US’ San Francisco Intenational Airport announced Dec-2010 was its busiest December ever, handling 3.2 million passengers, a 3.0% year-on-year increase. The airport stated the month capped off a strong year of growth, to 39.4 million passengers, up 5.2% year-on-year - its sixth consecutive year of passenger growth. SFO attributed the strong growth to increased services from airberlin, Swiss International, LAN Peru, and Virgin America and the continued expansion of United Airlines, Continental Airlines, Delta Air Lines, Virgin America, JetBlue and Southwest. The Asia/Middle East region saw the greatest growth of international services with a 10% year-on-year increase. SFO added it increased its overall share of Bay Area air traffic by 1.0% to 68.7%. In 2010, SFO handled 63.5% of all domestic passengers and 96.1% of all international passengers in the Bay Area.
Dec-2010 was SFO’s busiest December ever
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Adding Virgin America’s network to its operations appears to be creating a competitive shield for Alaska. The company has refined competitive capacity growth estimates downward for 1Q2017 as the broader scale created by absorbing Virgin America gives Alaska the strategic network diversification that it lacked prior to the merger.
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jetBlue Airways reluctant to cut capacity despite uncertain revenue performance outlook
jetBlue Airways had a tough start to 2017, projecting a unit revenue decline of 8% to 9% for the first month of the year. The airline’s Jan-2017 unit revenue performance sets the stage for an overall negative performance in 1Q2017, and the company is offering little visibility into its outlook for 2Q2017.
The airline has outlined various factors for the surprising unit revenue decline for Jan-2017, including timing of YE2016 holidays, its new service to Cuba, and additional service from Newark Liberty International. After the less than stellar results for Jan-2017, investors were looking for jetBlue to offer remedies for the weak performance, but for the moment the company is keeping its 2017 capacity projections intact. The back and forth is a classic example of markets demanding immediate action when airlines aim to take a more measured approach in adjusting their strategies.
Investors are already concerned about the overall financial performance of US airlines in 2017 as unit costs are rising faster than unit revenues. jetBlue is facing its own cost inflation during 2017, and its rocky start will result in its revenue performance being closely scrutinised, with the potential calls for capacity cuts growing louder.