KPIs Pre- and
Post-Pandemic
Nov/Dec 2024
Global air passenger volumes in 2024 have surpassed the 2019 total by about 7%, though the growth trajectory now appears to be at a lower level. Nevertheless, this is an industry that now generates $1tr in annual revenues.
Some airlines have emerged stronger from the pandemic, others greatly weakened. Here we present a brief summary of some KPIs for six US and six European carriers, both Legacy/Network carriers and LCC/ULCCs, comparing the last 12 months data with the pre-pandemic 2019 results.
Passenger volumes for the US Legacies were up 5% while European Legacies were down 5%, but the big change has been in revenues. In a higher cost/yield environment US Legacy revenues were up 25% and European 11%. The US LCCs increased traffic by 10% and revenues by 22%, but Europe showed a more dramatic change: European LCC passengers up 21%, revenues up a remarkable 60%.
Operating margins fell to some degree across all the airline sectors between 2019 and 2024. But the US LCCs experienced a severe collapse in operating results, turning double digit operating profit margins into losses, or at best break-even. Ryanair and IAG were the best performers each achieving 12% margins in 2024, just slightly down on the pre-pandemic situation.
Despite the tight labour markets, the percentage of labour costs in total costs was generally up only one or two percentage points for the European carriers and the US Legacies. But there was a major change in the cost structure of the US LCCs: labour costs increased by 4-7 percentage points.
The US Legacies have emerged from the pandemic with a significantly higher level of net debt — up $9.4bn or 16%, largely the result of government guaranteed loans during the pandemic. The European Legacies as a group managed to reduce their net debt by $1.5bn over this period.
The European LCCs total net debt increased from $1.5bn to $4.2bn between 2019 and 2024, entirely due to the poor financial performance of Wizzair whose pandemic growth strategy went badly wrong. The US LCCs’ net debt position deteriorated markedly from $1.2bn to $8.2bn, partly due to JetBlue and Frontier becoming entangled in futile merger battles.
Stockmarket capitalisations should in theory reflect the relative financial performances and the airlines’ perceived prospects.
Among the US Legacies United’s share price has bounced, up 43% on pre-pandemic valuations, attributed to competent management and the view that it is best positioned to take advantage of the resurgence in long-haul markets, especially the Atlantic. By contrast, American has lost its strategic direction, and its market capitalisation is 25% down on 2019. Air France-KLM has been heavily discounted — valued at 54% less in 2024 than in 2019. Perhaps surprisingly, IAG shares have recovered to just 8% above 2019 levels.
There has been a general loss of investor confidence in the LCCs, especially the beleaguered US carriers — valuations are down 31-69%. Wizzair too has lost much of its value, share prices down 66%.
Ryanair is the happy exception — market capitalisation 24% higher in 2024 compared to 2019. Across all these KPIs Ryanair looks like the overall winner.
