- Global: +2.9% capacity, +1.9% scheduled services year-on-year;
Global seat capacity up 2.9% in Jan-2012: OAG
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Aeromexico and Volaris remain cautiously optimistic that a domestic yield rebound will hold
Two of Mexico’s largest airlines are encouraged by the country’s economic uptick and what appears to be capacity discipline in the domestic market, which should further help a recovery in yields that both Aeromexico and Volaris began to see in late 2014.
Despite the challenging conditions, Mexico’s domestic market remained fairly stable in 2014 reflected in roughly 8% passenger growth for the year, with the country’s major airlines retaining or growing their market share year-on-year.
Although the positive momentum is a welcome sign after a challenging 1H2014, there is an air of cautiousness underlying the optimism expressed by Aeroemexico and Volaris as the yield improvement is off a low base. As a result each airline plans to direct the bulk of their 2015 capacity growth to international markets.
Unit revenue pressure could linger beyond 1Q2015 for US airlines as capacity creeps up
The first quarter of 2015 is shaping up to be choppy for the three major US global network airlines, driven by currency fluctuation, some overcapacity, and for Delta, a reworking of its hedge scheme in light of lower fuel costs.
Those airlines are sticking to previous unit revenue performance estimates for 1Q2015, with the exception of Delta, which has slightly lowered guidance to reflect foreign exchange rate headwinds and the lifting of fuel surcharges in certain international markets.
Overall American, Delta and United believe that underlying demand remains strong; but higher capacity in some regions is outstripping that demand, creating some challenges in the short term. American in particular believes the US domestic market should improve in 2016 as the aircraft upgauge undertaken by nearly every domestic airline begins to taper off.