Airline Weekly Lounge

JetBlue’s big fourth quarter was kind of a big deal. Low oil prices essentially mean that every airline is making money right now, but JetBlue’s 21% operating margin is about more than just oil prices. The airline is changing, and the results are visible in the earnings. American Airlines set a record for annual profits in 2015—a triumph no doubt, even if the airline’s revenue picture is as ugly as a motel painting. United may have Asia’s slowdown to contend with, but American has Brazil where “crisis” is way too weak of a word. And lastly, in Japan, All Nippon (ANA) and Japan Airlines (JAL) have a bit of a rivalry of their own, with JAL posting exemplary fourth quarter earnings but ANA making great competitive strides.

Where Delta’s revenues were relatively resilient, United’s are rapidly receding, at least in the fourth quarter. In Episode 24—informally “part two” of U.S. earnings season—we discuss the sources of United’s revenue declines and the many moves the airline can make to restore them. Two other airlines, meanwhile, seem to have all the right moves. Southwest is enjoying being safely cocooned in the healthy U.S. domestic market, and Alaska Airlines is enjoying watching new routes bear fruit almost overnight. We do manage to break out of the U.S.A., booking passage to India, where IndiGo and SpiceJet notched solid fourth quarters. In short, everybody is making money!

Delta kicked off earnings season with—yawn—another record-breaking fourth quarter highlighted by a pre-tax profit that starts with a “b” (and ends with an “illion.”) The success is coming from a lot of baskets including cheap oil, operational performance and the fact that Delta’s revenues are holding up somewhat better than United’s and American’s, who report later. We try to break down Delta’s stellar quarter. Meanwhile, Air France/KLM, an airline group that weathered some tough headlines in 2015, appears to be feeling pretty good in 2016. In South America, LATAM, the most powerful airline in its region, tries to gain more power with two very large joint ventures. And should WestJet or Air Canada be worried about NewLeaf, the ultra-low-cost carrier that might actually fly this spring?

Regardless of whether it’s up or down, India’s airline market tends to be one of thrills and spills. And right now, we’re seeing both—IndiGo is providing the thrills, Air India the spills. Meanwhile, Jet Airways and SpiceJet are holding their own. Believe it or not, that’s a step forward. Not too long ago, it was all misery. Are we seeing the beginning of a stabilizing trend fueled by, well, cheap fuel? Or will growing competition from the likes of Vistara and AirAsia India keep it forever a tumultuous airline market? Also, we look at Korean Air’s difficult situation and offer our two cents’ worth of advice. Plus, has the U.S. market reached a bottom on ticket prices?

Ultra-low-cost carriers like Frontier Airlines are facing in 2016 a whole different animal—a beast that we call “fare compression.” In fact, America in 2016 might see a first-time experiment in which the ultra-low-cost model goes up against the forces of low fuel, a good economy and healthy legacy competition. In this week’s episode we also discuss Ben Baldanza’s departure from Spirit Airlines. We explore ponderous questions like “Would you rather be SAS or Finnair?” and “What’s the longest turboprop route in the world?” Plus, we hear from one of the authors of the new Delta book. It was an easy “get” seeing as how he’s a permanent resident in the Lounge.

Mexico is finding joy in a low-cost carrier renaissance as Volaris, Interjet and VivaAerobus are all growing and profiting. But the profits aren’t being distributed equally. Why is one carrier performing so much better than another? Also, how long can these airlines keep growing before they run out of elbow room? North of the border, Virgin America meanwhile is shifting to a high-growth gear. Canada’s Air Transat has taken up a new strategy. And it appears Qatar Airways won’t be the launch customer for the A320neo—does it matter? Lastly, in this special double-sized holiday episode, we spend a few minutes looking back at 2015.

Shouldn’t Doug Parker be dancing in the end zone? He is, after all, the CEO of a mega-airline with mega-profits at a time of economic strength and falling fuel prices. But even this airline has challenges. In this week’s episode, we ask him how American plans to remain a profit champion in the face of new and growing competitive threats. As it happened, the interview coincided with the big announcement of American's plan for an international premium economy class, a first among the U.S. Big Three. We asked about that, as well as Parker's thoughts on alliances, fuel hedging, Gulf carriers, the big upcoming changes to the AAdvantage frequent flier plan and much more.

The number of challenges facing Korean Air could fill an A380. Nonetheless the airline remains quite profitable. Korean Air’s prime competitor, Asiana, has not been as fortunate, and we discuss the differences. Meanwhile, Aegean Airlines is doing just fine—more than fine, even—in a very tough economic environment. No stranger to a tough economic environment, Brazil’s Azul is trying to hold its own by again selling a piece of itself. Also, what’s so special about the U.K. leisure carrier Jet2.com?

Not so surprisingly, easyJet wrapped up a strong earnings season in Europe with some strong numbers of its own. We looked at what’s working for easyJet but also why it can’t quite top rivals Ryanair or Wizz Air. Then it’s pretty much all downhill from there. Most airlines can top Air Berlin right now. Thai Airways is struggling with overcapacity and political unrest. Though things have improved significantly, Kenya Airways is still struggling with terrorism, Ebola and the fact that it’s tough to be in an emerging market right now. And LATAM and Gol are coping in the face of Brazil’s cratering economy. And lastly, desperate to end on a lighter note, we turn to Thanksgiving in America and touch on the realities (and myths!) of holiday air traffic.

More than anything, Spirit Airlines’ business model is built on low fares, which it uses to stimulate demand and fill its planes. But what happens when fuel prices drop, enabling airlines like JetBlue to drop fares too? In a wide-ranging interview, we asked Spirit’s CEO Ben Baldanza about such “fare compression.” We also asked him about the possibility of Spirit chasing corporate traffic (like Ryanair). How will A320-NEOs change Spirit’s network? Other topics included Spirit’s pilot contract and the notion that Spirit is “stealing traffic” from other airlines. Lastly, we learned why it’s “crazy” to call Spirit a “no-frills” airline and why Baldanza loves the Tonka-truck yellow livery. This is our first CEO interview in The Airline Weekly Lounge. It went so well that we plan to make this a regular feature.