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
You may also be interested in the following articles...
Hawaiian Airlines' bullish outlook is underpinned by slowing growth and a bolstered balance sheet
Moderating growth, maturing markets and less intense capital commitments are some of the main drivers of Hawaiian Airlines’ positive outlook for CY2015 that includes margin expansion and cost control.
After rapid long-haul international expansion that commenced in CY2010, Hawaiian during 2014 has entered into a slower growth period that should provide space for the airline to continue strengthening its balance sheet and meet its stated liquidity and leverage targets.
As it takes a breather from its ambitious network transformation, Hawaiian is scrutinising the role new Airbus narrowbodies will play in its route structure once the aircraft come online beginning in CY2017.
Virgin America's powerful market debut. Corporate travel will be a key part of its business model
Virgin America will be well pleased with its timing in accessing the public markets as airline stocks are currying favour with investors after consistent capacity discipline and lower fuel prices have drawn attention to airline stocks, driving up the sector’s performance during CY2014.
The airline is enjoying a trading price well above expectations after recording a profit for 3Q2014 and the 9M ending Sep-2014, setting the stage for its second consecutive year of profitability. Much of Virgin America’s recent financial success rests on capacity reductions and debt restructuring, so arguably the real test of its ability to generate profits is yet to unfold.
Virgin America becomes a newly traded public company at an interesting time in the US airline business as the completion of consolidation among the major airlines creates space for smaller airlines to fill gaps created by those mergers. It is not totally clear how Virgin America intends to position itself in the new environment, but it could scarcely have chosen a better time to be exploring new territory, much of it newly vacated.