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Delta expecting operating margin of 1-2% for 1Q2010; United expecting RASM of USD 11.44-11.54 cents


The majority of North and South American carriers’ stocks were up on Monday (29-Mar-2010), moving with the wider market, with the Dow (+0.4%) pushed higher by energy and mining stocks. The airline gains came despite a 2.3% rebound in oil prices, to USD82.17.

Delta expecting operating margin of 1-2% for 1Q2010

Delta Air Lines (+1.0%) gained after stating it expects an operating margin of 1-2% for 1Q2010, while cargo and other revenues will total USD1,100 million. Cost per ASM for the period is expected to increase 1-2% year-on-year for the period. Its fuel hedge position totals 47%.

In terms of traffic, Delta decreased capacity (ASMs) by 4-5% for the period, including a 2-3% decline in domestic capacity and a 7-8% decline in international capacity.

United expecting RASM of USD 11.44-11.54 cents

United Airlines' stock (+0.4%) was also up marginally, after the carrier stated it expects consolidated revenue per ASM of USD 11.44-11.54 cents for 1Q2010 - an increase of 16-17% year-on-year. Operating cost per ASM is also expected to increase, rising 6.0-6.7%, to USD 12.63-12.72 cents.

In terms of traffic, the carrier expects a 1.7-2.7% increase in passenger traffic (RPMs), while capacity will be down 3.4% for the period.

UAL Corp expects to end 1Q2010 with an unrestricted cash balance of USD3.4 billion to USD3.5 billion, not including USD700 million in net proceeds from senior secured notes and senior second lien notes issued in the first quarter and scheduled to be received in Apr-2010, and a restricted cash balance of USD310 million.

Continental expecting load factor of 79-80%

Continental Airlines was flat after stating it expects load factor of between 79-80% during the quarter, including mainline load factor of 80-81%. The carrier reduced capacity by 0.2% year-on-year for the period, with a 1.6% reduction in domestic mainline capacity and a 1.5% increase in international mainline capacity. Continental also expects cost per ASM to total USD 12.18-12.23 cents.

Air Canada allowed to challenge Toronto Port Authority process

Air Canada (+3.8%) was also up. During trading, the Canadian Federal Court issued an order allowing Air Canada to challenge the Toronto Port Authority's announced decision to engage in a process that would discriminate against airlines wishing to serve the Toronto City Centre Airport and to seek an order requiring the TPA to properly allocate available slots at the airport. A hearing on the carrier's application has been scheduled for 06/08-Jul-2010.

Elsewhere, Expressjet (+3.2%) was up again, while Hawaiian Airlines (-1.6%) and Republic Airways (-1.0%) fell.

Also in today’s issue of America Airline Daily:

  • Cape Air and American Airlines sign codeshare agreement;
  • Sky King files for Chapter 11 bankruptcy reorganisation;
  • United Airlines seeing recovery in demand for trans-Pacific services - report;
  • US Airways launches Gogo Inflight Internet;
  • BTS reports 5.3% decline in system pax on US airlines and foreign airlines in 2009;
  • GOL launches new structure of its fare categories.

North & South America selected airlines daily share price movements (% change):  29-Mar-2010

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