Delta Air Lines stated (17-May-2012) it is estimating a 7.0% year-on-year increase in passenger unit revenue in May-2012, following growth of 11.0% in Apr-2012, 13.0% in Mar-2012, 13.0% in Feb-2012 and 14.5% in Jan-2012. Revenue growth has been driven by corporate contract gains, the benefit of product investment and a "continued solid demand environment". Meanwhile, year-to-date corporate booked revenues are up 12% despite a 3% capacity reduction. [more - original PR]
Delta Air Lines expects 7% unit revenue increase in May-2012
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Copa Holdings believes a recovery in demand will support marked rise in 2017 capacity growth
Panama’s Copa Airlines is planning markedly increased capacity year-on-year in 2017 as demand patterns in Latin America continue to build on strength that began to emerge in 2H2016. That followed two years of economic contraction in the region. Most of Copa’s growth in 2017 stems from higher utilisation, given that its fleet is expanding by just a single aircraft during the year. The airline also plans to add back, in the lower season, the capacity that it cut in 2016 to adjust to Latin America’s weakened supply demand scenario.
Copa’s outlook is based on its determination that demand is holding steady in Latin America, and it is joining other airlines in the region in expanding capacity as a slow economic recovery begins to take effect. Its approach, that there is strengthening demand, stretches broadly across its network, even in Brazil, whose deep economic recession drove Latin America’s overall two year long economic contraction.
Copa has no concerns about its fellow Star Alliance partners Avianca and United potentially deepening their partnership through a proposed equity stake by United in Avianca. Although Copa has not publicly confirmed that it courted Avianca during its evaluation process for a strategic partner, the airline now believes United is the best partner for Avianca.
Avianca: shareholder strife threatens plans to deepen ties with United
Avianca Holdings’ generally positive outlook is being overshadowed by a deep rift and battle between the company’s two largest shareholders over a tie up with, and strategic investment by, Avianca’s fellow Star Alliance partner United Airlines. The legal wrangling ensuing over Avianca’s and United’s future partnership could drag out their potential commercial tie up, possibly placing Avianca at a competitive disadvantage to its rival LATAM Airlines Group.
Avianca is also reconsidering a potential merger with Avianca Brazil after deciding against merging with Brazil’s fourth largest airline in 2014. The public rationale behind Avianca’s decision to have a second look at Avianca Brazil includes the beginning of a long economic recovery in Brazil, and improved financial conditions at Brazil’s fourth largest airlines.
In the short term, Avianca plans a capacity growth increase year-on-year in 2017, citing sustained demand and strong traffic and load factor growth in 2016. Although the company’s yield growth remained negative year-on-year in 4Q2016, Avianca posted sequential improvement in that metric throughout the year. The company feels confident about the trajectory of Latin America’s economic recovery, but Avianca’s long term strategy remains clouded by the composition of its ownership structure in the future.