Is an Amazon Freighter deal enough to lift Hawaiian?
Pushing back: inside the problem
Airline earnings reports are coming fast and furiously. The big three Europeans all released last week, showing robust earnings all around. Some things never seem to change, like IAG’s superior performance compared to Air France-KLM and Lufthansa. It is Air France, however, which is improving its margins the most, helped by a 16% reduction in its workforce since 2019. KLM, on the other hand, although still the most profitable airline, is heading downwards, betting challenged by uncomfortable developments in Amsterdam.
In the US Southwest, earnings were rather uncomfortable, especially given favorable carrier fuel coverages and strong domestic demand. Southwest just isn’t Southwest when it’s not sweating its assets, which it can’t do until it beefs up its workforce. JetBlue also has cost issues, while lifeless results from Spirit and Frontier have investors wondering: Was United’s Scott Kirby right? Is the ultra-LCC business model poorly 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 streak of success for over a decade is not a Ponzi scheme. But is it a relic of the past? The Norwegian has had a good summer, and may even have a bright future – its past has been marred by overweening ambition and reckless long-haul adventures. Latin America’s Volaris and Gol hardly dazzled with their margins in the third quarter, but both see better days ahead. Air Canada achieved a double-digit operating margin in the third quarter. Many other airlines (be prepared) will report this week.
Weekly Airline Lounge Podcast
Who would have thought three years ago that we were talking about the bright future of Norwegian Air? A restructuring and a pandemic later, and the discounter is profitable and takes the share of business travel from its competitor SAS. Plus, Hawaiian’s ongoing struggles. Listen this week episode discover. A complete archive of the ‘Lounge is here.
weekly sky
The capacity discipline imposed on the airline industry by the confluence of a myriad of constraints is unlikely to dissipate any time soon. But it’s good financial news, Lufthansa Group CEO Carsten Spohr said last week.
Landing runway
French airport operator Vinci, which has terminals around the world, said passenger numbers “continued to accelerate in the third quarter” at nearly all of its facilities. “Momentum was strong in Europe, South America and the Caribbean,” he said, adding that traffic volumes…
Roads and Networks
Norwegian Air will open a new base in Riga, Latvia, with two Boeing 737s next year. Although the routes were not announced, CEO Geir Karlsen said they would complement his existing flights to Norway. Norwegian flies to Riga from Oslo and…
state of unions
American is close to a tentative agreement with its pilots’ union, the Allied Pilots Association, that would include at least 12% raises, CNBC reported. The airline’s first officers would start at around $110 an hour under the deal. The…
Fleet
Boeing reported an operating loss of $2.8 billion, or a net loss of $3.3 billion, on nearly $16 billion in third-quarter revenue. The results were driven by “losses on our fixed-price defense development programs,” Boeing CEO Dave Calhoun said.…
Reportage
Sweet memories of the Great Recession? Not exactly, but for Hawaiian Airlines, the global economic calamity of 2008 and 2009 didn’t leave many scars. Hawaii’s tourism sector has felt the impact for sure – the number of visitors arriving by air dropped by 10…
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