Issue No. 763

Is the Glass Half Empty or Half Full?

Pushing Back: Inside This Issue

Aside from a few stragglers like Hainan Airlines, Philippine Airlines, and El Al, fourth-quarter earnings season is now finished. Those were simpler times, featuring familiar names near the top of industry profit rankings: Delta, IAG, Copa, etc. Brazilian airlines, interestingly, enjoyed extraordinarily strong fourth quarters, with Gol topping all airlines worldwide with a 26% Q4 operating margin. For all of 2019, Gol was the industry’s third most profitable airline, behind only Allegiant and Air Arabia.

Soon, earnings season for Q1, 2020 will begin, in a radically altered industry landscape. Gone are quaint questions like how carriers will manage without their B737 MAXs. The questions today are of far greater gravity, like how many weeks of cash are left in the till. 

Fortunately, governments are providing enough aid to prevent a pandemic of airline bankruptcies. Uncertainties remain though, about what governments want in return. An ownership stake in the airlines they help? Airline stocks did jump last week, albeit from severely depressed levels, a sign that the pandemic — Covid-19 — may be perhaps starting to recede. Governments are now starting to consider ways to responsibly reopen economies. The re-opening could come gradually, though, and air travel could be one of the last commercial activities to revive given the ease with which microbes can spread throughout densely packed airplane cabins.   

There’s a case for optimism, as we outline in this issue and discussed in a webinar last week. There’s a pessimistic case too, however, and it’s one to which airlines are increasingly subscribing. Lufthansa is purging its fleet of older planes, approaching unions about concessions, and more broadly preparing to downsize, anticipating a long road to recovery. Air France, still waiting for government aid, is no less pessimistic.

For an airline like Norwegian, there might be no recovery. A drastic last-ditch survival plan could devastate shareholders and creditors alike, in the name of transforming into a much smaller airline. Rival easyJet, meanwhile, comforted investors by raising new cash and cutting aircraft commitments. Wizz Air says it could survive for many months on minimal revenues. Helpfully for such LCCs, shorthaul, price-sensitive demand might be first to recover. Carriers specializing in longhaul premium demand, by contrast, could be in for a longer journey back to health.  


"We will over the next weeks engage in dialogue with the bond holders, lessors and other creditors, with the intent of converting substantial debt to equity. This will create a platform which will enable Norwegian to return to the skies as an even better and stronger company to the benefit of the traveling public, our dedicated colleagues and current shareholders."

Norwegian CEO Jacob Schram


October-December (3 months)

  • Juneyao: -$35m/-$56m*; -9%

Net result in USD; operating margin
*Net profit excluding special items (all operating figures exclude special items)

Sky Money

Call it a non-bankruptcy bankruptcy. Norwegian, no surprise, is running out of money again. The once recklessly expanding LCC, which began greatly curtailing its ambitions late last year, has no cushion at all to deal with the ravages of the…

Weekly Skies

Following Q4 financial updates from China’s Big Three a week earlier, it was Juneyao’s turn to report. It’s a Shanghai-based full-service airline controlled by private-sector shareholders, not the government. But it does have a cross-ownership arrangement with state-owned China Eastern.…


Chris Sloan, writing for Airline Reporter, explains how even as they fight for their own survival, airlines are playing vital roles in helping the world manage through the Covid-19 pandemic.Airline employees, specifically, are often serving as first and second responders,…


With all these retirements, it’s heartening to hear of deliveries. Air Lease Corp. said it delivered eight aircraft in the first quarter, the bulk of which happened in the latter half of the quarter even as the Covid-19 pandemic swept…

State of the Unions

IATA predicts that 25m aviation jobs could be at risk if not outright lost if the Covid-19 pandemic continues to exact a toll on air travel. Full-year revenues at the world’s airlines are expected to fall by $252b this year,…

Landing Strip

In markets where it flies to multiple airports, JetBlue is consolidating its operations at one facility. At its New York base, JetBlue will operate from Newark and JFK, suspending LaGuardia, Westchester, and Stewart. In Los Angeles, the carrier will fly…

Routes and Networks

Airlines taking U.S. government funds provided through the CARES Act are required to maintain air service to the cities they served before cutting schedules due to the Covid-19 pandemic. The Transportation Department this week clarified its rules on the minimum number of…


One thing keeping airlines busy while their planes are grounded: Reassuring elite customers that their loyalty benefits won’t expire anytime soon. Air Canada, while extending status benefits until the end of 2021, is going one step further and allowing customers…

Covid Crisis 2020

As IATA maintains pressure on governments to provide airline relief, the trade group is also turning its attention to the challenge of restarting the industry when the time comes. It’s calling for, among other things, a “predictable and efficient approach”…

Feature Story

This much is clear: The world’s airline industry is experiencing its greatest crisis ever. Nothing in the past comes even close. But as governments provide massive support to distressed economies, as entire societies mobilize to defeat the pandemic, and as…