The food scene and the tequila are great in Mexico. The airline industry? Not so much—at least at the moment. Everybody lost money in the first quarter of 2017. In the second quarter, only one airline—VivaAerobus—did merely okay. What has happened to the usually high-flying Volaris? Even Interjet has outperformed Volaris in the first half. And despite lackluster success, these airlines are growing like gangbusters. Meanwhile, American Airlines goes to great lengths to demonstrate that less seat ...
Oct 04, 2017•41 min•Ep. 82
Jet Airways didn’t give up the ghost. Instead, it rose from the hospital bed and plodded toward recovery, and today the Indian airline is the proud owner of a profit streak of nine consecutive quarters. How did Jet avoid its near-death experience? Speaking of near death, Air Berlin is watching its planes get repossessed, its pilots strike and its time run short. Meanwhile, easyJet is interlining with Norwegian, WestJet and surely others to be named later. Why is this a particularly good move? Al...
Sep 19, 2017•38 min•Ep. 81
Cathay Pacific has seen all its oxygen sucked out of the room by the hyper growth of the Chinese carriers. Is there anything to be done? Sometimes waiting is the best option. Australia has two major airlines with two very different stories to tell. While Qantas is enjoying a golden age, Virgin Australia is a tragic tale in the making. Meanwhile, Air New Zealand, taking advantage of some of the same forces lifting Qantas, had a second quarter it could be proud of despite a 21% increase in fuel co...
Sep 05, 2017•35 min•Ep. 80
After losing $300m in 2016 as a result of some horrific exposure to terrorism and political tumult, things are looking up for Turkish Airlines. In its second quarter, the airline posted a 5% operating profit margin and with that likely will turn a profit for the full calendar year. How did Turkish do it? Other airlines facing some political duress include Korean Air and Asiana. South Korea’s two major carriers are caught in a crossfire of political tension among the U.S., China and North Korea. ...
Aug 15, 2017•31 min•Ep. 79
United is still trailing its peers, but can it catch up? That’s the question we weigh first in this episode. In the second quarter, American Airlines bested United with a 16% operating margin versus United’s 14%. One thing that went right for AA: Latin America. One thing that went wrong for United: Asia. Meanwhile, little is going wrong for Alaska Airlines, which is enjoying life in all the right markets at the right time. JetBlue’s transcontinental routes, which used to be a vulnerability, are ...
Aug 01, 2017•47 min•Ep. 78
The airline is on such a roll that not even a grouchy demagogue can stop Delta. The Atlanta-based carrier posted a better second quarter than it did last year, and it leaves Delta with at least a slim shot of having its best year ever. Low fuel prices were a defining factor for the industry during the quarter, and Delta took full advantage. But it saw success on the revenue side too. Not all airlines were so lucky, including Norwegian, which posted a slightly negative operating margin during a q...
Jul 18, 2017•43 min•Ep. 77
Terror attacks… a blockade… Alitalia… The first half of 2017 has been interesting—even against the airline industry’s high standard in that department. In just a 30-minute episode we attempt to unpack the first half of 2017. Despite a lot of excitement, the most significant story of the year—low oil prices—is really rather mundane, but still a very big deal. For instance, it means the U.S. earnings bonanza might be more sustainable. Europe is enjoying one of its better years in recent memory. Gu...
Jul 04, 2017•33 min•Ep. 76
So this is happening: A major international airline faces a blockade. We admit it—this is a new one for us, with little to no history as a guide. Nonetheless, Qatar Airways faces a travel and trade embargo from four nearby countries, which overnight wiped 18 destinations off Qatar’s route map and essentially propped up a legal wall in the airspace to the south and west of Doha. This hardship—and it surely is one, despite management’s defiant swagger—comes at a time when all three major Gulf carr...
Jun 20, 2017•30 min•Ep. 75
Ryanair was one of just three individual airlines in Europe to post an operating profit in the first quarter. The success came not only by way of the airline’s juggernaut of a business model, but also because Ryanair was one of the few to see a year-over-year decline in fuel costs. One European airline had an even better Q1 than Ryanair. British Airways chalked up an 8% operating margin in the historically weak first quarter. Air France/KLM, by its own standards, had a good quarter, in part beca...
Jun 06, 2017•32 min•Ep. 74
Having just weathered a once-in-a-generation economic crisis, the airlines of South America just enjoyed a smooth first quarter. All the major South American airlines profited, and some even posted margins to brag about. But in Mexico, things were miserable. All four major carriers there lost money in the quarter, and some did so in a ghastly fashion. In fact, Volaris, who’s been a leader of the pack in recent years, is the country’s biggest loser so far in 2017. Meanwhile, Aeromexico managed we...
May 24, 2017•29 min•Ep. 73
The earnings picture for U.S. carriers in the first quarter was much worse than last year’s Q1—but that doesn’t mean it wasn’t good. It was indeed good—and good is good. Their success comes while wrestling with rising labor and fuel costs, and fickle demand. Allegiant continues to lead, and with confidence surely brimming, it’s buying new planes and slowing growth. American is benefiting from improving conditions in South American and at its Dallas-Fort Worth hub. Despite a big profit decline, S...
May 10, 2017•37 min•Ep. 72
Delta saw its operating profit margin slashed severely in the first quarter compared to last year’s Q1. Nonetheless there are plenty of reasons to smile—that’s how good things are at Delta right now—including beating rival United Airlines, which posted a much smaller profit. But the game isn’t over, and United has plenty of valuable cards to play, including improvements to its hub connections and operations. Also, what do the first few earnings reports tell us about the overall U.S. airline mark...
Apr 25, 2017•33 min•Ep. 71
The merger of Alaska Airlines and Virgin American is now well under way and begs the question: How is the integration taking shape? In a word: rosy. Of course, Alaska will be sacrificing the Virgin brand. But Alaska’s management says it’s finding more synergies on both the cost and revenue sides than expected. One of the more interesting moves is that Alaska won’t be joining the Big Three and JetBlue in providing a lie-flat product on transcontinental routes. In other news, Norwegian is adding t...
Apr 11, 2017•38 min•Ep. 70
When is a $2 billion annual profit disappointing? Answer: When you’re a giant airline group like Lufthansa, and $2 billion amounts to a mere 5% operating margin—and that lackluster result comes despite fuel costs dropping 16% year over year. But there are a few signs of hope. Meanwhile, American Airlines is purchasing a $200-million stake in China Southern. Frontier Airlines and Silver Airways are ending their short-lived Cuba service. And LATAM, still recovering from Brazil’s economic and curre...
Mar 28, 2017•31 min•Ep. 69
Once again we consider the ongoing demand problems in Turkey. The numbers are in, and they’re not pretty. Turkish Airlines posted a $300 million loss in 2016. Pegasus Airlines chipped another $50 million loss, a comparably bad number. But there are signs of hope. One of those signs could be the recent decline in oil prices. If this is the beginning of a downward trend, many—but not all—airlines around the world will rejoice, especially in the U.S. Pop quiz: What do the giant, mature airports Ams...
Mar 15, 2017•31 min•Ep. 68
With its fourth quarter results and a standout 2016, IAG, the airline group that includes British Airways, Iberia, Aer Lingus and Vueling, continues to separate itself from the other two members of Europe’s Big Three airline groups. And leading the way was IAG’s still rather new acquisition, Aer Lingus, which had the highest annual operating profit margin of all the IAG units in 2016. Posting even better numbers was Air New Zealand, which saw record profits for the year. Nearby, Qantas seems to ...
Feb 28, 2017•33 min•Ep. 67
Air France/KLM had some good news in 2016. For one thing, its Transavia unit broke even. Also, KLM made a decent profit. But the story is rather disappointing from there, with the group posting a mere 4% operating margin for the year. Could some positive revenue trends turn 2017 around? Air Canada and WestJet together have become quite a rivalry. Depending on where you put the decimal point, Canada’s two dominant carriers tied in the 2016 profit race as Air Canada closed the gap. Finnair, Virgin...
Feb 22, 2017•37 min•Ep. 66
Europe certainly has its share of struggling airlines, but Ryanair, easyJet and Wizz Air are not among them. And for Ryanair and Wizz, fourth quarter earnings simply topped off a triumphant 2016. (easyJet has yet to report on its fourth quarter.) In the U.S., Spirit’s fourth quarter numbers were great—just not great for Spirit, as the hunter has become the hunted. Meanwhile all those LCCs and ULCCs were bested in 2016 by Alaska Airlines, a carrier that’s never been happier to call Seattle home. ...
Feb 14, 2017•34 min•Ep. 65
Japan Airlines is enjoying a charmed life right now. How good is it? In 2016, JAL was the most profitable of the large global airlines outside the U.S. All Nippon Airlines is also doing pretty well. ANA has narrowed the gap between it and JAL, which is still benefiting from the retrenching that followed its 2010 bankruptcy. But both are facing revenue pressures. Meanwhile, Avianca chose United as its dance partner in the western hemisphere. What that dance will look like still remains to be seen...
Feb 07, 2017•25 min•Ep. 64
While the revenue story has improved for U.S. carriers, the cost story has become a headwind. Still, as American Airlines demonstrated in its fourth quarter results, costs are a headwind that can be overcome. With that, AA joined Delta and United in delivering solid fourth quarters and downright strong full-year results. And things only got better from there. Southwest delivered a higher profit margin than the Big Three despite new labor contracts and higher fuel costs. JetBlue continues to ride...
Jan 31, 2017•26 min•Ep. 63
By just a tenth of a percent, United’s fourth quarter operating profit margin bested that of Delta—and likely that of American, which reports later—making United, for the quarter, No.1 among the Big Three U.S. carriers. So, has the natural order shifted from United being a perennial laggard to leader? We’ll see. But, make no mistake, United is performing well. Not performing well is Cathay Pacific, an airline that has in recent years been stymied by intense competition. Some job cuts notwithstan...
Jan 24, 2017•32 min•Ep. 62
Rising labor costs at Delta dented its fourth quarter results significantly—but not enough to prevent the airline from posting a terrific profit for 2016. And the big story within the story is that revenues have stopped falling. All in all, Delta remains bullish, which is a nice way to kick off earnings season. Also in this episode, we consider a rumored Etihad-Lufthansa merger. One airline that certainly doesn’t need a merger is Volaris, but how worried should it be about U.S.-Mexico relations?...
Jan 17, 2017•29 min•Ep. 61
SAS has tried and tried to turn itself around, but to no avail—at least judging by its recent earnings report. In fact, on profits alone, the airline’s third quarter was a step backward. What’s going wrong, and can it be fixed? Meanwhile, Frontier Airlines posted a tremendous profit in the third quarter, with an operating margin among the best of the best. And let’s consider JetBlue for a moment. Here’s an airline that for two years has been ascendant, but unlike Frontier, they aren’t pursuing a...
Jan 10, 2017•34 min•Ep. 60
Call it our year-in-preview show. In this first episode of 2017, we look at some of the more interesting stories that are ushering in the airline industry’s new year. Of course, 2017 doesn’t promise answers to all our questions. But we can hope, can’t we? Some of those questions: Leisure demand was one of the defining stories of 2016—will the trend continue? Is the burgeoning low-cost longhaul model for real? What about premium travel? Will Airbus and Boeing see a rebound in aircraft orders? Wil...
Jan 03, 2017•43 min•Ep. 59
If anybody needed a reminder that the airline business is an interesting business, they got it last week as Air Berlin announced it will be handing over a big chunk of itself to arch competitor Lufthansa. Will Air Berlin be saved by shrinking itself? Not stopping there, Lufthansa decided it would also become the full owner of Brussels Airlines. Are either of these acquisitions a good thing for Lufthansa? Meanwhile, Air Canada continues to treat the world like it’s a buffet, loading its plate wit...
Oct 05, 2016•34 min•Ep. 58
South African Airways finally published its fiscal year results for the 12 months ending March 2015. Yes, that’s 2015. And the result—a $442m net loss—wasn’t worth the wait. But with the Ebola scare and high oil prices now in the past, how is the airline doing today? The short answer: We’re not too encouraged. But its competitor Comair is doing pretty well. Kenya Airways seems to be on the mend. Unfortunately, Fastjet is skidding. Meanwhile in Asia, Singapore Airlines reported some ominous load ...
Sep 27, 2016•31 min•Ep. 57
Because Frontier Airlines is a non-publicly-traded carrier (which, for one thing, means it doesn’t have earnings calls), it’s all the more interesting to interview the airline's CEO Barry Biffle. Of course, we asked about a possible merger with Spirit or a possible IPO. Not surprisingly, we didn’t get too far there, but Biffle did open up on some interesting topics, such as Frontier’s successful second quarter, unit revenue pressures and what it takes to grow capacity 20% per year. We talked fle...
Sep 20, 2016•23 min•Ep. 56
Despite a major oil bust and the weakening currency that followed, Canada’s airlines continue to plod along. Make no mistake, macro issues are leaving a mark on the earnings reports of Air Canada and WestJet, but the story is more about resiliency than infirmity. Meanwhile, a similar story—one that also includes an oil bust, a weak currency and nonetheless profitable airlines—is playing out in Mexico, where its four airlines of size (Aeroméxico, Volaris, Interjet and VivaAerobus) posted mixed re...
Sep 13, 2016•33 min•Ep. 55
Qantas reported a best-ever annual result. Not bad for a company that’s 95 years old. And not bad for a company that was barely breaking even just a few years ago. Virgin Australia, on the other hand, with a 2% operating margin, isn’t breaking any records—well, any records you’d want to break, that is. And then across the Tasman Sea is Air New Zealand… way out there… all alone… with nothing to keep it company except a whopping 15% operating margin. From there, things take a bad turn as we check ...
Sep 06, 2016•38 min•Ep. 54
Korean carriers Asiana and Korean Air are being squeezed between rapid growth from Chinese carriers and new capacity coming out of Japan. But nonetheless, the two Korean carriers posted some of the most improved earnings among widebody carriers worldwide. Japan Airlines and All Nippon, meanwhile, both regressed in their year-over-year earnings despite a strengthening yen and lower fuel costs. Dismal demand is the culprit. In South America, LATAM is wrestling with the economic breakdown in Brazil...
Aug 16, 2016•24 min•Ep. 53
