Airlines for America (A4A) reported (22-Aug-2013) 10 US passenger airlines, Alaska Airlines, Allegiant, American Airlines, Delta, Hawaiian Airlines, JetBlue, Southwest, Spirit Airlines, United Airlines and US Airways, collectively recorded a net profit of USD1.6 billion, +33.3% year-on-year, in 1H2013. This translates to a net margin of 2.1%, an improvement of 0.5 ppt. The airline association stated despite a slight fuel-price relief in 1H2013, jet fuel remains the airline industry’s single largest and most volatile expense, having already risen USD 26 cents per gallon since the end of Jun-2013. Every penny increase in the price of a gallon p/a costs the industry USD180 million p/a. [more - original PR]
Airlines for America: US airlines net profit up 33% in 1H2013
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US airlines and the Cuba route awards Part 1: The US DoT slices up many pieces of the Havana pie
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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)
Spirit Airlines feels sting of Southwest’s discounting. First signs emerge of changing network mix
Efforts by Spirit Airlines to create some pricing traction in the US domestic market during the early high travel season during 2Q2016 have been foiled, largely by Southwest Airlines. The result was continued weakening of yields for the airline, a metric that has been a mainstay for Spirit during the last couple of years. The airline’s double-digit yield decline slightly worsened from 1Q2016 to 2Q2016.
Spirit is forecasting some improvement in the US revenue environment in 3Q2016 as the airline starts to lap the onset of pricing dilution in the US market that started in mid-2015, and as its own capacity slows in comparison with 2Q2016.
The airline is also making network moves in late 2016 to reflect its new strategy of adding mid-size markets that are less competitive. Spirit is making a push from a new market – Akron-Canton – and is also expanding from Orlando. At the same time, Spirit is exiting markets featuring a mix of low and high levels of competition as it works to change the structure of its network, now that larger airlines are more wilful in matching the ULCC’s fares.