Issue No. 778

China's Uncertain Recovery

Pushing Back: Inside This Issue

U.S. airlines sounded common themes as they disclosed gargantuan second-quarter losses. Demand recovery was promising, until it wasn’t. Costs are down sharply, but more painful labor cuts are necessary. Corporate and international traffic volumes remain negligible. Carriers are dialing back planned capacity for the fall. There’s more than enough liquidity on hand to endure current rates of cash burn. Only with a Covid-19 vaccine, airlines seem to agree, will demand conditions start to normalize.

American is thinking strategically during the crisis, addressing its network deficiencies with domestic alliances. United is playing a more conservative game for the moment, operating fewer flights and in fact losing less money and burning less cash than its peers. Thanks to enthusiastic interest in voluntary job separation offers, Southwest said it won’t have to cut jobs or pay involuntarily, a minor miracle considering the circumstances. (Herb Kelleher would be proud). Alaska will team with American and join oneworld while navigating the crisis. Spirit insists its cost advantage will endure.

In Europe, Finnair recorded massive Q2 losses, just like everybody else. More importantly right now, it’s happily in the category of airlines without short-term liquidity concerns—not after a government-backed fundraising spree. Things in Europe get really interesting this week as Air France/KLM and IAG report results. So do the continent’s most successful low-cost carriers: Ryanair and Wizz Air.

They’ll be far from the only ones reporting Q2 earnings this week. Air Canada, Singapore Airlines, and ANA are some other heavy hitters scheduled to report.  


"It’s not only about raising new debt and it’s not only about raising new equity. We need to adjust our operations to new reality."

Finnair CEO Topi Manner

Mondays With Skift Airline Weekly

Brian Sumers, Skift senior aviation business editor, and Airline Weekly Editor Madhu Unnikrishnan discussed why the heads of four airlines would ask governments to ease transatlantic travel restrictions while the pandemic still rages. And why is there such an enduring love for the B747?


April-June (3 Months)

  • American: -$2.1b/-$3.4b*; -256%
  • United: -$1.6b/-$2.6b*; -209%
  • Southwest: -$915m/-$1.5b*; -214%
  • Alaska: -$214m/-$439m; -139%
  • Spirit: -$144m/-$286m*; -247%
  • Finnair: -$191m; -254%

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

Weekly Skies

Don’t even think about the “B” word. Bankruptcy is not something American Airlines has to worry about in 2020. Not with a massive $16b in liquidity, more than enough to cover even a lengthy worst-case scenario of near-zero revenues. This…


There will be even fewer opportunities to fly in a commercial B747, now that KLM is retiring its fleet of Delft Blue jumbos. The carrier announced earlier this year that its B747-400s would exit the fleet in March, instead of…

Landing Strip

Grupo Aeroportuario del Sureste (ASUR), which runs several airports in Mexico, Colombia, and Puerto Rico, has been buffeted not only by the Covid pandemic but by the bankruptcies of three airlines that operate from its facilities: Latam, Aeromexico, and Avianca.…

State of the Unions

Southwest, as mentioned in the Weekly Skies section above, is not resorting to job cuts yet. CEO Gary Kelly said the carrier has drawn up plans for layoffs and furloughs, but it should not have to resort to them at…

Routes and Networks

Unable to convince unionized pilots in Germany to swallow heavy pay cuts, Ryanair threatened to close several bases in the country this fall. Leading the list of vulnerable candidates is Hahn airport near (or not so near) Frankfurt. Weeze airport…

Covid Crisis 2020

Throughput at Transportation Security Administration (TSA) checkpoints last week was down slightly. While the overall trend is flat, there have been week-over-week declines in the last two weeks, the first such declines since April, the worst month of the pandemic.…

Feature Story

As most of the world suffers a deep recession, China’s economy managed to grow last quarter, by 3% y/y. But make no mistake: Its airlines face challenges no less daunting than those of its rivals abroad.

Around the World

A look at the world’s airlines, including end-of-week equity prices