Notes From a Turbulent First Quarter

It was an eventful first quarter, with good news, bad news, and even tragic news for the world’s airlines. The tragedy, of course, was the crash of Ethiopian Airlines Flight 302 last month, which killed 157 people and raising questions about the safety of Boeing’s 737-MAX jets. On the economic front, the picture was mixed, with financial markets rebounding from a fourth-quarter scare, but with the risks of a global recession rising. Also rising: oil prices, which increased by roughly 30% during the quarter, from $46 a barrel at the start of the year to about $60 now.

A state of what Skift calls “permanxiety” certainly didn’t ease, with additional traveler skittish-ness caused by trade tensions, Brexit woes, government shutdowns and hostilities between India and Pakistan. What else transpired from January to March? Here’s a look at some key moments, milestones, trends, and developments:

There’s an epidemic of airlines on death watch: Two years ago, Air Berlin and Monarch—both rather large airlines—disappeared. Last year, however, airline disappearances were limited to carriers of mostly negligible size; the most consequential collapse was that of the smallish Scandinavian LCC Primera. This year, though, augurs mass causalities—or at least major downsizing—among big players. Two smallish carriers, Germania and Flybmi, are already gone. So is the more influential Wow Air, which stopped flying last week.

Another, Flybe, avoided the same fate only by selling itself at a distressed price to a group led by Virgin Atlantic. Avianca Brasil is now bankrupt and greatly downsized, its assets perhaps before long absorbed by Azul. Jet Airways appears to have staying power thanks only to efforts by India’s government to save it. But it too spent the first quarter paring its schedules as lessors took back large chunks of its fleet. Alitalia, with more lives than a cat, might need yet another government lifeline following easyJet’s loss of interest in joining its turnaround effort.

Norwegian was saved not by any governments but by the willingness of its founders, plus Norway’s wealthiest person, to inject more money (IAG lost interest and sold its Norwegian shares). Elsewhere in Europe, struggling Thomas Cook wants to rid itself of the airlines it owns, setting up a possible absorption by Lufthansa. With Wow gone, Icelandair can breathe a little easier, but relief did not come before a rough Q1 in which bond-holders were breathing down its neck. In Mexico, Interjet was the only major publicly-traded carrier in the Americas that posted a Q4 operating loss, highlighting severe distress that’s now manifesting itself in labor strife.

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