American Airlines reports larger than expected losses; AirTran not considering merger
American Airlines reports larger than expected losses
American Airlines (-9.2%) reported a net loss of USD505 million for 1Q2010, compared with a loss of USD375 million in the previous corresponding period. Analysts had expected the carrier to report a loss of USD399.3 million. CEO, Gerard Aprey, attributed the result to an increase in fuel costs, which rose USD221 million year-on-year for the quarter. The carrier slid to its worst position since Oct-2009.
Meanwhile, American Airlines' Director of Merchandising Strategy, Cory Garner, stated that regarding plans for its Direct Connect program to help the travel industry sell more ancillary products, that during national industry briefings on the program the company did not mention any changes to the economics of either Global Distribution Systems (GDSs) or travel agency economics. The company is in negotiations with all GDSs and cannot predict what will result in commercial terms. "We are resolute in not charging for content," said Director of Marketing Communications Strategy, Stephen Schlacter.
See related report: American Airlines speaks up on direct connect distribution strategy – EXCLUSIVE
AirTran not considering merger
AirTran (-8.5%) was also down after reporting a net loss of USD12.0 million for 1Q2010, compared with a profit of USD28.7 million in the previous corresponding period. Operating profit also fell, dropping 93.6% year-on-year, to USD3.0 million.
The carrier stated it has no plans at present to merge with another carrier but may consider an offer if it is approached.
ATA March stats, Spirit bookings up
Passenger revenue rose 15.4% in March, the Air Transport Association reported yesterday, saying it marked the third consecutive month of revenue growth.
“With the global economy continuing to heal, spending on air travel in international markets led the way in March. However, we expect that the recent shutdown of European airspace due to volcanic activity will negatively impact April results,” said ATA President and CEO James May.
Carriers flew 1.4% more passengers in March when the average price increased to by 11.7%. ATA called growth robust across all regions in international markets with passenger revenues rising 19.6%.
US airlines reported cargo traffic, measured in cargo revenue tonne miles, rose 14% year-on-year (4% domestically and 23% internationally) in February 2010, driven by increased international trade. March 2010 cargo data is not yet available. Cargo traffic was based on data reported to ATA by Aloha, Alaska, American, Continental, Delta (including NWA), FedEx, Hawaiian, JetBlue, Southwest, United, UPS and US Airways.
The statistics are based on a sample of carriers, including data reported to ATA by Alaska, American, Continental (including Micronesia), Delta (including NWA), JetBlue, United and US Airways. It also includes data for Air Midwest, Air Wisconsin, Allegheny, American Eagle, Atlantic Coast, Atlantic Southeast, Chautauqua, Comair, Continental Express, Executive, Freedom, Horizon, Mesa, Mesaba, MidAtlantic, Piedmont, Pinnacle, PSA, Shuttle America, SkyWest and Trans States.
Spirit bookings up 50% despite bag policy
As proof there is no such thing as bad publicity, Spirit Airlines, which caused a Congressional furore when it announced it would charge for carry-on bags in August, said its advanced bookings were up. As well, bookings after August 1, when the new charge commences, were up 50%. CEO Ben Baldanza said tens of thousands of tickets had been sold as the result of Spirit’s announcement.
Also featured in today’s issue of America Airline Daily:
- Completing airline mergers has become harder: Delta CEO;
- United and Continental in early stages of exchanging financial information: reports;
- Southwest Airlines rejects Columbia Metropolitan Airport incentive deal;
- Milwaukee judge rules Frontier jobs must remain with union workers;
- Hawaiian Airlines reports approval of contract by mechanics union;
- Jamaican Budget will cover obligations to Air Jamaica staff: PM;
- Azul Linhas Aereas Brasileiras selects revenue management system.
North & South America selected airlines daily share price movements (% change): 21-Apr-2010