October 31, 2017
With most of the U.S. airlines having reported third-quarter earnings, it’s now clear that rising revenues aren’t keeping up with rising costs. While every U.S. airline fell victim to this condition, some are weathering it better than others. United and American Airlines were a couple of the “others” stumbling in Q3—at least compared to Delta. Neither hurricanes in Florida nor the horror in Las Vegas helped Allegiant, but it was a 19% increase in operating costs that really hurt profits.
Spirit saw $40m wiped out by hurricanes. Southwest and JetBlue both maintained margins near last year’s level, but JetBlue’s hurricane problem could be a fourth quarter story with Puerto Rico’s slow recovery. Things are good at Alaska Airlines, despite some transcontinental trouble. Lastly, Hawaiian saw year-over-year profits dip so mildly and starting from such great heights that one might think there’s no trouble in paradise. Then why did Hawaiian’s stock plummet last week?
October 17, 2017
Despite being dinged by rising costs, Delta opened the third-quarter earnings season with its customary show of strength. Revenues rose 6% on just 2% growth, and it posted a 16% operating profit margin. While things aren’t quite as good in Europe, airlines there have much to look forward to, namely the elimination—one way or another—of Monarch, Air Berlin, Czech Airlines and possibly Alitalia. Is that enough to lift other European carriers? Lufthansa seems especially confident. It’s looking to not only lose a competitor in Air Berlin but also gain planes for its Eurowings unit—and it’s placed a bid for parts of Alitalia.
Meanwhile, Bombardier might have found a solution to its Boeing problem by—wait for it—partnering with Airbus. Lastly, Southwest appears to be at last headed for Hawaii. No doubt the mai tais will be nice, but can the LCC compete there?
October 4, 2017
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 pitch doesn’t necessarily mean less legroom. Frontier, despite outward appearances, is enjoying perhaps its best results ever. Some of the smaller Gulf carriers are surging. And, lastly, there’s trouble in Thailand.