Fiji Airways acting CEO and CCO Aubrey Swift, speaking at the CAPA Australia Pacific Aviation Summit, stated (08-Aug-2013) “there are other fish to fry” than adding capacity on trans-Pacific routes for major US carriers.
Fiji Airways CEO: 'Bigger fish to fry' for US carriers than adding trans-Pacific capacity
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LATAM Airlines Group is forecasting higher system capacity growth in 2017, but also slightly higher margins as a slow economic recovery in Latin America sets in. The company has significantly cut its domestic capacity in Brazil during the past couple of years, but decreases for 2017 are less intense as LATAM balances rightsizing capacity with maintaining a certain level of market share.
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US airlines: a turnaround in unit revenue just as cost pressures rise in 2017
The four largest US airlines are moving closer to returning to positive unit revenue in 2017 after each of those companies has issued an improved unit revenue forecast for 4Q2016, driven by stronger yields and continued improvement in close in bookings. The yield improvement indicates that the US domestic environment is gaining some pricing traction after two years of weak fares, and the results on close in bookings continue a trend that emerged in the US market during late 3Q2016 and continued through the rest of the year.
Delta and Southwest have both publicly cited a bump in demand since the US presidential election in Nov-2016. Delta has expressed cautious optimism that the US revenue environment has turned a corner, and the positive momentum is driving the company’s confidence of climbing out of a negative unit revenue performance in 1Q2017.
Key to sustaining unit revenue momentum is keeping capacity in check over the course of 2017. American, Delta, United and Southwest have all declared their intentions to lower capacity growth in 2017, and show no intentions of revising those targets upwards. Rising fuel cost and non fuel cost inflation are the major headwinds for US airlines in 2017, which has resulted in Delta declaring margin compression for the year.