Air Transport Association of America (ATA) reported (20-Nov-2009) preliminary passenger revenue fell 15% year-on-year in Oct-2009, the twelfth consecutive month of decline. [more]
Passenger revenue down 15% in Oct-2009: ATA
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Copa Airlines sees positive trends for Latin American demand. A full recovery remains distant
Panama’s Copa Airlines is joining other Latin American airlines in expressing cautious optimism that some negative trends in the region are starting to stabilise, after a tough couple of years of challenging economic conditions. Copa, in particular, believes that weakened demand is beginning to improve, driven in part by some currencies within Latin America that are strengthening against the USD.
For 2H2016 Copa is continuing to post stronger close-in bookings that began to improve in 2Q2016, which is a positive sign for airlines operating in the region. Some of the upswing in bookings stems from capacity reductions by most Latin American airlines, to right-size supply with demand. That capacity discipline should continue in 2017, since all of the region’s major airline groups have worked to defer aircraft deliveries in order to maintain a proper supply-demand balance and lower capex commitments.
Similarly to other Latin American airline groups, Copa has worked to shore up its balance sheet to withstand overall economic weakness in many of its markets. Its cash balances at the end of 2Q2016 increased from the first quarter, and its leverage was the best among some of Latin America’s publicly traded airlines.
Air Canada: despite market weakness and its robust capacity growth, maintains a positive outlook
Air Canada is undertaking a significant international push, just as the UK has voted to exit the European Union and terrorist attacks have swept Belgium, France and Turkey. Despite the pressure those circumstances are creating for revenue and yields, Air Canada has a reasonably positive outlook for demand in 3Q2016.
The airline has posted declines in yields and unit revenues for numerous quarters, but stresses that outcome remains a by-product of its strategy to grow internationally. Expansion by the company’s low cost subsidiary rouge has increased Air Canada’s mix of leisure customers and its growing average stage lengths have also pressured unit revenues. However, the company continually declares that its expansion is margin-accretive.
Air Canada no longer provides specific capacity guidance but has no plans to slow its growth in 2016, the bulk of which is directed to international markets. The company’s message is that its capacity increases should in fact be absorbed, even accounting for a major capacity push that started in late 2Q2016.