AIR.PA - Airbus SE

Paris - Paris Delayed price. Currency in EUR
68.41
+4.71 (+7.39%)
At close: 5:39PM CEST
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Previous close63.70
Open65.41
Bid0.00 x 0
Ask0.00 x 0
Day's range64.60 - 68.53
52-week range48.12 - 139.40
Volume5,333,349
Avg. volume3,920,688
Market cap53.638B
Beta (5Y monthly)1.15
PE ratio (TTM)14.11
EPS (TTM)4.85
Earnings date30 Jul 2020
Forward dividend & yieldN/A (N/A)
Ex-dividend date20 Apr 2020
1y target est120.82
  • Airbus jobs on wire as underlying output falls 40% - sources
    Reuters

    Airbus jobs on wire as underlying output falls 40% - sources

    Airbus is looking to hold underlying jet output at 40% below pre-pandemic plans for two years, an approach which adds new pressure to cut thousands of jobs, industry sources said. The European planemaker has so far announced output cuts of a third from its plans before the coronavirus crisis struck air travel, but some analysts have said this is optimistic. Airbus, after adjusting for different levels of labour intensity, has now calculated that its "single-aisle equivalent" production rate, which is likely to drive decisions on staffing, will be down 40% for two years, the sources told Reuters.

  • Airbus jobs on wire as underlying output falls 40%: sources
    Reuters

    Airbus jobs on wire as underlying output falls 40%: sources

    Airbus <AIR.PA> is looking to hold underlying jet output at 40% below pre-pandemic plans for two years, an approach which adds new pressure to cut thousands of jobs, industry sources said. The European planemaker has so far announced output cuts of a third from its plans before the coronavirus crisis struck air travel, but some analysts have said this is optimistic. Airbus, after adjusting for different levels of labor intensity, has now calculated that its "single-aisle equivalent" production rate, which is likely to drive decisions on staffing, will be down 40% for two years, the sources told Reuters.

  • Don't resist order deferrals, Qatar Airways tells jetmakers
    Reuters

    Don't resist order deferrals, Qatar Airways tells jetmakers

    Qatar Airways Chief Executive Akbar al-Baker on Tuesday warned Airbus and Boeing against resisting the airline's requests to defer aircraft deliveries, in a battle over who should bear the strain of the coronavirus crisis. The state airline, whose CEO has more usually been known for criticising delays at planemakers, is now in talks like many rivals to push back deliveries due to the impact of the crisis. "We are negotiating with both Boeing and Airbus to fulfil our requirement to defer and we hope that both the manufacturers will oblige," he told Reuters by phone.

  • Emirates to decide on fleet size in the next few months
    Reuters

    Emirates to decide on fleet size in the next few months

    Emirates will decide over the next few months on the size of its future fleet, the Dubai-based airline's president said on Tuesday. It is not clear when Emirates, which flew to 157 destinations in 83 countries before the coronavirus pandemic, will start rebuilding its network after grounding passenger flights in March. The airline is looking at its 115 Airbus <AIR.PA> A380s, the world's largest fleet of the superjumbos, and the final eight pending deliveries of the double decker plane, Clark said without elaborating.

  • Aircraft makers go digital to fight coronavirus delivery logjam
    Reuters

    Aircraft makers go digital to fight coronavirus delivery logjam

    Helicopter and jet makers are turning to digital technology so customers can inspect their big-ticket purchases remotely before taking delivery, as they strive to push through deals paralysed by the coronavirus pandemic and bring in much needed cash. With outside quality inspectors unable to travel to factories to examine aircraft because of lockdowns, manufacturers hope the remote systems will ease the logjam in deliveries after they slowed to a trickle in April. Aircraft makers make at least half their revenue and generate significant cash at delivery.

  • We All Might Be Flying in Planes Again Soon
    Bloomberg

    We All Might Be Flying in Planes Again Soon

    (Bloomberg Opinion) -- Covid-19 became a pandemic because airplane passengers carried the new coronavirus with them around the world. As that became clear, airlines grounded nearly all of their fleets, governments issued travel restrictions and mandatory quarantines, and tourist attractions and conferences closed down. With no reason to fly, a quick recovery for air travel seemed unlikely. Warren Buffett dumped his airline stocks, claiming that the “world has changed.”Passengers also wouldn’t feel safe packed inside a metal tube for hours, would they?Happily for the industry, if not for the climate, the seemingly insurmountable barriers to air travel have begun to look less daunting. “We believe the worst is behind us, and we’re on the uptick,” American Airlines Group Inc.’s boss, Doug Parker, said after a surge in travel over the U.S. Memorial Day holiday weekend.Investors have taken notice. The Bloomberg Americas Airlines stocks index has rebounded by almost one-third from the mid-May low, and European carriers have made similar gains. Shares in German tour operator Tui AG have risen too.Such optimism feels jarring when airlines, American Airlines included, are poised to cut thousands of jobs. Most are still burning huge amounts of cash. Deutsche Lufthansa AG needs a 9 billion-euro ($10 billion) bailout, and Latam Airlines Group SA joined Latin American peer Avianca Holdings SA in filing for bankruptcy last week.But Parker is probably right to expect a continued recovery, at least on domestic and short-haul routes. This won’t be enough to put debt-laden airlines on a secure footing, and a full demand recovery probably won’t happen for a couple more years. But, right now, a desperate industry will take any good news it can get. The rigorous hygiene measures airlines have announced should go a long way toward restoring passenger confidence.  European budget carrier Ryanair Holdings Plc expects to operate at 40% of normal capacity from July, and the way bookings are shaping up suggests those planes will probably be at least half full. EasyJet Plc sees “encouraging” trends and notes that winter bookings are higher than usual for this time of year, although part of that may be because people have refund vouchers to use and are rebooking cancelled trips.  Ryanair’s extensive summer flight schedule had seemed premature a couple of weeks ago, but the travel restrictions that kept Europeans from moving around the continent are being relaxed. Starting in July, Spain is set to drop its requirement for international arrivals to quarantine for 14 days. Britain imposed a similar rule but is under immense pressure to abandon it. Travel between Europe and the U.S. will take longer to open up, but even on this there are encouraging signs of political will to get people flying again.   A month ago, United Airlines Holdings Inc.’s chief executive officer, Scott Kirby, lamented that there wouldn’t be a recovery in flying until attractions like Disney World and the Paris museums were open again.Well, they will be soon. It’s already possible to visit the Acropolis in Athens and St Peter’s Basilica in Rome. Paris’s parks and museums are set to reopen from June. The French capital is usually swamped with tourists at this time of year, so there’s an incentive for travelers to get there first. Walt Disney World expects to reopen its Florida park from July, albeit with compulsory face masks and a ban on hugging your favorite Disney character.I’ve written before about how things like wearing masks and having to ask permission to use the toilet will make flying even less enjoyable. But these measures may make passengers feel safer. For example, while the gowns and other personal protective equipment issued to Emirates’ cabin crew are a little intimidating, they’re likely to put some nervous flyers at ease.As with SARS almost two decades ago, there are understandable concerns about catching coronavirus within the aircraft cabin, most likely from someone seated close by. The evidence isn’t comprehensive or conclusive, but so far there are surprisingly few documented cases of this happening with Covid-19. Airline industry body IATA says it knows of only one case where a person transmitted the virus to more than one person on board. Not surprisingly, plane manufacturers Airbus SE and Boeing Co. are studying the subject intensively. There are other plausible reasons why flying might be safer than you’d think: The air is filtered and frequently replenished from outside, seats act as somewhat of a barrier and passengers don’t move around the cabin much. Singing, yelling and talking loudly — contributors to so-called super-spreader infection events — are a big faux pas when you fly. Many passengers would still prefer the middle seat to be empty, but as I’ve written before, unless ticket prices rise, that would severely hamper airlines’ ability to break even.Of course, the longer someone’s on board, the greater the chance they’re exposed to infection. Hence people may feel comfortable flying domestic and short-haul before they’re willing to fly halfway around the globe.Companies will probably take longer to get comfortable with the risk (and potential liability) of their employees flying for business. About half the corporate clients American Airlines surveyed still have a travel ban, although that’s down from two-thirds at the peak of the crisis. Millions of potential passengers have also lost their jobs and won’t feel able to splash out on holidays.And then there are the psychological scars from the prolonged lockdown. Being outside now feels a lot safer than being in any kind of confined space. A staycation in a local Airbnb might feel preferable to getting on a plane.For those willing to take the risk, and who can find adequate travel insurance, a rare opportunity awaits. Want to see Venice without the crowds? Now’s your chance.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Why Shares of Embraer Are Up Today
    Motley Fool

    Why Shares of Embraer Are Up Today

    What happened Shares of Embraer (NYSE: ERJ) spiked 17% on Friday following a report that a Chinese manufacturer has expressed interest in joining forces with the world's third-largest commercial airplane manufacturer.

  • Exclusive: Brazil's Embraer draws foreign interest after Boeing rift - sources
    Reuters

    Exclusive: Brazil's Embraer draws foreign interest after Boeing rift - sources

    Aircraft makers are circling Brazil's Embraer weeks after Boeing ditched plans for a historic commercial aviation tie-up, people familiar with the matter said. Boeing axed plans to buy 80% of Embraer's commercial unit in April, ending a planned move into regional jets that mirrored rival Airbus' purchase in 2018 of a competing model developed by Canada's Bombardier. China's state-owned COMAC planemaker has voiced informal interest in co-operation with the world's third-largest jetmaker, two of the people said.

  • Bloomberg

    EasyJet’s Future Hangs on Founder’s Bid to Dismiss Leadership

    (Bloomberg) -- EasyJet Plc’s future will be decided in a single vote on Friday, with billions of dollars of aircraft orders at stake.Top shareholder Stelios Haji-Ioannou has called for the ouster of the U.K. airline’s leadership in the middle of the coronavirus crisis. EasyJet’s founder and former chairman has spent more than 15 years opposing the plans of successive managers on the grounds that they’ve been too investment-intensive and offered insufficient returns.Haji-Ioannou’s latest campaign comes to a head at an extraordinary general meeting when investors vote on his motion to remove four directors, including Chief Executive Officer Johan Lundgren, Chairman John Barton and Chief Financial Officer Andrew Findlay.The clash centers on an order for more than 100 Airbus SE A320neo jets that make up the bulk of 4.6 billion pounds ($5.6 billion) in capital spending planned through fiscal 2023. Haji-Ioannou says the purchase will drain cash as the air-transport industry faces years of subdued demand in the aftermath of the coronavirus crisis. EasyJet says it’s revised the order and that the debate creates an unnecessary distraction at a tough time.“It’s a really important moment for the airline,” said Luke Hickmore, a fund manager with Aberdeen Standard Investments who manages around $3 billion for his firm. “He wins and the board becomes his to control and leads to a slashing of aircraft orders. At the moment that’s no bad thing, but how do you grow back any time soon?”EasyJet traded 1.4% lower as of 8:08 a.m. in London, taking the stock’s decline this year to 60%. The EGM is scheduled to start at 10 a.m. in the U.K. capital.CEO Lundgren has deferred the delivery of 24 planes to an undetermined date. He says EasyJet must be ready to renew its fleet when traffic finally rebounds and that the terms of the Airbus deal are uniquely flexible.The airline says it’s reduced its near-term capital expenditures by more than 1 billion pounds, though it has yet to announce job cuts of a level announced by peers. British Airways planning to cut 12,000 posts and Ryanair Holdings Plc and Virgin Atlantic Airlines Ltd. 3,000 apiece.Haji-Ioannou, 53, wants EasyJet’s existing fleet cut to 250 aircraft from 318. He has generally failed to attract broad shareholder support in previous battles with management, which have included clashes over pay and the Easy name.Attritional AttacksYet the attritional nature of his attacks has borne fruit. Barton’s predecessor as chairman, Mike Rake, announced his departure in 2013 less than six months after surviving a dismissal vote. EasyJet also pays out a higher-than-average 95% of its free cash flow, according to Citigroup analyst Mark Manduca.What’s different this time around is that rather than riding the crest of a decades-long surge in air travel, Haji-Ioannou’s call for a clampdown on spending comes with the industry mired in the deepest crisis in its history -- something that could turn more shareholders to his way of thinking. A decline of two-thirds in EasyJet’s share price will also focus minds, Manduca said.A defeat for Lundgren, a Swede who took over in December 2017 and is the same age as Haji-Ioannou, would still come as a surprise.The founder and his family collectively own about 34% of EasyJet, whereas the Luton, England-based company reckons it could have the backing of shareholders controlling 45% of votes, the Sunday Telegraph reported, citing an interview with Lundgren.A spokesman for Haji-Ioannou said they believe the vote will be very close and that many small shareholders have pledged support for their position. The vote is not a distraction but “a reaffirmation of shareholder democracy” that puts the interest of those risking their capital above “here today gone tomorrow” management, the spokesman said.Invesco, Ninety One U.K. and Phoenix Asset Management, the three biggest investors after the founder with a holding totaling of about 15%, have publicly pledged their support to management.Shareholder advisory firms Institutional Shareholder Services, Glass Lewis and Pensions & Investment Research Consultants have also recommended that people vote against Haji-Ioannou’s resolutions.‘Scoundrels’ JibeIn the last few weeks, the Greek-Cypriot entrepreneur has stepped up his campaign by questioning the nature of EasyJet’s relationship with Airbus in light of the manufacturer’s settlement earlier this year of a corruption case concerning aircraft sales. Haji-Ioannou has referred to the board and management as “scoundrels.”He’s also condemned other investors for failing to call EasyJet to account, said Britain’s Financial Conduct Authority should face a judicial review over a lack of action, and offered a 5 million-pound reward for evidence of wrongdoing that leads to the cancellation of the Airbus order.At the shareholder meeting, Haji-Ioannou plans to present questions including whether Airbus controls any EasyJet shares and if the carrier meets standards of a “going concern,” according to a statement from his EasyGroup business.Should he win the vote, EasyJet will be plunged into turmoil at the toughest moment in its 25-year history as European airlines haemorrhage an estimated $89 billion in revenue this year due to the pandemic, with the entrepreneur planning to call on Chief Operating Officer Peter Bellew to scrap the plane deal before the appointment of a new chief.EasyJet, which this week revealed that email addresses and travel data of 9 million customers were taken in a cyber attack, has said it plans to resume flights from 22 European airports on June 15, becoming one of the first airlines in the region to begin building up services as the coronavirus lockdown eases.Even if the motions fail, it’s hard to see Haji-Ioannou giving management much respite given heightened concerns about costs and cash flow in the post-virus era.“It will be helpful if it’s nice and clear cut,” said Andrew Lobbenberg, an analyst at HSBC. “He’s clearly on a mission here.”(Updates with shares in sixth paragraph, jobs situation, questions to be asked at EGM and cyber attack from eighth)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Abu Dhabi's Etihad considers future without A380, A350 jets - sources
    Reuters

    Abu Dhabi's Etihad considers future without A380, A350 jets - sources

    Abu Dhabi's Etihad Airways is planning to lay off 1,200 employees as it considers permanently grounding its Airbus A380s and never operating the A350s it has ordered, company and industry sources said. The state-owned carrier is reviewing its fleet strategy after the coronavirus pandemic hit travel demand, which Etihad's management expects will take years to recover, two sources said. Etihad may retire its 10 A380s early with them potentially never returning to service after the virus outbreak grounded the airline's passenger flights in March, the sources said.

  • Bloomberg

    Virus Sidelines A380 Superjet, the Biggest Plane in the Skies

    (Bloomberg) -- Airbus SE’s A380 superjumbo is proving to be too big to survive in many airline fleets after the coronavirus.The pandemic has already grounded planes and brought air-travel almost to a standstill. Now airlines are making strategic decisions which could hasten the demise of the world’s largest commercial jetliner.Air France-KLM said Wednesday it will book a 500 million-euro ($550 million) writedown from the early phasing-out of its A380 fleet, while Emirates, the world’s largest operator of the type, is said to be considering retiring as many as 65 of the double-decker aircraft.“What we’re seeing is the death of the quad,” said Agency Partners analyst Sash Tusa, referring to the plane’s four engines. “It’s hard to see which routes are going to need 500 seats in the coming two to three years.”The mammoth jet is a tough bet for airlines which are braced for demand not to return to prior levels until 2023 or later. Airbus had already opted to discontinue the A380 program as carriers looked to simplify fleets and upgrade fuel efficiency but now airlines around the world are opting to retire it early.Air France will switch to newer Airbus 350s and Boeing Co. 787s, it said in a statement on Wednesday. It plans to record the expense in the second quarter. The airline said a move to make its fleet more competitive also prompted the phase-out, originally scheduled for the end of 2022. Five of the A380s in the fleet are owned by Air France or on finance lease, with a further four on an operating lease.The early retirement comes a decade after Air France first started operations with the plane, and marks a symbolic blow because the giant model is assembled in France. Components like wings and fuselage sections are flown in or brought by barge and then wind their way down to Toulouse, where they are pieced together.Airbus is due to end production of the A380 in 2021, with 8 more aircraft to be delivered to Emirates and 1 to Japan’s ANA. Emirates is now seeking to cancel 5 of those deliveries, according to people familiar with the matter, with Airbus pushing back because the planes are already in assembly.Emirates has a fleet of 115 A380s and had planned to operate them through the end of the decade. Air France, on the other hand, had announced in July 2019 that it would replace its fleet of A380s with more efficient twin-engine models.Airbus declined to comment.(Updates with additional context, analyst comment from second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Air France axes A380, Emirates seen cutting deliveries
    Reuters

    Air France axes A380, Emirates seen cutting deliveries

    The world's largest airliner, the Airbus <AIR.PA> A380, took a step closer to the aviation archives on Wednesday as Air France said it would permanently axe its grounded fleet and sources said Emirates was in talks to reduce remaining deliveries. The superjumbo is close to the end of its production run after demand switched to smaller jets, and airlines including Air France <AIRF.PA> have been idling the double-decker temporarily because of the coronavirus crisis. Air France announced a fresh 500 million euro ($548.50 million) writedown as it permanently retires its nine jets, just over a decade after becoming the first European airline to operate them.

  • As flying returns, jetmakers seek to quell fears over cabin air
    Reuters

    As flying returns, jetmakers seek to quell fears over cabin air

    Boeing <BA.N> has appointed former engineering and development chief Mike Delaney to head wider efforts to build confidence, and Airbus <AIR.PA> leaders say the industry is moving from an initial crisis phase to securing public trust. Health officials are still quantifying various sources of transmission for COVID-19 disease caused by the virus, but attention focuses on the risk of catching it from airborne droplets from coughing or sneezing passengers as well as from touching infected surfaces. "It's about explaining what we do for the safety of passengers in the large sense: aircraft safety but also sanitary safety," Airbus engineering head Jean-Brice Dumont said.

  • Finnair sees 'green shoots' as some Asia flights restored - CEO
    Reuters

    Finnair sees 'green shoots' as some Asia flights restored - CEO

    Finnair <FIA1S.HE> is keeping its Asia focus and sees the "green shoots" of a coronavirus recovery from which it can emerge stronger, Chief Executive Topi Manner said on Monday, as the airline prepared to re-instate more flights for July. Finnair, which has built its business on competitive Europe-Asia services via its Helsinki transit hub, aims to restore about 30% of capacity in July with flights to China, Japan, Singapore and later Bangkok, the airline said. "There are signs that customers' willingness to travel is gradually increasing," Manner said in an interview, citing company survey findings that more than half of its customers were planning to travel again soon.

  • Simple Market Timing Strategies That Work - May 15, 2020
    Zacks

    Simple Market Timing Strategies That Work - May 15, 2020

    Have you ever dreamed of being that one in a million investor who has the talent to perfectly time the markets?

  • Why Boeing Shares Are Down Today
    Motley Fool

    Why Boeing Shares Are Down Today

    Shares of Boeing (NYSE: BA) fell more than 6% on Thursday morning after Delta Air Lines (NYSE: DAL) said it was permanently retiring its fleet of Boeing 777 aircraft by year's end. The announcement only confirmed what we already know -- that airlines are shrinking -- which might explain why Boeing's shares recovered somewhat after the open. Delta and other carriers have responded by shrinking their schedules and grounding planes.

  • Exclusive: Airbus to be 'resized,' could cut output again - sources
    Reuters

    Exclusive: Airbus to be 'resized,' could cut output again - sources

    Planemaker Airbus has told senior staff the company must be "resized" in plans to be set out around end-June and is ready to cut jet production again to tackle any second wave of the coronavirus crisis, people briefed on the matter said. Chief Executive Guillaume Faury told Airbus bosses to "face reality" in a briefing on Thursday on the crisis, which has idled an estimated 14,000 jetliners or two thirds of the global fleet and left manufacturers and airlines battling to save cash. Faury once again warned that Airbus may not survive without change and insisted that "radical," "proactive" and urgent steps were needed, according to people briefed on the presentation.

  • Airbus must be 'resized' to tackle crisis, bosses told - sources
    Reuters

    Airbus must be 'resized' to tackle crisis, bosses told - sources

    Planemaker Airbus <AIR.PA> has told top staff that the company must be "resized" in plans to be set out by around end-June and is ready to cut jet production again to tackle any second wave of the coronavirus crisis, people briefed on the matter said. Chief Executive Guillaume Faury told Airbus bosses to "face reality" in a briefing on the crisis, which has left an estimated 14,000 aircraft or two thirds of the global airliner fleet idle and manufacturers and airlines battling to save cash. Faury once again warned that Airbus may not survive without change and insisted that "radical," "proactive" and urgent steps were needed, according to people briefed on the presentation.

  • Airbus examining restructuring including job cuts - sources
    Reuters

    Airbus examining restructuring including job cuts - sources

    Airbus <AIR.PA> is exploring restructuring plans involving the possibility of "deep" job cuts as it braces for a prolonged coronavirus crisis after furloughing thousands of workers, industry sources said, though no decision is imminent. Chief Executive Guillaume Faury is expected to update managers on Thursday after warning staff last month that the firm's survival was at stake due to a slump in demand. Under French law, Toulouse-based Airbus cannot disclose restructuring plans internally before consulting trade unions through a formal exercise not expected before the end of May.

  • Qatar Airways in talks to defer Airbus, Boeing orders -SCMP
    Reuters

    Qatar Airways in talks to defer Airbus, Boeing orders -SCMP

    Qatar Airways, one of the Middle East's biggest airlines, is in talks with Airbus <AIR.PA> and Boeing <BA.N> to defer aircraft orders for several years, its chief executive was quoted as saying on Wednesday. “Well we are in negotiation with them, so I don’t want to talk about this, but yes it will be deferred for several years,” Akbar al-Baker told Hong Kong's South China Morning Post newspaper. The airline is also willing to provide capital to Cathay Pacific <0293.HK>, which it holds a 9.99% stake in, the newspaper reported.

  • EasyJet founder offers £5 million reward for help in cancelling Airbus order
    Reuters

    EasyJet founder offers £5 million reward for help in cancelling Airbus order

    EasyJet <EZJ.L> founder Stelios Haji-Ioannou is offering 5 million pounds for any information that leads to the cancellation of its order for 107 Airbus <AIR.PA> jets as he steps up his campaign to oust the budget airline's management. Haji-Ioannou, whose family owns a third of easyJet's shares, has argued for a decade that the airline's fleet expansion would destroy shareholder value and he has intensified his push for management changes since the coronavirus decimated air travel. In a statement on Tuesday, Haji-Ioannou said he was looking for tips or information from easyJet insiders about any suspicious dealings with Airbus, such as lavish entertainment or unexplained wealth.

  • Ryanair cools on Airbus, moves back towards all-Boeing fleet
    Reuters

    Ryanair cools on Airbus, moves back towards all-Boeing fleet

    Ryanair plans to move back towards an all-Boeing fleet by cancelling leases for Airbus A320s for its Lauda subsidiary and likely replacing 30 Airbus jets at the Austrian airline with Boeing 737s, Chief Executive Michael O'Leary told Reuters. Ryanair's purchase in 2018 of Airbus operator Lauda was pitched as a way to diversify the fleet of the budget airline group, which had until then exclusively flown Boeing jets and currently has over 450 737s. O'Leary, whose expansion plans have been curtailed by the grounding of Boeing's 737 MAX, said in March last year he was in early talks with Airbus about an order for 100 A321s and that Ryanair wanted to have a dual Boeing-Airbus fleet.

  • Bloomberg

    This Cozy Airline Carve-Up Is a Pandemic Chimera

    (Bloomberg Opinion) -- What do you get for the airline magnate who has everything? If he knows what’s best for him, the answer isn’t “another airline.”Rahul Bhatia, the biggest shareholder in India’s biggest carrier, InterGlobe Aviation Ltd., is evaluating data and considering a bid for Virgin Australia Holdings Ltd., a person familiar with the matter told Anurag Kotoky and Angus Whitley of Bloomberg News. He would bid via the vehicle he uses to invest in IndiGo, as India’s biggest budget airline is known, the person said.It’s not hard to see the attractions. IndiGo’s home market is fiercely competitive, with half a dozen major carriers duking it out even after Jet Airways India Ltd. was forced into bankruptcy last year. Jet was squeezed between the loss-making full-service flights offered by state-owned Air India Ltd. and IndiGo’s own devastatingly cheap fares. Australia, on the other hand, is more or less a duopoly between Virgin Australia — which was itself put into a coronavirus-induced administration last month — and a dominant Qantas Airways Ltd. That should offer the opportunity for the two carriers to cozily carve up the market between themselves.Opportunities to break into the Australian airline game don’t come along often. The last time was when Ansett Australia Ltd. collapsed just days after the Sept. 11 attacks. A fledgling Virgin Australia, at the time a budget carrier named Virgin Blue, was perfectly placed to capitalize.Despite the vast disparity in population, Australia isn’t that much smaller than India as a market, thanks to greater wealth and a higher propensity to fly. Traffic last year came to about 71 billion revenue passenger kilometers, roughly the size of the fast-growing Indian aviation market five years ago. It also has close links to India, raising the prospect that an Australian network could feed passengers via international flights into IndiGo’s domestic web of destinations. Indian-Australians make up close to 2% of the population, and the number of non-resident Indians — the subset of the diaspora who are most likely to take regular flights back to the motherland — is the largest after the U.K., U.S., Singapore, Nepal, and the Persian Gulf countries.(1)For all that, Bhatia should pass up the chance to have a crack at Virgin Australia. In its ruthless efficiency in controlling its home turf, Qantas behaves a lot like IndiGo, one reason that Australia has for a decade been a graveyard for ambitious foreign airlines. His best opportunities lie closer to home.Both Qantas and IndiGo exploit a rare and priceless phenomenon known as the S-curve, by which dominant airlines end up with more connections and a greater share of traffic the more planes they add. That makes life extremely difficult for competitors.Singapore’s attempt to set up a bridgehead via an outpost of its budget carrier Tiger Airways Holdings Pte. ended up being sold to Virgin Australia back in 2014 at a valuation of A$2.50 ($1.62), after years of struggle. AirAsia Group Bhd. showed fitful interest in establishing a bigger presence Down Under, but ended up mostly steering clear.Virgin Australia itself spent years trying to break the Flying Kangaroo’s dominance with the backing of strategic overseas players. Ordinary shareholders hold less than 10% of the now-worthless stock, with the balance being held by a rotating cast of carriers including Etihad Airways PJSC, Singapore Airlines Ltd., Hainan Airlines Holding Co., Qingdao Airlines, Air New Zealand Ltd., and Richard Branson’s Virgin Group itself. Their indifference to profits enabled Virgin to compete against Qantas for longer than many would have thought possible, but it hasn’t been enough to win the battle.The distance between Australia and India is too great to make connecting the two markets an easy play, too. IndiGo’s aircraft of choice is the Airbus SE A320neo, which some budget carriers have been using to open up longer-range routes — but it would be operating at its limits even on flights between India and Perth, which is a long way from Australia’s more populous east coast. That would necessitate Bhatia either using an unfriendly hub airport in Southeast Asia, or investing in bigger, more expensive twin-aisle jets.IndiGo is so powerful in its home market that it’s natural its owners should be looking at overseas expansion — but as we’ve argued, the better place for that is in the Persian Gulf, where a far bigger Indian diaspora is closer to home and largely flown across the Arabian Sea on Gulf carriers such as Emirates.With a pandemic-induced passenger drought threatening most non-state-backed players in the global aviation market, this is no time for Bhatia to go planting seeds in Australia’s barren soil.(1) India also counts foreign citizens with Indian ancestry as "Persons of Indian Origin" but they're as a group probably less likely to travel to the subcontinent frequently.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Qantas pauses plane deliveries from Airbus, Boeing due to virus
    Reuters

    Qantas pauses plane deliveries from Airbus, Boeing due to virus

    Qantas Airways Ltd said on Monday it had advised Airbus SE and Boeing Co that it did not expect to take delivery of any new planes in the near term as it grapples with a plunge in demand due to the coronavirus pandemic. The airline had expected to add three Boeing 787-9 jets to its fleet by the end of 2020 and to start taking delivery in August of the first of 18 Airbus A321neos due by 2022. There is no longer a specific timeline for them to arrive because the market is too uncertain, a Qantas spokesman said, confirming a report on travel website Executive Traveller.

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