The US Big 3 airlines ramp up efforts to improve PRASM. Anxious investors hold back for real results

The three large US global network airlines - American, Delta and United - are stressing to investors that they recognise the importance of attaining a flat-to-positive passenger unit revenue performance, while market place anxiety lingers over a continued negative performance by those companies in that metric.

Two of the drivers for contracting passenger unit revenues continue to be an imbalance of supply and demand, and pressure on close-in bookings. Those airlines are working to remedy those pressures, but it will take some time for a pricing reset in an industry that has been through deep discounting throughout the past year. A buzzword for American and Delta is a move away from product commoditisation, but that is a more slow-moving evolutionary process from which the rewards are further off on the horizon.

Perhaps the overriding concern of investors is whether the historical inverse relationship between fares and oil prices will fail to materialise when energy costs inevitably rise. That is what has occurred historically, but that has done little to ease investor concern during the last year as PRASM has suffered. As a result, American, Delta and United are pledging to return to a flat-to-positive PRASM trajectory, with varying timeframes.