American Shows Small Profit (With a Giant Asterisk) for Second Quarter
American Airlines released its earnings report for the second quarter of 2021 and the airline turned a teeny-tiny profit of $19 million when doing some mathematical gymnastics. Excluding the special items and add-ons, the airline actually lost $1.1 billion, which sounds bad – and it is – but it’s also AA’s smallest loss since the pandemic started.
Q2 revenue for American was $7.5 billion, a whopping 87% increase from the year’s first quarter when people on really started traveling again during the final month (March). In further good news, on the airline’s earnings call today, CEO Doug Parker said the airline expects a full recovery of domestic business travel by next year, which is great news for all of us who enjoy listening to a fellow passenger shouting into his or her phone at the gate about the Des Moines sales numbers.
Parker also said American was not lobbying the federal government to change the federal mask mandates — he was immediately pelted by tomatoes thrown by flight attendants — and that the airline will follow whatever the government decides. Well yeah, Doug, they’re the government, that’s how it works… unless you’re Air Canada.
American finished the quarter with $21.3 billion in liquidity – a new record for the company. It plans to speed up its debt repayments, expecting to have paid down $15 billion of its debt by 2025 which is the same thing we tell ourselves every January after going a little crazy with holiday shopping.
Southwest Reports Q2 Earnings
It’s a busy day in Airline Earnings Land as Southwest also announced its Q2 report, earning a $348 million profit – when accounting for $724 million in offsets through the Payroll Support Program.
Southwest earned $4 billion in revenue in the quarter, a 32% drop from the same timeframe in 2019 but a 300% improvement from the $1 billion in revenue it earned a year ago.
On its earning call today, incoming CEO Bob Jordan said the airline is committed to the airline’s lack of bag and change fees, a stance that makes even more sense with the incoming federal regulations to require refunds for delayed bags – there’s nothing to refund if you didn’t charge anything in the first place. Southwest is playing chess while we’re all playing checkers.
Southwest ended the quarter with $17.9 billion of liquidity and $11.4 billion in outstanding debt. Of its debt, nearly half is tied up in the large deposit it placed on booze for Gary Kelly’s going-away party when he retires as CEO in February. Half of that is expected to go unused since deceased former CEO Herb Kelleher won’t be in attendance.
Tailwind Sees Tailwinds Between NYC and Boston
Tailwind Air is debuting the first seaplane flight that offers nonstop service between Boston and New York, linking Manhattan and Boston Harbor.
As scheduled the flight will take about 75 minutes in both directions, which is much quicker than current options between the two cities if you consider drive time and airport congestion, cutting travel time by 40-60%. In Boston, the seaplane will depart off a floating dock near the East Boston shoreline, a brief water taxi ride from Fan Pier. In Manhattan, the flight will operate from the Skyport seaplane terminal at East 23rd Street on the East River.
As of now, Tailwind plans to operate seasonally, between March and November. Service will begin this year on August 3 and will fly twice daily on weekdays, going up to 4x-daily on August 21. The flights will be operated by Cessna Caravan EX Amphibians, with room for two pilots, eight passengers and the egos they must have to be willing to pay between $395 and $795 one-way to go between NYC and Boston on a seaplane.
Tailwind will not charge change fees, and all tickets include one 20 pound carry-on. Tailwind markets itself as dog-friendly, with important restrictions, which means you can bring your dog, but it has to fly on the wing. As of now it does not offer a loyalty program, which means it only offers slightly less value than Delta SkyMiles.
Several Airline Sites Part of Internet Outage
Many major websites across the internet went down on Thursday as part of a widespread outage, with most being back up and running shortly before 1 p.m. ET.
Air France, Breeze, British Airways, Cathay Pacific, and Delta were part of the outage, making airlines with names starting with a letter not at the beginning of the alphabet concerned about what might be coming for them tomorrow.
Delta’s mobile app and website were both down, but flights were operating normally. Delta was asking passengers to check-in with agents at the airport with the app being down, while begging and pleading with customers not to call the airline’s customer service line because wait times are long enough as it is.
Air France did not issue a statement when its website was down, going with their standard French hospitality of making people figure it out for themselves, while Breeze was just excited to be included in with Air France, BA, and Delta and was in no hurry for its website to come back up.
Oneworld Alliance Chairman Wants Oneworld Alliance to Grow
Qatar CEO Akbar Al Baker was appointed as the chairman of oneworld this past spring, and he has big plans for the alliance, saying his main priority will be to grow the alliance by bringing in more members. Al Baker wants oneworld to be number one amongst other alliances, and it is currently third – out of three assuming you don’t count Etihad Partners… which we certainly don’t. Oneworld’s 14 members trails SkyTeam with 19 and Star Alliance with 26.
Al Baker did not name the airlines he plans to look into adding to the alliance, but there are dozens of free agent airlines out there who would love to join oneworld – Spirit has been wanting to introduce its fee structure around the world, while Avelo and Breeze just discovered what airline alliances are and they’re very intrigued.
Globally, Ryanair doesn’t have an alliance and that’s a probably a good thing – but if it did join, Ryanair CEO Michael O’Leary and Al Baker could engage in a Festivus-like feats of strength to determine the alliance’s CEO going forward.
- Aer Lingus is requesting authorization from the DOT to codeshare on its flights between Europe and the United States.
- Chair Airlines of Switzerland is finally standing up and wet-leasing a B737-800.
- easyJet signed a lease agreement to construct a maintenance base at Berlin/Brandenburg.
- Med-View Airline of Nigeria retired its lone B777 aircraft.
- Qantas CEO Alan Joyce said he may have to furlough staff for an indefinite amount of time if lockdowns continue in Australia.
- Rossiya is leasing 15 high-density SSJ 100/95s for delivery by the end of the year.
- Super Air Jet’s President Ari Azhari outlined his carriers super network strategy at launch that will target six cities in western Indonesia with service on its fleet of A330-200 aircraft.
- TAP bondholders have waived early repayment of their outstanding debts.
- Uep! Fly, a subsidiary of Swift Air swiftly launched operations this week using ATR 72 aircraft.
Waitress: How did you find your steak tonight, sir?
Customer: I looked down next to the potatoes and there it was!