Airline Weekly Lounge

With most European airlines having now reported second-quarter earnings, the picture is filling in. But it’s a mosaic—not a portrait. Some carriers did well. Some did lousy. One thing we learned from Ryanair and Wizz Air is that it’s good to be an ultra-low-cost carrier in Europe right now. As for the legacy carriers, it’s not all bad—especially if your home economy is in the UK and you’re somewhat sheltered from the euro. Case in point: IAG, parent company of British Airways, Iberia and Vueling, which had a decent quarter. The Lufthansa Group plodded. Air France/KLM struggled. And Icelandair seems to be enjoying life in its own little corner of the canvas.

American Airlines doesn’t hedge its jet fuel, and now it’s enjoying the fruits of that somewhat contrarian strategy. Is AA onto something here? Is fuel hedging a smart play? Will other airlines mimic AA and reject hedging altogether? Those are some of the questions I ask Seth Kaplan in our second episode of The Airline Weekly Lounge. Also, while AA was on the right side of the fuel hedge bet, Air France/KLM was on the wrong side. The company was also on the wrong side of the euro-dollar bet and those two forces combined to further punish the already-limping airline pair. Back in America, Spirit Airlines had a great quarter by its own standards—but mediocre by its standards. Part of its difficulty was due to a softening revenue picture. Is such heated competition in the U.S. a surprise so soon after consolidation and with high oil prices such a recent memory? Lastly, we discuss WestJet, the subject of this week’s Airline Weekly’s cover story. The Canadian airline is clearly not afraid to changes its business model. We look at WestJet’s endeavors and more in this week’s episode.

Our inaugural episode of the Airline Weekly Lounge went live today. Within it, Seth Kaplan and I discuss this golden age for U.S. aviation. Can profits get any better? Along those lines, Delta reported earnings last week. They were exemplary, of course, even despite wrong-way fuel hedges. And Norwegian released its second quarter report as well. Norwegian is, of course, most interesting because of its experimentation with long-cost long-haul flying. It’s always interesting to hear how that’s going. And as we discussed in this week’s cover story of Airline Weekly, Emirates is facing real headwinds. In the Lounge podcast, we discuss Emirates’s situation a little more deeply. And, I asked Seth whether Turkish Airlines’s break-neck growth rate is sustainable. Our first podcast—it’s sure to be a collector’s item. So, do check it out.