Icelandair Soars

Strong Demand and High Yields Lift Iceland's National Airline

Pushing Back: Inside the Issue

We’ve now reached the point where most major airlines have published their first-quarter results. Singapore Airlines was among the carriers reporting last week, joining several other East Asian airlines near the top of the worldwide margin rankings. Its excellent 16 percent operating margin highlights Asia’s belated but now strong demand recovery, as well as the carrier’s own efforts to lower costs while the Covid crisis was playing out.

Singapore Airlines is of course a celebrated company with a storied past. But other Asian carriers like Philippine Airlines and Eva Air also unveiled doubled-digit first quarter profit margins. Remember too that Thai Airways produced stunningly high margins — the best first quarter margins of any airline in the world, in fact. In India, meanwhile, the domestically dominant IndiGo fared well, as international temptations beckon. EasyJet and Aegean will have no problems filling planes and collecting fat yields this summer. Azul is making money selling tickets, loyalty points, tour packages, cargo, and soon maintenance services. But all of its profits and then some are going straight into the pockets of lenders and suppliers — an out-of-court restructuring of these obligations is underway.  

At an investor event, several U.S. low-cost carriers, along with Air Canada, gave detailed updates on current demand conditions. Air Canada’s rival WestJet, for its part, reached a tentative new contract deal with its pilots but not before having to pre-cancel flights in advance of a threatened strike. American too, reached a tentative agreement with its pilots.

But American is also feeling blue, specifically about its alliance with JetBlue — the two airlines need to stop cooperating, said a court, handing a victory to the U.S. Justice Department. Next big question for JetBlue: What will the courts say about the DOJ’s attempt to torpedo its takeover of Spirit Airlines?