Issue No. 755

Alaska-American, That's What Friends Are For

Pushing Back: Inside This Issue

How long will it last? The Covid-19 virus outbreak, if contained soon, might prove just a painful but manageable disruption for China’s pummeled airlines, not causing any long-lasting damage. But with each passing week of grounded aircraft and empty flights, the crisis is looking more and more like a demand shock of 9/11-like proportions. As it lingers on, moreover, the hurt will spread to more foreign airlines, and perhaps the global economy itself. 

The virus is already a huge concern for Singapore Airlines, threatening to derail a profit improvement drive that was gaining momentum. The virus is likewise a big concern in Korea, where airline earnings momentum was already going in the wrong direction. 

Norwegian took a major step in the right direction this summer, earning healthy profit margins. But it proved unable to avoid a heavy loss in the offpeak final quarter of the year. Carriers in Latin America are both frustrated and bolstered — in terms of unit revenue growth — by their missing MAXs. Aeromexico and Copa, despite their grounded planes, both saw a big jump in Q4 margins. Low-cost carriers, meanwhile, are becoming the new stars of the Arabian Peninsula. Just as Air Arabia was announcing tremendous Q4 profits, Qatar Airways was announcing the closure of Air Italy. In the U.S., a former Allegiant chief is progressing in his mission to start a new airline. On the other side of the world, Qantas is pressuring its pilots to make a deal on ultra-ultra-longhaul flying. 

And the biggest strategic news of all last week: American and Alaska have found a way to get along. They’ll form a close partnership that elevates the standing of both carriers in the eyes of west coast frequent fliers. It’s a way for American, furthermore, to add new west coast intercontinental flying. It’s a way, furthermore, for American to strike a mighty blow at its wily nemesis Delta. 


I think one thing is very clear. Without tourism, inequality in the world would be bigger. In most of the countries, we are the biggest investors.

TUI CEO Fredrich Joussen


Net result in USD; operating margin

  • Singapore Airlines: $239m; 10%
  • Asiana: -$195m/-$286m*; -16%
  • Norwegian: -$206m; -13%
  • Aeromexico: -$3m; $37m*; 10%
  • Copa: $2m/$92m*; 16%
  • Air Arabia: $54m; 17%
  • Jazeera Airways: -$4m; -13%
  • Jeju Air: -$37m; -$54m*; -15%
  • Mesa Air: $11m; 15%
  • Chorus/Jazz: $28m/$19m*; 15%

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

Weekly Skies

It’s an unhappy time for airlines in East Asia. Last year, the giant Chinese economy slowed, the region’s export markets shrank due to tariffs, a street rebellion erupted in Hong Kong, and tensions flared between Japan and Korea. This year,…

Sky Money

How bad is the Covid-19 demand shock so far? ICAO, an agency of the United Nations charged with supporting civil aviation, released some preliminary estimates of the damage. It believes airlines will have lost $4b to $5b in first quarter…


Green Africa Airways, an ambitious startup airline in Nigeria, placed another big plane order. In late 2018, it chose Boeing to supply it with 50 B737 MAXs, or as many as 100 including options. Last week, it signed a memorandum…

State of the Unions

Time is running out for Qantas. It needs to tell Airbus soon whether it’s going to proceed with orders for A350-1000s capable of flying from Sydney to London. This is the “Project Sunrise” to which the carrier often refers. Before…

Landing Strip

Groupe ADP, which manages 26 airports in Europe, Asia, and the Middle East, reported its full-year 2019 traffic was down almost 17%, but this was mainly due to the shift of the bulk of Istanbul’s commercial traffic to the new…

Routes and Networks

It’s the biggest surprise from the surprising new American-Alaska alliance: American will launch Seattle flights to Bangalore this fall and London Heathrow next spring. Knowing it couldn’t possibly build a Seattle hub on its own — Delta already made that…


Indian online travel agency (OTA) MakeMyTrip said macroeconomic headwinds affected its calendar Q4 earnings, even as the Indian government works to improve airport infrastructure. The International Monetary Fund has downgraded India’s GDP growth to 4.8% for the current fiscal year,…

Feature Story

Things were looking dark for American. Poor margins. Messy operations. Fights with unions. Grounded MAXs. Lost friends. Then suddenly, this: A revived partnership with Alaska Airlines, this time envisioning a much deeper relationship than the two ever had before.