Issue No. 754

How Did the U.S. Industry Do Last Year?

Pushing Back: Inside This Issue

It is the best of times. It is the worst of times. Like a tale of two cities, there’s a tale of two airline industries right now, one watching with glee as oil prices plummet, the other watching in horror as a virus outbreak causes travel demand to plummet. At the epicenter of the scare are airlines in greater China, including Hong Kong, which can only hope that the outbreak is contained soon.

In the U.S. by contrast, airlines are enjoying near-blissful conditions, with demand strong, supply constrained, and yes, fuel prices tumbling. Spirit became the latest to post potent profits, though it does face some cost concerns. To be clear, all U.S. carriers face rising labor costs. Most are frustrated by fleet plan disruptions, the flip side of those supply constraints. In addition, incumbents have their eyes on Breeze, a promising new startup carrier. 

In Europe, Ryanair too has a love-hate relationship with the current aircraft shortage. It would clearly rather have its MAXs. But without them, Europe’s airline sector saw a tightening of supply and demand conditions, driving up fares. More capacity disappeared with the deaths of airlines like Thomas Cook. And sure enough, Ryanair’s profits increased.   

If only that were so for Korean Air. It faces terrible demand conditions in key markets like China and Japan. Cargo is no less a concern. At least Korean Air’s not Cathay Pacific, forced to temporarily close a major portion of its network. But at least Cathay’s not South African Airways, permanently closing much of its network and fighting for mere survival. At least South African isn’t in trouble with the law like AirAsia. 

American, robbed by Delta of its Latin alliance partner, can at least find comfort in a new relationship with Gol.


And if they had brains or..., they’d tell Branson to go and write the check himself instead of bailing it out.

Ryanair CEO Michael O’Leary, politely stating his objections to the provision of U.K. taxpayer money to Virgin-backed Flybe


October-December 2019 (3 months)

  • Ryanair: $98m; 5%
  • Spirit: $81m/$85m*; 13%
  • Korean Air: $45m/-$125m*; 4%
  • Jin Air: -$37m; -33%
  • Finnair: $27m/$10m*; 4%
  • Icelandair: -$30m; -11%

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

Weekly Skies

All along, it said not to worry. For seven straight quarters —almost two years — Ryanair’s operating margins were in steady y/y decline. Labor costs were rising sharply. Same for fuel costs, inflated by a weak euro and wrong-way hedges.…


Airlines in the Media


During its calendar Q4 earnings call, Ryanair said it’s still interested in buying additional B737 MAXs from Boeing, on top of the 200-plus it’s already ordered. Indeed, it even made an offer to do so, eyeing the upsized -10 version…

State of the Unions

When American and the TWU reached a tentative deal earlier this month for the airline’s mechanics, it put to rest (for the time being) one of the longest-running and most contentious of the carrier’s labor negotiations. Remember, relations between management…

Landing Strip

The Trump administration has barred New York state residents from applying for or renewing membership in the popular Global Entry expedited passport control as well as similar programs that ease return trips from Canada and Mexico. At issue is the…

Routes and Networks

Most of the world’s airlines have stopped or sharply curtailed their flights to mainland China in reaction to the coronavirus scare. But some are suspending service to Hong Kong too. United, for example, cancelled all flights through Feb. 20. Virgin…


As expected, American and Gol are teaming up. Both are recovering from the fateful decision of Latam and Delta to run off with each other. In doing so, Latam ditched American and Delta ditched Gol. American won’t take an ownership…

Feature Story

For U.S. airlines, Q4 earnings season is now complete. And as is customary these days, all players produced solid profits. Collectively, Delta, American, United, Southwest, Alaska, JetBlue, Hawaiian, Spirit, and Allegiant reached a double-digit operating margin, topping 10% on nearly…