US airlines’ cautious capacity approach proves beneficial

Cautious capacity growth plans for 2011 highlight concerns among US carriers in adding back seats at a rate that could create the excess capacity situations of previous post-recession recoveries. Instead, airlines are focussing on the protection of yields and profits as escalating fuel costs threaten the global aviation industry’s profits. [2805 words]

CAPA Members Login Username: Password: Remember details

Instantly get access to this article now for USD15.00. or If you've already bought this article, you can view it by typing your Article Key:

This report contains the following subheadings:

• Tale of two markets: domestic capacity declines while international reports boost
• Single-digit growth or contractions across the board
• Load factors remain strong; averaging above 80%
• Unit revenue growth higher across the board
• 18 consecutive months of revenue growth for US carriers: ATA
• A profitable summer driven by high load factors and improved yields
• Renewed challenge of escalating fuel prices
• ATA opposes proposed increase in passenger taxes

This report contains the following charts and tables:

• North American carriers’ domestic passenger capacity growth (% change year-on-year): Jun-2011
• Net Income (USD billions) and Profit Margin (%) for US Airlines
• Seat capacity between major North America and Asian hubs: Jul-2005 to Jul-2011
• US domestic and international weekly capacity (ASMs – bill per week): 4Q2007 to 4Q2011
• International Seating Capacity Constitutes a Growing Share of US Airlines’ Global Route Networks
• US domestic seating capacity trends
• Domestic capacity (ASMs) per USD1000 of real US GDP since 1979
• North American carriers’ traffic (RPMs) growth (%): Jun-2011
• Select US airlines domestic traffic highlights: Jun-2011
• North American carriers’ load factors (%): Jun-2011
• Yields closing gap to unit costs of operations 
• US airline unit revenue highlights (estimates): Jun-2011
• ATA domestic yield: Jun-2009 to Jun-2011
• 12-Month rolling Passenger Revenue per Available Seat Mile (PRASM)
• Price of air travel compared to inflation rate
• Summer Travel Season: Passengers (mill) on US Airlines
• Jet fuel costs: 1991 to 2011F
• Jet fuel price development: Jan-2008 to Dec-2012 (Prices have surpassed USD140/bbl on Rising Crude and Refining Crack Spread)
• Fuel consumption: 2005 to 2011F
• Tax Bite on USD300 One-Stop Domestic Round Trip
•  'Special' Aviation Tax Burden exceeded $16bn in 2010: 2010 collections (USD millions) from airlines