Breakingviews

Wanted: candidates for Europe’s worst CEO job

April 6, 2016

Air France-KLM’s boss Alexandre de Juniac has vacated an unenviable managerial position. Europe’s weakest legacy carrier is hobbled by high costs, mighty unions and a wayward state shareholder. His successor will need fluent French, modest pay expectations, and little ambition.

Alaska Air pays through nosecone for U.S. Virgin

April 4, 2016

The carrier is securing coveted airport slots in its $2.6 bln deal for Richard Branson’s stateside flier. Cost savings are slim, however, leaving an expected sales uplift to justify the 87 pct premium. It’s a risky bet that the airline industry’s destructive ways have changed.

United Airlines board dogfight could be win-win

March 8, 2016

Two hedge funds are gunning to get six new directors appointed, including a retired Continental boss. It’s a headache for CEO Oscar Munoz as he returns from sick leave. Despite heated rhetoric, though, a compromise on a revamped board should suit both sides better than a battle.

HNA’s $6 bln Ingram bid has weird Chinese logic

February 18, 2016

There’s no clear rationale for the conglomerate to buy a U.S. electronics distributor and leave its management and business untouched. But like other recent outbound Chinese deals, the acquisition gives HNA diversification, political capital, and a hedge against the sliding yuan.

EasyJet’s brio bodes ill for Lufthansa, Air France

November 17, 2015

On the back of an 18 pct jump in pre-tax profit in 2015, the UK budget carrier is ordering more planes to step up growth and expand into new routes. The confidence is merited. High-cost legacy carriers are too bogged down by labour unrest to fight more nimble low-cost rivals.

Europe’s stricken airlines cursed with good luck

October 29, 2015

Lufthansa and Air France-KLM reported boosts from lower oil prices and strong summer demand. The uplift is probably temporary. But try telling that to restive pilots who may push back even harder on essential cost cuts. There’s little respite for the carriers’ horrible returns.

United board flies into risk-management failure

October 19, 2015

The U.S. airline’s directors have been buffeted by the turbulence caused by new CEO Oscar Munoz’s illness. Apple’s handling of Steve Jobs’ terminal cancer remains a far worse example. But Goldman Sachs and JPMorgan show it’s possible to both inform investors and respect privacy.

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.