If you were following news reports from the IATA Annual General Meeting, you’d think executives spent hours in Rio de Janeiro discussing rising fuel prices, the war in Iran, future mergers and acquisitions, and supply chain woes.1 That stuff matters, but let me assure you: these serious conversations are a tiny part of what happens at this meeting every year. So what does happen?

Well, there’s the serious and sober part, when executives engage — often in dreary, windowless rooms at a convention center — with partners and potential partners about alliances, codeshares, interline agreements, and frequent flyer tie-ups. Then, at night, many executives enjoy happy hours and boozy dinners,2 perhaps with former colleagues or maybe with leaders from their airline’s closest joint venture and codeshare partners.

Sadly, airlines never invite me to those bilateral meetings (I hear they can be quite boring), and a carrier only once invited me to a boozy dinner, though just for dessert. But I do participate in what many consider to be the best part of the AGM: the gossip, when executives freely share industry chatter as if they’re characters from “Mean Girls.” The fodder is what you would expect: job openings, people they don’t like, and competitor executives they view as incompetent.3

I’m not going to betray what I learned in off-the-record discussions, but there is a topic that executives will discuss with me “on background” (that’s what you say to me when you’re telling me something I can use so long as it can’t be traced to you). They love to chat about big open jobs — specifically, who is going to get them.4

This year, the favorite topic was: who will replace Robert Isom and when?5 I’ll cover that soon, but since we think Isom has time, I’ll focus on a more urgent personnel matter: who will lead Air Canada no later than Sept. 30 after Mike Rousseau, who does not speak French, retires. Here’s what I heard in Rio about Rousseau’s likely successors.

The top three

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By now you should know the top headlines from last week’s Bernstein Strategic Decisions Conference. I won’t repeat them. You should come to The Airline Observer for the insider-y stuff that others don’t cover.

What they didn’t cover is how Robert Isom once again proved he is both bland and seemingly incapable of selling a compelling narrative about American’s future to investors.

I almost feel bad for the guy. As usual, Scott Kirby — Isom’s former boss and current public antagonizer — soaked up most of the attention at Bernstein with inflammatory comments on JetBlue’s losses. (Kirby was clear he’s not interested in a pre-bankruptcy JetBlue, though he’d gobble up American, should the opportunity arise.)

Kirby likely delights in making Isom look like an amateur. But other CEOs know how to play this rhetorical game too. Even Bob Jordan, whom I once considered the most vanilla man in aviation,1 has learned how to tease investors with enough nuggets to win extra press coverage. (This time, he said Southwest might add first class seats, as well as long-haul flights to as many as a dozen destinations.)

So while Kirby and Jordan played offense at last week’s conference, Isom mostly played defense, just like usual. And not a particularly effective version of it.

Perhaps I should let it go, and admit that’s who Isom is. A former operations chief, Isom is cautious, long preferring controlling costs over investing in cabin interiors, branding, and lucrative (but risky) long-haul flights. Still, I’ll note that, perhaps because I think he wants to retain his job, Isom recently embraced the promise of premium revenues and international flying. There have been improvements; now he must do a better job of communicating it.

Today, I will share with you four things Isom told investors in hopes of changing how investors think of the airline (and his leadership). I respect that Isom no longer views an airline seat as a commodity product, but I still don’t think he fully gets what it will take to turn American around.

Let’s get into it.

Isom used a hockey metaphor. It was incorrect.

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“We’re putting in an overlay that’s not letting the system overreact to a drop in bookings,” chief commercial officer Sophie Dekkers told analysts last week on EasyJet’s FY2026 first half results earnings call.

Even as more airlines trust A.I. and machine learning to give them concrete answers, how to price in an uncertain environment remains a dilemma. With August bookings down 7 percent compared to expectations, EasyJet had two choices – lower its prices (as the machine would suggest), or pray for better times while managing for yield.

EasyJet opted for the second option, because its executives bet they know information about consumer behavior that the revenue management system does not. CEO Kenton Jarvis told analysts that demand is robust, just delayed compared to historical norms, because customers have been spooked by “unhelpful comments” from European politicians who fear potential fuel shortages.

Airlines now know fuel won’t be a problem, but it’s not clear that all travelers have received the message. Some have been taking a wait-and-see attitude for late-summer trips.

”People are just leaving that decision to later,” Jarvis said. ‘We don’t yet know what the fare environment will be for July, August, and September."

‘A game of chicken’

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It should not surprise you which style I prefer. While I have empathy for CFOs who want to cut costs and for COOs who lobby for indestructible finishes, I like it when sharp product-focused executives win these internal battles. The most adept executives successfully lobby colleagues to accept the whole package — a bespoke (and perhaps more expensive) design that highlights the best of an airline’s brand but is still tough enough for the most persnickety tech ops teams.

Air Canada COO Mark Nasr knows how to navigate this complex internal bureaucracy to design a suite passengers want to fly. Nasr leads the team that soon will introduce two new business class suites: the Collins Aerospace Aurora business class on the A321XLR and the Elevate Ascent on the 787-10.

Many airlines install these seats. But Nasr, a former commercial executive, persuaded his colleagues to spend time and money to make significant alterations. Air Canada invested in improvements, like extra shoulder and legroom compared to the standard version, as well as branding elements (including colors) that should make passengers feel warmly toward the airline.2

Long-time readers know Nasr is among my favorites because he’s the rare executive who is both brilliant and a consummate aviation geek.3 Nasr brags that he flies about 300,000 miles yearly, about half on competitors, and he obsesses over tiny attributes that other airlines miss. “Details matter,” Nasr said, a phrase he used several times during our recent interview.

Nasr and I recently discussed some micro-improvements Air Canada made while designing its business class suites. Here are some highlights of our discussion.

Passengers probably won’t lose their AirPods

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Wizz Air Chief Commercial Officer Ian Malin also said he has no qualms, telling me his airline has secured its fuel for May and June, and is expecting its suppliers soon will secure stock for July.

”I struggle to accept that we will systematically run out of fuel,” Malin said. “Four weeks ago people were saying we had four weeks’ worth of fuel. Today there are no issues anywhere in our network. Now the press is saying it’s six to eight weeks. We have daily calls with all our airports and fuel suppliers. Nobody is saying they will run out.”2

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But under his successor, Jimmy Dempsey (a long-time financial executive), Frontier is taking a more measured approach, in both expansion and rhetoric. During Frontier’s first quarter earnings call on Tuesday, Dempsey made it clear that he does not seek world domination. Instead, he wants to return the airline to consistent profitability.

So while Frontier will evaluate opportunities to add flights, and consider bidding for assets at key airports, Dempsey said he won’t make irrational decisions to win share.

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Scott Kirby likes to remind us about his math acumen, so I figured he might share a sophisticated analysis of fare patterns. Or, perhaps he might he explain how raising fares in lockstep is illegal (remember the “capacity discipline” era?) and challenging to coordinate because some carriers grow for their own reasons.

But he did neither. Instead, he blamed other CEOs, saying some lack the knowledge and backbone to raise fares, except when faced with external stressors. Kirby said too many CEOs take advice from marketing and government relations executives and argued those people worry too much about whether the public will view their airlines as price gougers. In Kirby’s telling, that’s a big reason airfares have fallen in real terms since the pandemic.

”I’ve watched this for at least 25 years now and have come to the conclusion that ... every airline CEO should have to have spent two years at a reasonably senior position in revenue management [and] understand it,” Kirby said. “Most of them haven’t. That’s the reason it’s harder to get fares up.”2

I understand his argument. The math nerds who populate revenue management departments might be the smartest people at an airline, but many of them — how can I say this nicely? — struggle to communicate effectively. When they approach a CEO with ideas based on advanced math, Kirby said, they’re drowned out by louder voices who warn of public backlash. Some voices might remind CEOs that grandstanding lawmakers like to summon airline executives for questioning. Who wants that?

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Some subscribers have emailed and texted to say Scott Kirby’s very detailed statement about American rebuffing his desire to acquire the airline is an indication that Kirby wishes to move on. “They declined to engage and instead responded by publicly closing the door,” Kirby said in a statement filed Monday with the SEC. “And without a willing partner, something this big simply can’t get done.”

If you think he’s done, you don’t know Kirby.

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The numbers were not pretty. The parent company of Alaska, Hawaiian, and regional airline Horizon reported a net margin of -9.6 percent on revenue of $3.3 billion. The group spent an extra $100 million for fuel than it had budgeted, paying an average cost of $2.98 per gallon, about 14 percent higher year-over-year.

Overall demand was robust, but the group faced some revenue challenges as it limped to a loss equal to $1.69 per share. During what CEO Ben Minicucci called “once in a generation rainstorms” in Hawaii, with rainfall during two weeks in March reaching 3,000 percent of normal levels in some regions, passengers called off many trips, driving “a spike in cancellations and near-term book away,” chief commercial officer Andrew Harrison said on Tuesday’s first quarter earnings call.

Customers might have shifted to Mexico, but Puerto Vallarta (where Alaska is the top U.S carrier) had its own problems. “Civil unrest leading up to the spring break travel period had a meaningful impact on demand as well,” Harrison said.

Alaska and Hawaiian remain leisure-oriented airlines, and these two regions account for roughy 30 percent of the group’s capacity — enough to cost the company nearly a point of RASM in the first quarter.

While the worst is over, Harrison warned of an overhang into April and May, a major headwind for a company that needs massive revenue to counter rising costs. It predicts its second quarter fuel bill will be $600 million higher than it planned for, and it expects to pay an average of $4.50 per gallon.1 “As of today, we are recovering approximately one-third of incremental fuel costs,” Harrison said.

With fuel costs expensive (and fluctuating), the company has suspended EPS guidance, telling analysts there are too many potential outcomes to make a concrete prediction about prices. Nonetheless, whatever the price-per-gallon, executives said they’re optimistic they can pass on some expenses to customers.

“Some of these fare increases are sticking,” Minicucci said. “We’re getting an average of $25 [extra] on an average fare, give or take, depending on which market it is.”

To gain pricing power, the group is removing flights in Mexico and on late-night departures in high-frequency markets. Though North America capacity should fall slightly year-over-year in the second quarter, systemwide capacity is expected to rise 1 percent, because of new long-haul flights from Seattle.

How big of a problem is all of this?

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If only Wizz Air executives had listened to their nemesis, Ryanair’s Michael O’Leary, who spent years gleefully suggesting that Wizz’s Abu Dhabi joint venture would fail. Perhaps O’Leary’s bombastic rhetoric was inappropriate, but his message to Wizz was accurate: ULCCs typically succeed when they fly packed airplanes on short stage lengths and turn airplanes quickly to leverage their cost advantage.

Unfortunately, Wizz chose a different path with its 2019 joint venture with the Abu Dhabi Developmental Holding Company. The sovereign investor wanted a low-cost option to connect Abu Dhabi with Europe, the Middle East, Asia, and Africa, both to bring in tourists and to make it easier for laborers to travel back and forth. Meanwhile, Wizz wanted entry into a market where it (presumably) would have less risk, since it only owned 49 percent of Wizz Air Abu Dhabi.

I don’t think you need as much experience as O’Leary to ask how this airline, which began flying in January 2021, would be a good idea. Long flights to Europe, Asia, and parts of Africa always were going to challenge the ULCC model, and while it’s true that passengers tend to find cheap fares, the Wizz brand wasn’t (and probably still isn’t) well known in the Middle East.

With little going right, Wizz Air Abu Dhabi closed Sept. 1. When they ended the 12-aircraft operation, executives blamed several challenges they had not expected, including high maintenance costs, engine issues, operational reliability problems, and government restrictions on which routes it could fly.1

With the benefit of hindsight, we know that shutting down the airline was a good idea. Six months later, Israel and the United States attacked Iran, and Iran retaliated in part by targeting the UAE with missile and drone attacks. By then, only about 4.7 percent of Wizz’s capacity flew to the Middle East, mainly on longer hauls from European bases to Saudi Arabia, the UAE, Israel, and Jordan.

“A lot of people say, ‘You look really smart,’” Wizz chief commercial officer Ian Malin told me in an interview last month. “Certainly we didn’t know what was going to happen, but one of the reasons for pulling out of that airline … was because every time there was political instability, geopolitical sorts of stuff, the capacity got all messed around.”

I like Malin, and not just because he’s such a loyal listener to The Air Show that he listened to it last year during the Wizz Air Skopje half marathon. I found him candid in discussing Wizz’s recent stumbles, and I appreciated how he led me through his network changes, like bolstering operations in Italy and Eastern Europe. I thought he chose his words carefully only once — when he responded to O’Leary’s very public vendetta against his employer, which goes beyond Abu Dhabi.

“Michael can say all sorts of stuff, and he will,” Malin said. “We don’t really care. We know that there’s a lot of good things he does. He should focus on what he does well and not trying to identify what we do poorly.”

Here are some highlights of my discussion with Malin.

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I checked in with American’s corporate communications team and learned that American now has a different approach to how it approves confirmed travel for competitors. While it will give tickets in advance in some circumstances, it now does so on a case-by-case basis and not nearly as often as before September, when it had a more liberal policy. More often than not, the answer is no, except for joint venture partners, because they’re not really competitors.

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However, some airlines elsewhere lack such optimism. Last week, I spent time in Auckland with Air New Zealand CEO Nikhil Ravishankar,1 and I learned he’s treating this situation far differently than Ed Bastian, who has told investors that Delta should recover all of the run-up in fuel within a couple of months. Before this crisis, Air New Zealand already had raised prices to cover its increased costs (like airport charges), and Ravishankar said he’s not sure how much more his market can bear.

“The world is volatile, and so it’s tempting to use the term unprecedented against every crisis we see,” Ravishankar said. “Some qualify as unprecedented crises, and some don’t. This is as unprecedented and as existential, I think, as it gets.”

How bad is it?

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That's a story for another time, because on Tuesday, JP Morgan held its annual airline conference in Washington, D.C. Insiders look forward to it because Jamie Baker doesn’t cozy up to CEOs with canned questions they have already answered 10 times. He can make executives look dumb or inept, but they must show up anyway, because he’s so influential.

Today, I will focus on how top executives from the four U.S. global network carriers handled Baker’s1 aggressive questioning. All are feeling a pinch from fuel prices, (United expects to pay about $400 million more in the first quarter than expected) though CEOs from what I’m now calling the Big Four — Alaska, United, Delta, and American — expressed optimism they’ll recover costs by raising fares.2

We won’t know if they can for several months. However, I think three of the four CEOs did a nice job of communicating why their airlines have enough strengths to attract motivated customers who will pay more.

The fourth airline might do OK too. But the CEO of that airline couldn’t tell Baker why his carrier had a moat that would protect it. It’s a potential problem as a carrier without a competitive advantage might struggle if demand wanes.

Which CEO struggled to define his moat? Read on to find out. And stay for nuggets from each of the four presentations.

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“When I accepted this role, the board gave me a clear mandate to enact change at our company,” Jimmy Dempsey (the airline’s former president) told analysts during his first earnings call as CEO.

Importantly, Dempsey promised to prioritize cost more than his predecessor. I found it odd that Biffle loved to argue that Frontier would win long term because the lowest cost always wins, and yet Frontier’s costs kept rising. Last year, CASM ex-fuel increased 10 percent to 7.41 cents. That might have been excusable had Frontier increased its unit revenue, but the opposite happened — RASM decreased by 1 percent compared to 2024.1

Now, while Dempsey will retain some of Biffle’s revenue-generating ideas (including adding new premium seats and focusing on loyalty), he’ll hack the airline’s costs more harshly than his predecessor. He told analysts he’ll achieve his goals through “network optimization, productivity enhancements, and other efficiencies.”

Perhaps most key: Dempsey, who worked at Ryanair before joining Frontier as CFO in 2014, wants to fly more hours daily.

Here are some of the more interesting things I learned from Frontier’s call.

Did the Ponzi scheme finally fall?

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United Airlines has removed its order for 45 Airbus A350s from its long-term fleet plans amid a contractural dispute with Rolls-Royce, the only company that makes engines for the airplane, according to a new filing.

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