Contributo molto interessante, per quanto riguarda la frammentazione nei cieli europei pubblico questa analisi nella quale si parla anche di air berlin e alitalia
6 MOODY’S CREDIT OUTLOOK 2 OCTOBER 2017
Air Berlin Liquidation Will Hasten Airline Consolidation, a Credit Positive for the Sector
On 25 September, insolvent German airline Air Berlin said it has chosen Deutsche Lufthansa Aktiengesellschaft (Lufthansa, Baa3 stable) and UK low-cost airline easyJet Plc (Baa1 stable) as the two preferred bidders for parts of its passenger airline business.
Air Berlin’s liquidation and split of its business between these two preferred bidders will improve their competitive positions in Germany and Austria and result in greater pricing discipline and more rational capacity allocation, a credit positive for Europe’s airlines. Although the purchase prices have not been determined and there is no certainty that any transaction will proceed, we do not believe the purchase prices would be high enough to meaningfully change Lufthansa’s or easyJet’s financial profiles or strong liquidity positions.
Air Berlin, Germany’s second-largest airline by market share, entered insolvency proceedings on 15 August.
With revenue of €3.8 billion in 2016, Air Berlin has a market share of around 12.7% in Germany and 2.2% in Western Europe. The airline has been struggling for many years but did not default earlier because it had financial support from its largest minority shareholder, Etihad Airways PJSC (unrated). However Etihad withdrew its support in August, four months after it withdrew support to Italy’s Alitalia SpA (unrated).
Etihad had purchased minority stakes in both airlines as part of a strategy to feed more passengers through its Abu Dhabi hub, but has not been able to turn around the two loss-making businesses. Alitalia filed for bankruptcy in May 2017 and has been put up for sale, with binding offers due on 2 October.
The situation around Alitalia is evolving and the final outcome is uncertain, but we believe it is unlikely to remain an independent airline even if the Alitalia brand is discontinued. If Alitalia is divided up and absorbed by a number of other airlines, which we consider the most likely outcome of the insolvency procedure, it would remove yet another large European carrier from the sector, furthering industry consolidation.
A less fragmented European market, with reduced overcapacity, would be positive for the sector and Western Europe’s five large airline groups, Lufthansa Group; IAG, which includes British Airways plc (Baa3 stable) and Iberia; Air France-KLM; Ryanair and easyJet. Although a number of smaller airlines still serve some market segments, the number of large airlines in Western Europe has declined significantly in the past 10 years.
Lufthansa acquired Swiss Airlines in 2005 and Austrian Airlines in 2009. Earlier this year, it acquired the remaining stake in Brussels Airlines it did not already own. These carefully executed acquisitions have widened Lufthansa’s home market to four countries. Similarly, IAG, formed by the merger of British Airways and Iberia in 2011, has increased its scale and extended its home markets to include the UK, Spain and Ireland with the additional acquisitions of Spain’s Vueling in 2013 and Ireland’s Aer Lingus in 2015. Air France and KLM merged in 2004 and recently acquired a 31% stake in the UK long-haul airline Virgin Atlantic.
The mergers and acquisitions have contributed to a healthier market structure with fewer national flagship carriers and less overcapacity. However, the European market is likely to consolidation more because lowcost carriers Ryanair, easyJet and Norwegian Air have captured a high share of the short-haul market and continue to curb incumbent airlines’ fares and profitability. Consolidation will support the efforts of the three enlarged legacy airline groups to improve their cost structures and enhance their scale, which are critical to their future success.
Sven Reinke
Senior Vice President
