Boeing announced (07-Mar-2013) the first 737 built at the rate of 38 aircraft per month is moving its way through the company's Renton factory and will come out of the paint hangar in "just a few days". The aircraft will be delivered to Copa Airlines. [more - original PR]
First 737 produced at 38 per month rate to be completed soon
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Copa Airlines margins compressed by continued economic deterioration in Latin America
Copa Airlines has revised its 2016 capacity targets downwards to 2% growth, which is half of the expansion the airline recorded in 2015. The cuts are against a backdrop of the IMF forecasting a 0.5% contraction in Latin America’s economy in 2016, which is deeper than the 0.3% decrease in 2015.
Given the effects of Latin America’s deteriorating economy on market demand, Copa has cut its margin forecast for 2016. The company is warning that operating margins for 2Q2016 could fall to the low single digits, which is a significant drop from Copa’s historical highs.
The company admits that it has little visibility beyond 2Q2016, but believes that unit revenues in 2H2016 will be slightly lower than the year prior. Although conditions remain historically weak, there is some easing of currency depreciation and capacity cuts by other airlines, but it remains to be seen when the benefits of those changing dynamics will materialise.
Hawaiian Airlines: cost creep casts a slight shadow over a favourable PRASM performance
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.