Table of Contents

Issue No. 771

The Crane's Pain

Pushing Back: Inside This Issue

The devastated airline industry continues its comeback, in some respects faster than expected. American, for one, is adding back flights at a rather bullish pace, chasing the small bursts of leisure and family-visit demand now crawling out of its cave. Beachgoers are returning to Florida. Other Americans are headed to the mountains. For an airline more dependent on international traffic, premium traffic, and business traffic, however, a meaningful comeback isn’t yet happening. Here’s looking at you, Lufthansa.

Lufthansa’s low-cost rival Wizz Air is in a better position. It’s almost perfectly positioned, in fact, to take advantage of the early recovery in shorthaul, price-sensitive, leisure demand. Russia’s Aeroflot thinks it can get things going again by focusing on its large domestic market and utilizing its impressively profitable LCC Pobeda. India’s large domestic market will be advantageous for IndiGo. Back in the U.S., airlines like Southwest are seeking creative if still-painful solutions to avoid autumn layoffs. Generous severance packages might do the trick. A more confrontational management-labor relationship is unfolding at British Airways. Virgin Australia, meanwhile, took another step closer to finding a new owner.

Verbulence

"We have two years of liquidity on hand. If we don’t operate a single flight [or] carry a single passenger in the next two years, we are still in business without any capital requirements from government or private investors. And I think that's a very important statement with regards to the resilience of the company."

Wizz Air CEO József Váradi

Mondays With Skift Airline Weekly

Aerospace journalist Jon Ostrower joined us this week to discuss all the latest in airframer news. The replay is available here. You can listen to the podcast version here.

Earnings

January-March 2020 (3 Months)

  • Lufthansa: -$2.4b/-$781m*; -19%
  • Aeroflot: -$337m/-$339m*; -17%
  • IndiGo: -$120m; -2%
  • Wizz Air: -$124m/-$53m*; -10%
  • Pegasus: -$54m/-$40m*; -8%

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

Weekly Skies

Lufthansa, as discussed in this week’s cover story, had an awful first quarter highlighted (or should we say lowlighted) by a negative 19% operating margin. The Lufthansa-branded passenger operation itself suffered a negative 23% operating margin. Swiss was much less…

Media

Delta CEO Ed Bastian spoke by video with Business Travel News (BTN), expressing grief over the death of George Floyd in Minneapolis, where Delta has a major corporate presence. Bastian also honored the 10 Delta employees who have died from…

Fleet

Airlines are retiring more fleet types in response to the collapse in demand from the Covid pandemic. Air Canada is retiring its five mainline B767s, after 37 years of operating the aircraft. In addition, the company is retiring the 25…

State of the Unions

Southwest is joining the ranks of airlines that are seeking to reduce their workforces. The Dallas-based carrier famously has never had an involuntary layoff in its history, and it probably still won’t. Earlier this year, CEO Gary Kelly said Southwest…

Landing Strip

Zurich Airport is pressing ahead with a terminal improvement project, using the near absence of passengers to complete the work. And it was indeed a near absence of passengers — the airport had almost no flights, except for cargo and…

Marketing

Delta is bucking an industry trend by committing to blocking middle seats on all flights through Sept. 30. It will maintain its capacity caps, too: 60% of economy and 50% in first class. The carrier also is requiring passengers and…

Routes and Networks

China and the U.S. stood down from escalating tensions that caught airlines in the crossfire. The U.S. Transportation Department (DOT) moved to ban all flights by Chinese carriers to the U.S., in what it said was a response to the…

Covid Crisis 2020

IATA gave its review of air traffic trends for April, the “disaster” month in which aviation all but came to a standstill. Measured by revenue passenger kilometers (RPKs), worldwide traffic was down 94% on 87% less ASK capacity. Mercifully, airlines…