Cranky Weekly Review Presented by OAK Airport: Delta’s Earnings, Spirit Rules by Committee

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Delta Q1 Earnings Show Profit and a Cautious Outlook

Delta was first up to release its Q1 earnings and the carrier posted a $569 million profit on $14 billion in gross revenue. Its total revenue finished up 3.3% over last year, right in line with its revised guidance it released several weeks ago. That is not a high bar to meet.

It expects Q2 to fall anywhere between down 2% and up 2% with international and premium flying staying strong, while domestic main cabin bookings slow — this is in line with much of the thinking in the industry and the economy in general — those not affected by the economic downturn will continue to flourish while the hoi polloi will experience belt tightening.

Transpac flying was way up for Delta in Q1, with revenue up 16% YoY. Transatlantic and Latin America revenues were up 5%, with international flying propping its books up thanks to what Delta described as “a reduction in corporate confidence.”

DL finished the quarter wth $6.8 billion worth of liquidity including cash, cash equivalents, and a windfall in OneKeyCash now that it is placing an overnight experience inside its Biscoff tunnel in Atlanta on VRBO.

Spirit Shakes Things Up

Spirit CEO Ted Christie resigned his role on Monday, definitely all by himself with no outside influence. The airline announced a triumvirate of Chief Financial Officer Fred Cromer, Chief Operating Officer John Bendoraitis, and General Counsel Thomas Canfield will take over the airline in the interim. Christie had been CEO of Spirit since 2019 and worked at the carrier since 2012. As of press time he declined comment except to say that “they needed three people to replace me, so I must have been doing something right.”

Spirit emerged from Chapter 11 protection last month after it was the first large U.S. carrier to file for bankruptcy since 2011. The airline is in the process of reinventing itself on the fly, going from a fee-loving, no-frills, discount carrier to a fee-loving, no-frills, discount carrier that also lets you buy-up to feel like you’re on a legacy carrier.

In addition to Christie leaving, Chief Commercial Officer Matt Klein also resigned Monday and is being replaced by just one person — Rana Ghosh. Ghosh has been with Spirit since 2015, most recently serving as a Senior Vice President and Chief Transformation Officer — what that is, no one really knows, but it’s understood he had something to do with collecting fees.

Republic and Mesa Join Forces

Republic Airways and Mesa Air Group announced an intent to merge in an all-stock transaction that will see Republic own as much as 94% of the new company — Mesa will get at least 6% with the possibility of doubling that stake to as high as 12% if CEO Jonathan Ornstein does a good job of shining Republic CEO Bryan Bedford’s shoes.

Will the deal pass the DOJ’s antitrust smell test? Probably yes. Assuming the deal is approved by the federal government, it will leave just two major independent U.S. regional carriers standing — the new Republic and SkyWest — though there are rumors that there are still some Jetstream 41s in Atlantic Coast colors just waiting to be put back into service.

The graveyard of former regional carriers that either were bought, merged with, went out of business on their own, or just floating somewhere over a Midwest state like a lost float from the Macy’s Thanksgiving Day Parade is a truly remarkable list and a trip down memory lane. For more on Republic’s purchase of Mesa and an analysis of former regional carriers and what happened to their capacity, please visit Thursday’s post on crankyflier.com.

Avelo Seeks a New Type of Passenger

Whether or not one agrees with the federal government’s vigorous deportation policies, the fact remains if it’s going to happen, someone has to do it, and potentially there is money to be made. Avelo has raised its hand.

Avelo will be basing three B737s at Phoenix/Mesa Airport (AZA) where it will begin flying deportation flights on behalf of the federal government beginning next month. Avelo’s recent job posting seeks flight attendants who would be solely used to work these deportation flights, saying that having flown at least 10 years at American would be seen as a good sign that the applicant has the right temperament for this kind of work. The carrier describe it as an opportunity “for a charter program for the Department of Homeland Security. Flights will be both domestic and international trips to support DHS’s deportation efforts.”

Avelo’s done the impossible — the airline has found something worse and more unpleasant for FAs than working a regular Newark turn on United.

AirBaltic Needs a New CEO

Spirit isn’t the only carrier that made a change at the top this week, with airBaltic CEO Martin Gauss being removed from his role on Monday. Some questioned the dismissal of Gauss as his record at the airline is very good, if you’re willing to set aside the fact the carrier went from an €8.3 million profit in 2023 to a €118.2 million loss last year.

The Latvian government owns a majority stake in the carrier, and it is supposedly planning an IPO for its airline, so a loss of about $130 million probably wasn’t looked up favorably. The Ministry of Transport expressed a vote of no confidence in Gauss, leading to the dismissal. Pauls Cālītis, the airline’s current COO and a member of its board of directors will take over the CEO on an interim role.

• Air Canada is the launch customer for new Airspace cabins on the A220.
• Air India Express will become an all-coach carrier by this time next year.
• Allegiant is running it back with Viva. Again.
• American will open a Flagship Lounge in Philadelphia this summer.
• ANA selected the seats it will add in economy and premium economy on its B787-8s.
• Avelo is ending seven routes — two of which never got started: Concord (or as Avelo calls it…Charlotte) to both Detroit and Washington/Dulles.
• Breeze pushed back the ending of E195 ops a couple weeks to April 21.
• Cathay Pacific will have 100% seatback entertainment and Wi-Fi connectivity by this August — except for when you fly. Your seatback screen won’t work. And the Wi-Fi is 50/50. But for everyone else — 100%.
• Delta opened a new SkyClub in Atlanta, its first new lounge in ATL in over a decade. The club comes equipped with state-of-the-art tracking technology to tell you to the minute how long the wait to enter will be and comes with a dedicated agent who will snarkily deny you entry due to overcrowding no matter the time of day.
• Discover discovered Minneapolis/St Paul is cold in the winter and doesn’t want to go there then. The flight will resume in March.
• EVA is adding airplanes.
• ITA has a LOT of codeshare partners but now it has one more.
• Norwegian is hoping to have an all-MAX fleet by 2030.
• Oman Air is adding a second daily nonstop to London/Heathrow, operating 4x weekly beginning October 26.
• Riyadh Air received its AOC. Alexandria Ocasio-Cortez was unavailable for comment.
• Royal Air Maroc is adding B737-8 capacity through a series of wet-leases.
• Southwest will begin its retrofits next month. It will begin by adding extra legroom at the front of each plane and removing the heart from the front bulkhead, just as it has been removed elsewhere at the company.

That’s it. That’s the punch line.