Airlines for America (A4A) reported (21-Aug-2014) an improving profitability among US passenger carriers, which enables them to to invest in their workforce, reduce debt and enhance the customer experience. Nine US carriers collectively reported a net profit of approximately USD3.8 billion in 1H2014, up from USD1.6 billion in 1H2013, which translates to a net margin of 5%. The year-over-year improvement was driven by a 6% increase in operating revenues, which outpaced the 2.2% increase in operating expenses. A4A projects a 2% year-over-year increase in the number of passengers flying on US carriers during the seven-day Labour Day travel period from 27-Aug-2014 to 02-Sep-2014. A4A expects 14 million people will travel via air, up from an estimated 13.8 million in 2013. A4A projects the busiest day of the period will occur on 29-Aug-2014, with carriers adding seats to the marketplace to accommodate the expected increase in demand. [more - original PR]
A4A projects 14 million people to travel via air over Labour Day holiday period
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US airlines and the Cuba route awards Part 1: The US DoT slices up many pieces of the Havana pie
US regulators have decided to spread Havana award rights among eight operators – a mix of global full service airlines, medium frills low cost carriers and ULCCs. Unsurprisingly, given the concentration of Cuban Americans residing in the region, South Florida features prominently in the tentative award approvals.
In theory, the DoT’s proposed route structure ensures that customers travelling to Havana have access to a wider range of fare prices and product offerings. In many respects the agency had little choice but to accommodate as many airlines as possible for service to Havana – in order to ensure that consumers had an array of service providers as scheduled air service resumes between the US and Cuba.
There may be some quibbles regarding the tentative route awards to Havana, but the route composition proposed by the DoT is not likely to change drastically. The agency’s route dispersal reflects certain expectations that the agency would institute a certain level of competitive diversity on new services to Havana.
(This is Part 1 in a series examining US-Cuba route awards. Part 2 will examine markets other than Havana)
Pilots aim to join the profit party; Hawaiian Airlines in tough pilot talks as profits improve
The record profits that US airlines are enjoying from lower fuel costs are being shaded by weaker passenger unit revenues and labour discontent as work groups at various airlines strive for market rates that are on an upward slope.
Some of the higher-profile negotiations include pilot collective bargaining at Delta and Southwest. Pilot groups at each airline have rejected contract proposals during the past year, and are currently requesting wage increases that they believe will put them on par with the industry average; an average which has been growing due to contracts brokered by their competitors, American and United.
Even airlines that have typically enjoyed positive pilot relations are encountering higher levels of turbulence in their latest round of talks. Hawaiian Airlines’ pilots have been especially vocal during the current round of negotiations, the pilots voicing their frustration over lower rates of pay versus the airline’s competitors.