United Airlines estimates 9.5-11.5% improvement in PRASM; Copa up; LAN down

North and South American carriers’ stocks were mixed on Monday (08-Feb-2010), as the wider market dropped. The Dow (-1.0%) fell as investors remained concerned over sovereign debt issues in Europe, possible global rate hikes and the US Government’s proposal to implement regulations restricting banks' proprietary trading, so as to limit systemic risk in the finance industry. Also pushing carriers lower was a 2.7% gain in oil prices, to USD71.19. The AMEX Airline Index ended trading.

United Airlines estimates 9.5-11.5% improvement in PRASM

United Airlines (+2.3%) gained after estimating a 9.5% to 11.5% year-on-year increase in passenger revenue per ASM (PRASM) for Jan-2010. Compared to 2008, PRASM was also estimated to be up 2.0% to 4.0%.

In terms of traffic, total consolidated traffic (RPMs) increased in Jan-2009 by 2.4% year-on-year on a 2.0% decrease in capacity (ASMs). This resulted in a load factor of 78.5%, an increase of 3.4 ppts.

Average Jan-2010 mainline fuel price, including gains or losses on settled fuel hedges and excluding non-cash mark-to-market fuel hedge gains and losses, is estimated to be USD2.22 per gallon for the month. Including non-cash, mark-to-market fuel hedge gains and losses, the estimated fuel price is USD3.12 per gallon for the month.

See related article: Airlines see improved yields ahead, but risks remain – IATA survey

Republic Airways (+3.3%) also made strong gains on Monday.

More information on North and South American carriers’ yields can be found in America Airline Daily, your one-stop shop for news, data and analysis from the dynamic North American, Caribbean and Latin American aviation markets.

Copa rises, LAN falls on traffic results

Copa (+1.8%) was also up after reporting a 3.6 ppts year-on-year increase in load factor for Jan-2010, to 81.5%, as passenger traffic (RPMs) rose 8.1%, on a 3.3% increase in capacity (ASMs).

However, LAN (-1.9%) shares dropped, despite reporting a 4.3 ppt year-on-year rise in load factor, to 82.3%, as traffic rose 17.6% and capacity was increased by 11.4%. International passenger traffic accounted for approximately 70% of total passenger traffic.

Domestic passenger traffic in Chile, Argentina, Peru and Ecuador rose 10.9%, as capacity increased 7.2%. As a consequence, the domestic load factor for the month increased 2.7 ppts, to 81.0%. International passenger traffic for Jan-2010 rose 20.6%, as capacity increased 13.4%. Accordingly, the international passenger load factor for the month increased 5.0 ppts, to 82.8%. International capacity was mainly driven by an increase in operations on routes to the US and Europe.

Meanwhile, cargo traffic increased 25.5% year-on-year. This increase was mainly due to the recovery in import and export markets in Latin America, as well as increased operations to Europe. In line with the higher demand, capacity grew 17.9%. As a result, the cargo load factor rose 4.1 ppts, to 66.9%.

Expressjet (-3.9%) and AirTran (-2.6%) shares meanwhile made the biggest losses of the day.

North & South America selected airlines daily share price movements (% change): 08-Feb-2010