February 24, 2016
What’s it gonna take to fix Air France/KLM? The airline group has a number of problems—from labor inflexibility to a soft French economy—all in a very competitive part of the world. But there are reasons for hope: Gulf carriers could one day slow their growth, Air France/KLM still has the gold standard in joint ventures and, heck, labor concessions are always a possibility.
Air Canada improved its 2015 operating margin from 6% to 11%—no easy task in a country that’s seeing economic and currency headwinds. The bad news for Copa Airlines is that its operating margin dropped from 18% to 7%. The good news is that Copa still has a profit margin at all, as it’s an airline heavily exposed to troubled Brazil and Venezuela. And why doesn’t Virgin America want to offer a basic economy seat option?
February 17, 2016
Finnair, Norwegian and Icelandair all had rather forgettable off-peak fourth quarters, but not because of the chilly weather they are all enduring. Rather, each has a unique set of challenges and opportunities. Finnair’s challenges include exposure to Asia and transatlantic competition, but there’s hope in seat densification. Norwegian is painfully exposed to Norway’s struggling oil industry, but they have a grow-baby-grow strategy. And Icelandair is perhaps doing the most with less. After all, the airline has never had a profitable fourth quarter until 2015. Icelandair has managed to get a good portion of its revenues in strong-currency countries and keep its costs in a weak-currency country. Hint: That’s a good thing. We also consider Spirit’s ticket revenue pressures and how Hawaiian is handling an up-and-down Japanese yen.
February 10, 2016
Singapore Airlines swung back to solid profits in 2015. Does this turnaround mean the airline is returning to its former glory, not seen since 2010? Or are low fuel prices just making everyone look good? Korean Air and Asiana continue to struggle with profit margins that barely stayed in positive territory. And the two Korean carriers are facing a new threat by way of some possible deregulation from China’s government.
India’s Jet Airways is seeing a dramatic improvement in its profits—could this carrier also be returning to its former glory? WestJet managed a nice fourth-quarter profit despite currency problems and a home market vulnerable to oil prices. And lastly, we consider Delta CEO Richard Anderson’s retirement.
February 3, 2016
JetBlue’s big fourth quarter was kind of a big deal. Low oil prices essentially mean that every airline is making money right now, but JetBlue’s 21% operating margin is about more than just oil prices. The airline is changing, and the results are visible in the earnings. American Airlines set a record for annual profits in 2015—a triumph no doubt, even if the airline’s revenue picture is as ugly as a motel painting. United may have Asia’s slowdown to contend with, but American has Brazil where “crisis” is way too weak of a word. And lastly, in Japan, All Nippon (ANA) and Japan Airlines (JAL) have a bit of a rivalry of their own, with JAL posting exemplary fourth quarter earnings but ANA making great competitive strides.