Airline Weekly Lounge

One of the bright spots in the Lufthansa Group’s second quarter earnings report was its Swiss unit, which bested Lufthansa mainline, the Austrian unit and even the healthy maintenance unit. Meanwhile, Eurowings was the worst performing airline of the group, with a negative one percent margin—but that was a great improvement from the first quarter. All in all, it added up to Lufthansa underperformi...

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...

Earnings season is in full swing and really there’s too much to talk about within the average commute or treadmill run. So we’ll talk fast. And in this episode, our fast talk starts with American Airlines’ billion-dollar quarter and, naturally, how that compares to rivals Delta and United. Speaking of which, United posted a second-quarter operating margin that was competitive with Delta and AA (al...

Delta Airlines gets a lot of play in this episode, but it’s not because we’re obsessed with Delta. Rather, there are two practical reasons: First, Delta is the the earliest of the big airlines to report. Secondly, with Delta’s global reach, you can learn a lot about the whole industry from this airline. What did we learn? Revenues continue dropping, but so did costs. Delta remains bullish on its W...

Brazil’s Azul is no doubt an innovative airline. But has it become too clever by half with its low-cost longhaul venture? A couple years into the experiment, we discuss it in this episode. Meanwhile, its competitor Gol is asking for relief from its bondholders. When the economy recovers, what are the prospects for both of these airlines? Further north, a rumor has been floated that Delta is intere...

Turkish Airlines and its cross-town rival Pegasus were seeing trouble in their business before the attack on Istanbul’s Ataturk International Airport. In this episode we try to assess—or at least speculate—how the attack will further hurt the two airlines’ prospects. Also, could Turkish’s business model, which relies heavily on sixth-freedom traffic, be especially vulnerable here? But this episode...

In the wake of Brexit, will the U.K. be able to remain in the European Common Aviation Area? We don’t know. But we do know that if the U.K. is relegated to some other status, it would obviously impact airlines inside and outside the U.K. In this episode we do a quick survey of airlines such as British Airways, Virgin Atlantic, Flybe, easyJet, Norwegian and Aer Lingus and attempt to size up each of...

Wherever you go in the airline industry, you’re never too far from Singapore Airlines, a carrier that played a primary role in—count ‘em— four of the bigger storylines last week. Singapore is pulling out of Brazil. In India, Singapore will likely be a key beneficiary of the end of the 5/20 rule. Singapore and United oddly seem to be rumbling on a San Francisco route. And Virgin Australia is asking...

Scandinavia’s SAS posted a pretty rough quarter despite huge tailwinds from its healthy home economy and cheap fuel. Fierce competition, labor concerns and operational problems all share the blame. Is SAS’s long-haul strategy the answer? Or will it take a merger? Meanwhile in Africa, Fastjet is failing fast, posting an ugly 2015 full-year result. Clearly, it is tough to be a start-up airline on a...

United last week revealed its new premium experience named Polaris, which includes its business class cabin. Ironically, the big design features in the cabin are all about missing the experience, because United wants its passengers to sleep right through it. But in addition to being optimized for sleep, the cabin is also optimized for something else: seat density. Does United have the right formul...

Ryanair is like a runaway train, in that nothing seems to be able to stop it. Despite unfavorable hedges, terrorism, air traffic control strikes and plenty of economic weakness, the airline still managed to turn a profit during the historically weak first quarter. A 6% operating margin never looked so good. How did Ryanair’s performance compare to that of Wizz Air and easyJet—two airlines that als...

Why are we seeing such different results from the two big Korean airlines? Korean Air again overcame systemic challenges to deliver a standout performance in the first quarter. And although the fuel situation certainly helped, the story wasn’t only about fuel. If you don’t believe us, just ask Korean’s chief rival Asiana, who struggled mightily in the same quarter. And although there’s no sign of...

Emirates last week posted an operating margin nearing 10% for its fiscal year. That’s significantly better than the 7% the year before and a whole lot better than the 5%, 4%, and 3% posted in the years prior to that. Is the airline permanently out of its funk? Turkish Airlines meanwhile is struggling in the face of serious revenue declines brought on by fears of terrorism, among other things. To m...

Is growing Eurowings a safe bet? Lufthansa’s low-cost unit had a rough first quarter and that might not be the last. Eurowings is growing like gangbusters, propelling itself into the teeth of a crowded airline market and doing so with an unproven low-cost longhaul model. Lufthansa’s competitor Air France/KLM meanwhile posted a first-quarter loss, pulled down by its own low-cost unit Transavia. Per...

Delta’s new CEO Ed Bastian thinks it’s great that the competition is trying to catch up to Delta in terms of operational performance. He also says, without hesitation, that the competition—namely American Airlines—won’t catch his airline and makes the case in this 30-minute interview. The interview covers a lot of ground and touches on Delta’s fleet philosophy, its network and its joint ventures a...

While Delta, American and United have all seen both revenues and costs dropping, Southwest and Alaska just experienced the opposite in the first quarter. In fact, Southwest and Alaska rode a wave of rising revenues (say that three times fast) and rising costs to fantastic profits—and they did it in the normally sluggish Q1, no less. Speaking of American, how serious is the airline’s declining reve...

Here’s a simple recipe for success: Make all the right moves in all the right places. Whether overseas or in the U.S., Delta has managed to avoid the pockets of pain being experienced by its U.S. peers, who have even been successful in their own right. Also, if one of the most successful airline in the world places a CSeries order, will it change the momentum of that aircraft program? TAP Portugal...

Is China’s slowing economy taking its toll on the country’s Big Three carriers? So far Air China, China Eastern and China Southern have held up well and posted a rather good 2015. But the fourth quarter of 2015 showed some signs of deterioration—even by the standards of this off-peak quarter. In the U.S., Alaska Airlines and Virgin America are, unlike a lot of mergers in the past, merging from a p...

Alaska Airlines clearly wants to be the dominant carrier on the West Coast, and if its purchase of Virgin America goes through, it will have four focus cities—Los Angeles, San Francisco, Portland and Seattle—all clustered on the Pacific. Such a network might look very different from the network of United, Delta, or American, but that doesn’t mean it won’t work, and it actually resembles the networ...

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 wil...

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 n...

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 r...

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 bo...

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, t...

What’s it gonna take to fix Air France/KLM? The airline group has a number of problems—from labor inflexibility to a soft French economy—all in a very competitive part of the world. But there are reasons for hope: Gulf carriers could one day slow their growth, Air France/KLM still has the gold standard in joint ventures and, heck, labor concessions are always a possibility. Air Canada improved its...