The US Big 3 airlines enjoy rally in domestic & Latin markets as the Atlantic and Pacific languish
The three large US global network airlines - American, Delta and United - were reasonably positive about their outlooks in early Jan-2017 prior to the US government issuing travel restrictions for several countries. The long term effects of President Trump's executive order remain unclear, but early indications show a curb of some corporate travel just as yields in that passenger segment were starting a slow recovery.
Those three airlines were optimistic that pricing in the US market, including business travel fares, had hit the bottom and was turning a corner. For now that is still the likely scenario, with the domestic market serving as one of the stronger entities for those three airlines prior to the travel ban. Latin America had also started a solid recovery, with American, Delta and United all posting positive passenger unit revenue results for that region during 4Q2016, and they expect Latin America's momentum to continue into 1Q2017.
The trans-Atlantic and trans-Pacific remain the most challenging regions for American, Delta and United. Trans Atlantic flights are challenged by competitive capacity and currency fluctuations that show no signs of retrenching. But prospects for the trans Pacific look better in 2H2017 as service caps in the current China-US bilateral are met during that period.
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