January 31, 2017
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 its strong Boston base and healthy transcontinental markets to spectacular heights. And then there’s Hawaiian Airlines—the only carrier (of those reporting so far) who didn’t see costs rise faster than revenues. It’s all smiles so far in the U.S. earnings season, but Hawaiian’s smile might be brightest.
January 24, 2017
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 notwithstanding, investors are waiting for a comprehensive turnaround plan at Cathay. Meanwhile, we introduce a new segment and pose some interesting questions such as: Why is Emirates flying Athens-Newark? Will JetBlue catch Spirit in terms of profitability? And if the U.K. follows through with a so-called “hard Brexit,” will Ryanair abandon its domestic service there?
January 17, 2017
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? And in India, Go Air, Indigo and now SpiceJet all have placed fairly big aircraft orders. Are they too ambitious? And is Jet Airways, which doesn’t have as many aircraft on order, being too cautious?
January 10, 2017
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 tried-and-true business model. At times JetBlue looks like a legacy carrier with a lie-flat bed, and at other times it looks like an LCC, densifying their cabin and chasing ancillaries. Is it smart to do both? Also in this episode: Delta, Transasia, Asiana, Korean Air, Spirit, Allegiant and more.
January 3, 2017
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? Will the CSeries continue the momentum it saw in 2016? Will Singapore Airlines finally get out of its rut? Where will Qantas fly its B787-900s? Will Ryanair or easyJet interline? Will the Gulf carriers continue to decelerate growth? Will Air Canada continue its aggressive expansion? And in the U.S., have we finally seen a peak in the mighty earnings cycle of 2015/2016?