Issue No. 902

Thai Turns to Black

Bankruptcy Was Just What Thai Airways Needed

Pushing Back: Inside the Issue

The U.S. Justice Department has removed any doubt about its feelings toward the JetBlue-Spirit merger. It doesn't like the idea and is suing to stop it. That's hardly the end of the story though. JetBlue plans to mount a vigorous legal defense, arguing that the flying public will ultimately benefit, not suffer.

Asian airlines that suffered even longer than most from the Covid shock are now bouncing back to life. Hong Kong's Cathay Pacific and Thai Airways joined Singapore Airlines, All Nippon, and Korean Air as major Asian comeback stories, all reporting double-digit operating margins for 2022's fourth quarter. Thai Airways performed particularly well, attesting to the power of bankruptcy restructuring. Bangkok Airways had a great quarter too, further attesting to the current unleashing of pent-up leisure travel demand across the world.

No airline did better last quarter than Turkey's Pegasus Airlines, a low-cost carrier with coverage across multiple regions including Europe and the Middle East. Its operating margin was a breathtaking 25 percent. In Brazil, meanwhile, Azul and Gol are having no problems earning strong operating profits. But foreign exchange woes and other headaches nearly prevented them from paying their bills. Fortunately, they managed to avoid bankruptcy, unlike their rival Latam (not to mention Avianca and Aeromexico). Azul and Gol skirted defaults through out-of-court debt restructurings instead. Latam for its part, now out of bankruptcy and much leaner than before, reported an 8 percent fourth-quarter operating margin, compared to 12 percent for Azul and 15 percent for Gol. (More on Latam's results in next week's issue).

Airline Weekly Lounge Podcast

It’s official: The U.S. Justice Department just sued to block JetBlue and Spirit from merging. Will it win? That’s anyone’s guess, but JetBlue CEO Robin Hayes said he plans to fight the regulator. Plus, the latest results from Azul and Thai Airways. Listen to this week’s episode to find out. A full archive of the Lounge is here.

Weekly Skies

The U.S. Department of Justice has filed a suit to block the proposed $3.8 billion merger of JetBlue Airways and Spirit Airlines citing competition concerns.

Feature Story

Sometimes, bankruptcy is just what the doctor ordered.

By the Numbers

After a dismal decade, Thai Airways finished 2022 with its best operating profit since 2010. Thank an epic fourth quarter, propelled by recovering tourism and drastic cost-cutting for those numbers.