The editors of Airline Weekly discuss the most interesting developments within the commercial airline industry. In keeping with Airline Weekly’s style, conversation generally centers on one question: How do you make money in this industry?
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Presented by American Airlines
In part one, Gordon Smith and Jay Shabat take a closer look at Qantas and ask how major new projects could change its business. In part two, we turn our attention to Colombian national carrier Avianca and put its latest earnings in context.
Episode Summary:
Qantas performance: Qantas reported a 9% operating margin for the first half of 2023, stronger than 2019 levels. Domestic demand remains robust due to the vast distances in Australia and limited rail/road alternatives.
Domestic market competition: Qantas faces limited competition domestically, with Rex Airlines scaling back and Bonza collapsing. Koala Airlines is a potential new competitor, but Qantas largely dominates through its mainline, Jetstar, and Virgin Australia.
Qantas business breakdown: Qantas operates three core segments: domestic, international, and Jetstar (low-cost, domestic, and international). Their loyalty program is highly profitable, with a 19% operating margin in the first half of 2023.
International markets: Key markets for Qantas include New Zealand, Singapore/Southeast Asia, Japan, the US, and the UK. Their international operations are profitable but lag behind domestic performance, with a 5% operating margin in early 2023.
Project Sunrise: Qantas plans to launch nonstop flights from Sydney and Melbourne to London and New York by 2026 with Airbus A350-1000s, aiming to boost its international market.
Fleet investment: Qantas is heavily investing in new Airbus aircraft (A220s and A321XLRs) for domestic routes and retiring its older 737s. Boeing's Dreamliners (787-9s) remain important for international operations.
Virgin Australia speculation: There are unconfirmed reports that Qatar Airways may acquire a 20% stake in Virgin Australia, which could complicate oneworld alliance dynamics, as Qantas and Qatar Airways are both members.
Future outlook: Qantas is positioned for growth with strategic fleet upgrades and long-term plans, while maintaining dominance in the Australian market. Further insights will be featured in the Airline Weekly newsletter.
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Busiest Global Airports: The Q4 2024 Preview
Friday, August 30, 2024 • Duration 25:52
Presented by American Airlines
In this week’s show, Gordon Smith and Jay Shabat examine the global airport capacity data for the coming quarter. Of the 100 busiest airports worldwide, we reveal the likely winners and losers for Q4 and ask what these capacity trends tell us about the industry’s broader direction of travel.
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Subscribe to @SkiftNews and never miss an update from the travel industry.
Air France's Olympic Headache
Thursday, July 4, 2024 • Duration 35:26
In part one, Gordon Smith and Jay Shabat examine why this summer's Olympic and Paralympic Games in Paris are likely to be a financial drag on Air France. In part two, we turn our attention to U.S. airlines and ask what the second half of 2024 could hold for some of the country's biggest carriers.
Key Points: Air France and the Olympics Impact
Olympic Disruption: Air France expects a revenue hit of €160-€180 million ($175-$200 million) for Q3 due to international markets avoiding Paris during the Olympics.
KLM Insights: KLM CEO noted a decline in Paris-bound passengers, with potential shifts to Amsterdam as an alternative hub.
Airline Challenges with Major Events: Airlines, including Air France, generally find large events like the Olympics disruptive and not as profitable, contrary to what might be expected.
Long-term Benefits: Infrastructure improvements (e.g., Orly Airport upgrades) may benefit Air France KLM long-term, despite short-term disruptions.
Key Points: Outlook for US Airlines in H2 2024
Cost Increases: U.S. airlines face significantly higher operating compared to pre-pandemic levels, with labor costs in particular rising faster than revenues.
Delta’s Position: Delta is expected to perform well, driven by strong premium demand and international routes, though it still faces higher costs.
Spirit Airlines’ Struggles: Spirit has increased capacity and revenue but suffers from a disproportionate rise in costs, especially labor, leading to financial difficulties.
Growth and Efficiency: To combat rising costs, airlines aim to grow capacity and improve efficiency, although supply constraints (e.g., aircraft availability) pose challenges.
Premium Demand: A trend towards more premium offerings in both long-haul and short-haul markets is evident, with airlines betting on sustained demand for higher-margin products.
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Hawaiian Airline's Recovery
Saturday, September 3, 2022 • Duration 23:44
What does post-pandemic life like for a destination carrier like Hawaiian Airlines? CEO Peter Ingram joins Edward Russell to discuss the airline's recovery and outlook, including the long-awaited reopening of Japan. Plus, what Hawaiian might do with the new Boeing 787s that arrive soon.
The London Airport Crunch
Friday, August 26, 2022 • Duration 20:49
Flying through London is getting a little better with the end of capacity caps at Gatwick Airport. But constraints remain in place at Heathrow until the end of October, and British Airways has already reduced its schedules through the winter. And always eager Ryanair is ready with more seats to grab market share, Edward Russell and Jay Shabat discuss the situation. Also, American Airlines' regional strategy.
Lufthansa, ITA and European Airline Consolidation
Friday, August 19, 2022 • Duration 23:00
The Lufthansa Group has spent the better part of 20 years trying to improve its fortunes through consolidation. Some deals, like of Swiss, have been winners, others, like of Austrian and Brussels, not so much. Edward Russell and Jay Shabat discuss Lufthansa's aim, and what a potential ITA Airways deal could mean for the group. Also, what's in the Inflation Reduction Act for airlines.
Southwest's Airports Czar
Saturday, August 13, 2022 • Duration 18:52
Meet Steve Sisneros, the airport czar at Southwest Airlines. As vice president of airport affairs, he oversees current and future real estate at the carrier's 121 airports. Edward Russell and Sisneros chat about Southwest's new facilities in Denver and Phoenix, and the status of Terminal 0 plans in Los Angeles.
Southwest Airline’s Secret Weapon
Friday, August 5, 2022 • Duration 23:22
Southwest Airlines had a secret weapon in the second quarter: Its fuel hedges. That helped propel it to an impressive 17% operating margin. High oil prices pulled down the results of most other U.S. airlines during what was an otherwise strong quarter. Also, Edward Russell and Jay Shabat discuss what’s next for JetBlue and Spirit now that they’ve agreed to merge.
Boeing's 41,000 Aircraft Forecast
Friday, July 22, 2022 • Duration 14:30
Airlines globally will need more than 41,000 aircraft over the next 20 years, according to Boeing's latest outlook. Edward Russell sat down with Boeing's Vice President of Commercial Marketing Darren Hulst at the Farnborough Air Show to discuss the outlook. Also, what is Boeing's response in the so-called middle-of-the-market that Airbus has run away with with its A321neo?
Get more essential airline news at Airline Weekly.
Travel's Like a T.J. Maxx
Friday, July 15, 2022 • Duration 22:13
What's travel like in the U.S. now? Busy and, in some cases, like a T.J. Maxx, The Wall Street Journal's new travel columnist Dawn Gilbertson told Edward Russell of her 11 flight, six airline "stress test" of the system over the July Fourth holiday weekend. We also chat with her about her role and her view on covering airlines and the travel industry.
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