Airline Weekly Lounge

Airline Weekly Lounge Episode 51: Air France Is Missing Out

August 2, 2016

The second quarter year-over-year profit margin improved at Air France/KLM, but only because of a huge windfall from fuel. In fact, the real story is that the airline group is largely missing out on profits that normally would come from such a lift from fuel. Another airline group, IAG (the parent company of British Airways, Iberia, Vueling and Aer Lingus), did better despite the Brexit vote. But IAG’s results were nothing like Ryanair, who actually lowered unit costs even after excluding fuel, which lowered costs further still.

In the U.S., JetBlue continued the profit parade, but it did so rather modestly compared to the giant profits of its peers. Spirit is still cruising along, but conditions in the U.S. now leave the LCC slightly outside its comfort zone. It shows when you compare its results to, say, Southwest. And then there’s Allegiant, who at the moment is certainly comfortable towering over everyone.

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