World Airlines Turn Profitable, But What About India?

Slowly but surely airlines in the Americas and Europe are moving into the black, but there is no light at the end of the tunnel as yet for Indian carriers.

- Ameya Joshi

Delta Air Lines – one of the top three US carriers reported a profit of $652 million in the second quarter of the calendar year. This is the first profit for the airline since the pandemic began and also a sign that airline recovery could be on the horizon, especially when a significant chunk of the population gets vaccinated and is able to travel without restrictions.

The airline further added in its investor call that they are not seeing a dip in booking due to the new variants of the virus. Leisure travel has recovered to pre-COVID levels as per the carrier and there is significant recovery in business travel. Rival United Airlines had also hinted at profitability when it announced a 270 aircraft order last month. More insights will come forth when JetBlue, Southwest and American Airlines speak to analysts in August and give guidance for September and beyond. All of them have started inching towards profitability.

This has also led to these airlines planning an increase in capacity. While United Airlines placed an order with Boeing and Airbus for new jets, Delta has decided to acquire a mix of B737s (not MAX) and A350s from the leasing market and both carriers are looking for expansion beyond the current uncertainty.

Another carrier to return to black is Mexican carrier Volaris. The company is in black for the first time after 2019. It registered a net income of $78 million. While it is not as large as either Delta or United, it belongs to the geography where COVID-19 had impacted severely and affected the economy badly. While recovery has been fast in the US, it was on the back of government aid - something missing in Mexico.