AirTran Airways released (18-May-2010) its Annual Shareholder Meeting presentation. The carrier stated it expects total unit revenue per ASM (TRASM) to improve 13% to 14% year-on-year for 2Q2010, as capacity is increased 4%. The carrier has approximately 60% of fuel requirements hedged for the quarter, with the average economic cost per gallon of fuel all-in at USD2.37 to USD2.42. Non-fuel unit costs are expected to rise up to 4.5% for the quarter and 4% to 5% for FY2010. AirTran plans to pay USD96 million of convertible debt with cash in Jul-2010. [more]
AirTran expects 14% improvement in TRASM in 2Q2010
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With 20 European destinations it is developing a role as a provider of low cost trans-Atlantic connecting services to sit alongside its point-to-point offering. In this respect it is providing growing competition to its larger compatriot Icelandair, which is also growing fast (and profitably).
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Monarch Airlines: group receives new cash from Greybull Capital but profit outlook is down
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Nevertheless, Monarch continues to face significant challenges. Europe's short/medium-haul markets are feeling significant downward pressure on unit revenue – particularly in the leisure markets that Monarch serves. This is due to overcapacity and concerns about terrorism in key Monarch markets. Brexit and the sharp devaluation of GBP (it has fallen by 30% against the EUR over the past 12 months) are further challenges for the LCC.
Although Monarch quickly quashed rumours of its financial difficulties in late Sep-2016 and then secured new funds, its commentary indicated that its profit for the year to Oct-2016 would be lower than in the previous year. It has an uneven track record of profitability and has often flown with close to empty cash reserves. Those reserves have been partially replenished, but only sustainable improvements in profitability will avoid the need for further cash calls in the future.