Emirates Trims Annual Loss, Sees Profit Ahead as Travel Revives Bloomberg
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American Express News: American Express profit tops the chart due to doubling of travel and entertainment spend
On Friday, AmEx’s profit in the first quarter topped the chart, with a doubling in the customer spending on entertainment and travel to keep up with the pre-pandemic levels. This quarter’s AmEx profit has soared the most since 2020.
With the pandemic now finally being in control and restrictions being relaxed, Americans are in a mood to travel to make up for the time they lost due to the lockdowns in the pandemic. Customers of the United States are now travelling, shopping, and eating out with the relaxation in Covid-19 guidelines. People no longer want to be confined to their homes and are ready to venture out.
Major Wall Street banks like JPMorgan Chase & Co, Wells Fargo and Bank of America Corp have forecasted a spike in the spending trend.
In the American Express result, travel and entertainment spending had risen 121% as compared to the previous year of pandemic. This level globally rose for the first time in March, contributing to the AmEx profit.
The overall global spending has increased to 35% on a forex-adjusted basis, touching the monthly record high in March. This sky-touching AmEx profit is due to increased expenditure by millennial and Gen-Z AmEx cardholders, which surpassed 56%.
However, shares in American Express fell 1.2% low with the 35% spike in the company’s expenses due to increased customer engagement and reimbursement costs.
The biggest category, which accounts for American Express profit, expenditure on goods and services, hiked 21%, showcasing the strong consumer demand.
American Express anticipates the same type of profit for the rest of the year. American Express, the NY-based payments company’s entire revenue minus the expense, climbed 29% to around $11.74 billion.
What is American Express Company?
American Express Company, commonly known as AmEx, is an American payments company specialising in credit card services based in New York City. AmEx is a luxury credit card company providing elite rewards on every expenditure. In the first three months of 2022, AmEx profit transgressed its estimation due to people spending a lot on travelling and shopping. AmEx profit climbed up to $11.74 billion.
Details of American Express result
- The first quarter of the year that ended on March 31 revealed that AmEx’s net income was worth $2.1 billion, or $2.73 per share.
- However, in the previous year, the net income was $2.2 billion, or $2.74.
- According to the data collected by Refinitiv IBES, as expected by analysts, the surplus was $2.44 per share.
- The American Express result showed that the yearly growth rate of the company is somewhere between 18% to 20%, and per-share earnings fall between $9.25 to $9.65.
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Etihad enjoys profit boost despite ‘suppressed’ business travel
Etihad Airways will report its first-ever profitable first quarter this year despite corporate travel remaining “hugely suppressed”.
Tony Douglas, CEO of the Abu Dhabi-based carrier, said the improved results included a “$1 billion ebitda (earnings before interest, taxes, depreciation and amortisation) turnaround and $1.25 billion turnaround on core operating profit”.
“It puts us in a far better mood now than we were at this time last year,” said Douglas at last week’s CAPA Airline Leader Summit in Manchester.
The carrier’s momentum built in the second half of 2021, particularly in the fourth quarter, and carried on into 2022, with Douglas adding that load factors in March 2022 were higher than March 2019.
“That’s not to suggest we are back to 2019 – we most certainly are not, but it’s a big signal for us that we are seeing signs of a recovery,” he stressed.
Corporate travel, however, remains “hugely suppressed,” said Douglas, who added that some corporations were starting to “come back in and operate in a way in which we are familiar with pre-pandemic, [although] many still from a policy point are avoiding it”.
What Etihad has seen take off is a “sizeable increase” in demand for its business class cabin, but not from corporate travellers.
Douglas said leisure travellers booking premium cabins “may prove to be a trend”, which could make it more difficult for returning corporate travellers to find premium seats.
“It’s something that may or may not occur as business travel comes back. [Leisure customers] may have gotten [their pent-up travel] out of their system. But as the corporate travel market opens back up, they’ll have exciting new options to choose from,” added Douglas.
Douglas was referring to the new business and economy classes onboard Etihad’s Airbus A350-1000 aircraft, which the carrier put into operation on 31 March.
The aircraft’s business class cabin offers 44 studios with sliding doors for privacy. Each seat has direct aisle access and converts into a fully 79-inch lie-flat bed.
The company will receive four more A350s this year and has orders and options that can bring that total up to 20 aircraft.
Etihad to Report First Q1 Profit, But Corp. Travel Still ‘Hugely Suppressed’
Etihad Airways will report its first-ever profitable first quarter, Etihad CEO Tony Douglas said Thursday at the CAPA Airline Leader Summit in Manchester, England.
The company improved first-quarter 2021 results with a “$1 billion [earnings before interest, taxes, depreciation and amortization] turnaround, and $1.25 billion turnaround on core operating profit,” Douglas told BTN. “It puts us in a far better mood now than we were at this time last year.”
The carrier’s momentum built in the second half of 2021, particularly in the fourth quarter, and carried into 2022, Douglas said, adding that load factors in March 2022 were better than March 2019. “That’s not to suggest we are back to 2019—we most certainly are not, but it’s a big signal for us that we are seeing signs of a recovery.”
Corporate travel, however, remains “hugely suppressed,” Douglas said. Some corporations are just starting to “come back in and operate in a way in which we are familiar with pre-pandemic, [though] many still from a policy point are avoiding it.”
What Etihad has seen take off is a “sizeable increase” in demand for its business-class cabin, but traditional business travelers aren’t the ones filling it. Douglas said it’s travelers who see the value in the cabin’s space and amenities from a wellness standpoint, and who have little or no credit card debt and more disposable income.
“It may prove to be a trend,” Douglas added. As for whether that means business travelers will have more difficulty finding premium seats as they return to the skies, “that’s a high-class problem,” he said. “It’s something that may or may not occur as business travel comes back. [Leisure customers] may have gotten [their pent-up travel] out of their system. … But as the corporate travel market opens back up, they’ll have exciting new options to choose from.”
Douglas was referring to the new business and economy classes on board the Airbus A350-1000, which the carrier put into operation March 31. The aircraft’s business class offers 44 studios with sliding doors for privacy. Each seat has direct aisle access and converts into a fully lie-flat bed with 79 inches in length. Passengers are offered noise-canceling headphones, an 18.5-inch TV screen, a built-in wireless charging dock and Bluetooth headphone pairing. The A350 economy class is configured with 327 seats in a 3-3-3 arrangement, including 45 ‘Economy Space’ seats with an additional four inches of legroom.
“We’ve made a business-plus proposition, using roughly the same real estate, but you’ve got a proper studio of your own with private space, such that I would suggest that many North American or Western European travelers would conclude this is better than most people’s first class,” Douglas said. “But it’s commercially efficient in the way it’s designed and very sustainable. It’s deliberately designed for the discerning corporate market and for people who wish to have that level of comfort refinement.”
The company will receive four more A350s this year and has orders and options that can bring that total up to 20, Douglas said. Another aircraft Etihad operates is the Boeing 787 Dreamliner, and the plan is to have 11 of them “over time.” Those two aircraft “are the mainstays now of our fleet, and are the world’s most efficient aircraft,” he added. “They are game-changers in their own right.”
Douglas also cited as another draw for the business market is Etihad’s recently launched Conscious Choices program, through which corporate clients can make sustainability-based choices, including paying a green surcharge and investing in offset solutions and sustainable aviation fuel. “Corporate green loyalty is going to be far more important going forward than it’s ever been,” he said, adding that almost every corporate client has said, ” ‘We just can’t not do this.’ ”
Corporate clients have embraced sustainability options, because the alternative is to say “I’ve made a conscious choice not to,” Douglas said. “And if you’ve made a conscious choice not to, going back to your [corporate social responsibility] agenda as a corporate, it’s possible you may come under more scrutiny. So it has been received extremely well. What the corporates like about it is it is simple and easy to understand. Quite frankly, what we see in this is yet another way of drawing attention to the way in which everybody can contribute to this. The Etihad guest loyalty program is an essential element in the way we operate our business. But we see it now as even a bigger bridge into the green space.”
Mastercard Profit Beats on Spending, Travel Revival | Investing News
(Reuters) – Mastercard Inc reported a quarterly profit above analysts’ estimates on Thursday, as a rise in domestic spending and growth in cross-border volumes following an uptick in international travel drove higher transactions through its cards.
Over the past quarter, vaccination programs across the world gained steam, benefiting card companies such as Mastercard as people ventured out more and spent on travel and entertainment.
However, the recovery in spending was somewhat dented towards the end of the quarter with the spread of the Omicron coronavirus variant.
The company’s profit rose to $2.4 billion, or $2.41 per share, for the fourth quarter ended Dec. 31, from $1.8 billion, or $1.78 per share a year earlier.
On an adjusted basis, Mastercard earned $2.35 per share. Analysts had expected a profit of $2.21 per share, according to Refinitiv IBES data.
Net revenue rose 27% to $5.2 billion.
(Reporting by Sohini Podder in Bengaluru; Editing by Shounak Dasgupta)
Copyright 2022 Thomson Reuters.
Lufthansa Jumps Back to Profit as Travel Restrictions Ease | Investing News
BERLIN (Reuters) – Germany’s Lufthansa posted a return to operating profit in the third quarter on Thursday for the first time since the beginning of the pandemic, boosted by the easing of COVID-19 travel restrictions and strong demand in the summer season.
The group reported adjusted earnings before interest and tax of 17 million euros ($19.69 million) in the quarter, compared to a loss of 1.262 billion euros a year ago.
Analysts in a company-provided poll had expected an adjusted EBIT loss of 33 million euros.
Third-quarter revenue almost doubled to 5.2 billion euros, compared to an average analyst forecast for 5.5 billion.
(Reporting by Riham Alkousaa, editing by Emma Thomasson)
Copyright 2021 Thomson Reuters.
Allegiant ‘bullish’ about summer travel, after turning small profit | News
Allegiant Travel Company, the parent of ultra-low-cost carrier Allegiant Air, turned a slim profit in the first three months of the year as the company prepares for a busy summer with a “bullish” outlook.
“Based on the data we are seeing, I can say, we are back,” the company’s chief executive Maury Gallagher tells analysts on the company’s quarterly earnings results call on 4 May.
The Las Vegas-based carrier reports it earned $6.9 million in the first quarter of 2020, compared to a $33 million loss for the same quarter in 2020, just as the coronavirus pandemic was beginning to make itself felt around the world. In the fourth quarter of 2020, the company had reported a loss of $29 million.
Revenue for the first three months of 2021 was $279 million, down 32% from the same quarter in 2020.
But signs of improvement and a sustainable recovery are mounting, executives say. Potential passengers are booking tickets in numbers that align with 2019 trends, and they are also planning further ahead with their air travel.
“The momentum reported last quarter picked up in earnest towards the back half of the first quarter with booking trends showing meaningful improvement,” says Gallagher. “I could not be more bullish on our outlook. Going forward our full-year, 2021 capacity should exceed 2019 capacity levels.”
In the first quarter of the year, capacity was 3.1% above that of pre-pandemic 2019, Gallagher adds.
“Booking trends have been particularly impressive with average daily bookings for the months of March and April exceeding the same time period in 2019,” he says.
The booking curve – the amount of time between when a customer books a flight and the date of that travel – seems to be extending further into the future, meaning potential customers are more confident of plans they can make with more advance notice, Allegiant adds.
“April’s results came in as strong as March helped by a ten-point increase in load factor from 54% to 64%. We expect capacity in the coming months will be equal to or greater than our 2019 levels,” the company adds.
The carrier ended the quarter with 100 aircraft in its all-Airbus fleet, and expects to end the second quarter with five more. By the end of the year the airline will have 108 aircraft in its fleet, executives say. Allegiant will cut five 177-seat A320s from its fleet as it adds 13 of the higher-density 186-seat A320 aircraft.
Trip posts profit as domestic travel recovers
Trip.com, formerly Ctrip, posted a net profit of 1 billion yuan (US$156 million) for last year’s fourth quarter, the second quarter of profitability since the coronavirus outbreak, China’s biggest travel agency said on Thursday.
The domestic travel business had shown a “strong recovery momentum” and international tourism is expected to recover as more people are vaccinated and the weather gets warmer, the Nadaq-listed company said.
Trip’s fourth-quarter profit compared with 2 billion yuan a year ago. Revenue in the quarter was 5 billion yuan, a 40 percent decrease from the previous year ago, but narrowing from the decrease of 48 percent in the previous quarter, according to the Shanghai-based company.
“2020 was a challenging year,” James Liang, executive chairman, said in a statement, “while at the same time, we remain ambitious with a global vision to drive our sustainable growth post pandemic.”
Investment bank Piper Jaffray has upgraded Trip’s target price to US$47 from the previous target of US$40, compared with its current price of US$39.8.
The global tourism industry faces a total loss of US$1.3 trillion in 2020 because of the pandemic, according to media reports.
For the full year of 2020, Trip’s revenue reached 18.3 billion yuan with a gross merchandise value of 395 billion, ranking No. 1 in the world. GMV is an index measuring business for Internet service providers.
The company noted a booming demand for domestic air travel and hotel accommodation, with high-end hotel sales enjoying “double-digit” growth.