Delta’s Cost Conundrum 

Third quarter earnings season is now underway, with Delta as usual hosting the opening ceremonies. Its results were again good, though somewhat disappointing given just how strong demand was this summer, not to mention just how far fuel prices had fallen. Non-fuel costs, alas, are starting to swell, all while fuel prices are once again marching upward.

EasyJet’s profits are marching upward. The orange-clad British carrier earned a lofty 21% operating margin in the peak summer quarter, lifted by strong demand, a flourishing package holiday business, and robust ancillary revenues. The low-cost carrier is buying more planes, including A321s. These allow it to grow capacity from slot-contrained airports like London Gatwick, where margins tend to be highest. A key priority going forward: Reduce and ultimately eradicate wintertime losses.

In other news, events in the Middle East forced many airlines to suspend service to Israel — Turkish Airlines, Wizz Air, and Ryanair are some of the country’s largest foreign carriers. Virgin Australia, a longtime money loser, is making money again. And American is rebuilding its presence in New York after its relationship with JetBlue was deemed illegal.