ride.

Capital Calls: AT&T’s bankers, Blackstone in Italy

17 May 2021

Concise views on global finance: The U.S. telecom giant’s unwinding of its purchase of Time Warner is a gift for advisers on Wall Street; a court rules that the U.S. private equity firm’s 2013 purchase of Corriere della Sera’s HQ was valid.

Infrastructure funds get case of private jet envy

11 Jan 2021

GIP has outgunned rival Blackstone with a $4.6 bln bid for Signature Aviation, offering a 51% premium for the aircraft servicer. Catering to the flying habits of the mega-rich is hardly a stable business, though, and private aviation faces climate-change clouds on the horizon.

Boeing gets off easy as life grows harder

8 Jan 2021

The 737 MAX maker is paying $2.5 bln to settle U.S. criminal charges tied to crashes, with over 70% going to airline customers. Other companies have been hit with steeper fines and heavier oversight for lesser offenses. The penalty looks light, but Boeing only can afford so much.

Qantas charts choppy path for Bain’s Aussie flight

26 Jun 2020

The U.S. buyout shop beat out rival bids for bankrupt Virgin Australia. There’s haggling to do with creditors and others before the sums are known. At the same time, Qantas is raising $940 mln and plans to axe 20% of its workforce in a fresh sign of the brutal challenges ahead.

Flying cars are a cool solution to a tiny problem

23 Jan 2020

Toyota has pledged $394 mln to support aviation startup Joby; Geely and Hyundai are also dabbling. Technology advances have put commercialisation within reach, and regulators will slowly come to grips with the idea. The final frontier is finding actual customers.

Plane woes cast doubt on Beijing’s DIY tech plan

14 Jan 2020

The C919, intended to compete with Airbus and Boeing commercial jets, is behind schedule and riddled with problems despite vast state support. China’s plan to replace foreign hardware and software with local versions may struggle to take off for similar reasons.

Asia’s airports fly far higher than its carriers

5 Nov 2019

Thai Airways’ market value has shrunk by a third this year to $600 mln, and the loss-making airline says it is running out of time. Airports of Thailand, by contrast, is worth $38 bln and is a top performer. It’s a light signal for investors eyeing the region’s travel boom.

Airlines flash economic warning lights Down Under

22 Aug 2019

Profit at Qantas and Air New Zealand fell, hurt both by pricey fuel and headwinds at home. Corporate and discount travellers alike are pulling back, and neither carrier is offering much future guidance. Any benefits of rock-bottom interest rates are taking time to trickle down.

Hadas: Boeing lens refracts a Beijing dilemma

21 Aug 2019

Xi Jinping wants both tight government control and a modern economy. That combination has never worked, for good reasons. China’s leader could learn from the U.S. aerospace giant’s mess. A politically uncomfortable free press can be an economically helpful check on corruption.

Cathay Pacific yields to its Beijing co-pilot

12 Aug 2019

The Hong Kong carrier will allow Chinese authorities to vet staff flying to and over the mainland, as anti-government protests heat up at home. “Overly radical" employees will be kept away. Local roots and links leave Cathay and parent Swire vulnerable, and with limited options.