US major airlines poised to deliver solid 2Q2014 results as N Atlantic overcapacity signs emerge

All the major US airlines are projecting strong unit revenue growth for 2Q2014 underpinned by continued strong domestic demand. Southwest so far has the highest projections of 8% while United is reversing a 1Q2014 unit revenue decline of 2% with 3.5% growth year-on-year in 2Q2014.

Although United's estimated passenger unit revenue growth is still trailing its peers, the improvement is encouraging. The airline's unit cost projections for 2Q2014 are also favourable, a welcome sign for investors looking for indications that United is really beginning to clear some major merger hurdles.

There are lingering concerns about a slight capacity imbalance in the trans-Atlantic market and weakness in Latin America triggered by a decline in business demand during the World Cup. But overall the positive momentum from 1Q2014 seems to be continuing for US airlines, which should result in solid profits for the summer high season.