Issue No. 752

ANA's Challenge to JAL

Pushing Back: Inside This Issue

The week begins with China taking drastic steps to curb a spreading flu virus — one such step was temporarily banning all group tours. For Chinese airlines, what was supposed to be the busy Spring Festival travel peak has become a nightmare of cancelled trips and empty jets. Airlines elsewhere are monitoring the situation closely, hoping health officials can prevent another SARS-like industry disruption. 

Speaking of industry disruptions, none right now is as significant as the B737 MAX crisis, upending the business plans of carriers like United, American, and especially Southwest. Still, all three carriers earned solid profits in the closing quarter of 2019, thanks chiefly to robust domestic demand. American again lagged its peers, pledging to do better in 2020 with help from initiatives like more flying from its best hubs. It couldn’t resist however, expressing a little jealously about Delta’s monstrously profitable Atlanta hub.

Is easyJet monstrously profitable? That’s probably too strong a word. But its latest update suggests demand within Europe is no less strong than it is within the U.S. Just as importantly, both markets face supply constraints because of yes, all those grounded and never-delivered MAXs. Like Delta, easyJet isn’t a MAX customer, which helps for the moment. That said, both face frustrating Airbus NEO delays. Ditto for JetBlue, which posted decent Q4 margins but not good enough to dispel the hypothesis that it’s forever destined to underperform other U.S. LCCs (and Alaska and Hawaiian too, based on recent history).

Finally some good news for Boeing: The first B777-X performed its first test flight. Good news for Germany’s Condor too: LOT Polish will buy it. Bad news though, for South African Airways, whose cash situation looks increasingly desperate.


“I do not agree that the MAX crisis compels us to acquire another carrier. We would not overpay.”

Southwest CEO Gary Kelly


October-December (3 months)

  • American: $414m/$502m; 8%
  • United: $641m/$676m; 9%
  • Southwest: $514m; 12%
  • JetBlue: $161m/$162m*; 11%

Net result in USD; operating margin

Net profit excluding special items (all operating figures exclude special items)

Weekly Skies

Clearly, American is losing important customers. Domestically, the airline’s fourth quarter unit revenues declined a bit y/y, on about 5% more ASM capacity. That’s despite a roaring economy and robust corporate and household spending on air travel. Delta by contrast…


Sweden’s Dagens Nyheter cites an internal company document at SAS to report that the carrier intends to start another low-cost unit. That’s not a total surprise following the airline’s latest earnings call in December, in which it hinted at the…

Sky Money

The world is on edge as a dangerous virus spreads from its origin in Wuhan, China. The Coronavirus outbreak is spreading worldwide via air travel, making airlines an important line of defense in the efforts at containment. Already, the economic…


The B777X, the world’s largest twinjet, took to the skies for its first flight on Jan. 25, after many weather-related delays. The four-hour flight was a success, offering Boeing a rare bit of recent good news. The 777X presented Boeing…

Landing Strip

Moscow’s Sheremetyevo’s capital improvement program is going up a gear. The airport is reconstructing a runway, lengthening it to 3,350m and widening it to 60m. The project is expected to take 11 months and the airport, and main tenant Aeroflot, do not…

Routes and Networks

Spirit is expanding from Baltimore BWI again, not at all intimidated by Southwest’s enormous size there. The ultra-LCC is adding more frequencies to Florida, namely Fort Lauderdale and Orlando. It’s adding more flights to Puerto Rico as well. Spirit says…


Air France unveiled its new domestic business class offering, a component of its latest turnaround plan. Is there raging demand for business class travel on quick hops from Marseilles to Paris? Not really. But the airline thinks its longhaul business…

Feature Story

If All Nippon Airways (ANA) has a bit of a chip on its shoulder, you can understand why. It was once Japan’s most profitable airline, routinely beating its larger, bloated rival Japan Airlines (JAL). After the Japanese government rescued JAL…