American Airlines president Tom Horton believes the company's "Flight Plan 2020" will deliver. "We're building something for the long term. We're running in a marathon and it's mile five." The carrier is in negotiations with Boeing and Airbus on a potential order for more than 250 single-aisle aircraft to replace its ageing domestic fleet. CEO Gerard Arpey is also hopeful, stating: "We have to continue to demonstrate the path we're on, over time, will close the gaps. Our international strategy will bear fruit. Our job is to prove it out."
American hopeful of delivering 'Flight Plan 2020'
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Delta Air Lines: reaping rewards, but building balance sheet strength has no set endpoint
Few would challenge the conclusion that Delta has one of the soundest balance sheets among US airlines. Its reductions in adjusted net debt and leverage ratios garnered their just rewards in 2016 when the company secured coveted investment-grade rating from Fitch and Moody’s.
During the time Delta has significantly improved its balance sheet metrics it has also steadily increased its shareholder rewards, and has reiterated its commitment to increasing dividends. The airline's position is that continuing to drive the importance of its dividend performance is a key component of the company’s valuation proposition.
Similarly to many other US airlines, Delta is facing unit cost inflation in 2017; but the company’s unit costs growth for the year should fall below 2016 levels. Those costs are inflated due to a new pilot contract that joins a number of new contracts that US airlines inked in 2016, which are resetting industry pay scales.
Hawaiian Airlines emerges as the unit revenue champion among US airlines in 1H2016
Hawaiian Airlines’ unique geography continues to benefit the company in 2016 as favourable capacity trends are one factor in its industry outperformance in unit revenue metrics. Hawaiian’s outlook for the remainder of 2016 remains positive as industry capacity on its routes to North America and long haul destinations remains relatively benign.
The airline is acknowledging slight pressure in its inter-island operations due to heightened competition with the smaller operator Island Air. Hawaiian plans to adjust its inter-island schedule later in 2016 to maximise peak flying and cut some off-peak flights.
Hawaiian is expanding service to the Tokyo market in 2016 after being awarded new slots at Haneda airport. But the expansion is not affecting Hawaiian’s overall growth targets of a 2.5% to 5.5% increase in capacity, which is significantly lower than the double-digit expansion it recorded from 2011 to 2013.