In the first part of this week’s podcast, Gordon Smith and Jay Shabat reveal which US airlines had the best and worst second quarter of 2024. In the second part, we focus on the latest developments at European supergroup IAG, which is withdrawing from a planned takeover of Air Europa. This episode is presented by American Airlines.
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- Strong performance from Alaska Airlines: Alaska Airlines emerged as the top performer among U.S. airlines in the second quarter with an operating margin of 16%, which is notable given that many other airlines struggled or saw their margins decline.
- Widespread margin decline: U.S. airlines overall reported an operating margin of 11% for the second quarter, compared to 15% in the same quarter last year. This decline was largely due to rising operating costs across the industry, which many airlines struggled to offset.
- Deviations in airline performance: The performance of U.S. airlines has varied widely. While some, such as Alaska, Delta and United, have been able to maintain relatively high margins, others, such as Spirit and Hawaiian Airlines, have experienced negative margins, highlighting the varying impacts of cost pressures and market conditions.
- Challenges for low-cost airlines: Airlines such as Sun Country and Spirit faced increased competition and capacity in their markets, putting pressure on fares and operating margins. Sun Country’s margin fell to 5% from 14% a year ago, and Spirit posted a negative margin of 13%.
- IAG’s continued success in Europe: IAG, the parent company of British Airways, Iberia and others, reported a solid 15% operating margin in the second quarter, consistently outperforming its European peers. The company also decided to back away from its planned acquisition of Air Europa due to regulatory challenges, but will retain a 20% stake in the airline.
