Episodes

  • United Closes the Gap on Delta

    United Closes the Gap on Delta
    Oct 18 2024
    Presented by American Airlines In this week's episode Gordon Smith and Jay Shabat provide an early status update on Q3 earnings season. With Delta on the back foot after the CrowdStrike chaos and Olympic disruption, United is eyeing the top spot. The pair also discuss the latest financials from Virgin Australia and ask what could be next for the carrier. Key Takeaways: Upcoming Skift Aviation Forum Hosts Gordon and Jay discuss the upcoming Skift Aviation Forum on November 12th in Dallas. The event will feature a star-studded lineup of airline executives, including CEOs from major carriers like American Airlines and Southwest. Visit live.skift.com for tickets and further information. Delta’s Q3 Earnings: Challenges and Setbacks The conversation shifts to Delta's Q3 earnings, which were slightly weaker than expected, with a 9% operating margin. The airline was negatively impacted by a software issue with CrowdStrike, costing them about 2 percentage points in margin. Additionally, they lost around $100 million in potential revenue due to reduced travel to Paris during the Olympics. Domestic and International Trends for Delta Jay explains other factors affecting Delta’s Q3 performance, including domestic overcapacity and softer international demand in regions like Korea and Taiwan. However, domestic conditions improved toward the end of the quarter, thanks to capacity cuts by rivals such as Southwest and JetBlue. Delta expects a strong Q4, driven by these adjustments and lower fuel prices. United Airlines and Q3 Competition We preview United Airlines' Q3 results. Jay notes that United typically performs better in Q3 due to its business-heavy hubs and strong domestic capacity growth. United has increased its domestic seat capacity by 9% in Q4, with routes like Newark-San Francisco enjoying growth. Virgin Australia’s Latest Financials The podcast ends with a brief discussion about Virgin Australia, which recently made headlines after Qatar Airways acquired a 25% stake in the airline. This move has sparked industry interest as it could strengthen Virgin Australia's international partnerships and expand its market presence. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    29 mins
  • Setting the Scene for Earnings Season

    Setting the Scene for Earnings Season
    Oct 11 2024
    Presented by American Airlines In this week's show, Gordon Smith and Jay Shabat explain the key elements to watch as third-quarter earnings season begins. The pair discuss all-important factors including aircraft supply shortages, oversupply in U.S. markets, and a possible resurgence in corporate travel. Key Takeaways: Q3 Earnings Preview: Delta is set to kick off Q3 earnings season this week with valuable insights into operational efficiency and profitability. The company faces heightened expectations following a year of travel recovery, but there are concerns about overcapacity. Investors are watching closely to see if Delta can maintain its industry-leading margins and sustain revenue growth from both business and leisure travelers. U.S. Airline Industry Trends: The broader U.S. airline industry is facing moderate headwinds, with airlines grappling with excess domestic capacity. This is putting pressure on margins as carriers strive to remain profitable in a competitive environment. The industry's over-expansion during the post-pandemic travel surge has led to concerns about underutilized seats and reduced pricing power, creating uncertainty around future profitability despite high travel volumes. Business Travel and Premium Demand: Premium travel, particularly among business travelers, continues to be a key revenue driver for Delta and other U.S. network carriers. Despite a slower recovery compared to leisure travel, corporate demand is showing signs of a resurgence. Leisure Travel as a Status Symbol: Leisure travel is evolving, with more consumers viewing it as a status symbol, according to Skift Research. This trend is especially pronounced in the premium segment, where travelers are opting for upgraded experiences such as lie-flat seats and luxury accommodations. This shift in consumer behavior is reshaping the airline industry, making premium leisure a vital component of future growth strategies. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    32 mins
  • Southwest and its New Plan

    Southwest and its New Plan
    Oct 4 2024
    Presented by American Airlines In this week’s episode, Jay Shabat and Meghna Maharishi discuss Southwest's latest turnaround plan. They also look at the current state of the transatlantic market connecting the U.S. with Europe. Key Takeaways Southwest Airlines' Strategic Changes: Southwest plans to implement premium seating, red-eye flights, and cut back services in some areas like Atlanta to improve profitability. The airline also plans to monetize aircraft delivery delays and expects a positive outcome despite pressure from activist investors like Elliott Management, which is advocating for leadership changes. Execution of the Plan is Crucial: While Southwest's strategy received a positive reception from investors, the main challenge lies in how effectively the airline can execute these changes within the expected timeframe, with some analysts expressing skepticism. Southwest’s Strong Historical Performance: Despite recent financial challenges, Southwest has had a solid historical track record, especially before the pandemic, when their profit margins were strong. In comparison, other budget carriers like Spirit and JetBlue have performed worse. Investor Pressure and Management Defense: Elliott Management, a significant shareholder, has been pressuring for leadership changes. However, there is debate on whether these proposed changes would truly benefit the airline since Southwest has already initiated several strategies that align with investor expectations. Transatlantic Market Overview: The transatlantic market, especially between the U.S. and Europe, has been performing strongly post-pandemic, largely driven by robust leisure demand. Despite some business travel decline, markets like Italy, Greece, and Portugal have seen significant capacity increases, reflecting changing travel patterns among American travelers. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    26 mins
  • El Al Comes Out on Top

    El Al Comes Out on Top
    Sep 27 2024
    Presented by American Airlines In this week's episode, Gordon Smith and Jay Shabat discuss the final results from Airline Weekly's Earnings Scoreboard for Q2 2024. From household names to niche regional players, we examine the carriers that had the strongest performance in the all-important second quarter. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    28 mins
  • Skift Global Forum: The Airline Storylines

    Skift Global Forum: The Airline Storylines
    Sep 20 2024
    Presented by American Airlines In this special episode, Gordon Smith and Jay Shabat are in New York City for the Skift Global Forum. Recorded just minutes after stepping off stage, the pair debrief following a wide-ranging discussion with United Airlines Chief Commercial Officer Andrew Nocella. From Boeing strikes to overtourism we explore the big takeaways. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    27 mins
  • Southwest's Evolving Network

    Southwest's Evolving Network
    Sep 13 2024
    Presented by American Airlines In part one, Gordon Smith and Jay Shabat examine the huge changes taking place across Southwest Airlines' network and reveal the big winners and losers as the LCC's route map evolves. In part two, we discuss the key trends to watch for the coming season in the U.S. airline sector. Episode Summary Southwest Airlines Leadership CEO Exit: Gary Kelly, former CEO and chairman, to step down amid pressure from Elliott Management, a hostile investor. Current Leadership: CEO Bob Jordan retains the board’s confidence; no imminent changes announced. Upcoming milestones: Investor Day: September 26, 2024. Board meeting: November 2024. Southwest’s Network Cuts Significant capacity reduction, including a 1% overall decrease in 2024. Q4 2024 will see an 8% reduction in seat capacity. Capacity cuts attributed to Boeing delays and internal decisions to improve financials. Southwest’s Top Airports Busiest Airports: Denver (up 87% in 10 years), Las Vegas, Baltimore, Chicago (Midway), and Dallas (Love Field). Capacity reductions in major markets: Fort Lauderdale (-34%), Atlanta (-27%), San Jose (-12%), Los Angeles (-12%). Future of Southwest Potential changes to in-flight products, boarding processes, and bag fees. Growth in Phoenix (+7%) and Nashville (+2%). Expanding corporate travel and adjusting ancillary revenue strategies. Boeing Delays Ongoing Boeing 737 MAX delivery delays have impacted Southwest’s operations and financial performance, contributing to network cuts. However, these delays are not the sole reason for capacity reductions. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    34 mins
  • Qantas in Focus

    Qantas in Focus
    Sep 6 2024
    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. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    32 mins
  • Busiest Global Airports: The Q4 2024 Preview

    Busiest Global Airports: The Q4 2024 Preview
    Aug 30 2024
    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. Connect with Skift Airline Weekly LinkedIn: https://www.linkedin.com/company/airline-weekly/ X: https://x.com/Airline_Weekly/ Facebook: https://www.facebook.com/airlineweekly/ Instagram: https://www.instagram.com/skiftnews/ WhatsApp: https://whatsapp.com/channel/0029VaAL375LikgIXmNPYQ0L/ Subscribe to @SkiftNews and never miss an update from the travel industry.
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    26 mins