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American, US Airways up on load factor results; Air Canada down despite record traffic

4-Sep-2009

The majority of North and South American carriers ended trading up on Thursday (03-Sep-09), due to a rise in the wider market, with the Dow up (+0.7%) and steady oil prices (-0.04%), to USD67.96. The rise came as many carriers reported their Aug-2009 figures late in the afternoon.

Network carriers led the way, with United Airways (+9%), American Airlines (+7.4%), Delta Air Lines (+4.7%), Continental (+4.2%) and US Airways (+4.2%) the biggest gainers of the day.

United Airlines reported a 3.9% year-on-year fall in passenger traffic for Aug-2009, to 7.7 million. The carrier reported a 3.3% decline in traffic (RPMs), as capacity (ASMs) were reduced 6.2%, leading to a 2.5 ppts rise in load factor, to 86.1%.

American Airlines' load factor also improved in Aug-2009, up 1.2 ppts, to 84.7%, on a 9.4% reduction in capacity and 8.1% fall in traffic. Overall passenger traffic consequently fell 8.5%, to 7.7 million for the month.

US Airways' passenger traffic fell 7.5% year-on-year in Aug-2009, to 4.5 million. RPMs fell 3.9%, as capacity declined 3.8%, with load factor remaining steady year-on-year, at 85.7%. President, Scott Kirby stated the carrier “remains encouraged that recent booking and yield improvement trends are continuing into September.”

Continental was up, despite FTN Equity Capital Markets forecasting the carrier’s RASM to decline by 22% in Sep-2009, while Oct-2009 is also expected to be a tough month for the carrier. Continental estimated RASM fell 17-18% in Aug-2009. Furthermore, Continental’s unsecured debt was downgraded by Standard & Poor's from 'B-' to 'CC+', due to the declining value of its aircraft amid the global financial downturn, which the company believes could reduce asset protection for unsecured creditors, if it were to file for bankruptcy. 

Hawaiian Airlines' (+0.3%) stocks meanwhile rose only marginally, despite a 3.3 ppts year-on-year improvement in load factor for Aug-2009, to 85.4%. Traffic rose 7.3% as capacity was increased 3.2%. As a result, passenger traffic rose 2.9% over the period, to 746,646 passengers.

In LCC news, Allegiant (-0.2%) slipped, despite reporting a continuation of its aggressive growth strategy in its Aug-2009 traffic results.

WestJet (-0.7%) was down, after reporting a load factor of 84.5%, a 3.9 ppt reduction, as traffic (RPMs) declines of 4.7% exceeded the 0.4% decline in capacity (ASMs).

Fellow Canadian carrier, Air Canada (-0.6%) also reported its Aug-2009 traffic on the day. The carrier reported a record load factor of 86.8%, up 2.4 ppts - its second consecutive monthly record. The carrier attributed the result to its careful capacity management, which fell 3.6% for the month, adding its “initiatives over recent months to re-engage customers and travel agents are clearly starting to pay off.” Traffic fell 0.9%. Air Canada plans to continue strategically redeploying capacity to improve its revenue generation.

North & South America selected airlines daily share price movements (% change): 03-Sep-09


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