Halftime Show, Ups and Downs: Top trends that shaped the first half of 2014 for the world’s airlines

Sadly, the biggest airline news in the first half of 2014 was the disappearance of a Malaysia Airlines jet. But there was plenty of commercial news too, with airlines busily working their way through the hazards of a still-shaky global economy and a still-high price for oil. Here are some major trends from the past six months of battle.

For U.S. airlines, stormy operations but thriving finances: The early part of 2014 was hardly what you’d call a walk in the park. A rash of winter storms, exacerbated by new labor regulations affecting pilot staffing, led to hundreds of thousands of flight cancellations, erasing more than $300m in profits at American, United, Delta and JetBlue alone. There was other turbulence too: International markets weakened, United reported more bad earnings, JetBlue’s pilots unionized, American broke off its partnership with JetBlue and competition escalated in a number of markets. Delta, for one, bullied Alaska in Seattle, while Virgin America made a move on Dallas. Washington’s Reagan National Airport became a hive of LCC activity, Frontier came rushing in after United closed its Cleveland hub, Spirit stayed on the attack, Gulf carriers made the U.S. one of their biggest growth markets and Norwegian made the U.S. its laboratory for B787 low-fare longhaul flying. But that aside, the first half of 2014 was a glorious one financially, with U.S. carriers collectively amassing $1.6b in operating profits during the off-peak first quarter alone. Fuel prices were stable. Higher interest rates eased pension burdens. Alliances and joint ventures expanded and matured. And industry capacity growth remained tame.

The story was a less happy one across the border to the north—and across the border to the south: Canadian airlines had to deal with a weakening currency, more aggressive industry capacity growth and last year’s addition of two new airlines-within-airlines: Rouge and WestJet Encore. Air Canada lost money in Q1, and although WestJet did well, its margins fell y/y. In Mexico, meanwhile, the economy grew disappointingly slow, Aeromexico barely broke even at the operating level, Volaris had an awful winter and VivaAerobus failed in its attempt to take its shares public.

Things got a bit dicey in Latin America: Currency depreciation hit markets like Argentina and Venezuela especially hard, but Brazil wasn’t immune. The economic situation got so bad in Venezuela that airlines all over the Americas and Europe found their money trapped in the country. Despite these troubles, LAN/TAM and Gol shrank…

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