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Alaska, jetBlue and Southwest unable to offer solutions to airline revenue instability in the US

29-Jul-2016

US airlines Southwest, Alaska and jetBlue are not escaping the stubborn pricing softness in the country’s domestic space which, as it does with the larger network US airlines, continues to pressure their unit revenues – unit revenue being a metric that, logically or illogically, has become a lightning rod for many US airline investors.

Southwest is being hammered after sticking to its planned capacity growth for 2016 and sitting out on some of the fare increases undertaken by other airlines. Its unit revenues have been propped up by a credit card deal reached in 2015, but in 3Q2016 it will post a negative performance in that metric. Alaska is also feeling the effects of macroeconomic trends, but has expressed that its current situation is the result of real difficulty in determining when close-in bookings could improve – given the inherent shorter booking window for those reservations.

Among those three airlines jetBlue posted the largest unit revenue declines for 2Q2016, but in fact it faces tough year-on-year comparisons due to its outperformance in 2015. The overall revenue choppiness continues to cast a pall over the US industry as predictions of when pricing traction will return remain opaque.

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