- Turkish Airlines posted a $161 million net profit on a $512 million operating profit in the first quarter. Revenues increased 10 percent year-over-three-years to $3.1 billion during the period with cargo the highlight; freight revenues doubled to $980 million. Unit revenues were up 18.3 percent compared to 2019 on a 1.2 percent increase in unit costs excluding fuel. Turkish felt a “limited” impact from the war in Ukraine; it has suspended all flights to Belarus, Russia, and Ukraine that together amounted for 2-3 percent of group revenue in 2021.
Looking ahead, Turkish plans to fly more capacity this year than it did in 2019. It plans for capacity flat to up 10 percent in the second quarter; up 5-15 percent in the third; and flat to up 5 percent in the fourth. The airline’s capacity was down 9 percent year-over-three-years in the first quarter. It also targets lower unit costs excluding fuel for the full year than three years earlier.
- Mexican leisure demand remained buoyant for Volaris in the first quarter, despite the Omicron variant. CEO Enrique Beltranena said the Omicron surge resulted in the three weeks of booking softness for the airline, and he expects future waves of Covid-19 to be similar. Revenues for the quarter rose 80 percent year-over-year, to $567 million, but the carrier reported a loss of $49 million, due in part to higher fuel costs and unfavorable foreign exchange. Capacity for the full year is expected to be up in the high 20-percent-range, and the company’s guidance on revenue is $2.8-3 billion for the full year.
- Aeromexico, which exited its U.S. Chapter 11 restructuring in March, dramatically narrowed its operating loss to 763 million Mexican pesos ($37 million) in the first quarter, a 78 percent year-over-year reduction. Revenues were down 21 percent compared to 2019 to 12.9 billion Mexican pesos. Unit revenues decreased less than 1 percent on a 4 percent increase in unit costs excluding restructuring expenses and fuel. Aeromexico carried 27 percent less passenger traffic on 20 percent less capacity than in 2019. The airline did not provide forward guidance.
- Frontier Airlines posted a $121 million net loss in the first quarter. The red ink flowed despite an 11 percent increase in revenues to $605 million compared to 2019. Ancillary revenues jumped 21 percent year-over-three-years. Total unit revenues decreased 8 percent compared to the same quarter pre-pandemic while unit costs excluding fuel jumped 30 percent; Frontier attributed the CASM-ex increase to lower utilization and stage length, as well as higher labor expenses. The airline flew 3 percent more passenger traffic than in 2019 during the quarter on a 20 percent increase in capacity. Frontier forecasts a 1-5 percent pre-tax margin, and capacity growth of 10-12 percent year-over-three-years in the second quarter.
- Icelandair was hit by the Omicron variant in January and February, which helped widen its net loss to $49.7 million in the first quarter compared to the quarter prior. However, like its peers elsewhere, demand picked up in March and the airline forecasts profits in the June and September quarters; it withdrew its full-year profit outlook citing global geopolitical uncertainty. Icelandair plans to progressively ramp capacity as the year continues from 59 percent of 2019 in the first quarter to 77 percent in the second, and 85 percent in the third quarter. Revenues were down 36 percent year-over-three-years to $159 million in the first quarter.
- U.S. regional SkyWest Airlines continued to turnout its pandemic profits with a $17.7 million net result in the first quarter. Revenues jumped 38 percent year-over-year to $735 million driven by a 13 percent increase in block hours over the same period. Those results give SkyWest the confidence to forecast a profit for 2022, which is better than the breakeven outlook executives provided at the outset of the year. But it is not all positive for the airline: the U.S. pilot shortage continues to weigh on SkyWest with high levels of captain attrition. CEO Chip Childs does not expect the situation to ease for SkyWest until the end of the year or early 2023. However, the carrier has improved its capacity guidance for the year and now forecasts only a roughly 5 percent year-over-year decrease in block hours due to the pilot situation.
SkyWest reminded investors of its investment in Southern Airways Express, a U.S. Part 135 scheduled operator. What SkyWest describes as a “strategic minority” stake dates to 2019. The airline is now using it to ensure a continuity of air service to the 29 small essential air service communities it plans to exit, said Childs.