Airline Finance News - North America.

 
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Mar 8, 2009

As business travel bookings plummet in the economic recession, US airlines are looking hungrily at the summer travel season for a bump in their leisure bookings. That may be wishful thinking, however. Carriers must fight the uphill battle of persuading people to hand over cash for vacations at a time when job losses mount and personal investments in homes and retirement plans shed value. Travelers are booking trips closer to their departures, which indicates more shopping and less buying, he said. Furthermore, airlines now offer deeply discounted tickets in hopes of luring thrifty passengers. The sales, which last much longer this year than last year, typically shave 25 percent to 50 percent off the high fares of last summer, Seaney said. Mar 7, 2009

Despite massive downsizing last year and in 2009, airlines still struggle to keep planes full and fares supported. Monthly reports on airline operations released this week showed sharp declines in traffic as carriers slashed capacity. Most troubling for the airlines, however, was the shrinking load factors, which measure how full a plane is. Mar 7, 2009

Individual airline stocks fell Friday. Recently, the Amex Airline Index rose a fraction of a percentage point to 12.80. The benchmark nearly broke its all-time low of 12.66 points on Thursday. The Dow Jones Industrial Average recently rose 23 points to 6617. Mar 6, 2009

Most airline stocks were higher Friday afternoon, as investors looked for bargains after Thursday's sell-off. Late Thursday night, Frontier Airlines added to the list of carriers reporting a sharp drop in passenger traffic for February. All the major carriers reported February traffic declines, some of them by double-digit percentages compared with a year earlier. Among the gainers in afternoon trading, United Airlines parent UAL Corp., up 20 cents, or 5.5%, at $3.86 USD; American Airlines parent AMR Corp. rose 9 cents, or 3.5%, to $2.63; Southwest Airlines Co., added 12 cents at $5.13 USD; and US Airways Group Inc., gaining 14 cents, or 7.1%, to $2.11 USD. Mar 6, 2009

US Air Transport Assn. wrote a letter to Senate Committee on Transportation and Infrastructure Chairman James Oberstar (D-Minn.), who recently introduced legislation targeting antitrust immunity among airline alliances, saying that "the traveling and shipping public will suffer from a withdrawal of the immunity, which fosters the development of seamless networks of service so beneficial to airline customers." Oberstar's bill would require immunity to be renewed every three years. ATA said that "arbitrarily terminating" ATI would "cause a ripple effect across the travel and tourism industry at a time when US unemployment is escalating rapidly" to the tune of up to 15,000 jobs. Mar 6, 2009

US FAA Acting Administrator Lynne Osmus yesterday formally named Peggy Gilligan associate administrator-aviation safety, replacing the retired Nicholas Sabatini. Gilligan previously served as deputy assistant administrator-aviation safety. John Hickey, director of FAA's Aircraft Certification Service, will replace Gilligan. He in turn will be replaced by Dorenda Baker, formerly deputy director-Aircraft Certification Service. Mar 6, 2009

FAA funding bill clears House committee. An FAA funding measure passed the House Transportation and Infrastructure Committee Thursday via voice vote. Of particular note are two amendments in the bill: one that would limit antitrust immunity for airline alliances, and another that would tighten restrictions of foreign repair stations. The Air Transport Association has already written to the panel's chairman, Rep. James Oberstar, D-Minn., saying it "strongly oppose[s]" language that sunsets existing alliances after three years, requiring reapplication by airlines "who, in good faith reliance on a valid exercise of DOT authority, have invested millions of dollars in developing and integrating alliance operations." ATA President James May said the sunset provision was "tremendously unfair" and harmful to passengers and could cost up to 15,000 airline jobs. Mar 6, 2009

Legislation that could eventually force US airlines to abandon joint ventures with their transatlantic peers may be gaining momentum in Washington, just as carriers such as United, American and British Airways seek federal approval to build closer ties. Stymied by rules forbidding mergers between US carriers and their foreign counterparts, many of world s largest airlines have forged alliances to help share revenue and costs, and extend their reach around the globe. Mar 5, 2009

Aviation analysts say discount airlines around the world are taking advantage of the recession to grow their brands and route systems. Such U.S. carriers as JetBlue Airways and Allegiant Air are expanding into major markets, challenging larger rivals at key airports such as Los Angeles International. With new flights to San Francisco, San Diego and Fort Lauderdale, Fla., Canadian discounter WestJet vows, "This is a year for us to steal market share." Mar 5, 2009

Oberstar seeks to tie anti-alliance measure to FAA funding bill. When House Transportation and Infrastructure Committee Chairman Rep. Jim Oberstar, D-Minn., introduced a bill last month requiring tougher oversight of airline alliances, few in the industry thought the measure would pass. But Oberstar now plans to attach his proposal to a crucial funding measure for the FAA, a move that could provoke unified opposition from both the airline industry and European regulators. Mar 5, 2009

Airline stocks rose out of the ashes of early-week losses Wednesday, helped by a broad market rally and some new February traffic results that appeared a little more hopeful than previously. In early morning trading, the Amex Airline Index added 4.5% to 14.16 points, with all of its 13 components trading up. In prior-day trading, the benchmark index had fallen within 7% of its all-time low of 12.66, set this summer when the price of oil spiked to above $147 a barrel. Shares of United Airlines parent UAL Corp. leapt 11%. Mar 4, 2009

Airline stocks were mostly higher Wednesday, as investors were torn between a rally in the broader market and more evidence of weak travel demand. American Airlines said its February traffic fell 13.5%, adding to similar reports from Continental, Southwest and United earlier this week. American Airlines parent AMR Corp. shares rose a penny to 3.14 USD; Delta Air Lines Inc. gained 22 cents, or 5.2%, to 4.48 USD; and US Airways Group Inc. rose 3 cents to 2.33 USD. Mar 4, 2009

Airline stocks were mostly higher Wednesday, as investors were torn between a rally in the broader market and more evidence of weak travel demand. American Airlines said its February traffic fell 13.5%, adding to similar reports from Continental, Southwest and United earlier this week. American Airlines parent AMR Corp. shares rose a penny to 3.14 USD; Delta Air Lines Inc. gained 22 cents, or 5.2%, to 4.48 USD; and US Airways Group Inc. rose 3 cents to 2.33 USD. Mar 4, 2009

Airlines try to fill seats by slashing fares. After steadily increasing fares for the past two years, airlines are reducing ticket prices in an attempt to fill planes. Travelocity estimates a 40% drop in airfares for the most popular routes from their peak in June 2008. "I don't remember a year other than 2001 that we've seen this kind of commotion in airfares," says Tom Parsons, CEO of Bestfares.com. Mar 4, 2009

In signs of dramatic slowing in airline passenger traffic in February, Continental said its unit revenue fell sharply, while Southwest cited [sup.3]continued deterioration in revenue and booking trends.[sup.2] Continental said its consolidated passenger revenue per available seat mile in February fell by 11.5% to 12.5%, while consolidated load factor fell by 3.5 points to 72.5%. Meanwhile, mainline PRASM fell between 9.5% and 10.5% from the same month a year earlier, while mainline load factor fell 3 points to 77.7%. International mainline load factor fell 2.9 points to 68.4%. In January, Continental's consolidated PRASM fell 4.8%, while mainline PRASM fell 3.4%. Meanwhile, Southwest said PRASM for the first two months was in the 2% range. Mar 3, 2009

U.S. stocks were mostly flat midday Tuesday as the Dow Jones Industrial Average rose 0.1% to 6771 and the S& P 500 lost 0.1% to 700. The Nasdaq Composite was up 0.3% to 1327. Among the companies whose shares are actively trading in the session are American Capital Strategies LLC (0.90 USD, -0.29 USD, -24.71%), Delta Petroleum Corp. (1.03 USD, -0.79 USD, -43.41%) and Continental Airlines Inc. (8.30 USD, -1.30 USD, -13.54%). Mar 3, 2009

The U.S. airline industry is shrinking routes this year, as fewer passengers fly. But one small carrier, Allegiant Travel Company (ALGT), is on a growth track. The plucky Las Vegas company, which caters to vacation-minded travelers in small towns across the country, hasn't flinched in the face of economic recession and fluctuating jet fuel prices. The airline on Tuesday reported that February passenger traffic on scheduled flights rose nearly 10%, with load factors, or the number of full seats per plane, rising to 90.2%. Mar 3, 2009

Airports court airlines...

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