Cranky Weekly Review Presented by Oakland International Airport: Earnings Season Hits High Gear, Delta and WestJet Slow Down Their Relationship, More

American Turns the Tide, Posts Q1 Profit

American Airlines becomes the first major U.S. carrier to earn a profit for Q1, as the carrier eked out a $10 million quarter in the black on a massive gross revenue figure of $12.2 billion.

The gross revenue represents a 37% leap from Q1 a year ago, with $11.1 billion of it coming from passenger revenue.  AA’s two largest expenses in Q1 were tied at around $3.3 billion on both salaries and fuel. That nearly $6.6 billion figure accounted for more than half of its $11.8 billion in operating expenses, and our suggestion that the airline save money by paying its staff in fuel was considered, but not implemented. 

American and its regional partners operated more than 476,000 flights with a load factor of 80% and the carrier confirms that a few of them even arrived on-time. Due to its positive Q1, AA will offer profit-sharing payments to its staff for the first time since the pandemic.  AA has AAcrued about $211 million for its profit-sharing pool, which will be paid out to staff next month in the form of waived annual fees if they apply for a special offer on the credit card.

AA ended the quarter with $14.4 billion in liquidity, plus several dozen fruit baskets and flower bouquets that DOJ officials sent back after receiving them in the past several weeks.

JetBlue Left Feeling Blue after Q1 Loss

JetBlue Airways suffered a $192 million loss in the first quarter, an improvement on the $255 million JetBlue dropped in Q1 a year ago. Similar to other U.S. carriers who posted Q1 losses, JetBlue anticipates strong revenue growth in Q2 leading into the busy summer travel season — despite JetBlue being the lone airline out of the group to carry a bright-yellow weight on its shoulders while also trying to fight the DOJ on two fronts.

Gross revenue for JetBlue was $2.3 billion, a 34% increase from a year ago and the highest revenue figure for a Q1 in company history. Capacity jumped 9% YoY, which led in part to the 12.1% jump in expenses per ASM.  The increased costs included fuel, where JetBlue paid $3.50 per gallon at the pump, but the carrier expects that price to drop into the summer down to $2.95 to $3.15 per gallon.

JetBlue paid down $109 million in debt and lease obligations during the quarter, leaving it with $1.7 billion in unrestricted cash and cash equivalents plus a $600 million undrawn revolving credit facility.  The airline also closes the quarter boasting an entire closet full of yellow paint sent over from Spirit and a voodoo doll that functions so well that every time a JetBlue employee pokes it with a pin, a random DOJ employee feels a prick at the same time.

WestJet Tells Delta it Would Rather be Just Friends

Delta Air Lines potential JV with WestJet appears to be off the table as WestJet told Delta it’s happy with the current arrangement between the two and no longer cares to pursue the JV route.

The two carriers have applied twice to have their JV approved — the first try was dropped in late 2020 after the DOT said WestJet would have to divest itself of eight slot pairs at New York/LGA and to exclude Swoop from being part of the agreement. The most recent application in 2021 will now fade away with WestJet’s decision to back away from the venture.

Despite the two no longer pursuing a deeper and more meaningful relationship, the pair will remain friends — and close friends at that. WestJet is adding four new routes to Delta hubs next month with Calgary to Detroit, Edmonton, Minneapolis/St. Paul, and Seattle along with Vancouver to Atlanta, while also extending Edmonton to LAX from seasonal to year-round. Last year the two announced reciprocal elite benefits including free poutine for Delta passengers flying WestJet and free peaches for WestJet customers connecting through Atlanta.

Spirit to Add Fee to Counter Q1 Loss

Spirit Airlines reported a loss of $104 million in its first quarter earnings on revenue of $1.35 billion. To stem the tide in the immediate future, the airline is expected to add a $19 mandatory “return to profitability” fee to passengers during summer travel. The fee will apply to every segment of travel for customers, and the carrier intends to also charge the fee to customers who are traveling on other airlines to raise even more cash.

When asked for comment, a Spirit spokesperson said that choosing to fly another airline is not a valid reason to avoid fees, as it wouldn’t be fair to Spirit’s customers to shoulder the entire burden.

The $1.35 billion of revenue came with load factors hovering just above 80%, up from being in the mid-60s a year ago, a figure expected to rise as the year continues. As with most carriers, revenue was up – 39.5% for Spirit, but it was unable to outpace the jump in expenses at the same time. Total revenue per passenger flight segment was $127.36, with $57.45 coming from the ticket price and the remaining $69.91 coming from “non-ticket revenue” which is Spirit-speak for “fees.”

The carrier closed March with $1.7 billion in cash and cash equivalents, most of which is being tied up in the Buzzball lab to develop new ridiculous drinks to sell on-board.

In Search for New Partner, Alaska Reaches for the Stars

Shoot for the moon and if you miss, you’ll be amongst the stars has never been truer for Alaska Airlines as the carrier announced its newest global partner, Taiwan-based Starlux Airlines. Starlux is launching initial service to the United States with its inaugural landing in LA earlier this week, and Alaska will be its first partner airline anywhere in the world.

Mileage Plan members can begin earning redeemable miles on Starlux right away, but elite qualifying miles are not part of the agreement for now.  AS customers can begin redeeming miles for travel on Starlux this summer, but only for travel in economy, premium economy, and business – first class will not be available via Mileage Plan.

Alaska passengers will be able to book itineraries to any of Starlux’s 16 destinations in Asia through its Taipei hub immediately while Starlux customers can do the same on Alaska through Los Angeles.

• Air France and KLM are introducing a Business Light product that is generally pricing €100 less than regular business. The new, unbundled fare comes without a second checked bag, free seat assignments prior to check-in, and lounge access. It adds a €300 change fee and a requirement to wear a blanket over your head when boarding that says “too cheap to spring for real business class” while regular biz passengers are permitted to throw fruit on you during boarding.
• Air India signed a multi-year agreement with Sabre for access to its fares and seats. American executives declined to comment.
• Alaska is speeding up the phase-out of its A321neo fleet to be done by this fall.
• American had a passenger detained upon arrival in Delhi for really pissing off another passenger.
• Avianca launched a subscription service for its business customers.
• Azerbaijan Airlines is adding an additional eight Dreamliners to its fleet.
• Azores Airlines will no longer receive state aid from Portugal. It won’t receive state aid from any other countries either.
• Cargolux reported a record $1.6 billion profit for 2022.
• Emirates has a hankering for smoked meats.
• Etihad finally debuted its new business class amenity kits.
• Eurowings will begin flying from Dubai to both Stuttgart and Berlin with 4x weekly flights beginning in November.
• Hawaiian lost $98 million during Q1 on $612 million gross revenue including growing its POG juice stockpiles by 340 gallons.
• IndiGo is thinking about a widebody order this year. Presumably it’s thinking about other things too, like what’s for dinner tonight, but it’s definitely thinking about adding some airplanes.
• ITA‘s first A330neo took off for its first test flight Thursday. The aircraft is hoping to be painted in ITA livery as late as possible as it’s embarrassed to tell its fellow planes in the hangar that it will operate for ITA.
• JetBlue finally announced its Amsterdam schedule with New York/JFK to Amsterdam beginning August 29, and Boston following on September 20. Timing is better than was expected, with JFK-AMS leaving at 10 p.m. and arriving at 11:35 a.m. the next day and the return leaving AMS and arriving in New York at 4 p.m. The Boston flights will operate on a similar schedule, but with both flights departing and arriving about two hours later.
• Madagascar Airlines is ready for takeoff.
• Lufthansa still plans to purchase ITA. Definitely. Probably. Maybe.
• Norse Atlantic has gone public, being listed on the Oslo Stock Exchange with the ticker symbol BJORN.
• Northern Pacific is going to begin operating charters, leading to the conclusion that its random once-weekly flight between Ontario and Las Vegas isn’t enough to keep everyone at the company busy.
• Qantas‘s new lounge in Hong Kong is open.
• Rex is cutting regional flights blaming everyone but itself for the cuts.
• Ryanair suspending service to Camiso, Italy due to a petty spat with airport operator Società Aeroporto Catania (SAC).
• Spirit is adding daily service from Boston to Charlotte, Dallas/Fort Worth, Los Angeles, and Phoenix. Boston to LA is 6+ hours which sounds like a very pleasant experience on Spirit.
• SriLankan Airlines is grounding give of its A320neos as it found they didn’t operate efficiently without engines.
• Starlux would like Airbus to hurry up and deliver its airplanes.
• United too.
• Viva Air‘s merger with Avianca was approved by Aerocivil, the civil aviation regulator in Colombia and despite that, Avianca doesn’t like it.

My cousin is colorblind, and he always insists the apples are yellow.

I told him that was bananas.