Issue No. 766

Flight Path Unknown

Pushing Back: Inside This Issue

The carnage is now plain to see. Some of the largest airlines from the U.S., China, Japan, and Europe showed just how much money the wicked coronavirus is bleeding from their coffers. A few like Southwest and Japan Airlines escaped the ugly first quarter with negative operating margins in the single digits. Others had a much bloodier story to tell.

The horror show began in China first, robbing airlines of their normally lucrative Lunar New Year profits. Their only consolation, perhaps, is the notion of what starts first should end first. There is, in fact, evidence of modest demand recovery. But it’s domestic only, and a far cry from where things will need to be for carriers to make money again.

The most comforting aspect of the moment for U.S. airlines is the extended period of survival they’ve guaranteed themselves, by borrowing billions, slashing costs, selling assets, and successfully lobbying for government aid. Bookings are a bit better than their low point a few weeks ago. But everyone agrees: Full recovery will be measured in years, not weeks or months.    

They won’t get any arguments from Europe. There, Finnair’s heavy China exposure triggered early alarms. IAG didn’t wait for its earnings release to share gory Q1 figures. As its British Airways unit joins SAS and others in prepping unions for big job cuts, Lufthansa is fending off government attempts to drive a hard bargain — Berlin wants a big slice of the company in exchange for any aid. Norwegian, meanwhile, got bondholder buy-in, in advance of a fateful meeting of shareholders this week. If that’s all not enough to exhibit the gravity of the crisis, consider this: Ryanair — the always profitable Ryanair — warned of losses this spring and summer.

Will there be any summer travel, which so many economies, let alone airlines, depend on for sustenance? Add that to the many questions the world still faces as it fights the twin evils of pandemic and recession.


"The virus will be defeated. There will be recovery. We just don't know when. "

United President and soon-to-be CEO Scott Kirby

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January-March 2020 (3 months)

  • American: -$2.2b/-$1.1b*; -16%
  • United: -$1.7b/-$639m*; -11%
  • Southwest: -$94m/-$77m*; -3%
  • All Nippon: -$539m/-$579m*; -15%
  • Japan Airlines: -$210m/-$176m*; -7%
  • Air China: -$802m/-$945m*; -24%
  • China Eastern: -$599m/-$760m*; -31%
  • China Southern: -$859m/-$955m*; -24%
  • Hainan Airlines: -$947m/-$1b*; -77%
  • Juneyao/9Air: -$71m/-$81m*; -18%
  • Spring Airlines: -$33m/-$52m*; -17%
  • Finnair: -$158m; -16%
  • Cebu Pacific: -$23m/-$8m*; -4

October-December 2019 (3 months)

  • Hainan Airlines: $7m/-$86m*; -11%
  • Spring Airlines: $17m/-$81m*; -16%

Net result in USD/*Net result excluding special items/ Operating margin

Weekly Skies

When Delta reported Q1 results a week earlier, its negative 5% operating margin masked the true gravity of the current Covid crisis. American’s results, by contrast, made the carnage crystal clear. The Texas-based airline reported a gruesome negative 16% Q1…


On CBS current-affairs news program “Face the Nation,” Southwest CEO Gary Kelly insisted that flying is no less safe than other routine activities, describing measures the airline is taking to make that even more true than ever. Is cheap travel…

Covid Crisis 2020

This week is Norwegian’s fateful shareholder meeting, at which owners will vote on whether to accept a major dilution of their holdings. Shareholders aren’t the only ones that Norwegian needs to convince, however. It also needs to convince aircraft lessors…

Sky Money

Warren Buffet, perhaps America’s most famous investor, regretted ever lending money to US Airways, with a stock conversion option, in 1989 (though his Berkshire Hathaway did ultimately profit from the investment). Those bad memories notwithstanding, by 2016 he was convinced…


Airbus is slashing its production rate by one-third as it grapples with the collapse in demand due to the pandemic. The airframer plans to produce 40 A320-family aircraft per month; two A330s, and six A350s. Yet, the first quarter wasn’t…

State of the Unions

After an earlier move to cut 1,700 pilot jobs, Canada’s WestJet said it reached agreement with the ALPA union to save about 1,000 of those positions. This applies to WestJet mainline, WestJet Encore, and Swoop, the group’s ultra-LCC. The union…

Landing Strip

London Gatwick, a pillar of the world’s largest airline market, expressed confidence in the longterm future of U.K. aviation. But it’s not a pretty picture in the short-term, with one important tenant going belly-up just before the crisis (Thomas Cook)…

Routes and Networks

In a rare example of an airline announcing new route expansion in these difficult times, Wizz Air says it’s opening a new base in Lviv, a Ukrainian city. It will base an A320 there in July, signaling expectations of a…

Feature Story

Face masks. Blocked middle seats. Extensive aircraft cleaning and disinfection. Health screening before security. Flight attendants in protective gear. These are among the many ways in which airlines, airports, and governments around the world are grappling with a raging viral…