Airline Finance News - North America

AirGuide Business, Feb 18, 2008

Feb 18, 2008

The Airline Reporting Corporation reports air sales gain. The Airline Reporting Corporation (ARC) reported $7.1 billion in sales for January 2008, a 6.2 percent increase over January 2007. The report covers 18,203 retail locations and 1,416 satellite ( STP) locations. Average daily sales were $11,729 for 166 carriers, primarily airlines. The percentage of e-tickets continued to climb accounting for 97.4 percent of the total. While total transactions declined 2.27 percent to 13.9 million-led by a 4.8 percent decline in domestic transactions-international transactions grew 5.6 percent to 3.6 million for the month. Credit card sales were $6.2 billion of the total sales. International fares grew 10.1 percent to $2.8 billion while domestic fares grew 2.3 percent to $3.2 billion. Total taxes and fees paid also grew 8.4 percent to $925 million. Feb 14, 2008

Many airline experts say mergers are needed to help stabilize the volatile industry, which finally emerged from a five year slump in 2006 after racking up USD$35 billion in losses. United Airlines and Continental Airlines also are in the "very initial stages" of merger talks, a source familiar with the matter said last Thursday. Analysts have said the mergers could lead to higher fares in some markets, at least in the short term, as combined carriers cut costs by reducing flights and used their increased market power to raise prices. Feb 12, 2008

Airlines Look For Savings As Fuel Costs Rise. The need for US airlines to control costs is greater than ever with losses creeping back onto balance sheets and shares slipping, but carriers are simply running out of fat to trim after years of restructuring. The main culprit undercutting profits is high fuel prices. But overall US economic weakness is threatening to erode travel demand and make it more difficult to generate revenues. Feb 11, 2008

Texas carriers come up with plans if industry consolidates: American Airlines, Continental Airlines and Southwest Airlines are planning how they will react to the potential merger of Delta Air Lines and Northwest Airlines, observers say, noting some carriers are looking for ways they can benefit if others merge. Feb 11, 2008

Air Canada

Air Canada and Jazz flew a combined 4.06 billion RPMs in January, up 3.8% from the year-ago month. Capacity rose 3.7% to 5.22 billion ASMs and load factor increased 0.1 point to 77.9%. Feb 11, 2008

Air Canada Jazz

Jazz, which provides regional service for Air Canada, reported net income of C$150.7 million (US$149.5 million) for 2007, up 7.6% over a C$140 million profit in 2006, on an 8.3% lift in revenue to C$1.5 billion. Expenses increased 8.5% to C$1.38 billion and operating income of C$153.2 million was up 6.5% from C$143.8 million in the previous year. Fourth-quarter net income of C$35.1 million was ahead 9.9% from C$31.9 million in the year-ago quarter. Separately, ACE Aviation Holdings, which owns a 20.1% stake in Jazz and 75% of Air Canada's shares, reported net income of C$1.4 billion for 2007. The company, which was created in 2004 as part of Air Canada's restructuring and subsequently spun off Air Canada and Jazz as independent entities, said its results are not comparable to prior-year performances owing to its ongoing sale of assets. Feb 11, 2008

AirTran Airways

AirTran Airways CEO Robert Fornaro said last week that mergers are a good idea for struggling airlines that may need to reduce capacity but not for AirTran, which has been profitable consistently for nearly a decade and should benefit from consolidation. Speaking at an Aero Club luncheon in Washington, Fornaro said, "The industry needs to evolve and the quicker the better. . .It creates larger competitors for us to contend with but we can compete with anyone out there," adding that the carrier "would seek assets and opportunities in any merger." He said he expected it would have expanded opportunities at certain airports, as gates likely would be reallocated following a merger to ensure fair competition. "We need access to East Coast markets. These are being closed to competition," he said, mentioning New York as a market it would like to serve more frequently. Feb 15, 2008

AirTran Airways

AirTran reported 2007 net income of $52.7 million, more than triple the $14.7 million earned the prior year. But it is facing similar cost pressures to the legacy carriers, driving the consolidation speculation. It now spends 42 cents of every $1 on fuel. "We can't hide from it," Fornaro said. "We could offset fuel prices with revenue over the past few years, but the revenue potential for raising prices might not be there. At some point the rate of domestic growth will turn negative." Feb 15, 2008

AirTran Airways

AirTran Airways constantly reevaluates its route structure to add capacity in markets were it sees demand and cut capacity in markets that cannot support it. Feb 11, 2008

AirTran Airways

AirTran Airways flew 1.22 billion RPMs in January, 14.4% more than in the year-ago month. Capacity was up 5.5% to 1.8 billion ASMs, lifting load factor 5.2 points to 67.4%. Feb 11, 2008