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.
"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.
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