雅虎香港財經 Top 10 Richest Airlines in the World
In this article, we will be taking a look at the top 10 richest airlines in the world. To skip our detailed analysis, you can go directly to see the top 5 richest airlines in the world.
The importance of the global airline industry cannot be understated. The expansion and growth of the industry has been one of the most important factors behind globalization, connecting people and facilitating international trade. In 2014, according to estimates provided by the Air Transport Action Group, the total economic impact of the airline industry, including both direct and indirect, was around $2.7 trillion, contributing close to 3.5% of the world's GDP. While the bulk of cargo transportation is still carried out through sea due to efficiency, ability to transport a large quantity of goods at the same time and lower costs, airlines can transport goods much faster which is important for time-sensitive transportation. But perhaps the biggest impact of airlines is on the tourism industry, allowing people to travel from one end of the world to the other in less than a day.
While flying was initially limited to the rich for several decades because of the costs associated with it, low-cost carriers have now ensured that flying is accessible to a lot more people, with tickets within Europe on many low-cost carriers often being available on deals for less than $20 - $30.
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Despite the many benefits that airlines provide, contributing heavily to the economy and providing employment to millions of people across the world, it has come in for criticism as well. The carbon footprint of flying in an airplane is significantly higher than other forms of transportation, including ships and trains, which is why governments have taken steps to convince people to take other forms of transportation as opposed to airlines. There are also complaints regarding the quality of services provided including high rates of cancellation and high barriers to entry, since setting up an airline company is a hugely capital-intensive process which is why competition is often not very high. Add to that complaints about airlines adding as many seats as possible while affecting the comfort of passengers, it is obvious that there is a scope of improvement within the industry as well.
The Covid-19 pandemic, which affected the world in 2020, had devastating consequences for the airline industry, with most countries locking down in an effort to contain the spread of the disease. This resulted in international travel and mostly domestic travel coming to a complete shutdown, and with the barriers to travel imposed once international travel resumed, including vaccinations and forms, travel only very slowly started to pick up till early 2022. From 2020 to 2022, the global airline industry has been estimated to have lost more than $200 billion and job cuts for tens of thousands of people across the industry.
In 2022, global travel finally started to resume as most countries eased travel restrictions and people all across the world started to look forward to life beyond the pandemic. And just when things started to look up again, the Russian invasion of Ukraine began, which has affected airspace as well.
Despite the aforementioned issues, the airline industry has shown incredible resilience to cater to extremely high demand in 2022. In fact, Q2 2022 was said to be among the most profitable quarters in the history of the industry after cutting costs and jacking up prices, with the price per mile being higher than ever before in history. Passengers have come out in droves, which has led to airports being unprepared to handle the influx, resulting in flight cancellations and Heathrow Airport in London announcing that it would cap the number of passengers at 100,000 per day, resulting in a conflict with airlines who had prepared for the higher number of passengers but had to cancel flights anyway.
The future outlook does look good though for airlines in 2023. Most airlines expect to return to profitability as the pent-up demand for travel looks to sustain bookings in the next year. Despite the higher demand in 2022, losses for the year are still expected to be around $9.7 billion, according to the International Air Transport Association. According to Moody's, the operating profit for the airline industry is expected to increase by more than 200% in 2023, which will be a relief for most of the richest airlines in the world, which have still been in a loss in their latest financial reports.
While there will be a lot of commonalities between the richest airlines in the world and the biggest airlines in the world, the method of assessment is incredibly different. While the biggest airlines are based on revenue, market cap, assets, profits and employees, the richest airlines have been assessed based on cash, profits, gross margins and net debt. The lower the net debt, the richer the company is. For our rankings, we have checked the latest profit and loss and balance sheet items of each company through Yahoo Finance, while assigning 40% weightage to cash in hand and 20% weightage to the other three criteria. Most airline have been struggling to return to profitability and so, have negative margins and net losses with high levels of net debt. Thus, airlines which have managed some semblance of profits or low level of losses with high cash reserves have ranked much higher on our list. So, without further ado, let's take a look at the richest companies in a major industry, starting with number 10:
10. IAG
Total cash and cash equivalents of the company (in millions): $8,224
Total net profit of the company (in millions): -$3,050
Gross margin of the company: -8.2%
Total net debt of the company (in millions): $2,164
The Anglo-Spanish company owns many of the biggest airlines in Europe, including Iberia, the flag carrier of Spain, and British Airways, the flag carrier of the United Kingdom. In addition to these, IAG also owns other airlines including budget airline Vueling, Aer Lingus and BMI. The company currently has more than 50,000 employees.
9. Air France - KLM
Total cash and cash equivalents of the company (in millions): $7,077
Total net profit of the company (in millions): -$3,424
Gross margin of the company: 21.7%
Total net debt of the company (in millions): $2,631
Founded 18 years ago through the merger of French France Air and Dutch KLM, Air France - KLM is one of the biggest and richest airlines in Europe, with headquarters in Paris and Amsterdam. The airline has struggled in 2021 resulting in losses of nearly $3.5 billion. The company currently has over 86,000 employees.
8. Turkish Airlines
Total cash and cash equivalents of the company (in millions): $2,677
Total net profit of the company (in millions): $959
Gross margin of the company: 22.1%
Total net debt of the company (in millions): $6,387
The flagship carrier of Turkey, Turkish airlines services around 340 destinations in six continents and is considered to be the largest mainline carrier in terms of number of passenger destinations, flying to 126 countries.
7. JetBlue Airways Corporation (NASDAQ:JBLU)
Total cash and cash equivalents of the company (in millions): $2,842
Total net profit of the company (in millions): -$182
Gross margin of the company: 5.8%
Total net debt of the company (in millions): $1,988
JetBlue Airways Corporation (NASDAQ:JBLU) is an American low-cost carrier. JetBlue Airways Corporation (NASDAQ:JBLU) operates over 1,000 daily flights and its low net debt has ensured that JetBlue Airways Corporation (NASDAQ:JBLU) ranked higher in our list of the richest airlines in the world.
6. American Airlines Group Inc. (NASDAQ:AAL)
Total cash and cash equivalents of the company (in millions): $17,336
Total net profit of the company (in millions): -$1,933
Gross margin of the company: 0.1%
Total net debt of the company (in millions): $37,787
American Airlines Group Inc. (NASDAQ:AAL) has the highest cash and cash equivalents for any airline company in the world, but its significant losses and high levels of net debt has made it drop down the list of the richest airlines in the world. American Airlines Group Inc. (NASDAQ:AAL) is also the world's largest airline in several metrics including fleet size and scheduled passengers carried. American Airlines Group Inc. (NASDAQ:AAL) handles more than 200 million passengers every year.
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Disclosure: None. Top 10 richest airlines in the world is originally published at Insider Monkey.
