United Releases Q2 Earnings Report
United Airlines’s Q2 earnings report is out, and the airline registered higher revenues and smaller losses than any earnings report since the pandemic began as it continues to rebound financially. United expects to turn a positive adjusted pretax income for Q3 and Q4 this year thanks to ever-increasing demand and improvement in bookings.
United’s Q2 revenue was $5.47 billion, a 50% drop from Q2 in 2019 but a 70% increase from Q1 2021. United’s loss for the quarter was $434 million, a huge step forward from its $1.6 billion loss in Q2 last year and $1.4 billion loss in Q1 this year.
The $5.47 billion revenue figure beat expectations by $100 million. Cargo revenue rose 51% from last year to $606 million for the quarter, partially because the airline now recognizes revenue from basic economy tickets as cargo since the experience is roughly the same.
The airline ended the quarter with just under $21 billion in cash and cash equivalents which includes an investment of several billion dollars in outlets and charging cables in anticipation of its electric aircraft orders that are supposed to begin arriving in a few years.
US Extends Land Border Closure with Mexico and Canada
Despite Canada reopening its land and air borders with the United States next month, the U.S. is not prepared to reciprocate quite yet with its land border.
Canadians have been able to enter the United States by air for a while now, but land crossings will remain for essential travel only on both the northern and southern U.S. borders. The closure is being extended for another 30 days, through August 21.
According to DHS, officials in all three countries have mutually determined that non-essential travel at land and ferry crossings poses additional risks. This is similar to how parents and children mutually determine that kids will clean their room and do their homework before going outside to play and how Spirit and its customers agree to mutually determine what fees will be charged on any given itinerary.
DOT Releases Proposed Guidelines for Ancillary Refunds
The DOT filed its proposal stemming from President Biden’s executive order to require airlines to refund passengers for baggage and other ancillary fees when the airline does not deliver. The DOT is asking for comments by September 20, and while it will see some pushback from airlines, the proposal is far more airline-friendly than what was previously expected.
The DOT would mandate refunds to passengers for delayed checked baggage that is lost for 18 hours on domestic flights and 30 hours on international flights if it takes the airline suggestions. Instead, the DOT suggests refunds to kick in at 12 hours on domestic flights and 25 hours for international. On itineraries that include domestic and international travel, the international standard would apply.
The DOT would consider the 12- or 25-hour clock to start once the plane reaches the gate and its actual arrival time is recorded. The rule would not apply to the scheduled arrival time, meaning delayed flights that arrive late would not be counted against the baggage clock which is a relief for Southwest considering its operation as of late.
As for other ancillaries, the government is considering taking action against passengers who are dumb enough buy unhelpful bundles offered by the airlines. A fine would be issued to people who buy mileage accelerators, overpriced “priority access” bundles that include priority check-in, security, and boarding for a crazy-high price, or anyone who pays for a bag on Spirit at the airport.
Aeromexico Adds to Fleet; Posts Q2 Earnings
Aeromexico signed a letter of intent with Dubai Aerospace Enterprise (DAE) to lease 12 more 737 MAX aircraft according to a filing in U.S. Bankruptcy Court where the carrier is currently undergoing a trip to the bankruptcy spa Chapter 11 restructuring.
The agreement would increase the airline’s commitment to the plane from 24 to 36 in addition to the seven it’s taken delivery of this summer. Aeromexico would be grabbing these planes on the cheap, as DAE had outstanding orders for 14 737 MAX as recently as April. The judge in Aeromexico’s bankruptcy court will hear the terms of the lease deal on August 12.
Aeromexico also announced its Q2 earnings today, as the airline recorded just under $500 million in revenue for Q2, a 40% drop from Q2 2019 but a nearly 400% increase from Q2 last year. AM posted a loss of about $60 million, after the airline turned a $5 million profit in 2019.
Rex Suspends Non-Regional Flying
Rex, the regional carrier in Australia that’s trying to carve a niche as a good boy and mainline carrier, is suspending its non-regional flying due to border closures and lockdowns in Australia.
All B737 flying will be stopped. The airline will continue some regional flying but with dramatically reduced frequencies. Rex’s B737 service operates its network of flights between major cities Sydney, Melbourne, Canberra, Adelaide, and Australia’s Gold Coast.
Rex has told passengers the airline will stand by its COVID-19 guarantee to offer a refund within days of their claim. Air Canada heard this and asked Rex, “yeah, but what’s a refund really?”
- Aer Lingus has transferred its remaining order of five A350-900s to an undisclosed carrier. It would be hilarious if the undisclosed carrier turned out to be Aer Lingus UK.
- airBaltic is requesting more funding from the Latvian federal government. Ryanair is skeptical.
- Air Canada is seeking new loans worth $5.3 billion to refinance its debt, and likely to continue to fight the U.S. government on paying COVID-19 refunds.
- American extended its aircraft maintenance base lease in Pittsburgh for another five years. The deal will keep at least 500 mechanic jobs in the Steel City for its duration while doing nothing to address the fact that Primanti Bros. sandwiches are wildly overrated.
- China United Airlines is opening a base at Chengdu/Tianfu (TFU) in the Sichuan Province.
- Delta has extended SkyBonus points expiration dates to December 31, 2022.
- EW Discover discovered Munich airport this week, and so it now plans to open a base there in 2022.
- Korean Air is planning to launch missiles and orbital vehicles from a B747 in a joint research program with the Seoul National University and the Korean Air Force. These missiles should not be confused with the missiles dropped by AA passengers two summers ago when the airline introduced chili as a dining option in first class.
- Kuwait Airlines is defending itself in court against bribery claims from Airbus.
- My Indo Airlines is suing rival Garuda Indonesia over the latter failing to pay a debt that the two airlines undertook together to pay a consultant. That doesn’t sound shady at all.
- Ryanair released its schedule from Manchester for the rest of 2021 that will include over 315 weekly flights to 67 destinations and dozens of lawsuits.
- TAP continues to cancel select flights as the ground staff at Lisbon Airport began the third day of their strike.
- Volaris El Salvador has pushed its debut to late this fall after previously hoping to begin flying this summer.
Every morning I walk outside and I get hit by the same bike. Every single morning. What a vicious cycle.