Issue No. 780
European Airlines' Summer of Anguish
Pushing Back: Inside This Issue
Finally, an airline that actually made money last quarter. Two of them actually. Korean Air and its hometown rival Asiana, both cargo power players even in normal times, reported solid Q2 profits as yields for shipping goods rose dramatically. The cargo yield boom (volumes were down) gave Lufthansa a boost too, but not nearly enough to offset giant losses from its multi-branded passenger operations. The Lufthansa Group is happy to see some Europeans taking Mediterranean holidays again. But even coupled with the positive cargo trends, this doesn’t negate the need to become much smaller, meaning big job cuts and many fewer planes. The same is true for easyJet, shrinking as well, never mind its lack of longhaul exposure.
Japan Airlines too, is grappling with industry’s greatest shock ever, taking only modest solace in having a large domestic market not subject to as many travel restrictions. An early-summer increase in domestic bookings, however, is starting to stall as Covid cases rise. Panama’s Copa, alas, doesn’t even have a domestic market. Just getting planes back in the air will be a big milestone.
Elsewhere, Virgin Australia unveiled a recovery plan. U.S. airlines are pushing for more payroll support. Sadly, an Air India Express accident killed 18 people, adding more grief to what’s already the worst year ever for airlines.
Verbulence
“Aviation has bounced back before. We can and will do so again, and we may and must change for the better in the process.”
Lufthansa CEO Carsten Spohr
Mondays With Skift Airline Weekly
Join Senior Analyst Jay Shabat and Editor Madhu Unnikrishnan for a livestream about this issue and how the second quarter played in Europe. We'll take your questions live on air. Join us at 12 p.m. Eastern, on Monday, Aug. 10. Registration is free for subscribers.
Earnings
April-June (3 Months)
- Lufthansa: -$1.66b; -89%
- Japan Airlines: -$871m; -170%
- Korean Air: $133m/$4m*; 9%
- Asiana: $95m; 14%
- Jeju Air: -$68m; -235%
- Garuda: -$600m/-$510m*; -368%
- Copa: -$386m/-$115m*; -748%
*Net result in USD/*Net result excluding special items/ Operating margin