Legacy in Motion

Tuesday, June 16, 2020

Lockdowns Ease, Airlines Takeoff, But a Long Way to Go [Flickr]

airwaysnc posted a photo:

The corona induced measures for lockdowns are now slowly being eased by the governments. Earlier, the coronavirus had forced the world economy to a standstill, the aviation sector saw a painful definite slump in business during the past two months. Now, as the lockdowns are being eased, skies are clearing up, various airlines slowly are adding back their flights and travellers have started arriving at airports.

The airline industry has really been grounded during lockdowns for months after a fall in passenger demand forced American Airlines, United Airlines and others to sever flight schedules. They were among the hardest hit companies as the coronavirus sharply shut down overseas markets and then thrust the world into a pandemic-induced slump.

Air travel had plunged to levels unseen since the early years of the business jetliner days in the 1950s. The industry had to take a $25 billion bailout pack from the U.S. government to survive as it grounded flights and cut staff. When it saw revenues of major airlines being quickly drying up, Warren Buffett’s Berkshire Hathaway unloaded all of its holdings in the major airlines.

Aviation analysts do not foresee passenger traffic to get back to 2019 levels anytime soon after lockdowns. But the airlines look to salvage some lost damages during the key summer travel season

Also Read: Southwest acknowledges Berkshire Hathaway takeover rumours

Last week, American Airlines stated that following month it will run 55% of the U.S. ncairways.co/lockdowns/

source https://www.flickr.com/photos/165450454@N07/50014732166/

Wednesday, June 10, 2020

Airport Takeovers Witness Crash Landings and Grim Prospects [Flickr]

airwaysnc posted a photo:

In December 2018, in one of the world’s top airport takeovers, the French giant Vinci had bought a 50.01% stake in UK’s second-busiest airport, Gatwick. In 2009, Global Infrastructure Partners (GIP), had bought the whole airport for just £1.5bn.

In 2006, GIP had bought London City airport in London’s Docklands for £750m. Later it sold it to a Canadian-led consortium of pension funds for £2bn, more than 40 times its earnings. By 2019, Gatwick had paid its shareholders £1.5 billion since 2009.

Gatwick Airport

Vinci had then become the world’s second-biggest airport operator. It paid investors, led by GIP, £2.9bn for the stake. At that time, the Brexit warning aided Vinci to get 50.01% stake in for ‘reasonable’ £2.9bn.

Investors generally assumed that airports were a safe bet for predictable cash flow and high returns. Infrastructure was the hot ticket for global investors because it was viewed as a long-term, stable asset class to provide inflation-linked cashflows. Insanely high prices used to be paid in such airport takeovers in the past. Investors competed for anything with predictable cash flow, such assets changed hands for huge sums in the hunt for attractive returns. High networth individuals - bankers, CEOs, executives and politicians - used to regularly meet and celebrate in luxurious hotels of the world to make deals worth trillions.

Then by the end of the last decade, covid-19 hit.

Nearly all sectors of the economy came crashing down. ncairways.co/airport-takeovers/