Breakingviews

Cheap oil comes with hidden risks for airlines

January 19, 2015

Falling oil prices cut airlines’ fuel bills and will lift earnings this year. European carriers’ share prices are up, but weaker players will find it easier to stay in business so needed consolidation may slow down. Excess capacity could soon put pressure on ticket prices.

Malaysia Airlines plight points to riskier world

July 18, 2014

Fatal air passenger accidents almost never happen. Malaysia Airlines has been struck by tragedy twice in four months. The aviation industry has its own challenges. Yet even more robust businesses need to consider political risk carefully.

TPG can be forgiven its mile-high club fetish

January 17, 2012

A successful contrarian bet on bankrupt Continental in 1993 was the buyout firm’s seminal deal. Since then, David Bonderman has chased airlines across the globe, including now American, and scored with a few like Ryanair. Even bad romances like Midwest can’t dampen the thrill.

Why 100 pct FDI could save India’s Kingfisher

February 20, 2012

Mounting debts and deteriorating service levels are bringing the airline to the brink. The can has been kicked further down the road, but eventually something must give. New investors are in very short supply. A proposal to allow 49 pct FDI does not go far enough.

World’s new air giant taking off at turbulent time

June 18, 2012

The marriage of Brazil’s TAM with Chile’s LAN has taken nearly two years to consummate and will create the most valuable airline in the world. The promise of greater regional integration is fueling big expectations that will be difficult to meet given economic headwinds.

Investors may be happy to ride on renovated JAL

August 3, 2012

The airline’s plans to raise roughly $8.5 bln in an IPO may seem a heavy lift amid weak markets and a perennially limping industry. But big funds will likely clamor for seats on a flight fueled by a mix of government largesse and one of Japan’s most promising turnaround stories.

How to stop worrying and love that volcano

April 19, 2010

It's tough on the flower-growers of east Africa, the salmon-farmers of the Orkney Islands, and almost everyone in or near the airline industry. For the rest of us, the eruption of an unpronounceable volcano is a heaven-sent chance to reflect.

Cathay-Qantas spat to clear cloudy Hong Kong skies

October 11, 2013

The city’s dominant carrier is challenging its Australian rival’s plan to set up a local budget operator. The dispute hinges on the vague definition of airline ownership in Hong Kong’s constitution. Greater legal clarity could freeze Qantas out, or spark a competitive scramble.

Ryanair shares still expensive despite rapid descent

November 4, 2013

Europe’s largest low-cost airline has spooked investors with a second profit warning in two months. Ryanair has strengths, but confidence is leeching fast. Stability may return most quickly if the company prunes its growth ambitions and focuses more on sustaining profit.

Bankruptcy best for overloaded JAL

November 25, 2009

Japan Airlines needs a new flight path. It has no hope of breaking even without jettisoning huge debts, massive pensions obligations and a bloated cost base. Even a last-minute deal with its pensioners will not solve its problems. JAL should opt for bankruptcy.