March 29, 2016
If the U.S. airline market were to see even more consolidation, what kind of effect would it have? That’s one question we consider in a discussion about the possible acquisition of Virgin America by another airline. We also talk about possible consolidation in Europe, where it’s a more urgent need. There are reasonable airline pairings to be made there, including IAG tying up with Finnair. But will it ever happen?
Virgin Atlantic, meanwhile, had a decent 2015. Will the profits continue in 2016 with Norwegian breathing down its neck? And lastly, Israel’s El Al had one of its best years ever despite a host of challenges—but Israel’s open skies agreement, which ushered in more competition, doesn’t seem to be a challenge at all.
March 22, 2016
Attacks at airports are rare, and Tuesday’s bombing at Brussels Airport will no doubt have repercussions around the world. Which airlines will see the worst financial impact from the attacks? Brussels Airlines, not surprisingly, is most vulnerable. Unfortunately, the airline is not starting from a position of strength. Its 2015 earnings report released last week depicts an improving airline, but not quite a healthy one.
Lufthansa is another airline likely to see revenues suffer in the wake of the attacks. And although the Lufthansa group is certainly a strong company, its fourth quarter earnings report was a disappointment. Lastly, will the Brussels bombings usher in another wave of security measures at airports around the world?
March 16, 2016
It’s good to be a Gulf carrier—Gulf carriers are well positioned to connect the whole world. But it might be better to be a near-the-Gulf carrier like Turkish Airlines. Turkish offers a blend of service as an intercontinental carrier and also as a gateway to an entire continent. We discuss Turkish’s fleet, revenue concerns, growth plans and what kind of threat Pegasus poses. Cathay Pacific had a rather ordinary fourth quarter, but the Hong Kong carrier was likely happy to get that.
In South America, LATAM might be thinking the same thing despite very different circumstances. Ethiopian Airlines had a terrific quarter, growing revenues and notching a 10% operating margin. And Air New Zealand and United announced a joint venture just days after we discussed it on the Lounge. Coincidence?
March 8, 2016
After hitting the floor in 2013, Qantas, has—like a boomerang—come all the way back and more. In fact, the Australian carrier set an annual profit record in 2015. Despite enjoying the same advantages inherent to the Land of Oz right now, Virgin Australia has not found the same level of fortune. But in terms of operating margin, at least, there’s one airline in that corner of the world outpacing both those carriers as Air New Zealand continues to defy gravity and surprise the editors of Airline Weekly.
In Bogotá, Avianca appears to be weathering—in pretty good fashion—the economic storm that’s consuming Brazil right now. Aeroflot is doing its own bit of weathering, demonstrating its resiliency in a tough home economy. And lastly, United grapples with some shareholders who want changes to the airline’s board.
March 2, 2016
IAG, the airline group that includes British Airways, Iberia, Vueling and Aer Lingus, is continuing its run of success—a run that probably has peers such as Air France/KLM and Lufthansa feeling a bit envious. In fact, while those two companies struggle with labor pains and more, IAG just posted its most profitable fourth quarter since BA and Iberia merged in 2011. Speaking of combining airlines, the Aer Lingus acquisition is looking more and more like a smart move.
Mexican flag carrier Aeroméxico has a peso problem, but it’s managing it fairly well. And like every other airline in the world (okay, not quite) it’s planning a joint venture with Delta, and history has shown that’s usually a good thing. Meanwhile, Aeroméxico’s competitor Volaris continues flexing its ultra-low-cost muscle. And, of course, we talk about Republic Airways’ unconventional bankruptcy.