Breaking Down the Airline Industry's Biggest Winners, Losers in 2016
PHOTO: Southwest Airlines was one of our winners and losers for 2016. (Courtesy Southwest Airlines)
Invariably, looking at a year in review means that some entities fare well over the previous 12 months and some, well, some didn’t.
Here’s a look at the 2016 winners and losers from the airline and aviation world.
WINNER – SAFETY. According to the Aviation Safety Network (ASN), this will be the safest year on record for traveling on an aircraft. The ASN keeps a database of all air travel incidents and fatalities. With an estimated 3.5 billion passengers flying this year, there will have been just one death per every 12,867,647 fliers. The previous best year was 2013 – one death for every 11.5 million passengers who flew.
WINNER – SOUTHWEST AIRLINES. This was a carrier that didn’t have an international flight as recently as 2014. But in 2016 Southwest was one of eight U.S. carriers to be chosen to begin commercial flights to Cuba.
LOSER – SOUTHWEST AIRLINES. With much fanfare, the airline introduced its new flight from Los Angeles International to Puerto Vallarta, Mexico earlier this month. Within days, it had to halt the flights because Mexican authorities have yet to issue required paperwork authorizing the flights in question.
“Because required paperwork still has not been issued by authorities in Mexico, we are now faced with unplanned challenges and forced to make proactive flight cancelations,” the carrier said in an emailed statement to TravelPulse. “We’re working to reach out well before impacted customers original departure dates to alert them to the canceled flight and accommodate them on alternative service.”
WINNER – ALASKA AIRLINES. There are still many hurdles to overcome, as United, Delta and American can attest, but Alaska Airlines’ acquisition of Virgin America has gone extraordinarily smooth so far. And that includes the settling of a lawsuit by a group of passengers loyal to Virgin America.
LOSER – THE U.S. BIG THREE. It’s been almost two years now that American, Delta and United filed a 55-page report to the U.S. government, alleging that their three counterparts from the Middle East – Emirates, Etihad and Qatar – accept government subsidies that violate the Open Skies Agreement and alter the international travel marketplace. And for almost two years, they have been stalled without a decision. In the meantime, the Gulf carriers continue to introduce routes to the U.S. Qatar Airways re-ignited the Open Skies debate earlier this year as it launched its new daily service between Doha and Atlanta’s Hartsfield-Jackson Airport – home base to Delta.
LOSER – LUFTHANSA AIRLINES. The German national carrier has been waging a battle with its pilots’ union for the last 15 months, with the pilots hitting back with intermittent strikes that have crippled the airline. Lufthansa has been forced to cancel more than 10,000 flights in the last year-and-a-half, and has lost almost $ 100 million in revenue.
WINNER – THE AIRLINES. At no time have U.S. airlines been more profitable than they are now, as an increase in passenger traffic coupled with historic low fuel prices have combined to bring more revenue to carriers than ever before. How solid has it been? Even investor Warren Buffett, who was burned more than 25 years ago and vowed never to buy airline stock again, purchased 21,770,555 shares of American Airlines Group, whose shares have gained 2.48 percent this year; 6,333,923 shares of Delta Air Lines Inc., although its shares have dropped more than six percent this year; and 4,533,013 shares of United Continental Holdings Inc., whose stock is up 9.8 percent in 2016. By sheer dollars and cents, Buffett spent more than $ 1.2 billion on airline stocks — $ 797 million on American, $ 249 million on Delta and $ 237 million on United.
WINNER – AIRLINE PASSENGERS. President-elect Donald Trump seems passionate about revamping America’s airports, which could benefit us all, though effects wouldn’t be measurable until years down the road. Thanks to new fuel-efficient planes, some notable new routes have been started or announced for the first time, including Las Vegas to Beijing. Singapore and United also kicked off service from San Francisco to Singapore. Emirates launched nonstop service from Dubai to Auckland.
LOSER – AIRLINE PASSENGERS. From a character standpoint, passengers continue to do stupid things like trying to open airplane doors while in flight, groping flight attendants, and hauling their bags off the plane during emergency evacuations. It might be a case of “a few bad apples ruining it for everybody,” but all it takes is one person to disrupt a flight.
LOSER – FREQUENT FLIER PROGRAM MEMBERS. American Airlines de-valued the redemption rate of AAdvantage miles of many of its routes earlier this year, especially if you want to use them to upgrade to business or first class. Most other airlines have done similar things in recent years, rearranging their programs to be based on money spent instead of distance flown.