July 31, 2018
So far all U.S. carriers have reported shrinking year-over-year profits in the second quarter. But nobody’s margin decline was worse than that of JetBlue, which posted a 9% operating margin, down from 19% the year before. Allegiant had the best margin of the bunch, narrowly besting Southwest and Delta, both of which had shining quarters.
American’s quarter was marred by its mishandling of basic economy, plus it wasn’t helped by its domestic-heavy network. Alaska has been lacking the right product to take advantage of booming premium demand in the transcon market. Spirit, while still quite profitable, is learning to live in a world where big carriers now pay attention to it. Hawaiian couldn’t have been happy with its nine-point margin decline. Speaking of happy—that might describe United, which showed surprising resilience in Q2.
July 17, 2018
Rising costs aren’t keeping Delta down. Delta overcame a 33% year-over-year increase in fuel costs to produce more than $1.2b in net profits (excluding special items) and a handsome 16% quarterly operating margin. In fact, despite the increased costs, Delta almost matched last year’s 18% Q2 margin. And the airline thinks it can return to improving margins by year’s end.
Meanwhile, it’s hard to imagine Norwegian’s results being more different. Norwegian chalked up a negative 3% operating profit margin, a ghastly result for the usually strong second quarter. JetBlue ordered CS300s—except now we’re calling them A220-300s. That deal surely made Airbus and its new partner Bombardier happy. In turn, Boeing is partnering with Embraer. What does this shakeup to the aircraft manufacturer space mean?
July 3, 2018
Frontier Airlines has had one of the most topsy-turvy histories of any airline, and its first-quarter earnings report was no exception. Sporting a wild animal on each tail, the airline has been soaring in recent years.
In 2017, Frontier had the seventh best operating profit margin in the world. But something happened in Q1 2018, as its margin was cut in half. Meanwhile, Air France/KLM searches for a CEO. Also, how important is it that United Airlines—by a wide margin—gets more revenue from Asia than Delta and American? Norwegian continues to lose money and remains, for the moment, without a buyer to bail it out. But at least Norwegian isn’t Fastjet, which notched a negative 55% operating profit margin in 2017.