Issue No. 885
Is an Amazon Freighter Deal Enough to Lift Hawaiian?
Pushing Back: Inside the Issue
The airline earnings reports are flying in fast and furious. Europe’s Big Three all reported last week, revealing robust profits all around. Some things seem to never change, like IAG’s superior performance relative to Air France-KLM and Lufthansa. It's Air France, though, that’s improving margins most, aided by a 16 percent reduction in staffing since 2019. KLM, on the other hand, while still the more profitable airline, is headed in a downward direction, challenged by discomforting developments in Amsterdam.
In the U.S. Southwest’s earnings were rather discomforting, especially given the carrier's advantageous fuel hedges and roaring domestic demand. Southwest is just not Southwest when not sweating its assets, something it can’t do until shoring up staffing. JetBlue has cost problems too, while lifeless results at Spirit and Frontier caused investors to ask: Was United’s Scott Kirby right? Is the ultra-LCC business model ill-designed for post-pandemic realities, like supply-side constraints on growth? (Perhaps Kirby was being a bit hyperbolic in calling the model a “Ponzi scheme”).
Hawaiian’s decade-plus run of success is hardly a Ponzi scheme. But is it a relic of the past? Norwegian had a good summer, and might even have a good future — its past was tainted by overambition and reckless longhaul adventures. Latin America’s Volaris and Gol hardly dazzled with their third quarter margins, but both see better times ahead. Air Canada reached a double-digit third quarter operating margin. Many more airlines (get ready) will report this week.
Airline Weekly Lounge Podcast
Who would have thought three years ago that we'd be talking about the bright future for Norwegian Air? One restructuring and pandemic later, and the discounter is profitable and taking corporate travel share from competitor SAS. Plus, Hawaiian's continued struggles. Listen to this week’s episode to find out. A full archive of the 'Lounge is here.