Southwest, JetBlue, and Alaska | Earnings Tell the Same Story
Southwest Airlines reported its first quarterly profit since the Covid-19 pandemic began, beating estimates and saying the worst of the Omicron impact “appears to be behind us.”
JetBlue and Alaska Air (ALK), who both also reported earnings early Thursday, painted a similarly positive picture for the sector heading into the months ahead, as the knock-on effects of the Omicron coronavirus variant’s surge wane.
Southwest (LUV) reported adjusted net income of $85 million, or 14 cents a share in the fourth quarter, beating analysts’ estimates of seven cents. Operating revenue of $5.05 billion was 12% lower than the same period in 2019 but ahead of analysts’ expectations of $4.97 billion.
Incoming CEO Bob Jordan, who will take over from Kelly Tuesday, said it has been a “challenging start” to 2022, but he was optimistic regarding the months ahead.
“While we made significant progress in 2021, the Omicron variant has delayed the demand improvement we were previously expecting in early 2022. With Covid-19 cases trending downward, the worst appears to be behind us, and we are optimistic about current bookings and revenue trends for March 2022.”
Southwest said it expects losses in January and February before returning to profitability in March, a start to the year that mirrors guidance from other major U.S. airlines.
It was a similar story for low-cost airline JetBlue, which also reported earnings early Thursday. The carrier reported a narrower-than-expected net loss of $129 million in the fourth quarter. The adjusted per-share loss was $0.36, beating estimates of $0.39.
Operating revenue of $1.83 billion also narrowly beat expectations and was 9.7% lower than the same period in 2019, within the company’s range for an 8% to 13% decline. JetBlue said that was achieved “despite a later quarter impact from the Omicron, driven by strong holiday peaks.”
CEO Robin Hayes also expected the Omicron impact to ease month-on-month, with the company “ultimately returning to sustained profitability in the spring and beyond.”
United Selects Non-Degree Flight School as Partner for Aviate Program
Skyborne Airline Academy in Vero Beach, Florida, has been selected by United Airlines as one of the first non-degree flight school partners for its Aviate pathway program.
“The United Airlines Aviate Program in partnership with Skyborne will immerse trainees in airline technique, custom and practice, equipping graduates with the skills to be truly flight deck ready,” said Lee Woodward, CEO of Skyborne.
Skyborne offers students a 12-month accelerated training program. After students obtain a private pilot certificate, they can apply to the United Aviate pathway program. Once accepted into the Aviate Program, they’ll receive a conditional job offer from United Airlines.
“We are thrilled to partner with Skyborne Airline Academy and are confident they will be an invaluable asset to Aviate due to their innovative approach to the aviation market, prestigious reputation and rigorous training,” he said. “We look forward to working with them and welcoming more pilots to the United family.”
Airbus to Create Own Airline | Rent Out Whale Plane
Airbus plans to charter out its whale-shaped Beluga transport planes -whose main job until now has been to ferry aircraft parts between its plants in Europe - to help other industries haul urgently-needed outsized machinery by air.
Airbus said the move to rent out spare capacity on its existing Beluga ST and new Beluga XL transporters would lead to the creation of a commercial-cargo airline subsidiary from 2023.
It is a rare example of aerospace 'in-sourcing' tasks from other industries after years of farming out work externally, and if successful could pave the way for other services.
"The Beluga ST are only at 50% of their life. They have been designed for 30,000 flight cycles and currently have an average of 15,000," said Philippe Sabo, head of Airbus Transport International. A flight cycle is one take-off and landing.
Airbus cut average output by 40% when the pandemic hit and plans to restore and slightly increase output of singe-aisle jets by summer 2023. But wide-body output is expected to remain around half levels foreseen when Beluga XL was launched in 2014.
Airbus said there was no connection between the project to commercialise the Beluga fleet and planned production, however.
The good news: Flying is more like it used to be. The bad news: Flying is more like it used to be.
Leisure travel came roaring back in 2021. So did cancellations, delays and other flight problems. Airlines began to resemble their pre-pandemic selves, even if they still flew less overall than they did in 2019.
In The Wall Street Journal’s 14th annual ranking of nine U.S. airlines by operational performance, Delta Air Lines Inc. reclaimed the top spot. JetBlue Airways Corp. finished last.
For airlines, 2020 was the most disruptive year in decades. Last year, recovery began, but flight cancellations still dominated headlines. Some carriers experienced summer meltdowns, leaving passengers stranded for days on end. Others struggled over the holidays, when staff members tested positive for Covid-19 as the Omicron variant spread.