Category Archives: Earnings
Iberia subsidiary of the IAG holding company posted an overall 1.2 billion dollar loss for 2012. This is bad news for the Spanish carrier as they struggle with labor relations and higher fuel costs. CEO Willie Walsh told the BBC that the airline needs to adapt to survive. Some of the recent changes IAG has made to the Spanish carrier include outsourcing large portions of the route network to “express” carriers. I put express in quotes because the express carriers are running A320s for the Iberia brand. This actions engender the predictable result from Iberia labor.
While BA, the other IAG airline, is hardly a model of airline efficiency they certainly do a better job than Iberia. Iberia is one of those airlines that has cranked along due to government support and a near monopoly on air service. However, that has changed in recent history with large numbers of LCCs entering in the Spanish market. Legacy carrier SpanAir shut down about year ago after a last minute takeover deal fell through. While it is unlikely Iberia will go bankrupt and shut down, they risk ending up like Austrian Airlines a brand run by contracted carriers.
I had the displeasure of flying Iberia from New York City to Istanbul several years ago on a mistake fare ($300.00). The only mistake made was that I purchased the ticket, I decidedly overpaid and that I think sums up Iberia quite well.
Iberia, adapt or be gutted.
South African Airlines has been in financial trouble of the past few months. This culminated with the need to secure a 64 million dollar short term loan to cover fuel costs. According to Times Live, a South African newspaper, the airline is financial trouble. Though the airline is owned by the state, the state has been unwilling to grant the airline a 600 million dollar line of credit to cover obligations. While the airline is trying to cut costs and re-evaluate supplier relationships, will it be enough?
United airlines, Delta Airlines, U.S. Airways and American Airlines all have one thing in common, losses across the board. For United and Delta this is not really a problem. For U.S. it impacts their ability to sell AA’s creditor committee that they are able to assume control of AA and turn it to a profit making institution. If US’ loss is bad then AA’s is worse. Most companies are able to turn a profit in bankruptcy because their creditors can not collect on the debt. AA even bankruptcy can not turn a profit. Their creditors will see this. For those creditors on the fence about supporting US Airway’s bid this may push them over to US’ side.
Spring has come and the airlines have survived another winter season. Between now and the start of summer operations, airlines will be releasing Q1 2012 earnings. These dates are not official but based on when they released Q4 2011 earnings.
Southwest Airlines, Apr 19th (Confirmed)
Delta Airlines, Apr. 25th
U.S. Airways, Apr 25th
JetBlue Airways, Apr. 26th
Alaska Airlines, Apr. 26th.
United Airlines, Apr. 26th
I am not familiar when AA is going to release earnings due to being in Ch. 11.